Daily Newsletter

22 February 2024

Daily Newsletter

22 February 2024

First Quantum reports loss in Q4 2023 over Panama woes

Total copper production for the quarter was 160,200 tonnes (t), a 28% decrease from the third quarter (Q3) of 2023.

Umesh Ellichipuram

First Quantum Minerals has posted a net loss attributable to shareholders of $1.45m (C$1.96m) for Q4 2023, compared with a $1.17m profit in the same period of 2022.

In the three-month-period that ended 31 December 2023, the company’s EBITDA (earnings before interest, taxes, depreciation and amortization) stood at $273m, marking a 57.8% slump from $647m in Q4 2022.

The miner’s net debt increased to $6.42bn at the end of December 2023, largely due to a one-time payment of $567m to the Government of Panama for taxes and royalties.

First Quantum’s performance this quarter was significantly affected by production suspension at the Cobre Panamá mine at the end of November 2023, when the mine entered preservation and safe maintenance (P&SM).

Additionally, almost 121,000 dry tonnes of copper concentrate from Cobre Panamá remained unsold due to disruptions at the Punta Rincón port.

An impairment charge of $900m was recognised, which includes $854m at Ravensthorpe due to margin pressure from weak nickel prices, lower payabilities and high operating costs.

Total copper production for the quarter was 160,200t, a 28% decrease from Q3 2023.

Copper sales volumes in Q4 2023 totalled 127,721t, which was around 32,479t lower than production, mainly due to port disruptions at Cobre Panamá.

Total copper production in Q4 2022 was 206,007t, while copper sales volumes in the same quarter were 198,912t.

To bolster its balance sheet, the company has initiated several measures including dividend suspension, operating cost cuts, as well as a reduction in planned capital expenditure programmes by around $400m in 2024 and $250m in 2025.

The sales process for the Las Cruces mine in Spain is progressing, with the company also considering a minority investment by strategic investors in its Zambian operations after several expressions of interest.

Furthermore, First Quantum signed a $500m three-year prepayment agreement with Jiangxi Copper, which includes the delivery of 50 kilotonnes of copper anode per annum from Kansanshi at market prices.

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