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Investor Presentation April 2011
 

Investor Presentation April 2011

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    Investor Presentation April 2011 Investor Presentation April 2011 Presentation Transcript

    • Global Diversified TSX: FMLSE: FQM www.first-quantum.com April 2011
    • Cautionary Note ConcerningForward-Looking Statements Some of the statements contained in the following material are forward looking statements and not statement of facts. Such statements are based on the current beliefs of management, as well as assumptions based on management information currently available. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from expected results. Readers must rely on their own evaluation of these uncertainties. Note: all dollar amounts in US dollars unless otherwise indicated 2
    • A Growing Diversified Metals and Mining Company Profile: Copper Production Objectives  A mid-tier mining and metals company 000’s tonnes currently producing LME grade "A" 1,000 copper cathode, copper in concentrate, gold and sulphuric acid 800 Core strength: 600  Discovering, developing and operating mines efficiently and cost-effectively 400 Investment Highlights: 200  A significant copper producer with considerable new production growth in - the near and medium term 04 05 06 07 08 09 10 12F13F14F15F  An emerging nickel producer  Expanding into high-potential, low-risk Actual Further potential mining jurisdictions  Strong financial position and capacity to fund growth initiatives 3
    • A Solid Track Record Revenue Earnings* Operating Cash Flow ($ millions) ($ millions) ($ millions) $2,378 $557 $900 $520 $772 $1,864 $419 $678 $1,740 $399 $637 $1,539 $564 $300 $1,095 $155 $237 $445$114 $28 $46 *Before impairments and other adjustments 4
    • A Strong Operating Base Unit Cash Margin Debt to Capitalization Cash & Equivalents (US$/lb copper) (US$ millions) Ratio$2.80 1.60 $1,400$2.10 1.20 $1,050$1.40 0.80 $700$0.70 0.40 $350 $- 0.00 $- 5
    • Strong Operating Base & Development Pipeline Operations  Projects  Exploration — Kansanshi, Zambia — Ravensthorpe, Australia — Enterprise, Zambia — Guelb Moghrein, Mauritania — Kevitsa, Finland — Fishtie, Zambia — Sentinel, Zambia — Haquira, Peru  Other Investment — Mopani (16.9%), Zambia 6
    • ADVANCING GROWTH & DIVERSIFICATION STRATEGY 7
    • Growth and Diversification Copper Production Objectives 000’s tonnes  Copper production objective: 1,000 — 46% growth to 470,000 tonnes in 2015 – 800 excluding potential from Sentinel and 600 Haquira which could add a further 500,000 tonnes 400  Nickel production objective: 200 — Beginning in 2011 and increasing to - 04 05 06 07 08 09 10 12F13F14F15F 55,000 tonnes in 2014 Actual Further potential  Investment in growth projects: Nickel Production Objectives 000’s tonnes — ~ $2 billion projected over the 2011 – 60 2015 timeframe – excluding assumptions on the Haquira deposit and the building 45 of a copper smelter in Zambia 30 15 - 2011F 2012F 2013F 2014F 8
    • Expanding the Kansanshi Mine (80%), Zambia  Located near Solwezi, Zambia  Copper-gold operation  Production began in 2005  2010 production  231,124 tonnes of copper  109,629 ounces of gold 9
    • Expanding the Kansanshi Mine (80%), Zambia  Stepped up exploration program  Primary focus on the Southeast Dome prospect  Updated reserves & resources estimate by end of 2011  Will provide design details for Phase 2 expansion  60% expansion to the production capacity over the 2011 – 2015 timeframe  Phase 1 underway – 20% expansion to oxide circuit; added flexibility - 2011  Phase 2 in 2012 – new concentrator with throughput capacity of 25M tonnes per year - 2014  Production objective of 400,000 tonnes of copper per year in 2015  Capex estimate of $390M 10
    • Optimizing Guelb Moghrein (100%), Mauritania  Located near Akjoujt, Mauritania  Copper-gold operation  Production began in 2006  2010 production  36,969 tonnes of copper  81,766 ounces of gold  Estimated 8-year remaining mine life; ongoing exploration 11
    • Optimizing Guelb Moghrein (100%), Mauritania  Optimizing recent expansion — Throughput capacity expansion to 3.8 million tonnes per year  Combination of increased production and enhanced recoveries will allow annual copper production to rise to approximately 50,000 tonnes  Ongoing exploration at and nearby focused on identifying additional feedstock to extend the life of the operation 12
    • Ravensthorpe Nickel Project (100%), Australia  Located in Western Australia  Three lateritic deposits — Halleys, Hale-Bopp and Shoemaker-Levy — Resource comprises 385Mt @ 0.62% Ni and the reserve comprises 235Mt @ 0.67% Ni  Open pit using conventional drill and blast, load and haul system  Processing plant using proven technology 13
    • Ravensthorpe on Schedule for Commissioning  85% of nameplate capacity  Average annual production of nickel metal: — 39,000 tonnes for the first five years; 28,000 tonnes over the life of mine  C1 cost estimate: — $5.00/lb nickel — $3.00/lb without realization  Expected mine life >30 years  Capital of approx. $190 million  Assumptions: — nickel = $6.75/lb; cobalt = $12.00/lb  Production in 2H 2011 14
    • Kevitsa Nickel-Copper Project (100%), Finland  Located in northern Finland  Open pit mine — Estimated measured and indicated resources of 240 million tonnes grading 0.30% nickel; 0.28 nickel sulphide; 0.41% copper; using a nickel cut-off grade of 0.1%  Conventional processing to produce two concentrates: — nickel-cobalt-PGE-concentrate grading ~ 12% nickel — copper-PGE-gold concentrate grading ~ 28% copper  Designed for 5 million tonnes per annum with built-in expansion capabilities 15
