First Quantum releases Q4 results, Panama update

First Quantum Minerals Ltd. (FM-TSX), a company that was recently ordered to close its flagship copper-gold mine in Panama, reported a loss to US$954 million or $1.38 per share in 2023.

Commenting on the company’s fourth quarter and year-end 2023 financial results, First Quantum CEO Tristan Pascall said the company is facing one of its biggest challenges in recent history. “However, I am confident in the resilience of First Quantum and the determination of our teams to work through these challenges.’’

As the company works to manage its balance sheet and address liquidity, Pascall said he is pleased that the company has signed a US$500 million copper prepay agreement with Chinese state-owned Jiangxi Copper Corp. “The arrangement is a reminder of the strategic nature of copper as supply challenges abound across the sector,’’ he said.

First Quantum was recently ordered by the Panamanian government to close its Cobre Panama copper-gold mine in the wake of country-wide protests.

First Quantum has said it remains committed to Panama even after Panama’s top court ruled that the operating contract for Cobre Panama is unconstitutional. Cobre Panama ranks as one of the world’s largest and newest copper projects.

At Cobre Panama, Pascal said the blockades around the mine have dissipated, allowing for critical supply deliveries by port and by road. “We continue to work closely with local authorities in order to ship the concentrate stockpile from the site, which is required to fund critical environmental work,’’ he said.

First Quantum is a diversified mining company that is engaged in the production of copper, nickel, gold and zinc. It has operating mines in Zambia, Finland, Turkey, Spain and Mauritania.

Cobre Panama is First Quantum’s key asset. It is a huge open-pit copper project located in the Panama jungle, about 120 kilometres west of Panama City and ranks as First Quantum’s key asset.

The company said total copper production for the fourth quarter was 160,200 tonnes, a 28% decrease from the third quarter of 2023. The quarter-over-quarter decrease in production was attributable to lower production at all three of the company’s main operations, mainly Cobre Panama.

Cobre Panama produced 62,616 tonnes of copper in the fourth quarter of 2023, a decrease of 50,118 tonnes from the previous quarter as production was suspended at the end of November, 2023.

Approximately 121,000 tonnes of copper concentrate remains on site following disruptions at Punta Rincon port. The sale of this concentrate will result in a net cash inflow of approximately US$225 million at current market prices.

Meanwhile, First Quantum is forecasting 2024 copper production of between 370,000 to 420,000 tonnes, rising to between 400,000 to 460,000 tonnes in 2025 and 2026 as the S3 expansion at the company’s Kansanshi mine in Zambia comes on line.

Total capital expenditure for the S3 expansion project remains unchanged at US$1.25 billion, with approximately US$215 million spent to date. First Quantum shares rose 1.37% or 16 cents to $11.77 on Wednesday. The shares are trading in a 52-week range of $39.13 and $9.31.