First Quantum returned to profit in Q2 as Cobre Panama restarted output. The hedge program ended, leaving the miner fully exposed to copper prices. Production rose 4%.
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First Quantum Minerals swung to a net profit in the second quarter as it restarted production at its long-idled Cobre Panama mine and boosted copper output elsewhere.
The Toronto-based miner reported net earnings of $136 million, or $0.16 a share, for the three months ended June 30, compared with a net loss of $75 million a year earlier. Adjusted for one-time items, the company posted an adjusted loss of $106 million, or $0.13 a share.
Revenue rose to $1.16 billion from $1.02 billion a year earlier, helped by higher copper sales volumes and stronger realized prices.
The quarter included a $164 million loss from the company's sales hedge program, which ended on June 30. First Quantum now has no derivative contracts outstanding and is fully exposed to copper prices again.
Total copper production reached 100,487 tonnes, up 4% from the first quarter. The increase came mainly from higher output at the Sentinel mine in Zambia and the first output from Cobre Panama since the mine was idled in late 2023. Cobre Panama produced 3,216 tonnes of copper in May and June after the company began processing stockpiled ore. The restart was faster than expected, with one of three processing circuits commissioned during the quarter.
Chief Executive Tristan Pascall said the company is well positioned for improved production in the second half. “Alongside stronger production, this will position the company for improved free cash flow generation at current copper prices,” he said in a statement.
The Cobre Panama restart is a turning point for First Quantum, which lost access to the mine in November 2023 after Panama's government ordered it closed amid a dispute over the mining contract. The company has been working to resume operations under a new framework. Pascall noted that a final audit report released in the quarter found the mine broadly compliant, with an overall rating of 87.7%. He said First Quantum is ready to engage with the government to reach a durable resolution.
Copper sales volumes totaled 93,300 tonnes, roughly 7,200 tonnes below production because of timing differences. There were no sales from Cobre Panama in the quarter.
Copper C1 cash cost, excluding Cobre Panama, fell $0.03 from the first quarter to $2.48 a pound, helped by higher output at Sentinel and higher capitalized stripping costs. Including Cobre Panama, cash cost rose $0.03 to $2.54 a pound.
EBITDA came in at $400 million, which included $51 million in negative contributions from Cobre Panama related to pre-production costs.
The company sold its Çayeli mine in Turkey on April 30, which reduced quarterly output by about 4,000 tonnes.
First Quantum ended the quarter with $1.2 billion in cash and equivalents.
Looking ahead, the company expects stronger production in the second half as the S3 circuit at Kansanshi continues to ramp up and Sentinel completes debottlenecking work. Cobre Panama is expected to produce more concentrate as the remaining two circuits come online.
Pascall said the company is now fully exposed to copper prices after the hedge program expired. Copper futures on the London Metal Exchange averaged about $9,200 a tonne in the quarter, up from $8,500 a year earlier.
The stock rose 3.2% in Toronto trading Tuesday to C$24.15.
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