First Quantum shares down 16.76% on closure of Panama mine

The price of  First Quantum shares on the Toronto stock exchange,(TSE) fell 2.76%, Friday, December, 16  adding to the 14% they lost of Thursday when it became known that the Panama Government ordered the closure extraction operations in Donoso, Colón.

In addition to seeing its share price drop, the Canadian mining company suffered a rating downgrade by the National Bank of Canada for failing to comply, on December 14, with the deadline given by the Government of Panama for the signing of a new contract law

Shane Nagle, an analyst at the bank, indicated that “although we see the order to close operations as a tougher negotiation tactic on the part of the Government, this action creates greater uncertainty about the value that the market will give to the company.”

Credit Suisse reiterated its neutral rating on the shares of the Canadian mining company and noted that the closing order generates a lot of uncertainty about the future of the company, as the Cobre Panama project is one of the pillars of the Canadian company. .

According to the financial statements at the end of the third quarter of 2022, 45% of the copper processed by First Quantum was extracted from Donosco, while 39% of the $5.794 billion that the company generated in that period was the product of the sales from the mine.

Cobre Panamá generated 876 million dollars in gross profit at the end of the third quarter of this year, which represented 47% of the $1.839 billion reported by the mining company to the TSE.

Investment fund executives that have First Quantum bonds in their portfolio told La Prensa that the decision adopted by the Panamanian authorities has generated confusion about the immediate future of the mine.