First Quantum Minerals Limited (TSX: FM), Canada’s largest pure copper company, now controls the massive Cobre Panama open-pit copper development project following its hostile acquisition of Inmet Mining in April 2013.
Here is why this development project in Central America is important to the company and why it’s prudent as an investor to consider First Quantum for your portfolio.
1. Cobre Panama’s sheer size and potential
The Cobre Panama project in Colon Province, Panama is First Quantum’s immense copper-gold-silver project. This concession comprises four zones totaling 13,600 hectares.
Cobre Panama is one of the largest and most important private investments in Panama. Once it is in operation, it’s expected to become Panama’s primary exporter with income comparable to that of the Panama Canal.
2. First Quantum’s interest and mine life
First Quantum has an 80% interest in Minera Panama, S.A., which is the Panamanian company that holds the Cobre Panama concession. The life of this mine is estimated to be 34 years.
3. Good accessibility to the project
Cobre Panama is 120 kilometres west of Panama City and 20 kilometres from the Caribbean Sea. The Pan-American Highway system from Panama City to Penonome provides access to Cobre Panama. Furthermore, surfaced all-weather roads to Llano Grande and gravel roads through the town of Coclecito also provide access to the project. The company worked last year on improving access to the site.
4. Capex commitment and Cobre Panama capacity
The company announced earlier this year that it expects to invest $6.4 billion in the Cobre Panama project. The expectation is that the project will be completed in the second half of 2017. For 2014, First Quantum Minerals has forecast approximately $600 million in capital expenditures for the Cobre Panama project. For Q2 2014, the company spent $180 million at Cobre Panama.
This project will have an installed capacity of approximately 70 million tonnes per year for the first 10 years. Cobre Panama can additionally expand to 100 million tonnes per year beyond the tenth year. This project will produce an average of approximately 320,000 tonnes of copper per year over the life of the mine.
5. Efficient development
At Cobre Panama, site accommodation, road access, communications and management are currently all in place and functioning fully. The chief metal at Cobra Panama is copper. Secondary metals at the project include gold and silver, as well as molybdenum.
Big things are on the horizon for First Quantum Minerals and its Cobre Panama project. The company is worth your due diligence as it moves ahead with its enormous development plans in Panama.
