1. The New Leader in Global Copper
December 2013
TSX: FM; LSE: FQM
2. Cautionary Note Regarding Forward-Looking Statement
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
3. First Quantum Minerals - The New Leader in Global Copper
• Geographically diversified asset base
• 7 high-quality, stable operations; current
total copper and nickel production
capacities of 445 ktpa and 45 ktpa,
respectively
• 6 major projects with completion targeted
from mid-2014 to 2017
• Total production capacities for copper and
nickel to rise to 1.3 Mtpa and 110 ktpa,
respectively by 2018
• Proven track record of building projects
efficiently and delivering superior
shareholder returns
• Low-cost producer: $1.37 - $1.45/lb
copper; $5.20 - $5.60/lb nickel
Pre-Acquisition First Quantum
Post-Acquisition First Quantum
Australia
10%
Australia
19%
Africa
36%
Europe
10%
Americas
45%
Africa
71%
1
Mtpa1
1.3
1 2018E
Copper production
Europe
9%
Mtpa1
3
4. Strong Q3 2013 Results
•
•
•
•
Copper production 36% higher to 114,488 tonnes
Nickel production up 26% to 12,485 tonnes
Gold production 29% higher to 65,368 ounces
Copper production cash costs lower by 19% to $1.16 per pound
• Comparative net earnings of $143.6 million or $0.24 per share
•
•
inclusive of $21.9 million or $0.04 per share of unfavorable, recurring acquisition-related
adjustments
Unfavorable impact of $112.9 million due to lower metal prices
As at September 30, 2013
•
•
•
$617 million of unrestricted cash and equivalents
$2,945 million of undrawn facilities
$2,892 million of drawn debt
Q3 '12 Q4 '12 Q1 '13 Q2'13 Q3'13
Copper Production
Q3 '12 Q4 '12 Q1 '13 Q2'13 Q3'13
Q3 '12 Q4 '12 Q1 '13 Q2'13 Q3'13
Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13
Nickel Production
Gold Production
Copper Cash
Production Cost
4
6. High-Quality, Stable Operations
Kansanshi Cu-Au mine, Zambia
• Located near Solwezi in the north
western Province of Zambia
• First production in 2005
• Open pit mining
• Flexible ore treatment to allow for
variation in ore type :
– sulphide circuit; oxide circuit;
gold facility
• As at December 31, 2012, the
estimated mine life was ~17 years
• Workforce = ~1,700
6
8. High-Quality, Stable Operations
Guelb Moghrein Cu-Au mine, Mauritania
• 100% ownership
• Located 250 kilometres northeast of
the nation’s capital, Nouakchott
• As at December 31, 2012, the
estimated mine life was ~ 9 years
(including stockpiles) based on current
operations
• First production in 2006
• Workforce = ~1,470
8
9. High-Quality, Stable Operations
Guelb Moghrein Cu-Au mine, Mauritania
• Stronger, more sustained performance
over the past 12 months
• Focused on improving plant availability
• IOCG type deposit - structure and mineralogy
has common features with other IOCG
deposits elsewhere in the world
• Magnetite plant project:
– In detailed design stage
– Estimated capex of $50M
– Expected annual production of 1M - 2M tonnes
of 69% Fe magnetite concentrate
– Expected start up in mid 2014
– Expected to extend mine life through retreatment of
tailings dam
9
10. High-Quality, Stable Operations
Ravensthorpe Ni mine, Australia
• Acquired as a decommissioned plant
in 2010
• First production within 20 months
of purchase
• Estimated mine life of 32 years
• Commercial production declared
Dec 28 2011
• Workforce = ~405
• Q3 ‘13 performance
– 9.917 tonnes of contained nickel
– C1 cash cost of US$4.85/payable lb.
10
11. High-Quality, Stable Operations
Kevitsa Ni-Cu-PGE mine, Finland
• Built, commissioned and started
commercial operations within 36
months of board approval
• Estimated mine life of 29 years
• Commercial production declared
August 2012
• Workforce = ~290
• Further potential
– Process optimization
– Approval to increase throughput to a
maximum of 10Mtpa from 5.5Mtpa
– Public hearings & inspections held in
September; decision expected within 6
months
11
12. High-Quality, Stable Operations
Las Cruces Cu mine, Spain
• Acquired in March 2013
• Estimated mine life of 9 years;
potential for extension
• Current average reserve grade of
5.4% copper
• Workforce = 250 direct employees;
650 contractors
• Annual production capacity – 72,000
tonnes of copper cathode
• Q3 ‘13 cash cost of US$0.69/lb.
