Martin Hubbes, CFA First Quantum Minerals FM-T COMMENT Feb 15, 2011

There comes a downside point when you have to decide whether to sell it all or, if your conviction is still there, to double up. No sense sitting around if your viewpoint's changed or if you have a higher conviction. Constitutional challenges in the courts in Panama, winding down operations, so it's quite a material issue.

Move on to something with more visibility that lets you sleep at night. Why fight this uphill battle? This is not a technical mining issue. Company can't control the social, political, or judicial outcomes.

We think the market has effectively now written off the mine, so any good news at all would have an amplified positive effect on the stock. But we doubt an agreement is going to be reached. FM is likely going to breach some debt covenants, but it is not in creditors' interest to force anything on the company. It has other assets, and has lots of short term liquidity. We would not expect bankruptcy here, though financial risks have indeed increased, and creditors can be difficult at times. There is still a question of environmental costs in Panama, and whether FM can capture any damages from the government. Fair value is likely $8 to $12, assuming no other negative news. That being said, the mine accounted for about 5% of world copper production. Copper potential goes into a global supply deficit, from a surplus, with any economic strength. Thus, FM's other assets might see some benefit even from its disaster in Panama. 
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Too risky for investors. Panama has lots of geopolitical risk. Better options for copper investors. Unsure whether company will survive without operations in Panama. 

He hasn't owned mining companies in a very long time. Shocking to see what's happened to FM with that mine, as it's a great asset. Shows how risky it is to invest in foreign countries outside NA. 

ABX knows how to allocate capital very well. If he were interested in a mining company, this would be the one, as the CEO certainly knows what to do. Eventually, the FM mine has to be up and running. If ABX can run it properly, there's a lot of value that can be created.

Small companies can't exist anymore in this new age of mining, oil/gas. We're going to see a lot of M&A.

The concern is on its mine in Panama and what the government will do. There is an election coming up and there could be a compromise on the opening of the mine. With First Quantum and Franco Nevada both having a stake in this mine there is basically a free option based on the price of their shares. Both companies have upside at this price.

Good assets, but very serious geopolitical problem. At whim of politicians. If you own, worth a lot if they can get it sorted out. He owned, but got stopped out. Higher risk than what he wants to be involved in.

Copper's had an incredible run, plus new Panaman president will reopen negotiations. His analysts assume it'll come back online in 2026. If not, look out. Once bit, twice shy, too much uncertainty. Risk/reward too risky.

Even with change of government in Panama, still black or white Vegas-type bet as to whether the mine will come back on. Wouldn't buy. He'd look at other copper names where it's "when" not "if". Speculative. He owns it, bought it way cheaper, wouldn't buy at these levels.

Lots of uncertainty with its Panama mine, and the issue is at an international tribunal. But that's the risk of the mining business. He prefers and owns HBM in his global equity growth fund.

Looking at it with renewed interest. Political situation has changed, license may be reinstated. That's critical to this company going forward, but also critical for Panama. Multi-decade reserve life, produces 1.5% of world's copper. Cautiously optimistic. Potential outsized upside for a risk-hungry investor.