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First Quantum Q2 copper output up 12% on year: company

  • Author
  • Filip Warwick
  • Editor
  • Nick Jonson
  • Commodity
  • Metals

London — Canadian miner First Quantum Minerals second-quarter production of copper increased by 12% on year to 168,399 mt, the company said.

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"Production ramped-up significantly [at Cobre Panama copper project] with pre-commercial copper production of 30,896 tonnes in the quarter, on track to produce 140,000-175,000 tonnes of copper as previously guided for the year," the company said in a statement Monday.

The Toronto-listed miner saw second-quarter gold production increase 28% on year to 59,647 oz, including 10,550 oz of pre-commercial production and zinc production of 4,123 mt, it said.

"Production of 30,900 mt this quarter is in line with the previously-announced FY guidance of 140,000-175,000 mt," Bernstein senior research analyst Paul Gait said in a note Tuesday. "Progress to full-ramp is continuing, with six out of eight mills in operation and 80% of the workforce in place."

"Production at Cobre Panama was 30,900 mt, better than our 27,300 mt estimate and making up for Kansanshi and Sentinel in Zambia, both below our estimate," BMO mining analysts said in a note Tuesday. "We expect further improvements to production in Q3 as Cobre Panama commissions and with the restart of Las Cruces [in Spain]."

However Gait said First Quantum have "flagged a 6% increase in total capex for the [Cobre Panama] project, up to $6.7 billion [from $6.3 billion], driven by an unforeseen increase in costs."

"We had estimated $6.6 billion, and are increasing our capex estimate modestly to reflect the higher guidance," BMO said. "The additional amount will be spent on extra work at the tailings management facility, to accelerate commissioning and remove commissioning bottlenecks, and on additional mining fleet."

The Cobre Panama copper project is operated by Minera Panama which is 90% owned by a First Quantum subsidiary while the remaining 10% is owned by Korea Resources Corporation.

ZAMBIA SETTLEMENT REACHED

Last week, First Quantum's subsidiary Kalumbila Minerals had reached a settlement with the Zambia Revenue Authority (ZRA) with respect to the assessment claim on duties, the company said.

"First Quantum have reached a settlement with the Zambian Revenue Authority on duties paid on exports," Gait said. "We will have to clarify with the company the exact magnitude of the settlement, but the report has stated that 'the settlement amount agreed was in line with the Company's previously disclosed expectations and no further provision is required.'"

Gait added that First Quantum "has previously stated that it does not expect the sum to be material (i.e. nowhere near the $8 billion initially claimed by the ZRA) and we are assuming this is still the case today."

First Quantum's Sentinel copper mine second-quarter production came to 54,977 mt, it said.

The Sentinel copper operation is 100% owned by Kalumbila Minerals Limited.

First Quantum's Kansanshi copper mine second-quarter production came to 58,634 mt due to "lower grades in the oxide ore circuit and lower recoveries in the oxide and mixed ore circuits slightly offset by higher throughput in all circuits," it said.

The Kansanshi mine is owned and operated by Kansanshi Mining which is 80% owned by a First Quantum subsidiary while the remaining 20% is owned by a subsidiary of Zambian company ZCCM Investments Holdings.

First Quantum's Guelb Moghrein copper mine in Mauritania second-quarter production increased by 34% on year to 7,750 mt, the company said.

The Guelb Moghrein copper-gold operation is 100% owned by Mauritanian Copper Mines and is a First Quantum subsidiary.

-- Filip Warwick, filip.warwick@spglobal.com

-- Edited by Nick Jonson, newsdesk@spglobal.com