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First Quantum Minerals says Cobre Panama project will cost and produce more

Last updated: 05:29 29 Jan 2014 AEDT, First published: 06:29 29 Jan 2014 AEDT

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First Quantum Minerals (TSE:FM)(LSE:FQM) shares rose on Tuesday even after the company told investors in an update that its Cobre Panama copper project will cost more to build than initially planned, as the mine will also produce more annually. 

The miner, which acquired the former owner of Cobre Panama Inmet Mining last March, said the capital cost estimate is now $6.4 billion, up from an earlier forecast of $6.2 billion. 

But the company also said the revised project will have installed capacity of about 70 million tonnes per year for the first 10 years, about 17% higher than the Inmet plan, producing an average of approximately 320,000 tonnes of copper annually over the life of the mine, up roughly 20% from before.

The project, beyond year 10, can further expand to 100 million tonnes per year, the company said. The mine life is projected at 34 years. 

Since acquiring Inmet last year, First Quantum's focus has been to review and stabilize all activities and focus on the key aspects of developing Cobre Panama, including the construction and contracting plans and the implementation of site infrastructure. 

It said it is still reviewing the potential sale of excess power, and the validation of the measured and indicated resource estimate as reported and filed by Inmet in May 2010. 

First Quantum's stock rose 2.2% on Tuesday afternoon, to C$20.28 in Toronto. So far this year, the stock has advanced nearly 6%. 

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