VANCOUVER (ResourceInvestor.com) -- For Vancouver-based First Quantum Minerals [TSX:FM], breakneck growth and high expectations are coinciding nicely with an impressive bottom line which helped drive the stock price up five-fold in just 2 years.
Stronger copper prices have helped push the company's fourth-quarter profit up by almost US$8m. And on Tuesday, the company (which reports results in US dollars) also reported that revenues rose to $30.7m in the quarter compared to $19.9m one year earlier.
First Quantum's Kansanshi copper project, located in the North Western Province of Zambia, continues to move forward, in turn capturing the attentions of institutional investors and retail-level mining stock enthusiasts. That's because the company is poised to become a much bigger fish in copper mining circles.
The company predicts that by the end of the decade, with Kansanshi a part of the mix, it could be producing over 250,000 tonnes copper per year.
Kansanshi alone, a US$180m project, is set to produce an average of 102,000 tonnes per annum, with more in the early years. First Quantum recently showed a newly expanded five year mine plan for the site, with annual copper production set to grow to 145,000t by next year.
According to company CEO Philip Pascall, the expansion is justified "in order to maximize copper production during the current period of favorable copper prices. As a result, we expect the Kansanshi mine to produce exceptional economic returns for First Quantum shareholders, our partner Zambian Consolidated Copper Mines and the people of the North Western Province of Zambia."
It joins First Quantum's existing Bwana Mkubwa/ Lonshi operation, which produces at a rate of 40,000t/annum.
Two other projects, DRC and Mauritania, are set to begin production after Kansanshi. Mauritania's Guelb Moghrein has the potential to produce a minimum of 30,000t of copper a year.
Shares of First Quantum, which trade on the Toronto Stock Exchange and London's AIM, have been on the up-and-up since this time last year. Shares, which dipped as low as C$11.50 last April, currently hover close to $26, the 52-week high for the issue.
Analysts have been quick to jump on the First Quantum bandwagon. Last fall, analysts at Dryden Financial initiated coverage of the company with a "buy" rating -- attributed to the expectation of significantly increased earnings growth for 2005 and the commencement of production at Kansanshi.
Ever-bullish Canaccord Capital reiterated its "buy" rating in March, while upping its price target to $27.50.
Also in recent times, the outfit's wholly owned subsidiary, International Quantum Resources, has sold its equity ownership stake in Anvil Mining, for proceeds of US $22 m.
According to Pascall, the parting of ways is an amicable one. "We have enjoyed an excellent relationship with Anvil since acquiring this equity stake... With First Quantum's own considerable opportunities in the region, this interest in Anvil has increasingly become less important and therefore no longer deemed a core asset. With its excellent portfolio of assets, there is now strong market interest in Anvil as a financially sound growing copper producer in the DRC."