    • Kevitsa on Schedule for Completion  At initial capacity average annual production — 10,000 tonnes of nickel — 20,000 tonnes of copper  LOM C1 cost estimate of $2.50/lb nickel, net of by product credits  Capital cost estimate of $400 million  Estimated mine life >20 years  Assumptions: — nickel = $6.75/lb; copper = $2.00/lb; Euro/US = 1.35  Ongoing drill program returning further positive results  Production targeted for mid 2012 16
    • Trident Project (100%), Zambia  Located in Northwestern Province – approx.150 kilometres from Kansanshi mine  Acquired in January 2010  Trident project comprises five prospecting licences totaling 2,300 square kilometres that includes: — Sentinel copper deposit — Enterprise nickel target 17
    • Trident Project - Sentinel Deposit, Zambia  Significant drill program underway with 16 drills onsite  Excellent continuity of mineralization  Mining and processing conditions appear relatively straightforward  Mining licence application about to be filed  Extensive CSR program already underway 18
    • Sentinel Deposit Drill Pattern – February 2011 Completed >260 holes for 90,000m 19
    • Sentinel’s Estimated Potential  Internal evaluation assumptions: — Resource in the range of at least 700 million tonnes at a headgrade in the range of 0.65% to 0.80% copper — Annual throughput rate of 40 million tonnes — Annual production of ~250,000 tonnes of copper — Capital cost in the range of $1B, including the necessary infrastructure — recoveries in the range of 90% to 95% — unit cash cost of production approximate to Kansanshi  Initial design and construction could start in 2011 with commercial production in early 2014 20
    • Potential New Copper Smelter, Zambia  Bulk of Kansanshi concentrate treated at smelters ~ 250 kilometers from mine site  Limited smelter capacity  Substantial production increase expected from Kansanshi mine and Sentinel deposit  Evaluation underway to determine the economics and options for building and operating a copper smelter close to Kansanshi  Completion and decision expected in 2H 2011 21
    • Haquira Copper Deposit (100%), Peru  Acquired in December 2010  Large scale copper project located in southern Peru — M&I resource of 3.7 million tonnes of copper equivalent and an inferred resource of 2.4 million tonnes of copper equivalent  Current priorities: — Expand infill and condemnation drill program — Initiate the process to expand the exploration program — Commence the EIA — Updated reserves and resources estimate and the environmental impact assessment in mid-2012 when detailed project design will commence 22
    • A Significant and Growing Copper Producer Total Copper Production Copper Production 000’s tonnes Lbs per common share 1,000 Base Further potential 800 2010F 8.26 - 2012F 9.21 - 600 2013F 9.46 - 2014F 10.49 6.39 400 2015F 12.02 12.79 200 - 04 05 06 07 08 09 10 12F13F14F15F Actual Further potential Assumptions: 1) Sentinel granted permits and board approval by mid 2011 2) Haquira in production in 2015 23
    • An Emerging Nickel Producer Total Nickel Production Nickel Production 000’s tonnes Lbs per common share 2011F 0.38 2012F 1.28 2013F 1.33 2014F 1.41 24
    • Lowering Political Risk Profile Country Ease of Doing Business Australia 10 Finland 13 Peru 36 Zambia 76 Mauritania 165 Source: World Bank Survey – Doing Business 2011  The Doing Business project provides objective measures of business regulations and their enforcement across 183 economies and selected cities at the subnational and regional level 25
    • Goal: A Globally Diversified Mining Company  Technical strength at the core of growth strategy  Existing operations provide a solid platform to support growth  Strong financial position and cash flow  2011 milestones in execution of growth strategy: — Emergence as a nickel producer — Establishing a presence in Peru  ~$2 billion investment in growth over 2011 – 2015 to significantly increase copper production 26
    • Global Diversified TSX: FMLSE: FQM www.first-quantum.com April 2011
    • Corporate Profile Stock exchange listings & symbols – (S&P/TSX 60 Index) TSX: FM LSE: FQM Shares issued and outstanding 86.2 million Fully diluted 95.1 million 52-week share price range C$138.25-C$48.20 Recent share price – March 28, 2011 C$120.60 Market capitalization – $ millions C$10.4 billion Average daily trading volume - shares 621,000 Dividend paid in regards to year 2010 – per share C$0.80 Geographic breakdown of institutional shareholders NA=45%; Eur=45%; other=10% 28
    • Financial Summary Year ended December 31, 2010 Total revenues $2,378.2M Cost of sales $1,050.7M Net earnings, before impairment and acquisition costs $557.4M Earnings per share, before impairment and acquisition costs $6.94 Cash flow before working capital movements $899.8M Financing activities $(110.0)M Investing activities $(225.6)M Cash flow per share before working capital movements $11.21 Cash and equivalents – as at December 31, 2010 $1,344.9M Average shares outstanding for the period 80.3M 29
    • Operating Summary Year ended December 31, 2010 Copper produced – (tonnes) 323,017 Copper sold – (tonnes) 311,560 Gold sold – (ozs) 188,368 Copper in concentrate inventory – (tonnes) 36,753 Cash cost – (per lb) $1.18 Total cost – (per lb) $1.47 Realized copper price – (per lb) $2.98 Realized gold price – (per oz) $1,033 30 30