Hedge funds slash bullish wagers on gold over Trump election win
The precious metal has fallen about 8% from a record high on Oct. 31, with losses accelerating after Trump’s election victory last week.
First Quantum Minerals (TSX:FM) gained more than 2% on Wednesday after the company reported full year results that included a $1.2 billion one-time payment related to the nationalization of its Frontier copper mine in the Democratic Republic of Congo.
The compensation payment from London-listed miner ENRC which picked up Frontier on the cheap in 2011 after the government of the central African nation confiscated the prize copper mine – probably worth much more than $1.2 billion now – boosted First Quantum’s pre-tax profits to $2.2 billion from $1.1 billion in 2011.
Strip out the once-off item however and gross mining profits show a 15% decline on the back of higher costs and a 9% decline in realized copper prices.
Production rose strongly however with copper output up 16% thanks in part to a new annual production record at the flagship Kansanshi mine in Zambia – the largest copper mine in Africa.
Gold output at 201,942 ounces was 15% higher than 2011.
The company’s full year results also included the first contributions from the gold-copper-nickel Kevitsa mine in Finland which achieved commercial production in August.
The company also brought the Ravensthorpe nickel mine in Australia to full production.
First Quantum, worth $8.8 billion on the Toronto Stock Exchange, has a $5.1 billion hostile offer for smaller Canadian rival Inmet (TSX:IMN) on the table which it has extended to March 11.
At stake is Inmet’s $6.2 billion copper-gold porphyry Cobre Panama project, one of the largest undeveloped deposits in the world containing more than 32 billion pounds of copper, 9 million ounces of gold and 168 million ounces of silver in measured and indicated resources.
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