First Quantum Minerals upgraded ahead of anticipated restart of Cobre Panama mine

UBS analysts person upgraded First Quantum Minerals (TSX:FM) to ‘Buy’ from ‘Neutral,’ citing improving risk-reward dynamics and the anticipated restart of the Cobre Panama (CP) copper mine, located successful Panama.

The concern slope besides raised its 12-month terms people to C$50 per share, up from C$38, and supra existent levels of astir $34.

The analysts highlighted the restart of CP arsenic “the cardinal operator of the stock,” adding that the cognition is “increasingly apt successful 2026 with the results of the integral audit to beryllium published successful April and CP acceptable to commencement processing stockpiled ore implicit the adjacent 3 months.” The steadfast besides pointed to a caller adept telephone supporting the presumption that CP volition afloat resume accumulation this year.

UBS wrote that erstwhile CP is operational, it expects First Quantum to payment from a stronger equilibrium expanse and charismatic maturation optionality. The analysts noted that the institution is “a bully relation (and builder) of high-quality copper assets” and that the banal is presently trading astatine astir 4.5x 2027 endeavor worth (EV)/earnings earlier interest, taxes, depreciation and amortization (EBITDA).

UBS’s valuation reflects a 7x EV/EBITDA aggregate and incorporates 50% of CP’s nett contiguous value.

Two near-term catalysts were highlighted by the firm: the results of an audit by SGS, expected successful April, and the ceremonial support from the Panamanian authorities for CP to process stockpiled ore.

“In our opinion, this is simply a worldly measurement towards a afloat restart, allowing FM to commencement investigating the works instrumentality which has been idled for 2.5 years,” the analysts wrote.

UBS acknowledged that the economics of the updated statement stay somewhat much onerous than erstwhile arrangements. The bank’s basal lawsuit assumes an summation successful the effectual taxation complaint to astir 45% and that the authorities volition presume a 10% equity involvement successful CP.

Looking beyond CP, UBS expects the mine’s restart to broadly treble First Quantum’s copper accumulation and EBITDA by 2027 portion reducing leverage. Management plans to support a stronger equilibrium expanse going forward, advancing caller maturation projects lone erstwhile nett indebtedness to EBITDA is astir 1x, adding that the institution whitethorn past prosecute the Taca Taca task successful Argentina successful the 2nd fractional of 2027, apt successful concern with different investor.

The analysts besides said they stay “constructive connected the outlook for copper and expect the interaction of Middle East struggle to beryllium modest,” portion adjusting net estimates to bespeak a slower-than-anticipated CP startup.