Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- First Quantum Minerals Ltd (FQVLF, Financial) exceeded its 2024 copper and gold production guidance, with copper production reaching 431,000 tonnes and gold production at 139,000 ounces.
- The Kansanshi S3 expansion project is on track, with strong progress reported, and is expected to be completed by mid-2025.
- The company successfully reduced net debt by $61 million in the fourth quarter, bringing it down to $5.5 billion.
- Operational initiatives led to strong performance at Kansanshi and Sentinel, with Kansanshi achieving its highest annual copper production since 2021.
- First Quantum Minerals Ltd (FQVLF) maintained strong liquidity at $1.6 billion, including $112 million in cash and $750 million of undrawn revolver.
Negative Points
- The company faces ongoing challenges in Panama, with unresolved issues related to the Cobre Panama mine and pending approval of the Preservation and Safe Management program.
- Copper C1 costs increased by 7% to $1.68 per pound due to lower production volumes and higher costs at Sentinel.
- The environmental audit in Panama could potentially lead to long-term restoration costs and impact operations.
- The Zambian energy situation remains challenging, with reliance on supplementary power imports expected to continue into 2025.
- Nickel production at Enterprise was impacted by weathering and alteration, leading to lower production and increased costs.
Q & A Highlights
Q: Given the unresolved social security issue in Panama and the canal's focus, do you anticipate starting negotiations by the end of Q1, or could this timing shift later in the year?
A: The President has prioritized the social security matter before addressing the mine issue. Progress is being made, and we expect to reach a resolution as soon as possible. The canal situation does not alter our focus on constructive engagement with the government. — Tristan Pascall, CEO
Q: How should we think about the timeframe for approval of the Preservation and Safe Management program and the Environmental Audit at Cobre Panama?
A: The P&SM plan was submitted early last year and is awaiting approval, which is aligned with the President's policy to address social security first. The urgency of the program is emphasized for environmental stewardship and asset integrity. — Tristan Pascall, CEO
Q: Can you update us on the balance between financing options versus partnering in sale options going forward?
A: We have a strong starting position with $1.6 billion in liquidity. We are considering a range of options, including a minority stake sale in Zambia, bond market exits, and prepays. Each option will be weighed for financial and strategic benefits. — Ryan MacWilliam, CFO
Q: Regarding the S3 project, how long will it take to reach full capacity, and when do you expect to move out of the low-grade sulphide zone?
A: Construction will complete by mid-2025, with commissioning and ramp-up in the second half. We aim for 80-90% capacity by year-end. Higher-grade ore from Southeast Dome will be available from late 2026, with full benefits in 2027. — Tristan Pascall, CEO
Q: With the hydro power situation in Zambia, how confident are you in maintaining operations without exceeding the 40% import threshold?
A: We have proactively secured supplementary power and planned conservatively for the rainy season. We are working on long-term solar and wind projects, expected to be operational by 2027-2028, to ensure stable power supply. — Tristan Pascall, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
