ENRC payment boosts profit at First Quantum

CANADIAN mining giant First Quantum yesterday posted surging fourth-quarter profit, driven by higher copper and gold sales.

Net earnings attributable to shareholders in the fourth quarter rose to $186.7m (£124.2m) in the final three months of last year, up from $76m in the same quarter of 2011.

Over the year, net income rose to $1.77bn, compared to $528.9m in 2011, on revenues of $2.95bn, boosted by higher output.

A one-off payment of $1.2bn from rival miner ENRC following a settlement over an ownership dispute of mines in the Congo helped to boost profits.

First Quantum, which is currently in the midst of a hostile takeover bid of Inmet, said copper production over the fourth quarter was 26 per cent higher than 2011, with both higher grades and an expansion at Kansanshi driving output.

Quarterly gold output was 48 per cent higher than the previous year, thanks to the first contribution from its Kevitsa mine and higher grades from its Kansanshi operations, while nickel output jumped 78 per cent over the three months.

Production in 2013 is expected to be between 15,000 and 19,000 tonnes of copper, between 9,000 and 10,000 tonnes of nickel and 12,000 to 14,000 ounces of gold, First Quantum said yesterday.

Last week, First Quantum extended its hostile C$5.1bn (£3.3bn) bid for Inmet until 11 March.

The cash and shares bid, worth C$72 a share when the deal was first announced in the middle of December, topped the miner’s previous two offers. The Canadian mining behemoth wants to gain control of the Cobre Panama project, one of the world’s largest undeveloped copper deposits.

Numis analyst Cailey Barker described yesterday’s results as “solid.”