Canada's First Quantum Minerals Ltd. said on Wednesday its second-quarter profit fell 9 per cent as lower copper prices and higher production costs outweighed higher copper and gold sales volumes.
The base metal miner's net earnings attributable to shareholders were $142-million, or 30 cents per share, in the quarter ended June 30, compared with $155.3-million, or 33 cents per share, a year ago.
Analysts, on average, had expected earnings of 22 cents per share, on revenue of $688-million, according to Thomson Reuters I/B/E/S.
Revenue rose 9 per cent to $722.3-million as copper sales climbed 11 per cent to 72,711 tonnes in the second quarter.
While gold sales were higher, the average realized copper price in the quarter fell to $3.48 a pound from $3.81 a pound in the comparable period a year ago. Production costs rose 7 per cent to $1.53 compared with $1.43 in the second quarter of 2011.
First Quantum produced 71,543 tonnes of copper in the quarter and, with the start-up of the Ravensthorpe mine in Australia, added 8,053 tonnes of nickel. Gold sales climbed 21 per cent to 46,445 ounces from 38,426 in the year-ago period.
The Vancouver-based miner maintained its production outlook for the year and lowered its cash cost guidance for the Ravensthorpe nickel project to $6.50 a pound. The average realized nickel price in the second quarter was $7.84 a pound.
First Quantum also said that its board had approved in May the Sentinel project in Zambia and that it was ramping up development at the copper project. Sentinel is expected to produce up to 280,000 to 300,000 tonnes of copper in concentrate annually.
The company had some $900-million in cash and $1.3-billion of debt as of June 30. First Quantum has budgeted some $1.2-billion to $1.4-billion in capital spending for the year as it boosts output at its Kansanshi plant in Zambia and starts up its Kevitsa mine in Finland.
The miner has operations in Australia, Africa and Europe.