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(Kitco News) - First Quantum (TSX: FM), one of the world's largest copper miners, yesterday announced that its total copper production in Q1 2023 was 138,753 tonnes, a 33% decrease from Q4 2022 and a 24% decrease from Q1 2022.
The company explained that the quarter-over-quarter decrease in production was attributable to a 15-day temporary suspension of production at Cobre Panamá and the rainy season in Zambia, with Sentinel receiving its highest rainfall in 25 years. Kansanshi continued to experience lower feed grades across all three circuits.
The company's copper C1 cash cost of $2.24 per lb for Q1 2023 was $0.38 per lb higher than Q4 2022.
"While market rates for fuel and freight were, on average, lower in the first quarter of 2023, these benefits were more than offset by lower production levels," First Quantum said.
The company added that its Q1 2023 gross profit of $280 million and EBITDA of $518 million were 22% and 20% lower, respectively, than the fourth quarter of last year due to lower metal sales volumes.
Cash flows from operating activities of $299 million ($0.43 per share) for the quarter were $62 million higher than the fourth quarter of last year due mainly to working capital movements related to trade and other receivables.
First Quantum also reported Q1 2023 net earnings attributable to shareholders of the company of $75 million (Q4 2022: net earnings of $117 million; Q1 2022: net earnings of $385 million) and adjusted earnings of $76 million (Q4 2022: adjusted earnings of $151 million; Q1 2022: adjusted earnings of $480 million).
Importantly, the company noted that its 2023 guidance on production, C1 cash costs, all-in sustaining cost and capital expenditures that was previously disclosed on January 16, 2023 remains unchanged.
For 2023, copper production is forecast to be 770,000 to 840,000 tonnes. Production is expected to recover for each of the next three quarters, particularly in the second half of the year. Copper C1 cash costs are guided to be $1.65 to $1.85 per lb. Capital cost guidance for 2023 is $1,600 million.
"The first quarter was difficult with production impacted at our three largest operations. At Cobre Panamá, production was interrupted by a temporary suspension of exports but returned to full production rates once the suspension was lifted. Our Zambian operations experienced a seasonal impact, however, the rainy season is nearing an end. We are focused on improving operational performance and expect production to recover over the course of the year and, as such, we remain committed to our guidance for 2023," commented CEO Tristan Pascall.
"The first quarter also had important milestones, including a refreshed contract with the Government of Panamá and a new partnership with Rio Tinto to progress the La Granja project in northern Peru. The company also successfully executed on two of our brownfield projects. Commissioning of the CP100 Expansion was completed ahead of schedule and remains on track to achieve 100 million tonnes of throughput per annum by the end of this year and we introduced first ore through the Enterprise nickel plant. Both of these projects will increase our copper and nickel production, two metals that are critical to the global transition to cleaner energy," he added.
First Quantum is a global copper company. The company produces copper in the form of concentrate, cathode and anode, and has inventories of nickel, gold and cobalt. The company operates long-life mines in several countries and employs approximately 20,000 people world-wide.
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