First Quantum Minerals Q4 Earnings Call Highlights

First Quantum Minerals (TSE:FM) used its fourth-quarter 2025 results call to highlight progress on balance sheet initiatives, operational delivery across its producing assets, and ongoing efforts to reach a long-term resolution for Cobre Panamá. Management also discussed the commercial production milestone at the Kansanshi S3 expansion and outlined near-term steps to advance the company’s Taca Taca copper project in Argentina.

Balance sheet actions and hedging updates

Chief Executive Officer Tristan Pascall said the company entered 2025 with four priorities, including strengthening the balance sheet and enhancing financial flexibility. He pointed to a series of bond transactions that extended debt maturities and lowered the cost of capital, as well as a $1 billion streaming transaction with Royal Gold, which he described as the largest U.S. corporate investment in Zambia to date.

Chief Financial Officer Ryan MacWilliam said the company announced a new syndicated term loan and revolving credit facility that would free up about $360 million of liquidity and extend maturities to 2029, subject to customary closing conditions. He also said the company announced a new $1.35 billion ten-year unsecured bond offering. MacWilliam noted that S&P revised the company’s B rating outlook to positive, citing balance sheet progress and “positive expectations on the return of Cobre Panamá later this year.”

On hedging, MacWilliam said collars that rolled off in the fourth quarter resulted in aggregate copper and gold hedge losses of $42 million. He said 2026 planned copper and gold production remains roughly 20% hedged for the full year and 50% hedged for the first half, and that at current spot prices the company anticipates hedge losses of about $220 million for copper and $23 million for gold. He added that existing hedges expire by mid-year and the company does not anticipate adding additional hedges.

Operational performance: production, costs, and site updates

Chief Operating Officer Rudi Badenhorst said First Quantum finished 2025 within its revised guidance ranges, reporting annual copper production of 396,000 tonnes. He said annual gold production of 152,000 ounces and annual nickel production of 23,000 tonnes were above the top end of the revised guidance ranges.

Fourth-quarter copper production was about 100,000 tonnes, down 4% sequentially, as Sentinel was impacted by bolt fatigue, maintenance, and rainy season power interruptions. Copper sales were 108,000 tonnes, exceeding production by about 8,000 tonnes.

• Kansanshi: Q4 copper production of 48,000 tonnes increased slightly from the prior quarter, aided by higher mill throughput from the S3 ramp-up. Badenhorst said the site achieved record monthly mill tonnage in October and declared S3 commercial production effective Dec. 1 after commissioning and performance improvements. He said work on tailings storage facility 2 remains on track for completion in the second quarter of 2026. For 2026, Kansanshi guidance is 175,000–205,000 tonnes of copper and 110,000–220,000 ounces of gold, with S3 expected to contribute more than 84,000 tonnes of copper.
• Sentinel: Q4 copper production of 48,000 tonnes was down about 3,000 tonnes quarter-over-quarter, driven by lower throughput and lower grades. Badenhorst said Ball Mill 2 continues to require maintenance related to bolt fatigue; a long-term fatigue management strategy is in place, with full remedial work planned for the first half of 2027 when new parts become available. Sentinel’s 2026 production guidance is 190,000–220,000 tonnes of copper, with operational priorities focused on throughput, consistency, and recovery improvements, and modest grade strengthening expected as stage 1 and stage 2 ore becomes accessible following crusher relocations.
• Enterprise (nickel): The site delivered record quarterly nickel production of 9,000 tonnes, up 52% from the third quarter, driven by improved recoveries and mining higher-grade sulfide zones. 2026 guidance is 30,000–40,000 tonnes of contained nickel.
• Cobre Panamá: Badenhorst said the company continued inspections and preservation activities, including equipment reviews with OEM teams for major mobile equipment, with findings incorporated into preservation strategies.

