TD UPDATETHE TD COWEN INSIGHT HBM reported stronger-than-expected adjusted EPS and EBITDA for Q1/24, handily beating TD and consensus forecasts. While consolidated copper production was below our forecasts, gold production was well ahead of expectations both in Peru and Manitoba.
Higher gold prices are also helping. Management continues to focus on cost containment, production improvements, and reducing debt.
Impact: POSITIVE HBM reported Q1/24 adjusted EPS of $0.16, well above TD and consensus at $0.03. Adjusted EBITDA was $214M, also above TD at $183.4M and consensus of $175M.
HBM reported $87M of FCF for Q1/24. Q1/24 consolidated copper production was 34,749 tonnes (TD: 38,400 tonnes); cash cost for the quarter was $0.16/lb, significantly below TD's forecast of $1.30/lb on strongerthan-expected gold production.
Consolidated gold production for the period was 90,392 ozs (TD: 73,800 ozs). Constancia produced 24,576 tonnes of copper-in-concentrate during the quarter, ~8% below our forecast of 26,700 tonnes. Constancia's C1 cost was $0.43/lb, beating our forecast of $1.48/lb with the operation achieving better-than-expected gold production at 29,144 ozs (TD: ~23,000 ozs). Manitoba produced 56,831 oz gold in concentrate and in dor during the quarter, ~24% above our forecast of 45,700 oz.
Manitoba cash cost was $736/oz, which compares with our forecast of $710/oz. The New Britannia mill achieved record throughput levels, averaging 1,870 tonnes per day in the first quarter, exceeding its original design capacity of 1,500 tonnes per day. HBM received a permit to increase New Britannia throughput to 2,500 tonnes per day.
Copper Mountain produced 7,024 tonnes of copper-in-concentrate during the quarter, below our forecast of 9,100 tonnes. Copper Mountain's C1 cost was $3.49/lb, above our forecast of $2.30/lb. Copper recoveries averaged 83%, better than our forecast of 81% and mill throughput was ~40ktpd, slightly below our forecast of 41ktpd.
Copper recovery in Q1 was the highest achieved in a decade. Copper and gold hedges. At the end of the quarter, HBM had 15.9 million pounds of copper forwards and 19.8 million pounds of copper collars outstanding, representing approximately 44% of 2024 Copper Mountain production guidance levels at prices between $3.97/lb and $4.36/lb. HBM also entered into zero-cost collars for 36,000 ounces of gold from April to December 2024 at an average floor price of $2,088/oz and an average cap price of $2,458/oz. Guidance unchanged for consolidated copper production and cash costs of 137,000 to 176,000 tonnes at $1.05 to $1.25 per pound.
Target $14.00