First Quantum Mining - CEO, Philip Pascall
CEO, Philip Pascall
Source: Reuters
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  • First Quantum Minerals (TSX:FM) has reported a 38 per cent increase in sales revenue for the quarter ending March 31, 2020
  • Revenue increased from C$1.19 billion in the first quarter of 2019, to $1.65 billion in the first quarter of 2020
  • The company reported increases in both copper and gold production compared to the same period last year
  • However, gross profit was down to $205 million from $258 million
  • Both production and capital expenditure guidance estimates have been reduced for the rest of 2020
  • At market close yesterday, First Quantum (FM) was trading at $8.64 per share, with a market cap of $5.96 billion

First Quantum Minerals (TSX:FM) has reported a 38 per cent increase in sales revenue for the quarter ending March 31, 2020.

Revenue was up to C$1.65 billion, compared to $1.19 billion in the first quarter of 2019.

This came from similar increases in both copper and gold production. Copper was up 43 per cent to 195,285 tonnes, while gold was up 39 per cent to 68,788 ounces. Of these amounts, 189,953 tonnes of copper were sold, along with 73,782 ounces of gold – the balance of which came from stockpiled resources.

However, despite the significantly improved production, gross profits fell from $258 million to $205 million. First Quantum says that this is partially due to a drop in commodity prices, resulting from a slowdown in global economic activity brought on by the outbreak of COVID-19.

That said, the company’s copper hedge program will mitigate some of the price volatility in the near-term.

Philip Pascall, Chairman and CEO of First Quantum, acknowledged the difficult market conditions, but said that the company’s priority is the health and safety of its employees and communities.

“We are managing the restrictions and protocols implemented in each country where we operate to assist in the protection of all people, but particularly those most vulnerable.

“We have reduced our operating costs and capital spending to deal with the current environment and have hedges in place to mitigate the uncertainty of the copper price,” he said.

To date, First Quantum’s capital expenditure budget has been reduced by $244 million. The remaining $941 million will go towards construction work at the Cobre Panama site, as well as development work associated with resource expansion.

Similarly, production guidance for the remainder of 2020 has also been reduced. Copper production has been cut back by 75,000 tonnes to between 755,000  and 805,000 tonnes, while gold production has been cut by 30,000 ounces to between 250,000 and 270,000 ounces. This comes primarily as a result of reduced performance at Cobre Panama due to COVID-19 restrictions.

At market close yesterday, First Quantum (FM) was steady at $8.64 per share, with a market cap of $5.96 billion.

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