In a quarterly results update, First Quantum Minerals revealed that its coveted Cobre Panama copper project will require extra funding.
In a quarterly results update, First Quantum Minerals (TSX:FM,OTC Pink:FQVLF) revealed that its coveted Cobre Panama copper project will require extra funding.
While the asset has performed well through its ongoing production ramp up phase, First Quantum explained that capital expenditures are going up. With an increase of approximately 6 percent, total project capital is now docketed at US$6.7 billion.
According to the company, this is due to higher costs associated with construction completion, along with “commissioning to further mitigate risks associated with and to accelerate the ramp-up.”
Aside from the unexpected costs, the major project is operating as planned; pre-commercial copper production reached 30,896 tonnes over the last quarter. This puts the asset on track to hit its yearly guidance of 140,000 to 175,000 tonnes. The company also checked off the milestone of Cobre Panama shipping its first concentrate in June.
“As the construction phase of Cobre Panama comes to an end it brings to a close the many years of momentous effort that has gone into bringing such a large, complex, challenging and world class project into operation,” First Quantum Director of Projects Zenon Wozniak said in a statement.
Across its other assets, the company managed to hit record quarterly copper production with 168,399 tonnes, marking a 12 percent increase over Q2 2018. First Quantum also boosted its gold production by 28 percent from Q2 2018 with 59,647 ounces, 10,550 of which came from Cobre Panama.
Also on the rise was copper production from the Guelb Moghrein mine in Mauritania, which rose 34 percent from Q2 2018 to 7,750 tonnes.
As of Monday (July 29), copper was trading at US$5,949 per tonne on the London Metal Exchange.
In Toronto, First Quantum’s share price was down 1.8 percent at C$12.02 as of 3:13 p.m. EDT on Tuesday (July 30).
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.