As a leading global copper miner, First Quantum Minerals (TSX:FM) has remained resilient in the face of industry challenges thanks to its diversified portfolio of mining projects. The company’s shares have recorded a 13% gain over the last month and are now 9% away from 52-week high.
The important thing is that this Canadian resource stock with strong fundamentals may still be undervalued, and investors can still look for buying opportunities.
For the third quarter of 2024, First Quantum reported net income attributable to shareholders of C$108 million, equivalent to C$0.13 per share, and adjusted earnings of C$119 million, or C$0.14 per share. This was driven by higher copper and gold sales volumes and a strong increase in the gold price, which drove earnings before interest, taxes, depreciation and amortisation (EBITDA) to C$520 million.
The company reported a 13% increase in copper production compared to the previous quarter, driven by increased production from its Zambian operations, bringing total copper production for the quarter to 116,088 tonnes.
In addition, the company’s C1 cash cost decreased by 9 per cent from the previous quarter to $1.57 per pound, reflecting improved operational efficiencies.
Going forward, the Kansanshi S3 expansion project in Zambia is making significant progress and is expected to be completed by mid-2025. The project is expected to increase capacity and further strengthen First Quantum’s position in the global copper market. The company is actively managing its balance sheet by entering into additional derivative contracts to protect against price downside and securing a C$425 million unsecured term loan.
In October 2024, it was reported that Saudi Arabia’s Manara Minerals was in advanced talks to acquire a minority stake in First Quantum’s Zambian copper and nickel assets. This has the potential to provide additional financial and strategic support to further enhance its growth prospects.
Despite challenges, including power constraints in Zambia and the suspension of Cobre Panamá operations, diversified asset base and commitment to operational excellence have enabled First Quantum to effectively overcome these obstacles. This is a company with a focus on cost management and strategic investment, setting it up well for future growth, which means it would be a prudent investment strategy to buy when the share price is falling.
