First Quantum Minerals Shooting For The Top
Stephen Simpson, CFA
Stephen Simpson, CFA
Execution And Commodity Risks Have First Quantum At An Appealing Price
Stephen Simpson, CFA
Stephen Simpson, CFA
Fri, Mar. 4, 12:58 PM
- Vale (VALE +18.3%) and U.S. Steel (X +15.3%) are pacing the biggest weekly rally since 2008 for stocks of mining and metals companies, Bloomberg says as its index of 47 metals, mining and steel producers has racked up a 20% gain this week.
- Vale has rallied nearly 80% this week, as iron ore prices extended a rebound and Brazilian stocks jumped as the latest developments in the federal investigation of vast corruption threaten to topple the Rousseff government.
- Copper suppliers Freeport McMoRan (FCX +12.4%), Teck Resources (TCK +10.3%) and First Quantum Minerals (OTCPK:FQVLF +11.4%) also are among the top gainers, as copper prices climb to their highest in four months on speculation that China will announce more steps to boost growth.
- Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) also heads for its seventh straight gain, the stock's longest winning run in two years.
Tue, Jan. 12, 12:46 PM
- BHP Billiton (BHP -4.3%) could cut is payout in half when it releases results, and Rio Tinto (RIO -4.5%) also could cut its dividend later this year, HSBC analysts say, citing the need for the miners to cut expenses to help indebted balance sheets and offset weak commodities prices.
- HSBC also says Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) and First Quantum Minerals (OTCPK:FQVLF) are most at risk if commodities remain weak, although continued South African rand weakness would help Anglo, while strength in copper and other stock-specific reasons could favor returns for Freeport McMoRan (FCX -13.4%) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY).
- The firm downgrades BHP and First Quantum to Reduce, maintains a Reduce rating on Anglo, and has a Buy rating on FCX and Glencore.
Sep. 2, 2015, 11:29 AM
- Rio Tinto (RIO +1.3%) owns more than half of the shares of Turquoise Hill Resources (TRQ -1.7%), and likely will buy out the shares it does not already own in the next 12-18 months, CIBC analyst Tom Meyer predicts.
- Rio will make its move once key risks from the Oyu Tolgoi copper-gold project in Mongolia are removed, the analyst says, such as financing, a cost update on Oyu Tolgoi’s underground development, and next year’s Mongolian election.
- But Meyer maintains an Underperform rating and $4 price target on TRQ in a relative valuation call, saying higher-cost, higher-leveraged copper plays such as First Quantum Minerals (OTCPK:FQVLF) and HudBay Minerals (NYSE:HBM) offer more upside if commodity prices go up in the short term.
May 21, 2015, 2:48 PM
- First Quantum Minerals (OTCPK:FQVLF -4.6%) lays out plans for C$600M in new spending over the next 18 months to speed up project development, as it raises as much as C$1.44B in a public offering.
- First Quantum is earmarking C$300M-C$400M for expansion of the Kansanshi copper mine in Zambia, C$150M to advance permitting for the Haquira project in Peru, plus some money for the Taca Taca deposit in Argentina; the C$600M comes on top of C$1.4B budgeted for projects such as Cobre Panama.
- "It's better to build at the bottom of the cycle than at the top, but also to try and get as much of that pipeline into production to coincide with the inevitable rise in the copper price in the next two or three years," company president Clive Newall tells analysts.
Mar. 10, 2015, 3:45 PM
- Peabody Energy (BTU -5.6%) slides sharply after Jefferies downgrades shares to Hold from Buy with a $6 price target, cut from $10, on continued concerns about domestic thermal coal fundamentals due to low natural gas prices, weakening exports, MATS related coal plant closures and increased renewable capacity.
- BTU's Australian coal business is more likely to improve in the near-term due to higher seaborne thermal coal prices, the firm says, but operating costs have not declined nearly as much as competitors due to its extensive hedging program.
- Jefferies is bearish on mining shares in the near-term, and the firm revised many of its commodity price forecasts lower, but it has placed four metals and mining stocks above the rest: Freeport McMoRan (FCX -3.5%), Rio Tinto (RIO -2.6%), First Quantum (OTCPK:FQVLF -6.8%) and Angofagasta (OTCPK:ANFGY -5.8%).
Jan. 27, 2015, 10:58 AM
- First Quantum Minerals (OTCPK:FQVLF -8.5%) says it has substantially reduced planned capital spending in 2015 for its Cobre Panama copper project to $600M, while projecting total capital spending for the year of $1.2B-$1.4B.
- Says Q4 copper production fell 8.3% Y/Y to 105.1K metric tons while copper sales fell less than 1% to 94.8K metric tons; gold output fell 9% to 57.5K oz.
- For 2015, the company expects copper output of 410K-440K metric tons and gold production of 218K-247K oz.
Jan. 14, 2015, 12:49 PM
- As TD Securities analysts test free cash flow for Canadian copper producers at US$2.50/lb. for copper, every company in their coverage area except Copper Mountain Mining (OTCPK:CPPMF -13.5%) is found to have negative free cash flow.
- First Quantum Minerals (OTCPK:FQVLF -11.4%) might have the biggest problem, the TD analysts say, calculating that its free cash flow is negative US$1.2B at $2.50 copper due to a royalty hike in Zambia and major spending commitments at the Cobre Panama project.
- The favorite names in a low price environment are Lundin Mining (OTCPK:LUNMF -12.7%), HudBay Minerals (HBM -13.7%) and Nevsun Resources (NSU -4.7%), thanks to their solid balance sheets and low capital spending requirements in 2015.
Dec. 10, 2013, 12:42 PM
- First Quantum Minerals (FQVLF -2.5%) says it will delay the release of a full update on its Cobre Panama copper project to Q1 2014, saying it needs to "correct a number of acquired technical and logistical shortcomings" in the project development plan.
- Before being taken over by First Quantum earlier this year, Inmet had pegged the capital cost of developing the project at $6.2B; in its bid for Inmet, First Quantum had cited its project development expertise as a rationale for the combination.
First Quantum Minerals Ltd. is a growing mining and metals company engaged in mineral exploration, development and mining. The Company produces LME grade "A" copper cathode, copper in concentrate, gold and sulphuric acid.
Sector: Basic Materials
Industry: Steel & Iron
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