JOHANNESBURG (miningweekly.com) – Canadian base metals producer First Quantum Minerals (FQM) set a new quarterly record for copper production and sales of 131 349 t and 132 030 t, respectively, in the three months to June 30, surpassing previous records set in the first quarter of this year.
The company’s Sentinel copper mine, in Zambia, recorded a 53% production increase quarter-on-quarter, which FQM attributed to “steady operational and power supply improvements”.
FQM also recorded its highest quarterly production since the third quarter of 2014 at its 80%-owned Kansanshi Mining’s eponymous copper mine, owing to increased smelter availability and sulphuric acid supply from the mine’s smelter operation.
Meanwhile, the company’s higher sales volume quarter-on-quarter was mostly due to increased production at Sentinel.
The company announced comparative earnings of $38-million and cash flows from continuing operating activities of $304-million for the three months.
Further, FQM has completed two main initiatives in its strategy to survive volatile market conditions and sustained lower commodity prices. Firstly, the company put in place a new $1.82-billion debt facility equally comprising a term loan and a revolving credit facility. This new facility, which has improved the company’s financial covenants and amortisation schedule, matures in December 2019 and replaces the previous $3-billion facility.
Secondly, FQM completed the sale of Kevitsa nickel mine, in Finland, to Swedish mining company Boliden for $712-million in cash, plus restricted cash and working capital adjustments, of which $663-million was received in June this year. The remaining amount is due to be received in the current quarter.
FQM chairperson and CEO Philip Pascall noted that the company would maintain its “strong performance” as its focus on these priorities paid off.
He added that all of the company’s operations had shown cost and efficiency improvements, though he acknowledged that the Kansanshi smelter’s operation had the greatest impact on the company’s performance.
This was because the Kansanshi smelter provided additional acid at very little cost. “The extra acid helps recovery of mixed and high acid-consuming oxide ores. The combination of higher recoveries, negligible acid cost and the lower smelting treatment costs make a significant difference,” Pascall explained.
He also noted that the successful sale of Kevitsa and senior debt facility refinancing further strengthened the company’s financial position, “hence its ability to continue developing the Cobre Panama copper project, in Panama, amid volatile market conditions and sustained lower commodity prices”.
“Going forward, we are making progress with the complex process of arranging project financing for Cobre Panama. We will continue to be alert to any opportunities for further cost savings and improvements in profitability and cash flow,” Pascall concluded.
Source: Mining Weekly