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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Sherritt International Inc. [S-TSX] is to exit the Ambatovy joint venture in Madagascar, but its decision will not affect nickel or cobalt production at the mine.
Toronto-based Sherritt is a world leader in the mining and refining of nickel and cobalt from lateritic ores with projects and operations in Canada, Cuba and Madagascar. Sherritt is the largest independent energy producer in Cuba, with extensive oil and power operations across the island. Its key asset is a nickel mining joint venture with the Cuban government.
The 50/50 partnership, formed in 1994, involves the extraction and processing of nickel and cobalt from an open pit mine at Moa Bay in eastern Cuba.
The laterite nickel ore is processed on site, producing mixed sulphides (containing nickel and cobalt) that are shipped in bags to Halifax, Nova Scotia and then transported by rail to a refinery in Fort Saskatchewan, Alberta.
Sherritt licenses its proprietary technologies and provides metallurgical services to mining and refining operations worldwide.
The Ambatovy joint venture is a vertically integrated nickel and cobalt mining, processing, refining and marketing joint venture that produces Class 1 finished nickel. Sherritt acts as operator of the facility, and is a 12% owner. The other significant partners are Sumitomo and Korea Resources Corp.
On a 100% basis, Ambatovy produced 33,733 tonnes of finished nickel and 2,900 tonnes of finished cobalt in 2019.
The Canadian miner announced on February 26, 2019, that it would not fund its 12% stake in the Ambatovy joint venture in a move to protect its balance sheet after Ambatovy made a cash call to boost short term liquidity. Sherritt subsequently announced that it has become a defaulting shareholder on March 6, 2019.
Two years ago, Sherritt announced plans to reduce its stake in the Ambatovy joint venture from 40% to 12%, but has remained as the mine operator. At the time, Sherritt said the decision would allow it to eliminate $1.4 billion of debt.
This was after Sherritt spent 90% of the $5.5 billion that it cost to develop the asset.
The Ambatovy mine area is located 80 km east of Antananarivo (the capital of Madagascar) near the town of Moramanga. At the mine site, Sherritt has been operating an open pit mining operation and an ore preparation plant.
From the mine, the slurried laterite ore is delivered via pipeline to a processing plant and refinery located directly south of the Port of Toamasina.
The design at Ambatovy is based on Sherritt’s hydrometallurgical process that has been commercially proven at the Moa Joint Venture as well as at other international commercial operations.
On Wednesday, Sherritt International shares eased 4% to 12 cents. The shares are currently trading in a 52-week range of 11 cents and 46 cents.
Canada’s Copper Mountain Mining (TSX: CMMC) (ASX: C6C) became on Tuesday the latest company to adjust plans on the wake of yesterday’s markets collapse and near-term copper price uncertainty as a result of the rapidly spreading coronavirus panic.
The Vancouver-based miner has revised its mine plan and schedule for its flagship asset, the Copper Mountain project in British Columbia, deferring a $22 million capital spend by delaying the installation of the third ball mill.
The company has also cut mining rates by about 25% to between 120,000 and 160,000 tonnes per day for the remainder of 2020, down from 200,000 t/d as part of a series of measures to reduce operating costs.
Copper Mountain Mining now expects to produce between 86 and 94 million pounds of copper during 2020, down from a previous estimate of between 100 and 113 million pounds.
“In periods of low metal prices such as today, we will be disciplined and orderly in our development and take a prudent approach to cash management,” president and chief executive, Gil Clausen, said in the statement. “We will not sacrifice the future of our mine by high-grading and deferring stripping that builds a liability in the future.”
Clausen noted that while the existing mine plan was sustainable longer term at current low copper prices, the company believed it was better to protect cash flow, adding that he expected prices to recover soon.
The news comes barely days after the company’s investor relations manager, Dan Gibbons, said Copper Mountain was on track to triple 2019 production in the next two years to reach more than 215,000 pounds annually.
Other than its open-pit project in BC, the dual-listed miner owns the permitted, development-stage Eva copper project in Queensland, Australia and a 4,000 km2 prospective land package in the nearby Mount Isa area.