South32 (LSE:S32), the London-listed diversified miner, in Monday's quarterly report told investors that FY27 production guidance remains unchanged across all operations following its first quarter.
Net cash rose by $14 million to $297 million during the quarter, after the company received a $153 million distribution from its Sierra Gorda copper joint venture and continued investing in the Hermosa growth project.
South32 is developing the Taylor zinc-lead-silver deposit at its Hermosa project in Arizona, the company's principal growth asset, targeting first production in the second half of FY28 and steady-state output from FY31.
"We've made a positive start to FY27, maintaining production guidance across all our operations and achieving key development milestones for our copper and zinc growth projects," said chief executive officer Matt Daley.
At Hermosa, South32 invested $197 million in growth capital during the quarter, advancing underground construction and shaft sinking, with both shafts expected to reach the primary production level in the December quarter.
On 2 September, the US Forest Service released a Final Mine Plan of Operations for Hermosa, completing the project's federal permitting process under the FAST-41 programme.
Sierra Gorda, South32's 45%-owned Chilean copper operation, lifted payable copper equivalent production 11% to 22.4kt in the quarter, as higher planned copper grades offset temporary wet weather impacts.
The joint venture paid a record quarterly distribution of $153 million and began execution of its fourth grinding line project, which is expected to lift processing capacity by approximately 25% to around 60 million tonnes per annum, with first production in mid-FY30 and full rates in FY31.
Cannington, South32's silver-lead-zinc mine in Australia, saw payable zinc equivalent production fall 27% to 59.2kt after a temporary reduction in paste backfill availability delayed access to planned stopes.
The company processed lower-grade stockpiles to supplement mined ore feed and expects upgrades to the paste delivery system to support higher mining rates through the rest of FY27, with FY27 guidance for Cannington held at 290.0kt.
Manganese production rose 14%, with Australia Manganese benefiting from improved conditions following the wet season and South Africa Manganese lifting underground productivity at its Wessels operation.
Shareholders approved the sale of South32's aluminium value chain assets, excluding Mozal Aluminium, to Alcoa Corporation at the company's annual general meeting on 15 October, with the transaction on track to complete in the June 2027 half year subject to regulatory approvals.
Daley said the deal "will reposition South32 as a leading upstream base metals focused company with high-margin assets and transformational growth."
The company returned $13 million to shareholders via its on-market share buy-back during the quarter, purchasing 4 million shares at an average price of A$5.04, with its $2.6 billion capital management programme now 92% complete and $196 million remaining ahead of its expiry on 10 September 2027.
South32 also paid a fully-franked ordinary dividend of $242 million relating to the June 2026 half year, following the end of the quarter.