UPDATE 1-First Quantum adjusted earnings rise on higher shipments

Mon May 6, 2013 6:20pm EDT
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TORONTO May 6 (Reuters) - Canadian base metal miner First Quantum Minerals Ltd reported a rise in adjusted earnings on Monday, helped by higher sales volumes and its recent acquisition of Inmet Mining Corp.

Copper sales rose as production increased 13,439 tonnes from a year earlier, to 79,308 tonnes, thanks largely to gains at the Kansanshi mine in Zambia, which is in the midst of an expansion. Nickel production and sales also rose.

The higher volumes more than offset lower prices. Higher by-product credits and lower processing costs cut the miner's copper cash costs.

Sales and earnings were also boosted by the Inmet deal, with 10 days of the miner's results included in the first quarter.

First Quantum clinched a C$5.1 billion hostile takeover of its smaller rival in March, winning access to the Cobre Panama project in Peru, one of the world's largest untapped copper deposits.

The company said its review of Cobre Panama, which started when the Inmet deal was completed, is expected to take between two and four months.

Inmet had pegged development costs at $6.2 billion, but First Quantum is betting that its hands-on approach to construction, procurement and supervision will help slash expenses.

It said several contracts have already been changed or canceled, and "a rationalization of the work force is currently under way."   Continued...