JPM-First Quantum Minerals Ltd Q225 First Take：strong EBITDA beat vs JPMe Cons-20250724

Our Take: strong EBITDA beat vs JPMe & Consensus, 2025 guidancereiterated, Kansanshi S3 ramping up & new gold hedges: FQM’s Q2’25 resultswere a beat with EBITDA +22% vs JPMe and +25% vs Bloomberg consensus. Netdebt was -7% vs JPMe and -2% vs Cons given the latest copper prepayments. 2025guidance is unchanged across production, opex, & capex & the Kansanshi S3project is now ramping up ahead of schedule & on budget. At Cobre Panama, FQMcommenced shipping concentrate stockpiles in June, two more shipments in July,and the final shipment is currently being loaded. Mgmt also guided the Cobrepower plant will restart in Q4’25. Total copper hedges (zero cost collars) stand at~229kt (~50% of next 12 months’ output) & now have hedged ~78koz of gold(~40% of next 12 months’ output) with collars. We expect more detaileddiscussions over Kansashi S3 expansion and negotiations with the Panamagovernment during the conference call. No incremental update is given onpotential divestments. We estimate FQM trades on 2025/26E spot EV/EBITDA of12.3x/10.5x and -2%/-1% FCF yield. We rate FQM Neutral.

•Noteworthy Areas: 1) Production and financial performance: Q2’25copper output was -4% vs JPMe & -4% vs Con, but copper sales were +9% vsJPMe. Nickel and Gold production were -29%/+10% vs JPMe. Q2’25EBITDA was +22% vs JPMe & +25% vs Con, largely due to higher sales vsproduction across copper, gold and nickel. Q2’25 C1 costs is $2/lb, +15% vsJPMe of $1.74/lb). 2) Net debt: Net debt of ~$5.5bn is -7% vs JPMe & -2%vs Con. FCF was +$453m, well ahead of JPMe & Con given two copperprepayment agreements of $500m with Jiangxi copper. Adjusting for theprepayment, we calculate FCF to be -$151m (vs JPMe -$89m). 3) KansanshiS3 expansion: The project reached the final stages of commissioning ahead ofschedule & remains on budget. First ore was fed through the crushers in Juneand through SAG mills & floatation circuits in July. Cash spending will declineover H2 as the project reaches completion. 4) Hedging: as of 23 July 2025,FQM had ~229kt of zero cost collars (~50% of next 12 months’ output) withavg prices of $4.14-4.71/lb with maturities to June 2026. FQM has alsocommenced gold hedging. The company currently holds zero cost gold collarcontracts of 78koz (~40% of next 12 months’ output) at weighted avg prices of$2,941/oz - $4,168/oz to June 2026. 5) Zambia Power Supply: IncreasedZambian imports modestly eased the power balance in the period, but forcemajeure remains in place. To maintain reliable power supply at Kansanshi,FQM entered into a new10-year agreement with Africa GreenCo for supply ofsolar power from the 100 megawatt Chisamba Solar PV project, with aminimum of 25 megawatts of firm baseload power secured for FQM.Development of the previously announced 430-megawatt wind and solarproject also remains on track for commissioning in 2028.