First Quantum spells out aims, challenges at LatAm mining projects

First Quantum Minerals is pushing ahead with its Cobre Panamá Expansion project, while political and community challenges weigh on progress at the company’s Argentine and Peruvian assets.

PANAMA EXPANSION

The Toronto-based company is on track with its Cobre Panamá Expansion, Tristan Pascall, who took up the role of COO in January, told the 2020 earnings call.

The investment will boost throughput from 85Mt/y to 100Mt/y, delivering higher production at the US$6.5bn Panamanian copper-gold asset.

“What we see now is we will meet that timetable in terms of delivering that 100Mt/y [throughput], we are confident in delivering that in 2023,” Pascall said.

Monthly ore milled rates at the mine averaged 6.2Mt in the last two months of 2020, and increased to 6.8Mt in January, the COO added.

In 2021, the company has budgeted US$150mn for expansionary capex at the Panama mine, Juliet Wall, general manager, finance, told the call.

This includes advancing development of the tailings management facility and sixth ball mill, she added.

COBRE PANAMÁ OUTPUT

First Quantum expects Cobre Panamá to produce 300,000-330,000t copper in 2021, up from 205,548t last year.

Operations were impacted by a COVID-19 suspension in April-July.

Production is forecast at 310,000-340,000t in 2022 and 330,000-360,000t the following year.

While figures for subsequent years have not been given, the company’s five-year plan at Cobre Panamá indicates some “very high levels” of output post-2023, Pascall told the call.

TACA TACA

At Taca Taca in Argentina, a maiden mineral reserve estimate filed in November showed over 7.7Mt contained copper, but an investment decision, planned for 2023-24, is likely to hinge on political concerns, Pascall told the call.

The estimate outlined potential open pit production over 32 years, peaking at 275,000t/y copper within the first 10 years.

“It is a good asset, the decision is all about the investment case into Argentina, and in that regard we have more work to do,” the COO said.

As mentioned in the reserve estimate, the company is working to secure assurances regarding the Argentine fiscal regime in advance of any construction decision.

Concerns over investing in Argentina have prompted the company to prioritize on brownfield projects, including the Cobre Panamá expansion, Pascall added.

HAQUIRA

The Haquira project in Peru is seen coming into development after Taca Taca due to community challenges, Pascall said.

The company has yet to start community resettlement programs planned at the asset.

“We are dealing with the various community groups in different areas and locations,” Pascall added.

First Quantum is also evaluating a number of exploration projects in the region, the COO said.

CAPEX BUDGETS

Companywide capex guidance for the year is US$950mn, comprising US$700mn for sustaining capital and other projects, and US$250mn for capitalized stripping.

The 2022 capex budget is unchanged, with spending rising to US$1.05bn, due to a US$100mn rise in sustaining and other projects spending.

RESULTS

First Quantum recorded a US$180mn net loss attributable to shareholders for 2020, compared to a net loss of US$57mn the previous year.

Revenue increased to US$5.2bn from US$4.1bn. Copper production was 778,911t, up from 702,148t.