First Quantum Minerals (FM) Q2 2024 earnings summary

Executive summary

• Q2 2024 copper production rose 2% sequentially to 102,709 tonnes, driven by Kansanshi's higher output and solid operational performance in Zambia; Sentinel and Enterprise also performed well.

• EBITDA increased 86% quarter-over-quarter to $336 million, with net loss improving to $46 million, reflecting higher copper and gold prices.

• Ravensthorpe was placed on care and maintenance in May 2024 due to high costs, but nickel guidance maintained at the lower end; Enterprise declared commercial production as of June 1, 2024.

• Shareholder Rights Agreement signed with Jiangxi Copper, formalizing governance and reducing uncertainty.

• Cobre Panamá remains offline, with arbitration proceedings ongoing and environmental audit announced by Panama's new government.

Financial highlights

• Q2 copper production: 102,709 tonnes, up 2% sequentially; Kansanshi up 10,034 tonnes to 41,507 tonnes, Sentinel down 8,630 tonnes to 53,595 tonnes.

• Revenue reached $1.2 billion, up 19% quarter-over-quarter, driven by a 16% increase in realized copper prices to $4.39/lb.

• EBITDA was $336 million, up $156 million from Q1 2024; net loss improved to $46 million, adjusted loss $13 million.

• C1 cash costs averaged $1.73/lb, a 14% improvement quarter-over-quarter, aided by gold by-product credits.

• Net debt rose by $160 million to $5.44 billion, mainly due to S3 Expansion capex; liquidity at $1.6 billion.

Outlook and guidance

• 2024 copper and gold production guidance unchanged at 370,000–420,000 tonnes; nickel guidance narrowed to 17,000–20,000 tonnes due to Ravensthorpe care and maintenance.

• Kansanshi guidance: 130,000–150,000 tonnes copper; Sentinel: 220,000–250,000 tonnes copper.

• S3 Expansion at Kansanshi on track for mid-2025 production start, with major capex in 2024.

• Copper hedging program in place to protect downside price risk through 2025.

• Power supply in Zambia being managed through regional imports; no operational interruptions expected.