{"id":1181145,"date":"2020-04-28T17:04:06","date_gmt":"2020-04-28T22:04:06","guid":{"rendered":"https:\/\/www.mining.com\/?p=1022057"},"modified":"2020-04-28T17:04:06","modified_gmt":"2020-04-28T22:04:06","slug":"first-quantum-revises-guidance-for-2020","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1181145","title":{"rendered":"First Quantum revises guidance for 2020"},"content":{"rendered":"<p>With its Cobre Panama mine <a rel=\"noreferrer noopener\" aria-label=\"on care and maintenance since Apr. 7 (opens in a new tab)\" href=\"https:\/\/www.mining.com\/first-quantum-ordered-to-halt-cobre-panama-operation\/\" >on care and maintenance since April 7<\/a>,\u00a0First Quantum Minerals\u00a0has reduced its copper guidance for the year by 75,000 tonnes to 755,000-805,000, with expected gold production falling by 30,000 oz. to 250-270,000 oz. <\/p>\n<div class='d-flex justify-content-center d-xs-block d-sm-block d-md-none'>\n<div id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');});<\/script><\/div>\n<\/div>\n<p>The forecast depends on officials allowing Cobre Panama to reopen by the end of May, with normal production levels being achieved in late June or early July.<\/p>\n<figure class=\"wp-block-pullquote alignright\">\n<blockquote>\n<p> The mine, located about 120 km west of Panama City, was temporarily suspended after the death of a worker from covid-19 <\/p>\n<\/blockquote>\n<\/figure>\n<p>The mine, located about 120 km west of Panama City, was temporarily suspended after the <a href=\"https:\/\/www.mining.com\/covid-19-kills-worker-at-first-quantums-cobre-panama\/\"  rel=\"noreferrer noopener\" aria-label=\"death of a worker from covid-19.  (opens in a new tab)\">death of a worker from covid-19. <\/a><\/p>\n<p>The first case of the virus at the site was detected on March 24. While mining and processing are suspended, the port and power plant have continued to operate to supply power to the country\u2019s power grid. <\/p>\n<p>The $6.3 billion operation began commercial production last fall.<\/p>\n<p>On a conference call, Tristan Pascall, First Quantum\u2019s director of strategy, said a restart will depend on the company\u2019s ability to demonstrate the site is clean and safe \u2013 a requirement the company is confident it will meet. <\/p>\n<p>It will also depend on the big picture in Panama and the virus\u2019s trajectory in the country.<\/p>\n<p>\u201cWe would hope that Cobre Panama as an isolated site is a good candidate because it\u2019s segregated from the rest of the country with a reasonable ability to hold a border and then manage personnel onsite to operate within the very strict protocols that the Ministry of Health has put forward,\u201d Pascall said.<\/p>\n<p>There are still 1,100 people onsite, even though the operation is on care and maintenance \u2013 or \u201cpreservation and safe maintenance,\u201d as the company is referring to it.<\/p>\n<p>\u201cThe reason we talk about preservation and safe maintenance is that we are able to turn the mills \u2013 that\u2019s important because in the Cobre Panama climate we couldn\u2019t want condensation and so on,\u201d Pascall said. <\/p>\n<p>\u201cThere is rock going into the mill, there is some production happening \u2013 but it\u2019s really around ensuring that when we\u2019re ready to start, we can.\u201d<\/p>\n<p>The pandemic has seen copper prices decline to a low of $2.08 per lb. in late March. <\/p>\n<p>About 50% of First Quantum\u2019s remaining copper production for the year is hedged, with an average floor price of $2.62 per lb. \u2013 higher than the current price of $2.34 per lb. <\/p>\n<p>In the first quarter, the company reported all-in sustaining costs (AISC) of $1.64 per lb. For 2020, under its revised guidance, it\u2019s forecasting AISC of $1.65-$1.80.<\/p>\n<h2><strong>Quarterly results<\/strong><\/h2>\n<p>First Quantum recorded a 43% increase in copper production to 195,285 tonnes in the first quarter, with 56,240 tonnes of that coming from its 90%-owned Cobre Panama (Korea Resources Corp.&nbsp;owns a 10% stake). <\/p>\n<p>Revenue for the quarter was C$1.2 billion, an increase of 38% from the previous year.<\/p>\n<p>The company reported a loss of C$79 million, owing to a net finance expense of $184 million, compared to earnings of $95 million in the same quarter of 2019. <\/p>\n<p>EDITDA for the quarter was $434 million, up 18%.<\/p>\n<p>In a research note, Jackie Przybylowski, a mining analyst with BMO Capital Markets said the company is well-positioned to benefit from a post-covid-19 economic recovery.<\/p>\n<p>\u201cFirst Quantum\u2019s reported first-quarter earnings were below our expectations and the company has cut its 2020 guidance. However, we view the revised guidance as promising as it shows the company has confidence in a near-term Cobre Panama restart,\u201d Przybylowski said. <\/p>\n<p>\u201cThe company continues to grow, even in this challenging time, and the company expects it will remain in full compliance with all financial covenants through 2020, aided by its hedges on copper and nickel sales and diesel purchases.\u201d<\/p>\n<p>Przybylowski noted that First Quantum is the first miner covered by BMO that has provided detailed guidance for 2020.<\/p>\n<p>The company has reduced its operating costs and capital spending to deal with the current environment, with capital spending for 2020 reduced by $175 million to $675 million. <\/p>\n<p>In addition to the hedging it has in place to mitigate the uncertainty of the copper price, the company has improved its liquidity and flexibility. <\/p>\n<p>It had nearly $1.2 billion in cash and equivalents at the end of March.<\/p>\n<p>Senior staff have also seen compensation cuts of 25%.<\/p>\n<p>Aside from Cobre Panama, operations at First Quantum\u2019s Las Cruces mine in Spain were suspended for two weeks due to the pandemic; restrictions have now been lifted.<\/p>\n<p>Commercial production began at the company\u2019s Ravensthorpe nickel operation in Australia in April.<\/p>\n<p>The company\u2019s stock was down 1.39% on the TSX on Tuesday. First Quantum has a C$5.85 billion market capitalization. <\/p>\n<p><em>(This article first appeared in the&nbsp;<\/em><a rel=\"noreferrer noopener\" href=\"http:\/\/www.canadianminingjournal.com\/\" ><em>Canadian Mining Journal<\/em><\/a><em>)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The company has reduced its copper guidance for the year by 75,000 tonnes to 755,000-805,000.<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[369,4,2640],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1181145"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1181145"}],"version-history":[{"count":2,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1181145\/revisions"}],"predecessor-version":[{"id":1181152,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1181145\/revisions\/1181152"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1181145"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1181145"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1181145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}