UPDATE 1-First Quantum delays cost update on Cobre Panama project

Tue Dec 10, 2013 11:06am EST

TORONTO Dec 10 (Reuters) - First Quantum Minerals Ltd said on Tuesday the revised capital cost estimate and project schedule for its Cobre Panama copper project in Central America is taking slightly longer than expected and is now only likely to be completed in early 2014.

Vancouver-based First Quantum, which bought the huge copper project in Panama via its C$5.1 billion ($4.8 billion) takeover of rival Inmet Mining this year, had promised to outline a revised estimate and schedule before the end of the year.

"The update on the Cobre Panama project early in 2014 will be the culmination of a comprehensive review and re-engineering of all aspects of the project's development," First Quantum Chief Executive Philip Pascall said in a statement. "We had intended to publish the update earlier, however we have had to correct a number of acquired technical and logistical shortcomings so it is taking slightly longer than anticipated."

Shares in the company reacted negatively to the news falling 2 percent to C$17.20 in morning trading on the Toronto Stock Exchange.

First Quantum, which owns mines and projects spread across South America, Africa, Europe and Australia, is poised to become one of the world's largest copper producers over the next five years, as a number of its projects including Cobre Panama begin production.

Pascall said the company also continues to work on making cost efficient financing arrangements to fund its projects. In October, First Quantum extended the maturity of a $2.5 billion revolving credit facility to June 30, 2014 to give itself time to find more suitable long-term financing.

First Quantum said it recently completed the expansion of the oxide circuit at its Kansanshi mine to 14.5 million tonnes per year, a move that will help boost the production capacity of the largest copper mine in Africa.

The company said the construction of a new 1.2 million-tonne-a-year copper smelter in Zambia is approaching peak levels and commissioning is intended to start in mid-2014 with ramp up continuing during the year.

The smelter, which will process a combination of concentrate from both Kansanshi and its new Sentinel mine, currently under construction, is expected to operate at 80 percent of its design capacity by mid-2015 and achieve 100 percent in early 2016.

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