February 20, 2014 / 10:40 PM / 4 years ago

UPDATE 1-First Quantum profit down even as output rises, costs fall

VANCOUVER, Feb 20 (Reuters) - Canadian base metal miner First Quantum Minerals Ltd reported lower fourth-quarter earnings on Thursday due to weaker metals prices despite an increase in production and lower production costs.

The company, which primarily mines copper but also mines nickel and gold, said net earnings fell to $131.3 million, or 22 cents a share, in the three months through December from $186.7 million, or 39 cents, a year earlier.

Comparative earnings, adjusted to remove the effect of unusual items, fell to 23 cents a share from 39 cents a share a year ago.

Analysts, on average, expected First Quantum to report earnings of 22 cents a share, according to Thomson Reuters I/B/E/S.

The company, which took over rival Inmet Mining last year, gaining control of the huge Cobre Panama, is poised to become one of the world’s largest copper producers over the next five years, with a number of projects, including Cobre Panama in Central America, set to begin production.

The Vancouver-based miner also declared a dividend of 9.3 Canadian cents ($0.08).

First Quantum produced 114,791 tonnes of copper in the quarter, up from 84,918 tonnes in the same period a year ago.

Cash costs per pound of copper fell to $1.23 from $1.42 a year earlier, while its average copper price fell to $3.26 a pound from $3.46 a pound.

Looking ahead, First Quantum forecast it would produce between 418,000 and 444,000 tonnes of copper in 2014 at a cash cost of between $1.32 and $1.48 per pound. In 2013, it produced 412,281 tonnes of copper at a cash cost of $1.30 a pound.

It also said it expected capital spending of $2.1 billion this year, with $600 million to be spent at each of its Cobre Panama and Sentinel projects.

The company updated investors on its plans for Cobre Panama in January, raising the project’s estimated output but also saying initial production would be later than previously planned and capital costs would be $6.4 billion, about $200 million more than Inmet had planned.

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