First quarter production from mid-tier copper and gold producer, First Quantum Minerals (LSE: FQM & TSX: FM) rose sharply as the company continued to deliver on its stated goals.
Total copper production rose to 89,440 tonnes, up from 75,616 tonnes in Q1 2008. Gold production jumped to 50,425 ounces from 16, 495 ounces on Q1 2008 as the commissioning of gold plants at the Guelb Moghrein and Kansanshi Mines started to feed through.
While production did rise, net sales fell sharply, largely thanks to a substantially weaker copper price and hedging costs. Total net sales were US$268 million versus $511 million in Q1 2008. Net profit slumped to just US$10.9 million compared to $182 million in Q1 2008. First quarter earnings per share (‘EPS’) was 16 cents (Q1 2008 268 cents). Cash flow from operations came in at US$85 million, while total debt climbed to $424.7 million (Q1 2008 $390.3 million) and cash reserves fell sharply to US$123.1 million (Q1 2008 $269.6 million).
First Quantum also reported a 23% reduction in the average cash unit cost of production compared to Q4 2008 due to cost saving initiatives, lower process input costs and higher gold credits.
Looking ahead, the DRC focused producer maintained its full year production forecast of 240,000 ounces of gold and 380,000 tonnes of copper at a targeted average cost of 80 cents per pound.
“Average C1 costs for 2009 remains targeted to be $0.80 per pound with significant cost reductions now flowing from cost saving initiatives and declining process input costs; however, this target remains subject to the availability of Zambian smelter capacity. There is a risk that if smelter capacity remains constrained, the Company would have to export more concentrate at higher costs,” the company added.