11th Nov 2015 12:00
LONDON (Alliance News) - First Quantum Minerals Ltd on Wednesday said it has lowered its production guidance for the full year and said it swung to a substantial loss in the first nine months of 2015.
The miner said it will now produce between 380,000 to 400,000 tonnes of copper in 2015 compared to its original guidance of 410,000 to 440,000 tonnes. Full-year nickel production will now be in the range of 33,000 to 37,000 tonnes compared to its previous target of 32,000 to 40,000 tonnes.
Gold guidance for the full year was also reduced to 210,000 to 231,000 ounces from First Quantum's previous guidance to produce 218,000 to 247,000 ounces. The miner also lowered its guidance for its other commodities, specifically zinc, platinum and palladium.
However, First Quantum also is expecting its cash cost for copper for the full year to fall to between USD1.20 and USD1.35 per pound, compared to its previous forecast range of USD1.30 to USD1.55 per pound, whilst nickel costs will be between USD4.40 and USD4.70 per pound, lower than its original estimates of USD4.80 to USD5.30 per pound.
Capital expenditure guidance for the year was retained at USD1.40 billion, before falling to USD1.20 billion in 2016.
The miner said revenue in the third quarter of 2015 fell to USD673.0 million from USD885.0 million a year earlier, leading it to swing to a net loss of USD427.0 million compared to USD121.0 million of net earnings a year earlier.
Revenue fell mainly as a result of lower copper, nickel and gold prices as a lift in production and sales from all of three of First Quantum's divisions failed to offset those price falls.
Copper production in the third quarter rose to 107,485 tonnes from 101,553 tonnes a year ago whilst sales increased to 104,613 tonnes from 99,132 tonnes. It managed to reduce its cost of production but not enough to offset average copper prices in the period falling to USD2.28 per pound of copper from USD3.11 a year earlier.
Nickel production in the quarter fell to 9,955 tonnes from 11,884 tonnes, but sales remained broadly flat year-on-year at 10,733 tonnes. Again, it managed to reduce its cost of production but nickel prices almost halved year-on-year to USD4.81 per pound from USD8.47.
Third quarter gold production rose to 56,887 ounces from 51,446 ounces, with sales soaring to 63,411 ounces from 52,235 ounces. The company did not provide cost or pricing figures for its gold division, but gold prices have fallen throughout 2015.
Rounding up its results for the first nine months of 2015 as a whole, First Quantum swung to a USD610.0 million net loss from USD382.0 million of net earnings a year earlier, with revenue falling to USD1.93 billion from USD2.72 billion.
Copper production was down to 308,036 tonnes in the nine months from 322,479 tonnes a year earlier, with sales dropping to 284,180 tonnes from 316,367 tonnes. Cost of production rose over the nine month period, with average copper prices decreasing to USD2.49 per pound from USD3.06 per pound.
Nickel production was down to 25,282 tonnes in the nine months from 35,945 tonnes with sales falling to 25,160 tonnes from 35,560 tonnes. Costs for the nine month period were up from a year ago and nickel prices fell to USD5.61 per pound from USD7.71 per pound a year ago.
Gold production also was down to 166,394 ounces from 172,333 ounces with sales falling to 164,095 ounces from 165,496 ounces.
First Quantum shares were down 0.5% to 314.75 pence per share on Wednesday.
By Joshua Warner; [email protected]; @JoshAlliance
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