S&P Global Ratings upgraded First Quantum Minerals Ltd.'s long-term issuer credit rating to B from B-, with a stable outlook, after the miner released its 2017 results.

First Quantum's 2017 EBITDA stood at US$1.15 billion, in line with S&P's estimates and up 20% from year-ago figures, despite hedging deals limiting the company's upside from the recent copper price rally.

S&P Global Ratings on Feb. 14 attributed the upgrade to expectations that the miner will achieve an S&P-adjusted debt-to-EBITDA ratio of below 5x in 2018 and continue deleveraging in the following two years. According to the rating agency, this deleveraging will be driven by the scheduled start of commercial production at its Cobre Panama copper property in Panama in 2019 and the positive impact of the hedges that the company had in place over 2017.

The stable outlook reflects expectations that the miner's credit metrics will improve in 2018 and 2019.

The rating agency sees First Quantum improving its earnings in 2018 amid higher copper prices and a supportive market environment but said the company's S&P-adjusted leverage in 2017 was higher than expected at 6x due to increased adjusted debt. Most of this debt is associated with the miner's acquisition of additional Cobre Panama stakes, and the additional US$600 million CapEx for the project is expected to further raise the company's debt in 2018.

"Our expectation of deleveraging to 4.5x in 2018 is based on volumes from the existing operating mines, with 46% of 2018 volumes locked in at prices higher than last year," the rating agency said, adding that this is expected to improve to 3.3x in 2019 when Cobre Panama is slated to start boosting earnings.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.