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%)."