Analyst Actions: Credit Suisse Keeps Rating, Target Price on First Quantum Minerals


1Q13 FD Adjusted EPS $0.32. "Results were largely in-line with our estimate of $0.29 (consensus of $0.28). Adjusted EPS excludes charges largely associated with the acquisition of Inmet Mining ( IMN ) (GAAP EPS $0.23/sh)."

View: "Positive quarter driven by strong operations and inventory drawdown at Kansanshi. FM reported sales of $901Mln vs. our $781Mln on stronger copper/gold sales of 89.1Kt/58.8Koz (vs. our 78.8Kt/47.5Koz), which included consolidation of IMN results beginning on March 22nd (~10 days). Copper production (ex-IMN) and cash costs (ex-IMN) were a slight miss at 76Kt and $1.55/lb relative to our 81.7Kt and $1.52/lb, offset by stronger sales (inventory drawdown) and higher nickel/gold sales."

Catalysts: "Detailed review of Cobre Panama in the works. FM made various minor changes to FY13 guidance, and included ~9 months' of IMN guidance. A slight reduction was made to the high-end of copper production, while the gold production range was narrowed. Revised copper/gold production is now 384-416Kt/193-213Koz (including IMN mines) from 384-419Kt/190-215Koz. Nickel and zinc production guidance remain unchanged. FY13 copper cash cost (incl-IMN) has been revised to $1.40-1.50/lb, with cash cost from FM mines at $1.50-1.60/lb and from IMN at $1.05-1.11/lb. FY13 Capital expenditures for pre-acquisition FM remain at ~$2Bln, while expenditures for IMN-acquired operations are expected to be $70-85Mln (excl Cobre Panama). Mgmt is currently undertaking an extensive review of Cobre Panama, which is expected to take 2-4 months. We estimate every 10% in cost savings (vs. our $7Bln) adds 2.4% (or $0.60/share) to our base-case NAV."

Valuation: "Maintain Outperform. Our TP of C$23.50 is based on a 50/50 weighting of 1x our NAVPS of C$24.57 and 6x FY13/14 EV/EBITDA. At end-1Q13, FM had cash of $1.8Bln (net debt: $874Mln; D/E ratio 51%)."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: IMN

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