Vancouver, Canada — MININGREVIEW.COM — 17 February 2009 – Following the global economic crisis and the sharp fall in commodity prices in the second half of 2008, Canadian-listed First Quantum Minerals Limited (FQM) – an emerging mining and mineral company and one of the faster growing copper producers in Africa – has initiated a full review of its business operations in Africa.
Revealing this in an update of its 2009 operating plans released here, the company said this action was specifically aimed at protecting its core activities and financial resources, improving its operating cost profile through this period of low copper prices, and emerging stronger when economic conditions improved.
The update revealed that copper production was expected to rise 10% to 380 000 tonnes, and gold by over 100% to 240 000 ounces. The higher production followed the successful ramp-up at the Frontier mine (DRC), completion of capacity expansions at the Guelb Moghrein mine (Mauritania) and the Kansanshi mine (Zambia), and various other measures.
It added that the 2009 capital expenditure programme was being reduced to US$190 million (R1.9 billion) from approximately US$430 million (R4.3 billion) in 2008. It was being limited to committed capital projects – the development of the Kolwezi copper-cobalt mine in the DRC, the expansion of Guelb Moghrein, and a few smaller projects at Kansanshi in Zambia.
The update also revealed major reductions in exploration and overhead costs The company’s 2009 exploration budget had been reduced to US$10 million (R100 million) from approximately US$28 million (R280 million) in 2008. Senior management and the board were making a personal contribution to the efforts to lower costs with a 20% cut in salaries and fees.
Meanwhile, First Quantum’s financial position remains sound: The company’s net cash stood at about US$236 million R2.4 billion) at 31January 2009, and its revolving credit facility of US$250 million (R2.5 billion) has been renewed.
Chairman and CEO Philip Pascall commented: “While we believe the steps taken are sufficient to ensure the long-term integrity and success of the company, we also recognise that the current operating and financial environment is uncertain and volatile. Further measures may be required in due course. We will continue to demonstrate the flexibility and discipline that have underpinned First Quantum’s success to date,” he concluded.