FIRST QUANTUM MINERALS ANNOUNCES 2021 PRELIMINARY PRODUCTION, 2022-2024 GUIDANCE, CLIMATE CHANGE TARGETS AND FINANCIAL POLICY (In United States dollars, except where noted otherwise)
NEWS RELEASE
22-01
January 17, 2022
www.first-quantum.com
FIRST QUANTUM MINERALS ANNOUNCES 2021 PRELIMINARY PRODUCTION, 2022-2024
GUIDANCE, CLIMATE CHANGE TARGETS AND FINANCIAL POLICY
(In United States dollars, except where noted otherwise)
Toronto, Ontario (January 17, 2022) - First Quantum Minerals Ltd. (“First Quantum” or the “Company”) (TSX: FM)
today announced preliminary production for the three months (“Q4”) and year ended December 31, 2021, and
guidance for production, capital expenditures and costs for the years 2022 to 2024. In addition, the Company has
released its targets for reductions in greenhouse gas emissions (“GHG”) and a financial policy that includes a new
performance-based dividend payout policy. The Company has released an updated National Instrument 43-101
Standards of Disclosure for Mineral Projects (“NI 43-101”) resource for the Las Cruces Underground Project.
“First Quantum continues to be focussed on delivering disciplined and responsible growth, which is reflected in the
strong increase in our copper and nickel production through the guidance period,” commented Philip Pascall,
Chairman and CEO. “We remain committed to reducing our debt levels, whilst at the same time cautiously increasing
capital returns to reflect the robust financial outlook. At First Quantum, we are committed to extracting resources
responsibly and the importance that we place on sustainability is an intrinsic part of everything we do. We are pleased
to have identified tangible solutions to significantly reduce our greenhouse gas emissions and to contribute to the
global energy transition by delivering the critical metals required.”
HIGHLIGHTS
Q4 and 2021 Production: First Quantum achieved its highest ever annual copper production of 816 thousand
tonnes (“kt”), a 5% increase from 2020, attributable to record production at Cobre Panama and the resilience of
our other operations. Copper production in Q4 2021 was 201kt.
Three-year guidance: Copper and nickel production are forecast to grow to 850-910kt and 40-50kt, respectively,
by 2024. Capital cost guidance has increased to $1,250 million in 2023 and 2024 and $1,375 million in 2024,
principally due to inflationary pressures.
Inaugural Climate Change Report: First Quantum has set tangible targets with an identified realistic path to
reduce our GHG emissions by 50% by 2030. The achievement of these targets is not expected to result in
significant increases in capital expenditures or operating costs from previous forecasts.
Financial Policy: With the company on track to meet the previously announced $2 billion debt reduction in H1
2022, the target for debt reduction in the short to medium term has increased by $1 billion. A dividend policy
has been adopted that will comprise of a Performance Dividend so that 15% of available cash flows generated
after planned capital spending and distributions to non-controlling interests are allocated to shareholder returns.
Within the Performance Dividend there is expected to be a minimum Annual Base Dividend of C$0.10 per share,
comprising of biannual dividends of C$0.05 per share.
Updated Las Cruces NI 43-101 Resource: Following extensive drilling, test work and pilot plant studies, the NI
43-101 upgrades the previous Polymetallic Primary Sulfide (“PPS”) Inferred Mineral Resources to 41.2 million
tonnes of PPS Measured and Indicated Mineral Resources, which includes 5.02 million tonnes of Indicated
Mineral Resources tabled as stockpiles. There is an additional 7.1 million tonnes of Inferred Mineral Resources.
First Quantum Minerals Ltd. 22-01
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2021 PRELIMINARY PRODUCTION AND 2022-2024 GUIDANCE
2021 Preliminary Production
First Quantum achieved its highest ever annual copper production of 816kt, a 5% increase from 2020, attributable to
record production at Cobre Panama and the resilience of our other operations in dealing with the ongoing challenges
brought about by COVID-19 over the last two years. Copper production in Q4 2021 was 201kt, 2kt below Q4 2020.
Copper production was within January 2021 guidance of 785-850kt.
Cobre Panama achieved record copper production of 331kt for the full year, 125kt more than 2020. Copper
production in Q4 2021 of 80kt was an increase of 14kt from Q4 2020. Despite facing COVID-19 preventative
restrictions for over three quarters of the year, Cobre Panama’s performance was strong, exceeding initial 2021
guidance announced in January 2021 and delivering its first full year of uninterrupted production since announcing
commercial production on September 1, 2019.
