First Quantum rides copper wave

Vancouver – Increased mine output and soaring metal prices pushed African copper producer First Quantum Minerals (FM-T) to record quarterly earnings.

The company posted net earnings of US$29 million or US47 per share for its second quarter on revenues of US$86.5 million. Comparatively, First Quantum booked earnings of US$4.1 million for Q2-2004 on revenues of US$26.3 million.

Total quarterly copper production was 29,909 tonnes (66 million pounds), up from the 19,525 tonnes (43 million pounds) in the preceding quarter and the 9,585 tonnes (21 million pounds) in the prior year’s second quarter.

The mid-April launch of production from the 80%-owned Kansanshi mine in Zambia contributed heavily to the strong quarterly performance, surpassing output from the Bwana-Lonshi operation.

The company realized a copper price of US$1.42 per pound over the quarter versus cash costs of US60 per pound and total costs of US80 per pound.

Kansanshi operations have continued to be impacted by the worldwide tire shortage for heavy equipment. Earlier this year, up to half of the mine’s 100-tonne haul trucks were unavailable due to the tire shortage. During the second quarter the impact on ore haulage was lessened but only by deferring some of the waste stripping until later this year.

A final report from engineering studies on the Frontier project, in the Democratic Republic of Congo (DRC), is anticipated in the third quarter. A mid-2004 independent resource estimate reviewed a 87.6-million tonne resource of 1.17% copper that contains a high-grade cobalt resource of 5.6 million tonnes grading 0.169% cobalt.

The Guelb Moghrein copper-gold deposit in Mauritania is undergoing open pit development with an anticipated start-up date of early-2006. Initial production is expected at around 30,000 tonnes (66 million pounds) of copper and 50,000 oz. of gold annually.

With spot copper prices recently exceeding US$1.70 per pound, shares of First Quantum have recently risen to an all time high of over $27.00 per share. Given its 61.5-million shares outstanding, the company posts a market capitalization of over $1.6 billion.