FQM.L Share News (FQM)

Copper and gold miner First Quantum Minerals has reported a sharp rise in sales in the nine months to September 2010 thanks to a higher realised copper price. Sales grew from $1.22bn to $1.69bn. Gold revenues are less than 10% of the group total. The closure of its Frontier operations in August meant that First Quantum produced and sold less copper than in the same period last year. Production fell from 275,412 tonnes to 247,097 tonnes, while sales declined from 268,410 tonnes to 235,270 tonnes. Kanshahi in Zambia produces the majority of the copper. The realised selling price jumped from $1.88/lb to $2.84/lb. Full year copper production guidance has been lowered to 322,000 tonnes because of the shutting down of Frontier. Average production cost will be $1.17/lb.The gold production target is 195,000 ounces and nearly 143,000 ounces was produced in the first nine months of the year. The forced shut down of Frontier by the Congo government has meant that First Quantum has written down its value and incurred closure costs of $243.8m net of tax.The Kolwezi copper and cobalt project was also expropriated by the government. Adding the impairment charge for Kolwezi, which was taken in the second quarter, and other small charges the total impairment charge is more than $1bn. First Quantum is trying to obtain compensation to cover this cost. First Quantum has raised C$650m from the sale of its 16% stake in Equinox Minerals. There was cash in the bank of $632.8m at the end of September 2010, while total debt, including convertible bonds, is $656.9m.