First Quantum Minerals has reported net earnings of US$375 million on sales of $2 billion for the September quarter, a 235% gain over the $112 million achieved in the prior year period.
Copper produced increased 18% to a quarterly record of 221,550t compared with the June quarter due to an improvement in throughput and grades at its three largest mines, particularly at Cobre Panamá in Panama with the continued strong ramp-up of the CP100 expansion project. Its C1 cash cost fell 56c/lb compared with the June quarter, to $1.42/lb driven by higher production volumes and an easing of some input costs, including fuel, sulphur and explosive prices.
Cobre Panamá produced 112,734t. It is now forecast to produce 350,000-380,000t this year. Kansanshi in Zambia produced 39,600t and is guided to produce 130,000-140,000t this year. Sentinel in Zambia produced 63,805t, and guidance is now 220,000-230,000t.
Despite a good September quarter, the company updated its 2023 guidance for copper, gold and nickel production, with reductions all around. Copper guidance was reduced to 745,000-775,000t from 770,000-840,000t due to lower output expected from Sentinel. Its output is now guided at 220,000-230,000t from 260,000-280,000t.
Gold production has been reduced to 230,000-250,000oz from 265,000-295,000oz, while nickel production has been reduced to 25,000-29,000tt from 28,000-38,000t. The company also narrowed its Copper C1 cash cost guidance to $1.75-1.85/lb from 1.65-1.85/lb.
Nickel guidance is now 25,000-29,000t from 28,000-38,000t.
"It was pleasing that production continued to improve during the third quarter at each of our three main copper operations. The ramp-up of the CP100 Expansion project is progressing well, allowing the Cobre Panamá mine to achieve another record in quarterly production. This continued strong performance," said chief executive Tristan Pascall.
Pascall said the construction of a molybdenum plant at Cobre Panamá is advancing well, with commercial production anticipated in 2024.
A key reason for the tightening of its guidance has been the weaker performance of Sentinal during the first half of the year due to the wet season. COO Rudi Badenhorst said the company has invested to minimise future wet season impacts. "We made a lot of investment in dewatering capacity, tripling it to over 10,000m3/h. We finalised a treatment pond construction and a system for pumping water back to plant so we do not have to hold back and wait for the water to be neutralised to be discharged," he said.
Balance sheet
First Quantum said it ended the quarter with $2.3 billion of liquidity. "We will maintain a focus on strengthening its balance sheet and focus on less-capital-intensive projects," said CFO Ryan MacWilliam during the company's conference call.
With the Panama Cobre now passed into law, the company expects to soon make a $565 million tax payment to Panama for 2022 and the first nine months of 2023. It estimates its total tax liability for 2022 and 2023 as being $770 million.
Shares in First Quantum Minerals are trading at C$30.01, valuing the company at C$20.8 billion.