MacWilliam said fourth-quarter revenue rose 10% from the prior quarter on higher metal prices, contributing to a 7% increase in EBITDA and a $73 million improvement in net earnings. Copper C1 costs increased 13% to $2.21 per pound, reflecting lower production and higher power, labor, and maintenance costs, partially offset by a $0.14 per pound benefit from higher gold by-product credits.

Cobre Panamá: stockpile processing plan and audit timeline

Pascall said achieving a long-term resolution for Cobre Panamá remains a core priority, while the company awaits the start of formal discussions with the Panamanian government. He said First Quantum has continued to advance its preservation and safe management plan, including power plant work: Unit 2 was hot commissioned and synchronized to the grid during the fourth quarter and reached 150 megawatts in December, while Unit 1 entered commissioning in early February.

Management emphasized that Panamanian President José Raúl Mulino announced the government would approve the removal, processing, and export of stockpiled ore, which Pascall said is not a restart of mining operations. He said processing is intended to reduce environmental and operational risks from long-term stockpile storage, including acid rock drainage, and to supply material needed for reinforcement of the tailings management facility.

On a preliminary basis, Pascall said processing could begin roughly three months after formal regulatory notice and take about one year to complete, with estimated production of approximately 70,000 tonnes of copper. MacWilliam said operating costs to process stockpiled ore are expected to be $12 to $12.50 per tonne milled, with upfront cash outflows peaking around $250 million. He said the company would expect to be broadly cash-flow neutral by year-end at Cobre Panamá (inclusive of preservation and safe management plan costs) if formal approval is received shortly.

MacWilliam also said the preservation and safe management program is costing $15 million to $17 million per month, with $45 million incurred in the fourth quarter and $400 million spent since the mine was placed on the program.

On the audit process, Pascall said the SGS “Integral Audit” commenced in the fourth quarter and is expected to conclude in April 2026. He also noted that the latest published statutory biannual compliance audit achieved 100% compliance, with the latest external audit field phase completed in November and a final report expected in the first quarter.

Kansanshi S3 milestone and Taca Taca update

Pascall said the company is “extremely proud” of delivering commercial production at Kansanshi S3, noting that commercial production was declared after S3 demonstrated consistent performance at 90% of design capacity, achieved within five months of initial production. He described S3, with capacity of 25 million tonnes per annum, as one of the largest global brownfield copper projects delivered in recent years.

Looking to growth options, Pascall said the company expects to release an updated NI 43-101 technical report for the Taca Taca project later in the month. He said the report is part of the pathway toward a RIGI application in Argentina, alongside continued work on environmental and water permitting, and evaluation of financing strategy. Management said Taca Taca is expected to follow First Quantum’s approach of large-scale SAG mill processing trains with expansion optionality, leveraging experience from Sentinel, Cobre Panamá, and Kansanshi S3.

Net debt, liquidity, and leverage priorities

MacWilliam said net debt increased by $441 million during the quarter to $5.2 billion, driven by higher accounts receivable from late shipments in December and higher margin deposits tied to short-term customer pricing hedges due to rising copper prices. He said both factors are expected to unwind in the current quarter if copper prices remain stable.

He reported liquidity of $1.9 billion at quarter-end, including $644 million in cash and a fully undrawn $1.3 billion revolving credit facility. In Q&A, management reiterated deleveraging as a key focus. MacWilliam said the company ended 2025 at 3.3x net debt-to-EBITDA and has generally targeted around or below 1x net debt-to-EBITDA before starting a new greenfield build, while continuing to evaluate partnership structures for future projects.

About First Quantum Minerals (TSE:FM)

First Quantum Minerals Ltd is a diversified mining company. The company’s principal activities include mineral exploration, mine engineering and construction, and development and mining operations. The firm produces copper in concentrate, copper anode, copper cathode, nickel, gold, zinc, silver, acid, and pyrite. It has operating mines located in Zambia, Finland, Turkey, Spain, and Mauritania. The firm’s project comprises Guelb Moghrein, Sentinel, Kansanshi, Cobre Panama, Pyhasalmi, Ravensthorpe, among others.