MELBOURNE, Feb 10 (Reuters) - OZ Minerals Ltd OZL.AX is set to announce plans for a new copper project after a board meeting on Feb. 25, the Australian miner said on Wednesday, after reporting a near tripling in annual net profit in line with market forecasts.
Despite a severe commodities downturn, the miner was able to boost its profit through a sharp rise in the amount of copper sold, combined with cuts to production costs as well as head office and exploration spending.
Armed with A$553 million ($389 million) in cash and no debt, OZ Minerals is eager to go ahead with the Carrapateena project in South Australia state, considered one of the country's largest undeveloped copper lodes, as output at its lone operation, Prominent Hill, is declining.
The company has been weighing a range of options to bring down costs of the project, including potentially focusing on high-grade sections of the resource, which Chief Executive Andrew Cole said was "far more favourable" than other cases.
"So I suspect we'll be bringing to you, if we can demonstrate that it makes economic sense, one or two of the high grade options," he told analysts on a conference call.
A pre-feasibility study on a block cave development of Carrapateena in 2014 envisaged annual production of 114,000 tonnes of copper and 117,000 ounces of gold.
Copper prices have fallen 27 percent since the start of 2015. Gold prices have also eased but are up about 17 percent in Australian dollar terms.
OZ Minerals reported a net profit of A$130.2 million for 2015, up from A$48.5 million a year earlier, matching analysts' forecasts at A$131.6 million, according to Thomson Reuters I/B/E/S.
It said it would pay a final dividend of 14 cents a share, takings its full year total to 20 cents a share, beating market forecasts, which helped push its share price up 5 percent in early trade.
The stock last traded down 1.9 percent at A$4.16, reflecting concern about its ability to keep on paying strong dividends if it steps up spending for Carrapateena.
OZ Minerals produced 130,305 tonnes of copper in 2015 and expects output to drop to between 115,000 and 125,000 tonnes in 2016, although that is about 10 percent higher than an earlier forecast.
It also raised its forecast for gold output by about 24 percent to between 125,000 and 135,000 ounces.
($1 = 1.4209 Australian dollars)