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First Quantum's (FQVLF) Cobre Panama Faces Additional Headwinds

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First Quantum Minerals Ltd. (FQVLF - Free Report) announced that the Supreme Court  struck down its contract to operate at the Cobre Panama mine.

Panama's Supreme Court of Justice  has ruled that Law 406 is unconstitutional. On Oct 20, 2023, Law 406 approved the concession contract for the Cobre Panama mine. First Quantum is reviewing the ruling and continues to reserve all of its legal rights in Panama, both locally and internationally.

The company halted operations at its Cobre Panama mine due to a blockade of small boats at the Punta Rincon port on Nov 20, which hampered the delivery of essential supplies. It is implementing a Preservation and Safe Maintenance program to safeguard the mine's compliance and environmental integrity, asset preservation, and safe maintenance of the plant and facilities.

Cobre Panama accounted for roughly 40% of First Quantum's revenues and 1.5% of the world’s copper supply in 2022. In the third quarter of 2023, the mine produced 112,734 metric tons of copper and contributed $930 million to the company’s quarterly revenues.

In the third quarter of 2023, First Quantum recorded total revenues of $2,029 million, of which $1,791 million was accounted for by copper sales. It reported revenues of $1,727 million in the third quarter of 2022.

Price Performance

First Quantum’s shares have lost 60.6% in the past year against the industry’s growth of 0.8%.


Zacks Investment Research
Image Source: Zacks Investment Research


Zacks Rank & Stocks to Consider

First Quantum currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the basic materials space are Axalta Coating Systems Ltd. (AXTA - Free Report) , Universal Stainless & Alloy Products, Inc. (USAP - Free Report) and The Andersons Inc. (ANDE - Free Report) . AXTA sports a Zacks Rank #1 (Strong Buy), and USAP and ANDE each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Axalta Coating’s 2023 earnings is pegged at 44 cents per share. The consensus estimate for 2023 earnings has moved 23% north in the past 60 days. Its shares have gained 15.7% in a year.

Universal Stainless & Alloy Products has an average trailing four-quarter earnings surprise of 44.4%. The Zacks Consensus Estimate for USAP’s 2023 earnings is pegged at 27 cents per share. Earnings estimates have been unchanged in the past 60 days. USAP’s shares gained 96% in the last year.

The consensus estimate for ANDE's current-year earnings has been revised 3.3% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. ANDE shares have rallied around 32% in a year.

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