First Quantum Shares Sink Amid Uncertainty Over Panama Mine
By Robb M. Stewart
First Quantum Minerals' shares were sharply lower amid building uncertainty over the future of its big Cobre Panama copper mine.
In Monday trading, the Canadian mining company's shares were 26% lower at 20.75 Canadian dollars. The stock is now down 27% so far this year.
Panamanian President Laurentino Cortizo, who has faced public criticism for approving continued mining of Cobre Panama, on the weekend said a national vote would be held on Dec. 17 on whether to revoke the company's license, Bloomberg reported.
Panama's government has faced protests since Cortizo in October signed off on an agreement reached earlier in the year between the government and First Quantum covering the terms and conditions of a refreshed concession contract for the Cobre Panama operation, providing a further 20-year term and options for extensions. The mine temporarily closed last year when talks between First Quantum and the government broke down over payments the government sought.
Protesters blocked streets across Panama last week, demanding the government rescind the contract to continue mining, which they argue threatens forested land and important groundwater, the Associated Press reported. Lawsuits have been filed with Panama's supreme court seeking to overturn the agreement with First Quantum.
Analysts at National Bank of Canada on Monday lowered their call on First Quantum's shares to sector perform from outperform and cut their target by C$4 to C$36 a share to reflect increased uncertainty around the mine, which they note is integral to the company and Panama. In a research report, the analysts said there is likely a complicated legal pathway forward to impose any major revisions to the contract, given it has already been ratified into law.
Cobre Panama, one of the largest new copper mines opened globally in the last decade, produced 350,438 metric tons of copper last year, as well as gold and silver. Located west of Panama City, the operation includes two open pits, a processing plant, two power stations and a port.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
October 30, 2023 12:27 ET (16:27 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.-
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