LUSAKA, Zambia -(Dow Jones)- First Quantum Minerals Ltd., (FQVLF) said copper and gold output at Kansanshi Copper Mine, its Zambian unit, fell in the first quarter but expansion projects there were on schedule.
Copper production at Kansanshi dropped to 56,611 metric tons from 64,797 tons in the first three months of 2011 while copper sales fell to 58,545 tons from 63,073 tons a year earlier, it said.
"Copper production decreased by 13% from the previous year due to lower grade ore processed and two short-term labor-related work stoppages which resulted in an estimated production loss of 2,700 tons," First Quantum said in its earning report.
Gold production in the first quarter slipped to 27,158 ounces from 30,612 ounces a year earlier and sales of the precious metal dropped to 30,308 ounces from 31,210 ounces in the same quarter of 2011.
The fall in gold production was due to lower grades being processed but this was offset partially by improved recovery.
The company said: "The continued gold circuit enhancements and improvements have resulted in a higher proportion of gold recovered 'in dore', which is not subject to the smelter deductions applied to gold recovered in concentrate."
The miner, Zambia's leading producer, said it was focusing on accelerating pit development and improving its supplies of sulfuric acid.
Expansion of an oxide processing circuit at Kansanshi has progressed well and is scheduled for completion in the next quarter and the stage two expansion is also on track for commissioning in 2013, it said. While a fifth Kansanshi acid plant is scheduled to be commissioned during the third quarter of 2012.
The detailed design work on the Kansanshi copper smelter project is underway with long-lead equipment ordered and site construction works scheduled to begin in the second quarter.
Production costs surged year-on-year by $0.40 per pound of copper. Outweighing the improved gold credit were higher sulfur prices, mining costs, and the impact of lower production, First Quantum said. Realization costs were also higher in the first three months of 2012 due to higher off-take terms.
-By Geoffrey Sinkamba, contributing to Dow Jones Newswires; jeff.kapembwa@gmail.com
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