Vancouver — Increased mine output and soaring metal prices pushed copper producer
Those numbers were up significantly from earnings of US$4.1 million on revenue of US$26.3 million in the corresponding quarter a year ago.
Total quarterly copper production was 29,909 tonnes (66 million lbs.), up from the 19,525 tonnes (43 million lbs.) in the preceding quarter and the 9,585 tonnes (21 million lbs.) during the corresponding period of 2004.
The mid-April launch of production from the 80%-owned Kansanshi mine in Zambia contributed heavily to First Quantum’s strong performance, surpassing output from the Bwana-Lonshi operation.
The company realized a copper price of US$1.42 per lb. during the quarter versus cash costs of US60 per lb. and total costs of US80 per lb.
Operations at Kansanshi continued to be hampered by the worldwide tire shortage for heavy equipment. Earlier this year, as many as half of the mine’s 100-tonne haul trucks were without complete sets of tires. During the second quarter, the impact was lessened by deferring some of the waste stripping until later this year.
A final report from engineering studies on First Quantum’s Frontier project in the Democratic Republic of Congo is expected in the third quarter. An independent estimate in mid-2004 reviewed a resource of 87.6 million tonnes grading 1.17% copper, with a high-grade cobalt resource of 5.6 million tonnes of 0.169% cobalt.
The company’s Guelb Moghrein copper-gold deposit in Mauritania is undergoing open-pit development and is slated to begin production in early-2006. Initial production is expected to be around 30,000 tonnes (66 million lbs.) copper and 50,000 oz. gold annually.
With spot copper prices lately exceeding US$1.70 per lb., shares of First Quantum recently touched to an all-time high of more than $27 per share, to boost its market capitalization to more than $1.6 billion.
Meanwhile, a robust copper market and a financing plan for its Lumwana copper project in Zambia pushed shares in
In all, a group of European, African and Australian commercial lenders, developmental finance institutions, and export credit agencies have agreed to provide US$305 million in loans for the development and construction of Lumwana.
That includes US$255 million of the project’s US$285 million senior financing requirements, and another US$50 million subordinated loan. The company is in talks aimed at securing the balance of the proposed senior facility. The documentation and diligence process is under way.
Equinox will also provide additional equity to advance the project.
Lumwana is expected to produce an average of 125,000 tonnes of copper per year over 18 years. At last count, measured and indicated resources totalled 269 million tonnes running 0.8% copper. First production is slated for 2007.
Equinox recently inked a letter of intent to sell a portion of Lumwana’s copper concentrate to Namibian-based Ongopolo Mining & Processing. Earlier this summer, Equinox signed a similar letter with South African copper producer
Palabora, which operates a mine and smelter in the eastern part of the Northern province, is seeking smelter feed after converting to a 30,000-tonne-per-day underground mine in 2003 from an 81,000-tonne-per-day open-pit operation.
Equinox hopes to wrap up both deals by the end of the year.
In the boardroom, Equinox recently appointed Sir Sam Jonah as non-executive chairman.
Be the first to comment on "First Quantum, Equinox score in Zambia"