First Quantum Reports Q1 Loss in Wake of Cobre Panama Closure

First Quantum Minerals (TSX:FM,OTC Pink:FQVLF) reported its Q1 results on Tuesday (April 23), revealing a net loss of US$159 million (US$0.21 per share) and an adjusted loss of US$154 million (US$0.20 per share).

The company's gross profit came in at US$156 million, with EBITDA at US$180 million, both lower than last year.

These downturns have been attributed to disruptions at First Quantum's Cobre Panama mine, which led to it being taken offline and placed in a preservation and safe management phase in November 2023.

With those circumstances in mind, First Quantum emphasized its commitment to managing its finances. The firm completed a "comprehensive refinancing package" during Q1, along with other initiatives to strengthen its balance sheet, and said this has given it the ability to deliver the S3 expansion at its Zambian Kansanshi copper-gold mine.

“The company’s outlook reflects First Quantum’s enduring commitment to the success of our Zambian operations,” said CEO Tristan Pascall. “We recognize the challenges Zambia faces from the drought this year, particularly in regard to food security, even as we are pleased to be finalizing agreements to ensure adequate power supply to Trident and Kansanshi."

As its stands, the Kansanshi S3 expansion project is progressing as planned, with construction activities underway and the majority of capital spending expected in 2024. First production is anticipated in 2025.

Regarding production, First Quantum's total copper output for the first quarter was 100,605 metric tons (MT), with copper sales volumes slightly exceeding production. Kansanshi reported copper production of 31,473 MT, while Sentinel reported 62,225 MT. Enterprise produced 4,031 MT of nickel, with a focus on ramping up mining operations.

Looking ahead, First Quantum anticipates being able to secure power independently from alternative sources in response to power supply reductions in Zambia. Additionally, the company remains actively engaged in managing preservation and safe management costs at Cobre Panama and adjusting its operations accordingly.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.