anada-based copper and gold miner First Quantum has lowered its guidance for 2020 by 75 000 t of copper and 30 000 oz of gold, citing a reduction in production expectations at the Cobre Panama mine, which was temporarily idled after some workers contracted Covid-19.
The all-in sustaining cost guidance range has been reduced by $0.05/lb, to between 1.65/lb and $1.80/lb and the upper-end of the C1 cash cost guidance has also been lowered by $0.05/lb to between $1.20/lb and $1.35/lb.
The capital expenditure guidance has been lowered by $175-million to $675-million.
The Healthy Ministry of Panama on April 6 ordered the temporary suspension of labour activities at Cobre Panama, as a sanitary control measure owing to Covid-19. The mine was placed onto preservation and safe mode on April 7 and will remain in that state until the health authorities deem quarantine conditions appropriate.
It is costing First Quantum between $4-million and $6-million a week to keep Cobre Panama suspended.
Operations in Zambia are continuing to operate and although the South African and Zimbabwean borders have been impacted by Covid-19 restrictions, First Quantum said it was managing its exports through alternate routes.
In Spain, where Las Cruces were shut down on March 30 to comply with the Spanish government’s direction on Covid-19, operations resumed on April 13 after restrictions on non-essential services were eased. Las Cruces’ production guidance remains unchanged.
“We have reduced our operating costs and capital spending to deal with the current environment and have hedges in place to mitigate the uncertainty of the copper price. With the support of our banking group, we have improved our flexibility and liquidity. We will continue to make the changes necessary to deal with this global crisis,” said chairperson and CEO Philip Pascall.
First Quantum increased its production from 136 969 t in the first quarter of 2019 to 195 285 t in the first quarter of 2020, at an AISC of 1.64/lb and a C1 cash cost of $2.19. Production was bolstered by a 56 240 t contribution from the Cobre Panama mine.
The miner’s gold production increased to 68 788 oz in the quarter, from 49 357 oz in the prior-year period.
Sales revenue for the quarter jumped 38% year-on-year to $1.18-billion. First Quantum realised a copper price of $2.56/lb, which was 8% lower than the same period of 2019. The LME average copper price fell by 9% in the quarter, on the economic fallout of Covid-19.
First Quantum posted a comparative loss of $79-million, or $0.11 a share, a net loss of $62-million, or $0.09 a share, and cash flows from operating activities of $473-million, or $0.69 a share.
“The Covid-19 pandemic has brought unprecedented challenges to communities, industries and the global economy. Our priority continues to be the health and safety of all of our employees and the communities where we work. We are managing the restrictions and protocols implemented in each country where we operate to assist in the protection of all and particularly those most vulnerable,” said Pascall.