Q2 2026 marks a turning point: first concentrate from stockpiles, a 87.73/100 audit score, and the end of hedging — but a full restart still hinges on Panama's government.
FM.TO · Earnings Call · 2026-07-29
The Long Wait Ends: Stockpile Processing Is Live
First Quantum Minerals (FM.TO) reported Q2 2026 results that finally show Cobre Panama moving from a frozen asset back to a functioning mine, albeit in a limited, stockpile-driven manner. The most significant development is the commencement of stockpile processing, which CEO Tristan Pascall described as a "measured approach" and highlighted that Train 3 achieved "successful recommissioning … in May, and production of first concentrate in June which is earlier than our third quarter target." “It is been a very busy half or the first half of the year for First Quantum and in the broader markets.” — Anthony Tristan Pascall, CEO or President · 2026-07-29 This is a concrete milestone after two years of preservation and safe-management activities. The company processed 2.1 million tonnes of ore through Train 3, producing about 3.2 thousand tonnes of copper in concentrate. The CEO noted that at current processing rates and spot copper prices, Cobre Panama is expected to be neutral to positive free cash flow. The stockpile program is also an environmental imperative, mitigating acid rock drainage and helping manage the tailings dam. With an estimated 38 million tonnes of ore containing ~70,000 tonnes of recoverable copper, it supports around 12 months of processing at current rates. The company has already cycled over to Train 2, and there is potential to add Train 1, though people constraints remain.
Audit Score: A Vote of Confidence
The long-awaited independent environmental audit of Cobre Panama was published during the quarter, and the result was strong.
The audit concluded that Cobre Panama is a professionally managed and technically sound operation with a high degree of regulatory compliance. Achieving an overall score of 87.73 out of 100.
With 361 of 372 units in full compliance and only 7 partial, the audit found no fundamental gaps, just areas for improvement like reforestation and biodiversity that had understandably slipped during the closure. The Ministerial Commission is now reviewing the findings and will make recommendations to the President, but no timeline has been set. CEO Tristan Pascall noted, "We do not have a clear timeline as yet regarding the decision making process, but we know that they are very focused on this topic." This continues a long wait for a durable resolution.
Financials: Cost Pressures but a Cleaner Path
Financially, the quarter was solid. Revenue rose 8% to $1.5B, EBITDA jumped 23% to $400M, helped by higher copper prices and the opportunistic sale of surplus sulfuric acid. However, the quarter also included final hedge losses of $159M on copper and $5M on gold. CFO Ryan MacWilliam explained, “With strategic hedge book now fully settled, we have no further hedges in place. giving us full exposure to spot copper and gold prices going forward.” — Ryan L. MacWilliam, CFO or Finance Executive · 2026-07-29 This is a pivotal shift: the company is now unhedged just as copper prices are strong and production is expected to rise in H2. The hedge program that protected the balance sheet through S3 completion has ended, and the company will directly benefit from the ~$5.50–6.40/lb copper environment. Net debt increased $123M to $5.4B, but liquidity remains strong at ~$2B. Cost guidance was unchanged, though there is a ~$0.25/lb upside risk from fuel, Kwacha, and gold price assumptions.
The Road Ahead: Still Waiting on Panama
The key uncertainty remains when the government will decide on the mine's future. In prior quarters, management expressed hope that the environmental audit would unlock negotiations. At the Q4 2025 call (October 2025), Tristan Pascall said, “We remain disposed to the government's table. We will seek -- it will be the President that sets out that timetable and the pathway to those milestones and for progress.” — Tristan Pascall, Chief Executive Officer · 2025-10-29 By the Q1 2026 call (February 2026), he anticipated, “we do expect the audit will be completed in April.” — Orest Wowkodaw, Analyst · 2026-02-11 Now the audit is complete, but the decision process has moved to the Train 3? Actually, the commission is the next step, and management reiterates that a full restart would take 6–9 months to reach 80–90% throughput. As CEO stated in Q&A, “We will certainly be able to get to 80% or 90% of our throughputs within the 6 to 9 months that we have spoken about, and we think that guidance remains relevant as good as we have for the time being.” — Anthony Tristan Pascall, CEO or President · 2026-07-29 The company has spent ~$60M of the $250M budgeted for the stockpile restart, and an incremental $200M would be needed for a full operational ramp. Arbitration remains suspended, but all rights are protected. In summary, Q2 2026 represents a tangible step forward: Cobre Panama is processing ore, the audit is clean, and the company is fully exposed to copper upside. But the ultimate prize — a durable, government-sanctioned restart — still lies ahead, with the durable resolution hanging on the political process in Panama.