In contrast to many of its competitors, Canadian miner First Quantum has decided to maintain its 2022 cost projection despite inflationary pressures and decreased output from its mines in Zambia.
Despite second-quarter cash expenses exceeding the upper limit of the yearly guidance, the business continues to predict cash costs of C$1.45/lb to C$1.60/lb for the entire year.
First Quantum reported a $0.13/lb quarter-on-quarter increase in C1 cash expenses to $1.74/lb during the June quarter as freight costs and inflation drove up the cost of consumables like explosives, gasoline, and steel.
C1 cash costs were also impacted by lower production in Zambia, where the output from the Kansanshi and Sentinel mines continued to be affected by lower grades.
Overall, however, First Quantum’s production increased by 6% quarter-on-quarter to 192 668 t, which the miner attributed to record performances at Cobre Panama.
The total copper production guidance of 790 000 t to 855 000 t and total gold production guidance of 285 000 oz to 310 000 oz remains unchanged. Kansanshi and Sentinel are tracking towards the lower end of their respective guidance ranges.
Second-quarter sales volumes were about 5 000 t lower than in the preceding quarter at 187 642 t, owing to global logistical challenges and flooding in parts of South Africa that affected the Port of Durban.
“While the restrictions from the global pandemic have largely eased, the macro environment has become more challenging due to a combination of continued high inflation and the emerging global economic slowdown,” commented CEO Tristan Pascall, adding that the group’s focus in these uncertain times would be on driving consistent operational performance, successful execution of its brownfield projects and capital investment discipline.
“It is the determination and commitment of our workforce that has enabled us to surmount the unprecedented obstacles that we have faced in recent years, meaning that we can tackle these new challenges with confidence. I thank the team for their continued commitment and efforts.”