First Quantum Minerals Has A 'Key Wildcard,' Why This Analyst Is Turning Bullish

Canadian miner First Quantum Minerals FQVLFFM reported its fourth-quarter and full-year results in mid-February.

The recent financing package and increase to covenant give the company some breathing room to focus on S3 expansion at Kansanshi and recover value in Panama, according to RBC Capital Markets.

The First Quantum Minerals Analyst: Sam Crittenden upgraded the rating for First Quantum Minerals from Sector Perform to Outperform, while raising the price target from C$17 ($12.53) to C$18 ($13.27).

The First Quantum Minerals Thesis: The S3 expansion at Kansanshi can take the company’s copper production from 377kt in 2023 to 427kt by 2025, which could help free cash flows to turn positive by 2026, Crittenden said in the upgrade note.

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“Cobre Panama remains the key wildcard,” the analyst stated. He added that the election on May 5 could “provide more direction.”

“At the same time, the international arbitration proceedings are underway with FM seeking U $20B (C$32/share) plus damages and interest,” Crittenden wrote. “This could take several years to play out and the amount recovered is uncertain; however, we believe this provides some backstop in value,” he added.

FQVLF Price Action: Shares of First Quantum Minerals had risen by 2.31% to $9.74 at the time of publication on Monday.

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