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A minimum 70,000 meter drill program is now planned for 2025.
TORONTO, July 30 (Reuters) – Canadian base metal miner First Quantum Minerals Ltd said on Monday it had extended its hedging program for copper sales, as trade war worries push prices lower despite “excess demand” for its production.
The miner, whose second-quarter results included a $45 million loss from copper hedging, said it aims to ensure a level of cash flow for its $6.3 billion Cobre Panama project ahead of commercial production.
The Toronto-based company said it has 25,000 tonnes of copper under forward sales contracts, at an average price of $3.15 per pound, maturing out to December 2018. A further 98,000 tonnes, at average prices of $3.04-$3.45 per pound, mature out to June 2019.
“We continue to sell all of our production into a market where there is excess demand,” said Chief Executive Philip Pascall in a statement.
“We continue to sell all of our production into a market where there is excess demand.”
“Nevertheless, in light of current conditions, we think it is prudent to extend our copper sales hedge program on a limited basis. The intent is to ensure a certain level of cash flow during Cobre Panama’s commissioning and ramp-up phases that precede commercial operations.”
Cobre Panama, with proven reserves of 3.18 billion tonnes and a 40-year mine life, is 80 percent owned by First Quantum and 20 percent owned by Korea Panama Mining Corp, a partnership of Korea Resources Corp and LS-Nikko Copper.
Mine commissioning is starting this year with operations ramping up over 2019. In 2020, the mine is expected to process 85 million tonnes of ore.
First Quantum, primarily a copper miner that also produces nickel and gold, reported second-quarter earnings of $128 million, or 19 cents per share, slightly lagging analysts’ expectations for a profit of 21 cents a share, on average, according to Thomson Reuters I/B/E/S.
Copper prices are down about 15 percent from a mid-June peak as uncertainty over tariffs and trade wars rattles markets.
First Quantum also said it had filed documents with the Zambia Revenue Authority challenging an $8 billion tax fine imposed in March, while it continues to work with the agency.
(Reporting by Susan Taylor)
