First Quantum, the African copper-gold miner, now expanding into nickel beyond the continent, reported a sharp turnaround in its fortunes for 2009, bar the debacle at Kolwezi tailings in the Democratic Republic of the Congo, which appears to have turned into a farce of international proportions. USD m 2009 2008 2007 2006 2005 Operating cash flow 765.4 540.0 512.0 201.8 Capital expenditure -361.8 -460.3 -319.6 -302.1 -186.7 Other (net) -4.8 -304.7 -283.2 -61.6 21.9 Net 196.0 0.4 -62.8 148.3 37.0 Free cash flow Operating cash flow 562.6 765.4 540.0 512.0 201.8 Capital expenditure -361.8 -460.3 -319.6 -302.1 -186.7 Free cash flow 200.8 305.1 220.4 209.9 15.1 Debt (raised) repaid -279.7 -18.2 -69.3 -55.5 -28.2 Equity raised 279.1 5.0 11.5 3.5 2.2 Cash on hand 919.2 176.2 200.0 249.5 82.9 Debt -630.0 -385.7 -360.8 -294.9 -236.1 Net debt 289.2 -209.5 -160.8 -45.4 -153.2 Dividends -5.8 -53.0 -51.7 -20.2 -4.0 Selected copper stocks Stock From From Value price high* low* USD bn USD 82.18 -9.2% 139.2% 35.384 USD 31.51 -14.8% 110.1% 26.784 GBP 10.20 -3.2% 126.3% 15.241 PLN 101.80 -8.6% 139.5% 7.201 CNY 34.04 -33.4% 111.3% 8.155 USD 18.14 -9.8% 234.7% 15.243 CNY 24.86 -35.7% 87.9% 4.577 CNY 18.01 -31.3% 89.6% 3.415 CAD 90.30 -10.0% 177.8% 7.156 CAD 3.85 -17.9% 146.8% 2.682 PHP 13.25 -33.8% 212.5% 1.423 CAD 2.14 -22.5% 111.9% 0.328 CAD 0.75 -39.2% 236.8% 1.409 CAD 17.49 -5.8% 315.4% 1.714 AUD 0.52 -20.0% 197.1% 1.394 ZAR 4.20 -24.3% 228.1% 0.428 ZAR 109.90 -4.4% 138.9% 0.720 CAD 2.81 -18.8% 510.9% 0.539 CAD 4.04 -4.5% 386.7% 0.598 CAD 9.50 -7.6% 59.1% 0.873 CAD 5.19 -11.1% 359.3% 0.940 AUD 0.93 -43.6% 708.7% 0.266 CAD 8.51 -0.6% 71.9% 0.631 CAD 5.13 -10.8% 108.5% 0.605 AUD 4.68 -29.0% 153.0% 0.587 CAD 0.65 -1.5% 364.3% 0.234 CAD 0.77 -20.6% 234.8% 0.109 AUD 0.08 -35.8% 67.4% 0.006 CAD 1.11 -43.9% 516.7% 0.140 AUD 0.37 -28.8% 236.4% 0.163 AUD 0.42 -40.8% 35.5% 0.031 CAD 1.08 -10.0% 120.4% 0.112 AUD 0.36 -23.7% 222.7% 0.475 CAD 0.70 -17.6% 145.6% 0.102 CAD 4.62 -11.0% 148.4% 1.769 AUD 0.25 -21.9% 177.8% 0.093 CAD 0.46 -20.2% 236.0% 0.036 GBP 0.06 -61.3% 757.1% 0.075 AUD 0.11 -54.2% 120.0% 0.050 CAD 0.20 -54.0% 25.0% 0.011 AUD 0.24 -31.4% 192.7% 0.111 CAD 0.53 -27.4% 360.9% 0.047 AUD 0.77 -9.5% 446.4% 0.162 CAD 0.98 -34.2% 84.9% 0.069 AUD 0.13 -50.0% 120.3% 0.009 CAD 2.31 -42.1% 1148.6% 0.219 CAD 2.51 -35.5% 248.6% 0.368 GBP 0.04 -71.0% 61.1% 0.016 CAD 0.08 -54.3% 45.5% 0.005 CAD 22.73 -36.0% 8.7% 0.843 USD 2.69 -25.5% 249.4% 0.238 GBP 0.35 -8.6% 239.0% 0.031 CAD 2.30 -12.5% 94.9% 0.181 CAD 0.82 -25.5% 272.7% 0.041 CAD 3.07 -7.0% 119.3% 0.596 CAD 16.55 -2.2% 652.3% 0.560 CAD 6.75 -20.1% 35.0% 0.076 CAD 3.28 -8.1% 1582.1% 0.146 AUD 0.03 -43.2% 316.7% 0.012 AUD 0.20 -20.4% 81.4% 0.034 CAD 1.20 -24.5% 471.4% 0.083 CAD 1.90 -12.8% 955.6% 0.111 PHP 13.50 -26.0% 121.3% 0.028 CAD 2.19 -8.0% 461.5% 0.330 GBP 0.34 -16.5% 426.9% 0.024 CAD 0.93 -20.5% 49.0% 0.048 CAD 0.13 -35.9% 212.5% 0.010 CAD 0.15 -39.6% 52.6% 0.010 CAD 1.74 -22.7% 443.8% 0.136 Averages/total -16.2% 170.7% 146.244 Weighted averages -15.1% 140.3% Diversifieds with copper Stock From From Value price high* low* USD bn GBP 21.84 -2.9% 72.5% 204.291 USD 30.42 -4.8% 135.6% 160.883 GBP 36.89 -2.5% 144.7% 131.108 GBP 26.79 -9.6% 148.5% 53.445 GBP 11.58 -11.1% 230.2% 51.561 USD 16.80 -2.4% 211.1% 32.025 USD 40.68 -2.9% 962.1% 23.585 GBP 27.17 -8.4% 387.8% 11.159 CNY 13.79 -38.5% 58.3% 1.291 CAD 5.13 -2.5% 375.0% 2.928 GBP 14.90 -4.7% 403.4% 12.087 CAD 16.32 -11.7% 204.5% 6.845 CAD 59.19 -24.1% 101.9% 3.270 CAD 3.17 -14.3% 124.8% 0.907 AUD 1.14 -14.3% 152.2% 3.239 INR 169.55 -5.7% 310.0% 7.116 GBP 0.10 -42.3% 230.6% 0.062 GBP 0.12 -27.0% 217.2% 0.059 CAD 13.80 -11.7% 224.7% 3.717 CNY 4.18 -25.0% 120.0% 0.409 AUD 3.36 -20.8% 646.7% 0.985 CAD 0.96 -4.0% 68.4% 0.249 AUD 2.10 -18.9% 54.4% 0.636 CAD 0.30 -22.4% 268.8% 0.019 GBP 0.02 -42.9% 20.0% 0.006 CAD 0.52 -16.1% 55.2% 0.173 AUD 3.64 -17.1% 6286.0% 0.404 AUD 2.25 -8.2% 845.4% 0.166 CAD 1.12 -8.2% 86.7% 0.127 AUD 1.29 -40.2% 54.9% 0.301 AUD 0.26 -37.0% 372.2% 0.154 AUD 0.83 -37.1% 233.3% 0.512 Averages/total -16.9% 431.5% 713.719 Weighted averages -5.1% 133.2% * 12-month
