First Quantum Minerals’ profits increases by 30 per cent

First Quantum Minerals’ profits increases by 30 per cent

First Quantum Minerals Ltd. Chairman and CEO Philip Pascall

First Quantum Minerals’ profits increased by more than 30% at its various operations during the last three months ending September 30th 2011 compared to a year earlier although production of gold decreased at its Zambian operations.

According to the report, the company’s net profits from production and sale of its base metals that included copper were USD 195.5 million at the end of three months on September 30th 2011. This was after the company paid USD 127.1 million in income taxes from its gross earnings of USD 322.6 million.

However production of gold at its Kansanshi mine operation in north western Zambia was 9% lower than in quarter three a year earlier chiefly on account of grades decreasing proportionately with the decreased copper grades in quarter three this year.

Kansanshi’s cash cost of production increased 43% over quarter three in 2010 on account of the impact of lower grades and recoveries in quarter three this year. The company added in its report that the total processing costs were also higher as a result of increased input costs for acid, oil based consumables and costs incurred during circuit reconfiguration.

The gold credit in the Q3 this year benefited from an increased realized gold price Kansanshi’s gross profit was 10% higher than quarter three last year because of higher sales volumes and realized prices in the current period, offset partially by higher production costs.

On the future of the company, First Quantum stated that efforts will continue to focus on pit development in quarter four of this year utilizing the increased mine fleet and an additional mine contractor.

Available sulphide ore will remain low during Q4 2011 with grade increasing gradually towards the end of 2011. Cut backs in both pits are expected to open up access to higher grade sulphide ore in 2012 and allow for continued pit development as required for the plant expansion. The additional flotation capacity installed in the mixed circuit will allow for recovery rates to be maintained at significantly increased throughput volumes into 2012.

Oxide ore availability is expected to remain sound, however domestic acid supply will influence grade processed and total cathode produced into 2012. All four of the Company’s acid plants are now operating and a fifth acid plant is planned for construction and commissioning by the end of second quarter in 2012 to reduce the impact of acid supply shortages on Kansanshi’s operational flexibility and oxide circuit production.

The ongoing program of advanced grade control drilling will enhance the mine planning performance on the complex ore body and with the increased mining fleet will improve the flexibility of the mine to deliver the various ore-types to the plant.

Gold production is expected to improve as gravity gold extraction capacity has been amended to focus on potential gains from oxide ore versus the recently reduced sulphide treatment rate and ore grade. The Zambian government, through its subsidiary, Zambia Consolidated Copper Mines Investment Holdings has 20 percent stake in Kansanshi mine, one of the First Quantum Minerals’ units it operates worldwide. The company holds 80 percent in the Zambian operations.

(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)

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