Investor Presentation September 2011

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Investor Presentation September 2011

  1. 1. A SOLID TRACK RECORD A STRONG OPERATING AND FINANCIAL BASE TRIPLING PRODUCTION CAPACITY Growthwww.first-quantum.com TSX: FM LSE: FQM LuSE: FQM 1September 2011
  2. 2. Cautionary Note ConcerningForward-Looking StatementsSome of the statements contained in the following material are forwardlooking statements and not statement of facts. Such statements are based onthe current beliefs of management, as well as assumptions based onmanagement information currently available. Forward-looking statements aresubject to various risks, uncertainties and other factors that could causeactual results to differ materially from expected results. Readers must rely ontheir own evaluation of these uncertainties.Note: all dollar amounts in US dollars unless otherwise indicated 2
  3. 3. First Quantum - A Compelling Investment Total Shareholder ReturnFirst Quantum: January 2000 to August 2011— A mid-tier and growing mining and metals First Quantum 3695.28% company currently producing LME grade "A" 2527.49% copper cathode, copper in concentrate and gold. Norilsk Southern Peru 2388.65%A Compelling Investment: Antofagasta 2042.75%— Solid track record 1670.09% • Operational - developed five mines, within Inmet nine years, on schedule and within budget Vale 1493.10% • Return to shareholders - delivered an BHP Billiton 629.14% annualized return of ~37% since 2000 546.60% Teck— A significant and growing copper producer Freeport 495.37% • Set to more than triple production in 2015 Lundin 368.18%— An emerging nickel producer 296.81% • Set to become a significant nickel producer Rio Tinto in 2012 Vedanta 280.84%— Solid financial position Hudbay 223.05% • Net cash of $1.1 billion @ June 30 2011 Xstrata 221.23%— An industry with strong fundamentals • Forecast demand exceeds supply Anglo American 188.41% Kazakhmys 93.00% Eramet 67.08% 6.96% ENRC 3
  4. 4. A Solid Track Record of Results Revenue Earnings* Operating Cash Flow ($ millions) CAGR = 65% CAGR = 66% ($ millions) ($ millions) CAGR = 64% $557 $900 $2,378 $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
  5. 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 5
  6. 6. A SOLIDPlatform 6
  7. 7. Operations – Kansanshi Copper/Gold Mine• Located near Solwezi, Zambia• Copper-gold operation• Production began in 2005• 2010 production — 231,124 tonnes of copper — 109,629 ounces of gold 7
  8. 8. Operations – Kansanshi Copper/Gold Mine Multi-phase expansion: • Oxide circuit - Phase 1 to 7.2 Mtpa expected by Q1 2012 - Phase 2 to 12Mtpa expected at end of 2012 • Sulphide circuit - Addition of 16 Mtpa planned to begin in 2012 • Current aim to reach annual production of ~400,000 tonnes by end of 2014 • A major program of resource development and exploration drilling underway 8
  9. 9. Operations – Guelb Moghrein Copper/Gold Mine • Located near Akjoujt, Mauritania • Copper-gold operation • Production began in 2006 • 2010 production — 36,969 tonnes of copper — 81,766 ounces of gold 9
  10. 10. Operations – Guelb Moghrein Copper/Gold Mine • Optimizing recent expansion • Increased throughput and enhanced recoveries will allow annual copper production to rise to ~50,000 tonnes • Ongoing exploration at and nearby focused on identifying additional feedstock to extend the life of the operation 10
  11. 11. A ROBUST PROJECT PIPELINEGrowth 11
  12. 12. A Significant and Growing Copper ProducerAn Emerging Nickel Producer Copper Production Profile • Copper production objective: 1,200 000’s tonnes 900 – Triple production in 2015 to ~1.1M tonnes 600 – Expected to be world’s 5th largest 300 producer - • Nickel production objective: 04 05 06 07 08 09 10 12F13F14F15F Actual Provisional – Beginning in 2011 and increasing to 55,000 tonnes in 2014 75 Nickel Production Profile 000’s tonnes 60 • Investment in growth projects: 45 – ~ $2 billion projected over the 2011 – 30 2015 timeframe – excluding 15 assumptions on the Haquira deposit - 2012F 2013F 2014F and the building of a copper smelter in Zambia 12
  13. 13. Projects – Ravensthorpe Nickel Project• Located in Western Australia• Open pit using conventional drill and blast, load and haul system• Processing plant using proven technology• Purchased in February 2010 for US$340 million• Estimated capital for modification of ~US$200 million 13
