First Quantum jumps 35% on operations update

First Quantum’s Cobre Panama plant at night, Panama. Source: First Quantum Minerals Ltd.

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First Quantum Minerals Ltd. [FM-TSX] shares rallied Tuesday March 24 after the company released an operations update, saying its production and sales remain stable in the current environment. The company also said it is maintaining its production guidance for the year.

First Quantum shares advanced on the news, rising 35% or $1.78 to $6.82 on volume of over 5.0 million shares traded. The shares are currently trading in a 52-week range of $4.72 and $16.63.

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. The company’s portfolio of assets includes the Kansanshi Mine in Zambia, which ranks as the largest copper mine in Africa.

The company is working to develop its Panama copper-gold mine in Panama, the world’s largest new copper mine.

Cobre Panama is located in the Panama jungle, about 120 km west of Panama City. The concession consists of four zones, covering 13,600 acres. First Quantum recently increased its stake in the open pit project to 90%. Having reached the commercial production stage in early September 2019, Cobre Panama continues to ramp up amid expectations that its forecast copper production will amount to between 285,000 and 310,000 tonnes this year.

“Our key priorities are the health of our employees and to ensure the business remains robust in the midst of a challenging commodity price environment,” said First Quantum CEO Philip Pascall. “We are doing everything we can to care for our staff, their families and the communities around us in relation to the COVID-19 pandemic,” he said. “It is also our responsibility that we continue our contribution to the economies of the countries in which we operate and supply the products on which our customers depend. We will continue to operate our mines responsibly, providing employment and generating revenues, and we will ensure that our business withstands this period of downturn.”

First Quantum said several members of the contractor workforce at the Cobre Panama operation have been confirmed as having the COVID-19 virus. The affected personnel are being cared for in the public healthcare system as per the Panama Ministry of Health requirements. First Quantum said Cobre Panama has already implemented the appropriate control, isolation and quarantine measures in line with Government guidelines and site-specific conditions.

However, the company said the Government of Panama has decreed that Cobre Panama is specifically authorized to continue operating, albeit with strict adherence to protocols established by the Ministry of Health, which will require a reduced labour force operating on 12-hour shifts.

As a result of the implementation of the health protocols at the operation, the pace of ramp-up may be slightly slower than originally planned and will impact first half production, the company said. “At this stage, it is expected that the annual production expectation can still be met with better than planned second half production levels,” it said. “The Punta Rincon international airport at Cobre Panama remains open for import and export.”


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