12
13. High-Quality, Stable Operations
Çayeli Cu-Zn mine, Turkey
• Acquired in March 2013
• Estimated mine life of 6 years with
potential for an additional 3 years
• Average grade of 3.1% copper and
3.6% zinc
• Workforce = 493 employees
• Q3 2013 C1 cash cost of US$0.98/lb.
copper
• 2013 Estimates:
– 23,000 – 26,000 tonnes of copper
– 30,000 – 32,000 tonnes of zinc
13
14. High-Quality, Stable Operations
Pyhäsalmi Cu-Zn mine, Finland
• Acquired in March 2013
• One of the most efficient underground
mines in the world
• Estimated mine life of 6 years
• Average grade of 1.1% copper and 1.9% zinc
• Workforce = 210 employees
• Q3 C1 cash cost of US$0.65/lb. copper
• 2013 Estimates:
– 9,000 – 11,000 tonnes of copper
– 16,000 – 18,000 tonnes of zinc
– 820,000 tonnes pyrite
14
15. Outlook for 2013
Production
Copper
Zinc
(000’s contained tonnes)
(000’s ounces)
(000’s tonnes)
397 - 416
260 - 267
37 - 41
15 - 16
23 - 26
53 - 55
9 - 11
44 - 47
35 – 37
9 - 10
-
232 – 250
155 – 165
56 – 61
11 - 12
4–5
6-7
46 - 50
30 - 32
16 - 18
Copper
Nickel
Unit cash cost
Capital
expenditure
Gold
(000’s tonnes)
Group
Kansanshi
Guelb Moghrein
Ravensthorpe
Kevitsa
Çayeli1
Las Cruces1
Pyhäsalmi1
Group
Nickel
(US$/lb.)
(US$/lb.)
$1.37 - $1.45
$5.20 - $5.60
Excluding
Cobre Panama
$2.0 billion
The production guidance shown above for Çayeli, Las Cruces and Pyhäsalmi
represents guidance from acquisition date of March 22, 2013 until the end of the year.
1
15
17. Our Project Pipeline
Copper Smelter, Zambia
•
Processing capacity of 1.2 Mtpa
—Combination of concentrate
from Kansanshi & Sentinel
—Average copper grade 26%
•
Copper production 300,000 tpa;
acid production 1.0 Mtpa
•
Estimates:
− Capital cost of US$690M
− Commissioning from mid 2014
• Estimated savings:
− US$340M - US$510M/year
• Expansion being planned to increase processing capacity to 2 Mtpa in 2017
17
18. Our Project Pipeline
Sentinel Cu project, Zambia
• Located ~ 140 km northwest of
Solwezi, northern Zambia
• M&I resource of 1,027 Mt at 0.51% Cu
grade, containing 5.2 Mt Cu
• Estimates:
– 2.2:1 LOM strip ratio
– >15 years mine life
– Annual production up to 300,000
tonnes
– US$2.0 billion capex (incl. Enterprise
nickel project)
– Completion targeted for mid-2014
• Includes 4 Mtpa nickel facility; flexibility
to augment copper capacity
18
19. Our Project Pipeline
Cobre Panama Cu project, Panama
• Acquired March 2013
• Large open pit copper project; Larger
project than the Panama Canal
• Est. mine life of 40 years
• Est. average annual production of
260,000 tonnes copper
• Progress since acquisition:
–
–
–
–
–
Several contracts modified or cancelled
Transformed to complete self-perform arrangement
All key aspects fully functional allowing activities to advance efficiently
Access to site improved
Biodiversity, environmental and social programs continuing
19
20. Our Project Pipeline
Haquira Cu project, Peru
• Focused on community &
environmental aspects
• Potential:
- 20 year mine life
– Avg 190k tonnes of
copper production
per year
20
21. One of the Few Mining Companies
Investing in Building Capacity
22. Forces at work in copper market suggest medium- to long-term
prices driven by greenfield incentive pricing as market tightens
$3.75 - 4.00/lb
Short- and medium-term
corrections to demand
especially if deficit is
expected to be prolonged
$3.25 - 3.50/lb
Incentive price for
marginal greenfield
projects needed to meet
modest demand growth
Design
adjustments and
substitution
Slowing growth
driven by
macroeconomics
Mines depleting,
projects difficult to
build and fund
~$3.00/lb
Strategic buyers see value
versus all-in cash costs and
future greenfield needs
$2.80 - $3.00/lb
90th percentile total cash
+ susex cost (growing at
2.5% p.a. on a real basis)
$2.20/lb
90th percentile C1 cash
cost (growing at 2.5% p.a.
on a real basis)
Price floor on a year over year basis
Medium- to
long-term
price
range
Short-term
price
range
Strategic buyers and
traders, disruptions and
project issues
Real cost inflation, strained balance
sheets and need for miners to have
cash to replace reserves
Analyst LT
consensus
price
Price floor on a quarter over quarter basis
22
23. The New Global Copper Leader
The New Go-To Copper Producer
Attractive Diverse Geographic Exposure
A Long-Standing Commitment to Social and Environmental Excellence
Creating Value with Our Project Development Expertise
1.8
2018E Copper Production, Mt
1.5
0.5
0.5
0.4
0.4
0.3
First Quantum
2012
0.5
Norilsk
0.6
Antofagasta
0.8
Teck Resources
0.8
Kazakhmys
Southern
Copper
BHP Billiton
First Quantum
Codelco
Glencore
Xstrata
FreeportMcMoRan
0.9
Vale
1.2
KGHM
1.3
Anglo American
1.5
Rio Tinto
•
•
•
•
Source: BrookHunt
23
