First Quantum Yields Positive Earnings In Q4 2024 Despite Cobre Panama Hole
First Quantum Minerals (TSX: FM) has announced its fourth quarter 2024 earnings, toplined by sales revenue of $1.26 billion in Q4, a marginal increase from $1.22 billion in Q4 2023.
First Quantum saw a year-on-year rise in net realized copper prices from $3.62 per pound to $4.17 per pound, along with a modestly lower per-pound cash cost, which fell to $1.68 per pound from $1.82 per pound in Q4 2023.
Gross profit surged from $87 million to $405 million dollars during the fourth quarter. This improvement reflected higher realized metal prices, despite lower production volumes caused primarily by the suspension of operations at Cobre Panamá. However, on a sequential basis compared to the third quarter of 2024, gross profit declined by $51 million, and a lower realized copper price contributed to a decrease in net earnings from $108 million to $99 million quarter over quarter.
Net earnings came in at $99 million, or $0.12 per share, an improvement compared to the $1.45 billion loss in the same period last year. Quarterly EBITDA ended at $455 million, an increase from $273 million in the prior-year quarter.
Net cash flow from operating activities reached $583 million in the fourth quarter, higher than the outflow of $185 million reported in Q4 2023, aided by the continued drawdown of certain copper stockpiles at Kansanshi. Free cash flow benefited from the lack of production-related costs at Cobre Panamá, although the ongoing suspension prevented the mine from generating any revenue in the quarter.
Production output for copper totaled 111,602 tonnes in the fourth quarter, down from 160,200 tonnes in the same quarter last year, largely because of the zero contribution from Cobre Panamá, which produced over 60,000 tonnes last year before operations were suspended in November of that year. Kansanshi reported 48,139 tonnes, higher than the 31,887 tonnes achieved a year ago due to favorable feed grades, even though the latest quarter included scheduled maintenance shutdowns. Sentinel added 56,560 tonnes, down from 59,964 tonnes year on year.
Nickel output at Enterprise dropped to 3,720 tonnes from 7,313 tonnes in fourth-quarter 2023, as the operation was temporarily reconfigured to process copper ores from Sentinel for part of December.
Gold production slipped from 53,325 ounces in Q4 2023 to 38,784 ounces this quarter, reflecting the loss of volume from Cobre Panamá, which alone had contributed nearly 31,000 ounces a year ago.
With respect to Cobre Panamá specifically, the Preservation and Safe Management Program remained unapproved by the Panamanian authorities. First Quantum continues to incur approximately $13 million per month to maintain and preserve assets, comply with environmental obligations, and engage in ongoing public outreach across Panama. The company reiterated that it does not view arbitration as a preferred solution, despite the Government of Panama’s request for an extension of its submission timeline and the rescheduling of the final hearing to February 2026.
First Quantum’s 2025 production guidance remains at 380,000 to 440,000 tonnes of copper, 135,000 to 155,000 ounces of gold and between 15,000 and 25,000 contained tonnes of nickel. The company continues to forecast that Cobre Panamá will resume operations once the dispute is resolved, which could alter the overall guidance.
Capital expenditure targets for project, sustaining, and stripping activities in 2025 remain between $1.3 billion and $1.45 billion, and management is optimistic that the Kansanshi S3 Expansion and future ramp-ups at Sentinel and Enterprise can improve operating margins and further deleverage the balance sheet, particularly if copper prices remain near or above the $4.00 per pound mark.
First Quantum Minerals last traded at $18.83 on the TSX.
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