TORONTO (miningweekly.com) – TSX-listed base metals producer First Quantum Minerals has reported a 49% drop in second-quarter earnings as the prices for copper and nickel dropped.
The diversified miner reported net earnings of $71.9-million, or $0.12 a share, down from $142-million, or $0.30 a share, a year earlier.
Adjusted earnings fell to $106.1-million, or $0.18 a share, compared with $142-million, or $0.30 a share.
Metals production in the quarter was boosted by First Quantum’s C$5.1-billion hostile takeover of smaller rival Inmet Mining, which it completed early in April and which gave it access to one of the world's biggest undeveloped copper deposits, the Cobre Panama project, in Panama.
During the quarter, which was the first quarter after full consolidation of the Inmet assets, First Quantum lifted copper output by 44% to 103 694 t, nickel output by 33% to 10 875 t and gold output by 44% to 63 567 oz.
However, despite the increased metals production and lower costs, the realised copper and nickel prices fell in the quarter. The realised copper price fell 11% to $3.10/lb and that of nickel was down 13% to $6.82/lb.
At Cobre Panama, the company said it had applied its steadier, practical approach to project development and, as a result, the cash outflow had slowed considerably, while the company remained confident it could complete the project below the previous capital expenditure estimates of Inmet.
Following the acquisition of Inmet, First Quantum now operates seven mines, namely the Kansanshi copper/gold mine in Zambia, the Guelb Moghrein copper/gold mine in Mauritania, the Las Cruces copper mine in Spain, the Kevitsa nickel/copper/platinum-group metals (PGMs) and the Pyhäsalmi copper/zinc mines in Finland, the Ravensthorpe nickel/cobalt mine in Western Australia, and the Çayeli copper/zinc mine in Turkey. From these mines, the company produces copper, nickel, gold, zinc and PGMs.