Introduction & Market Context
First Quantum Minerals Ltd (TSX:FM) released its first quarter 2025 financial and operating results presentation, revealing a challenging period marked by production declines and cost increases. The Canadian copper miner reported flat adjusted earnings per share amid rising production costs and lower output from its Zambian operations, while implementing comprehensive measures to manage its balance sheet and debt position.
The company continues to navigate a complex operating environment following the closure of its Cobre Panama mine, with strategic focus now shifting to its Zambian operations and the advancement of the S3 Expansion project at Kansanshi.
Quarterly Performance Highlights
First Quantum reported copper production of 99,703 tonnes for Q1 2025, representing a decrease from the previous quarter. The company’s C1 cash cost rose to $1.95 per pound, a 16% increase quarter-over-quarter, primarily due to lower production volumes, stockpile drawdowns, and higher employee and maintenance costs in Zambia.
As shown in the following quarterly performance summary:
Revenue for the quarter stood at $1.2 billion, down 5% from the previous quarter, despite a 2% increase in gross realized copper price to $4.26 per pound. The company reported adjusted earnings per share of $0.00, with a net loss attributable to shareholders of $23 million.
The company’s Kansanshi mine in Zambia produced 46,544 tonnes of copper at a C1 cash cost of $1.34 per pound, while the Sentinel operation contributed 46,361 tonnes at a higher cost of $2.55 per pound. Enterprise, the company’s nickel operation, produced 4,649 tonnes of nickel at a C1 cash cost of $4.78 per pound.
As illustrated in the Kansanshi performance data:
Detailed Financial Analysis
First Quantum’s EBITDA declined to $377 million in Q1 2025, representing a 17% decrease quarter-over-quarter. This decline was primarily attributed to lower revenue resulting from reduced production volumes.
The following chart illustrates the EBITDA and adjusted EPS trends:
A detailed waterfall analysis of EBITDA reveals that external factors added $35 million while internal factors subtracted $121 million, resulting in the overall decline:
The increase in C1 cash costs to $1.95 per pound was driven by multiple factors, including lower Sentinel production, stockpile drawdowns, and higher employee and maintenance costs in Zambia. These negative impacts were partially offset by increased by-product credits from higher gold production and prices.
The following breakdown illustrates the components affecting C1 cash costs:
Net debt increased by $257 million during the quarter to $5,787 million, primarily due to capital expenditures, interest payments, and unfavorable working capital movements. The company reported working capital outflows of $140 million in Q1, compared to $154 million in Q4 2024.
The quarterly net debt movement is detailed in the following chart:
Strategic Initiatives
First Quantum has implemented a comprehensive strategy to manage its balance sheet, including both external and internal actions. External measures include a comprehensive refinancing with senior notes offering, a hedging program, and a Trident (NSE:TRIE) facility. Internal actions encompass dividend suspension, capital expenditure and operating cost reductions.
The company’s hedging strategy has proven effective in reducing copper price volatility, generating realized hedge gains of $3 million during the quarter and $38 million since the program’s inception. Approximately half of planned production and sales in 2025, and 40% for the first half of 2026, are protected from spot copper price movements.
The hedging strategy is illustrated in the following chart:
A key development is the progress on the S3 Expansion project at Kansanshi, which has reached 83% construction completion with 20% of systems handed over to commissioning. First production is expected in the second half of 2025, with the majority of initial feed sourced from low-grade stockpiles.
The S3 Expansion progress is shown here:
Forward-Looking Statements
Looking ahead, First Quantum has outlined several operational developments for 2025. Kansanshi is scheduled for a six-week maintenance shutdown, with first production from the S3 Expansion expected in the second half of the year. At Sentinel, a four-day full maintenance shutdown is planned for Q2 2025, with initiatives underway to increase mill throughput and higher grades expected in the second half.
The company has placed its Ravensthorpe nickel operation on care and maintenance as of May 2024, with monthly costs of $2 million reported in Q1 2025. For Las Cruces, the company published an NI 43-101 in February 2024 and continues to pursue a sales process.
First Quantum also highlighted its sustainability initiatives during the quarter, including education transformation with Cobre Conecta, clean water projects in Kansanshi, community engagement for the Taca Taca project, and empowerment of local entrepreneurs in Cobre Panamá, underscoring the company’s commitment to responsible growth despite operational challenges.
Full presentation:
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