First Quantum Minerals Ltd. (FM-TSX) said production at its three major copper operations is expected to be higher in the second half of the 2023 following a challenging start to the year.
Guidance for copper, gold and nickel production remains unchanged; however, full year production for each metal is expected to be towards the lower end of guidance to reflect year to date production.
The company also said full year cash and all-in-sustaining costs for copper and nickel are expected to be toward the upper end of its forecasts.
Meanwhile, the company posted net earnings of US$93 million (13 cents per share) in the second quarter ended June 30, 2023, and adjusted earnings of US$85 million (12 cents per share).
First Quantum shares were virtually unchanged on the news, easing 0.55% or 20 cents to $35.92. The shares trade in a 52-week range of $36.88 and $18.80.
First Quantum is a diversified mining company that is engaged in the production of copper, nickel, gold and zinc. It has operating mines in Zambia, Finland, Turkey, Spain and Mauritania. The company’s portfolio of assets includes the Kansanshi mine in Zambia, which ranks as the largest copper mine in Africa.
Cobre Panama is First Quantum’s flagship operation. It is a huge open-pit copper project located in the Panama jungle, about 120 kilometres west of Panama City and ranks as First Quantum’s key asset.
The Sentinel open-pit copper mine is located 150 kilometres west of Solwezi in Zambia. It represents Zambia’s largest infrastructure investment since the Kariba Dam was constructed in 1959.
“After a challenging start to the year, it is pleasing to see the improvements at our three largest operations,’’ said First Quantum CEO Tristan Pascall. “During the quarter, Sentinel achieved its highest monthly production for the year in May and Cobre Panama and Kansanshi achieved the same records in June,’’ he said. “We remain well on track for a stronger performance in the second half of the year.
The company reported total copper production for the second quarter of 187,175 tonnes, a 35% increase from the first quarter of 2023. The quarter of quarter increase in production was attributable to an improvement in grades Cobre Panama, Kansanshi, and Sentinel, and higher throughput at Cobre Panama and Sentinel.
Production for the three major copper operations is expected to be higher in the second half of the year.
On March 8, 2023, First Quantum and the government of Panama reached an agreement covering terms and conditions for a refreshed concession contract at Cobre Panama. Once the agreement is signed and passed into law as expected, payments to cover taxes and royalties up to year-end 2022 of approximately US$395 million are expected to be made within 30 days of the refreshed concession contract being enacted into law.
In addition, past due amounts payable for 2023 corporate tax instalments, withholding taxes and quarterly royalty payments will also be due 30 days after being enacted without penalty or interest.