Jungle tragedy and comedy aside, First Quantum produced 374,000 tonnes of copper in 2009, and is anticipating 385,000 tonnes this year. Gold production for 2009 was 193,000 ounces, with 240,000 ounces anticipated this year.
First Quantum's group copper production has grown from 29,500 tonnes in 2003, all from Bwana (Zambia) and Lonshi (just across the border in the DRC). Group gold production started out at a modest 14,300 ounces in 2005. The group owns and operates 80% of the Kansanshi copper-gold mine in Zambia ("a foundation asset"), 95% of Frontier in the DRC, and 80% of the Guelb Moghrein gold-copper mine in Mauritania.
First Quantum is expanding in Africa, and also moving offshore. On 23 November 2009, First Quantum announced it would acquire London-listed Kiwara for USD 260m, mainly for its controlling interest in mineral prospecting licence 267, covering 2,850 km² on the periphery of the Kabombo Dome in Zambia.
On 30 November, First Quantum announced the go ahead for its Kevitsa, Finland project, with a capital cost of USD 400m and first production anticipated for 2012. The mine will produce a cocktail of concentrates, with metals that include copper and gold, led by nickel.
On 8 December First Quantum announced the USD 340m acquisition of Ravensthorpe, Australia from BHP Billiton. Ravensthorpe, approved in March 2004, was built at a cost of USD 2.1bn but operations were suspended in January 2009, following the precipitous decline in nickel prices, long among the most volatile of any commodity. From highs close to USD 25.00/lb in 2007, nickel fell to nearly USD 4.00/lb, and has since recovered to close on USD 10.00/lb.
First Quantum has commenced work at Ravensthorpe, modifying the crushing, conveying, stockpile and reclaim areas, and will continue work for about the next 12 months, followed by about six months of commissioning and ramp-up.
First Quantum expects Ravensthorpe's average annual production of nickel metal at about 39,000 tonnes for the first five years, after recommencement of operations, and an average annual production of 28,000 tonnes of nickel metal over the expected life of mine of 32 years. The total modification cost is estimated at about USD 150m.
First Quantum is distinguished as one of just a few miners that have kicked off in Africa and expanded outside the continent. The group started mining at Lonshi, just over the DRC border, in August 2001; a 36km laterite road was built to haul ore from Lonshi to Bwana Mkubwa, near Ndola. The Lonshi orebody was mined out during 2008, by which time First Quantum had made it into the major league.
As for the drama in the DRC, the carrying value of the Kolwezi tailings development project, or KMT, is USD 787m, being an initial acquisition cost of USD 388m, and capital expenditures, so far, of USD 399m. In a September 2009 announcement, First Quantum confirmed suspension of work at the 75%-complete Kolwezi tailings project, after it was shuttered by government agents.
On February 1 2010 First Quantum announced commencement of international arbitration by First Quantum and its partners in KMT, under the facilities of the International Chamber of Commerce, International Court of Arbitration, in Paris.
Source: market data; table compiled by Barry Sergeant and mineweb
Selasa, 16 Maret 2010
First Quantum raise standards
