01:56 PM EDT, 10/03/2024 (MT Newswires) -- First Quantum reports its fiscal third quarter results on October 22.

Deutsche Bank is forecasting third quarter EBITDA of $357 million, 8% below consensus ($390 million) and up 6% on the second quarter. "We expect modestly higher output at Kansanshi and Sentinel despite operational setbacks in recent weeks (temporary power shortage) and declining costs QoQ with higher gold prices more than offsetting the impact of higher power import costs beginning this quarter ($0.06/lb cost impact on an annualised basis)," notes Deutsche Bank.

Deitsche Bank believes FY 2024 production and cost guidance is achievable, if temporary power issues are resolved by early fourth quarter and reflecting a sales catch up at Zambia in the final quarter (following port issues in Q2). On Cobre Panama, management recently noted that the mine will likely be a more significant priority for the Panamanian government to address early next year, following the results of an independent environmental audit which is yet to begin.

"We recently upgraded FM to Buy: whilst there is significant uncertainty over if, when and how the mine will restart, we view the stock as a hedged copper play and see attractive risk reward at current levels."

The shares are currently pricing in only $4-5 billion for Cobre Panama which could be recoverable through the company's arbitration tracks. Under a full reopening scenario, there is significant upside potential of between 70% and >100%, Deutsche Bank said.

First Quantum is rated Buy, with $24 target.

Price: 18.56, Change: -0.58, Percent Change: -3.03