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First Quantum posts record gross profit despite copper production decline in Q1; lowers 2022 copper guidance

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(Kitco News) - First Quantum Minerals (TSX: FM) today reported that its total copper production for the first quarter was 182,210 tonnes, down from the 201,823 tonnes reported in Q4 2021 as all three of the company’s main operating sites experienced lower production.

The company said that grades are expected to return to planned levels at Cobre Panama and Sentinel over the coming months, while Kansanshi’s grades are expected to be lower than 2021.

Total copper production guidance for 2022 has been lowered to a range of 790,000 to 855,000 tonnes from 810,000 to 880,000 tonnes to reflect the lower production experienced in the first quarter, the company added.

The company also produced 70,357 ounces of gold (Q4 2021: 74,945 ounces) and 5,122 tonnes of nickel (Q4 2021: 3,585 tonnes). Guidance for gold and nickel production remains unchanged.

Copper all-in sustaining costs were $2.27 per lb, up 11% quarter-over-quarter, impacted by higher royalties on production at the company’s Zambian properties due to the higher copper price.

The company also reported record gross profit of $908 million and EBITDA of $1,180 million for the first quarter, which were higher (16% and 9%, respectively) than the fourth quarter in 2021, attributable to higher metal prices and reduced hedge profile, with a realized copper price of $4.45 per lb achieved during the quarter.

Net earnings attributable to shareholders of the company were $385 million ($0.56 earnings per share) compared to net earnings of $247 million in Q4 2021 and net earnings of $142 million in Q1 2021.

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Net debt decreased by $238 million during the quarter, bringing the net debt level down to $5,815 million at March 31, 2022 with the debt reduction program on track. At March 31, 2022, total debt was $7,763 million (December 31, 2021: $7,912 million).

First Quantum is one of the world’s top 10 copper producers, exporting millions of tonnes of concentrate from multiple countries to customers worldwide. The company produces copper in the form of concentrate, cathode and anode, and has inventories of nickel, gold and cobalt.

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