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First Quantum Minerals (OTCPK:FQVLF) +3.3% in Wednesday’s trading after saying it is seeking $20B through international arbitration after Panama ordered the closure of its flagship Cobre Panama copper mine.
“We have provided a minimum value sought in those proceedings of $20B, reflecting an estimated fair market value of initial investment,” CEO Tristan Pascall said on a post-earnings conference call.
First Quantum (OTCPK:FQVLF) swung to a Q4 net loss of $1.45B, or $2.09/share, from a profit of $117M, or $0.17/share, in the year-earlier quarter, as total copper production tumbled 22% Y/Y to 160.2K metric tons from 206K tons a year ago; output at Cobre Panama plunged 30% to 62,616 tons in the quarter.
The company said it recorded $900M in impairment charges, including an $854M writedown of its Ravensthorpe nickel mine due to significant margin pressure from weak nickel prices and high operating costs.
First Quantum (OTCPK:FQVLF) also said it signed a $500M pre-pay arrangement with Chinese shareholder Jiangxi Copper to provide 50K metric tons/year of copper anode material from the Kansanshi mine in Zambia.
The Cobre Panama closure has put First Quantum (OTCPK:FQVLF) at risk of a covenant breach in the coming year, resulting in “material uncertainty” that may cast doubt on the company’s ability to continue, the miner said.
