Reuters reported that Canada's First Quantum Minerals Limited Q2 profit fell 9% 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 USD 142 million or 30 cents a share in the quarter ended June 30th 2012 compared with USD 155.3 million or 33 cents a share a year ago.

Analysts, on average had expected earnings of 22 cents a share on revenue of USD 688 million. Revenue rose 9 percent to USD 722.3 million as copper sales climbed 11% to 72,711 tonnes in the Q2.

While gold sales were higher, the average realized copper price in the quarter fell to USD 3.48 per pound from USD 3.81 per pound in the comparable period a year ago. Production costs rose 7% to USD 1.53 compared with USD 1.43 in the Q2 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% 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 USD 6.50 per pound. The average realized nickel price in the second quarter was USD 7.84 a pound.

First Quantum 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 tonnes to 300,000 tonnes of copper in concentrate annually.

The company had some USD 900 million in cash and USD 1.3 billion of debt as of June 30. First Quantum has budgeted some USD 1.2 billion to USD 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.

Source - Reuters

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