In the fourth quarter of 2021, the company produced 201,823 tonnes of copper, down 3% from the previous quarter due to lower ore grades at Cobre Panama. Total annual production rose 5% year-on-year to reach 816,435t, the highest annual production in the company's history.
An increase in sales volumes and the bullish copper market also lifted the company's fourth-quarter financial results, despite the absence of new additional copper hedges in its profile during the fourth quarter. This means the company's declining hedge profile is likely to be offset by higher costs.
First Quantum expected future cash flow to remain strong, which would enable it to continue with its debt reduction programme while progressing growth programmes and supporting ESG initiatives.
Cash flow from operating activities was $760 million for the fourth quarter and $2,885 million for the full year, with copper C1 cash costs averaging $1.39 per pound in the fourth quarter. The company's net debt was brought down by $249 million during the last quarter to $6.053 billion on December 31. Plans to hit its $2 billion debt reduction target in the first half of 2022 were progressing.
Guidance for 2022 to 2024 remained optimistic and copper and nickel production was estimated to reach 850,000-910,000t and 40,000-50,000t, respectively, within the next three years.
Cobre Panama was anticipated to produce slightly higher levels of copper in 2022 - 330,000-360,000t of copper and 135,000-150,000 ounces of gold. A further ramp up of production was expected in 2023.
The Kansanshi mine was anticipated to produce similar levels to 2021 in 2022 - 190,000-210,000t of copper and 120,000-130,000oz of gold - as processed ore was likely to be slightly higher when compared with 2021 levels, although grades could decline.
Copper production at Sentinel was anticipated to increase from 2021 results to 260,000-280,000t in 2022. Grades are likely to improve due to the exposure of higher-grade ore in both stage-one and stage-two pits. Meanwhile, nickel production in 2022 should also increase to 25,000-30,000t despite major shutdowns scheduled for Ravensthorpe in March and August.
The recent bullishness of the copper market, in addition to inflationary pressures, meant guidance for C1 cash costs and capital expenditures were unchanged.
On February 15, First Quantum Minerals traded on the TSX at C$35.21/share, down 0.5% on the day. Its shares rallied above $30 this year after strong falls last year.