Analyst Actions: Credit Suisse Optimistic on First Quantum Minerals; Maintains "Outperform", TP at $27.50
Posted 11/1/2012 12:46 PM
3Q12 FD EPS $0.23. "Results compare to our estimate of $0.21 and consensus of $0.25. Compared to our EPS, higher copper sales (77.4Kt vs. our 69.5Kt) and gold sales (48.9Koz vs. our 39.2Koz) were partially offset by unit costs and income taxes."
Kansanshi delivers solid operating qtr. "Total copper production of 84.1Kt was better vs. our estimate of 74Kt, largely due to higher sulphide ore throughput and higher oxide grades at Kansanshi. The full benefit of Kansanshi oxide expansion is expected to be realized in 4Q12, coinciding with the commissioning of the fifth acid plant. Copper cash costs came in at $1.44/lb (Credit Suisse estimate: $1.23/lb) on higher acid costs at Kansanshi and lower gold credits at Guelb. Nickel production was in-line at 9.9Kt. Through 3Q12, total copper, gold, and nickel production are tracking at 77%, 75%, and 70%, respectively, of the mid-point of full-year targets."
Guidance better: "Production guidance was revised higher for copper to 285-295Kt copper (from 270-290Kt previously) and for gold to 175-190Koz (from 170-190Koz previously). Nickel production guidance remains unchanged. Copper cash cost guidance was revised down to $1.50/lb copper (from $1.55/lb) while nickel cash costs at Ravensthorpe were also revised down to $6.20/lb (from $6.50/lb). Capex guidance was revised up to $1.5Bln (from $1.2-1.4Bln)."
Catalysts: "We believe a number of milestones over the next 6-12 months will reinforce our view of the FM growth story, including: Enterprise resource estimate (4Q12); Kevitsa 10Mtpa expansion environmental approval (1H13); and Kansanshi 14.5Mtpa expansion commissioning (1H13)."
Valuation: "Maintain Outperform. Our TP of C$27.50 is based on a 50/50 weighting of 1x our NAVPS of C$24.35 and 5.5x FY13/14 EV/EBITDA."
Read more:
http://community.nasdaq.com/News/2012-1 ... z2B3dN6VjG