  14. 14. Projects – Ravensthorpe Nickel Project• On schedule for commissioning in 2nd half 2011• 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• Assumptions: nickel = $6.75/lb; cobalt = $12.00/lb• Expected mine life >30 years 14
  15. 15. Projects – Kevitsa Nickel/Copper Project• 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
  16. 16. Projects – Kevitsa Nickel/Copper Project• 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• Assumptions: – nickel = $6.75/lb; copper = $2.00/lb; Euro/US = 1.35• Capital cost estimate of $400 million• Estimated mine life >20 years• Ongoing drill program returning further positive results• Production targeted for mid 2012 16
  17. 17. Projects – The Trident Project• Located in Northwestern Province – ~150 kilometres from the Kansanshi mine• Acquired in January 2010 for ~$260 million• Trident project comprises: – Sentinel copper deposit – Enterprise target – Intrepid target• Land use licenses obtained 17
  18. 18. Projects – The Sentinel Deposit• EIA and land use agreement approved and obtained• Resource drilling complete; finalization of resource estimate expected in late 2011• Excellent continuity of mineralization• Mining and processing conditions appear relatively straightforward 18
  19. 19. Projects – The Sentinel Deposit• Proceeding with design of a project to initially produce 150,000 tonnes of copper in concentrate annually• Rising up to 300,000 tonnes of copper in concentrate• Production target could increase once resource estimate finalized• Initial design has commenced; long- lead items ordered• Commercial production expected in 2014 19
  20. 20. Projects – New Copper Smelter• Compelling economics• Limited smelter capacity in Zambia currently• Facility would be dedicated to production from Kansanshi and Sentinel• Benefits include: – Production of sulphuric acid for use in Kansanshi’s oxide circuit – Existing infrastructure – Available workforce in nearby community – Reduce dependence on 3rd party available capacity 20
  21. 21. Projects – Haquira Copper Deposit• 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: – Expanding infill and condemnation drill program – Updated reserves and resources estimate and the environmental impact assessment in mid-2012 when detailed project design will commence 21
  22. 22. CopperIndustry 22
  23. 23. Surpluses Overestimated & Deficits Underestimated • Market often underestimates future demand and overestimates future supply • Leads to increased price volatility Source: Brook Hunt 23
  24. 24. Copper Grades Have Declined Significantly • Copper grades have declined significantly over the past 15 years • This trend is set to continue Source: Brook Hunt & Broker Research 24
  25. 25. Emerging Markets - Substantial Growth Ahead • Emerging economies experiencing significant growth • Still a long way to go for the vast majority of the world’s population • Brazil and China only at levels experienced by the US and UK in the 1920s Source: Maddison 25
  26. 26. Projected Impact on the Copper Market Source: International Copper Study Group 26
  27. 27. A Rapidly Growing Mining & Metals Company• Unique technical strength at the core of the strong track record of delivery• Existing operations provide a solid platform to support growth• Strong financial position and cash flow• ~$2 billion investment in growth over 2011 – 2015 to significantly increase copper production• Growth program expected to position First Quantum as the world’s 5th largest copper producer and a significant nickel producer 27
  28. 28. A SOLID BASE A POSITION OF STRENGTH A ROBUST PROJECT PIPELINE Growthwww.first-quantum.com TSX: FM LSE: FQM LuSE: FQM 28September 2011
  29. 29. Corporate Profile Stock exchange listings & symbols – (S&P/TSX 60 Index) TSX: FM LSE: FQM LuSE: FQM Shares issued and outstanding 476.3 million Fully diluted 476.3 million 52-week share price range C$29.43 – C$12.28 Recent share price – September 2, 2011 C$22.71 Market capitalization – $ millions C$11.0 billion Average daily trading volume - shares 2.5 million Dividend paid in regards to year 2010 – per share C$0.80 UK=33%; US=23%; Geographic breakdown of institutional shareholders Canada=18%; other=10% 29

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