First Quantum Minerals (TSX: FM) swung to an adjusted profit in the third quarter as stronger copper sales and the end of its hedging program lifted revenue 38% to US$2.09 billion, though the miner cut the top end of its full year copper outlook and raised cost guidance.
Net earnings attributable to shareholders rose to US$207 million, or US$0.25 per share, from US$136 million, or US$0.16 per share, in the second quarter. The prior quarter figure was inflated by a US$271 million gain on the sale of the Çayeli mine and Cobre Las Cruces project. On an adjusted basis, earnings came in at US$0.29 per share, reversing an adjusted loss of US$0.13 per share three months earlier.
EBITDA more than doubled to US$844 million from US$400 million. The second quarter absorbed US$164 million in hedge losses, a drag that disappeared once the program ended on June 30. First Quantum realized US$6.37 per pound of copper, up from US$5.34.
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Operating cash flow climbed to US$600 million from US$130 million. The company ended the quarter with US$781 million in cash, while net debt fell by US$98 million to US$5.31 billion after US$171 million in debt repayments. Total liquidity stood at US$2.13 billion.
Copper production rose 8% to 108,959 tonnes. Most of the gain came from Cobre Panamá, where stockpile processing produced 13,229 tonnes after all three trains were brought online, compared with 3,216 tonnes in the prior quarter. Kansanshi contributed 45,843 tonnes, while Sentinel slipped to 48,816 tonnes on lower grades. Gold output increased to 47,095 ounces, and nickel production fell 13% to 9,831 tonnes.
C1 cash costs edged up to US$2.59 per pound from US$2.54, reflecting the higher cost tonnes from Panama. Excluding Cobre Panamá, C1 costs declined to US$2.40. All-in sustaining costs were US$4.30 per pound, leaving a healthy margin against realized prices.
Guidance is where the quarter turns less tidy. Copper guidance was narrowed to 405,000 to 435,000 tonnes from 405,000 to 475,000 tonnes, with the company citing weaker grades at Sentinel and Kansanshi. With about 305,900 tonnes produced through nine months, First Quantum needs roughly 99,000 tonnes in the fourth quarter to reach the bottom of the range.
C1 guidance rose to US$2.50 to US$2.65 per pound, up from US$2.15 to US$2.40, on elevated fuel prices and a strong Zambian kwacha. AISC guidance moved to US$4.10 to US$4.25 per pound, driven largely by higher royalties. Gold guidance was trimmed to 150,000 to 170,000 ounces, while nickel guidance was raised to 40,000 to 45,000 tonnes.
First Quantum Minerals last traded at $35.89 on the TSX.
