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The Canadian miner said copper production reached almost 139,000 tonnes, down 33% from the previous quarter due to a severe rainy season in Zambia and a standoff with the government of Panama, where the company runs the vast Cobre Panama copper mine.

Output at First Quantum’s Sentinel mine fell by 51% due to water accumulation on the pit, while at Kansanshi production dropped by 18% as a result of the rainy season and lower feed grades.

Cobre Panama’s production was interrupted amid a dispute with the country’s government over tax and royalty payments. First Quantum reached a new deal with Panama in March, with mining operations ramping up to full production levels within two days and five shipments of copper sailing during the rest of March.

“We are focused on improving operational performance and expect production to recover over the course of the year and, as such, we remain committed to our guidance for 2023,”chief executive Tristan Pascall said.

Despite the challenges, the company kept 2023 full-year guidance untouched and the results were broadly in line with market consensus.

BMO analyst Jackie Przybylowski said that as operations recover from the disruptions and other projects move forward, First Quantum’s production is expected to be “more weighted” by the end of the second half of the year.

“We maintain our Market Perform rating, which continues to reflect First Quantum’s already rich valuation in our view,” she wrote on Wednesday, adding that the bank’s target for the company had been raised to C$32 per share, from C$30.

Przybylowski noted the market is watching closely the results of First Quantum’s public consultations in Panama, as the new contract must be presented before the country’s National Assemble in the legislative term starting July 1 for final approval.