Western Areas have issued an upgraded profit guidance which is great for shareholders but bad news for mining services
Western Areas have issued an upgraded profit guidance which is great for shareholders but bad news for mining services. Western Areas has told the market that mine production and concentrate production will exceed previous guidance based on strong operational performances. The Company also beat expectations on the cost front delivering concentrate at $2.7/pound which is 3% below their lowest guidance. Western Areas CEO, Dan Lougher, said, we have been able to improve our cost profile with the cooperation of major service providers. This sounds like a continuing trend for the mining services space as low commodity prices force producers to drive harder for cost savings. What do you do? Take the work at as lower price or miss out all together. No doubt mining services companies are in an enduring price taking cycle. Here is the upgrade note from WSA: (VIEW LINK)
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