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Despite awful copper pricing and ongoing political risk, analysts continue to believe that First Quantum Minerals Ltd. (OTCPK:FQVLF) is on the right track.

The company's third quarter earnings of $2.13 a share (fully diluted) were below the consensus estimate of $2.60, but analysts are pleased with First Quantum's strong balance sheet and low cost base, which will help it get through the tough times in the industry.

Raymond James analyst Tom Meyer wrote in a note to clients:

The company is in a comparatively strong position to weather the storm, assuming the Western banking system turmoil continues continues into the next few quarters.

One key decision the company made is to delay a development decision on the Kevitsa nickel project in Finland that it bought over the summer in the acquisition of Scandinavian Minerals Ltd. TD Newcrest analyst Greg Barnes wrote that the delay is a positive move and could free up capital expenditures of $250-million in 2009.

First Quantum also has well-documented political problems in Zambia (the windfall tax) and the Democratic Republic of Congo (um, yeah). The company is holding the windfall tax revenue in a holding account and has not yet paid it to the government, according to UBS Securities analyst Onno Rutten, and he noted that the company's recent meeting with the attorney general of Zambia to resolve the dispute is a "positive development" and suggests a compromise could be coming.

The same goes for the DRC, where Mr. Rutten noted that First Quantum is holding talks this month with Congolese authorities to "finalize agreed changes" to its mining contract on the Kolwezi project. So it appears that modest progress is being made. That said, he wrote that it seems unlikely that the government's "seemingly endless" contract review will be completed in 2008.

Source: Tough Market, But First Quantum Still Strong