Sentinel achieved copper production of 233kt for the full year and 61kt in Q4 2021, 18kt and 2kt lower than 2020
levels, respectively. 2021 performance was impacted by the Train 1 Ball Mill Trunnion failure in the first quarter and
a lower grade profile, however, record quarterly throughput was achieved in Q4 2021.
Kansanshi achieved copper production of 202kt for the full year, 19kt lower than 2020, reflecting the depleting oxide
ore in the maturing mine. Copper production in Q4 2021 was 52kt, a reduction of 1kt from Q4 2020 resulting from
the lower grades and oxide recoveries.
Other sites achieved consolidated copper production of 50kt for the full year, a 51kt reduction from 2020, resulting
from the cessation of opening pit mining at Las Cruces and Guelb Moghrein in late 2020 and early 2021, respectively.
Las Cruces is now reprocessing high-grade tailings while Guelb Moghrein is processing stockpiled ore until cutback
ore is available, which is expected in 2023.
Total copper sales volumes, in particular for product from Zambian sites, were impacted by several port availability
and operational issues, as well as the general and widespread constraints that the global container freight sector
experienced over the majority of 2021. Although the bulk shipping sector was less affected by the global supply
chain and freight related constraints, vessel freight costs were higher than the average over recent years.
Concentrates from Panama and Cayeli are shipped bulk.
The production and sales figures provided herein are preliminary and subject to final adjustment. The final production
and sales figures will be confirmed in the Company's financial results for the fourth quarter and year ended December
31, 2021.
000’s Q4
2021
Q4
2020
Year
2021
Year
2020
Copper production (tonnes) 201 203 816 779
Gold production (ounces) 74 69 312 265
Nickel production (tonnes) 3 6 17 13
First Quantum Minerals Ltd. 22-01
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Copper (000’s tonnes) Q4
2021
Q4
2020
Year
2021
Year
2020
Cobre Panama 80 66 331 206
Kansanshi 52 53 202 221
Sentinel 61 63 233 251
Other 8 21 50 101
Production 201 203 816 779
Gold (000’s ounces) Q4
2021
Q4
2020
Year
2021
Year
2020
Cobre Panama 33 25 142 85
Kansanshi 34 30 128 128
Other 7 14 42 52
Production 74 69 312 265
Nickel production (000’s tonnes) Q4
2021
Q4
2020
Year
2021
Year
2020
Ravensthorpe 3 6 17 13
Copper sales (000’s tonnes) Q4
2021
Q4
2020
Year
2021
Year
2020
Total copper 213 217 822 764
COVID-19
The Company continues to maintain proactive health and sanitary protocols and remains committed to support the
government health authorities in each jurisdiction according to the needs across all of its sites, operations and host
communities to combat the spread of COVID-19, including new variants as they emerge.
2022 – 2024 Guidance
Guidance is based on a number of assumptions and estimates as of December 31, 2021, including among other
things, assumptions about metal prices and anticipated costs and expenditures. The unprecedented challenges
presented by COVID-19 pose some additional risk to the accuracy of forward looking information. Production
guidance and cost guidance includes current assumptions on the impact of COVID-19 on operations. Guidance
involves estimates of known and unknown risks, uncertainties and other factors which may cause the actual results
to be materially different.
First Quantum Minerals Ltd. 22-01
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Production guidance
000’s 2022 2023 2024
Copper (tonnes) 810 - 880 840 - 910 850 - 910
Gold (ounces) 285 - 310 275 - 300 295 - 320
Nickel (tonnes) 25 - 30 30 - 40 40 - 50
Production guidance by operation
Copper
000’s tonnes 2022 2023 2024
Cobre Panama 330 - 360 350 - 380 370 - 400
Kansanshi 190 - 210 190 - 210 205 - 220
Sentinel 260 - 280 270 - 290 255 - 270
Other sites 30 30 20
Gold
000’s ounces 2022 2023 2024
Cobre Panama 135 - 150 140 - 155 155 - 170
Kansanshi 120 - 130 105 - 115 110 - 120
Other sites 30 30 30
Nickel
000’s tonnes 2022 2023 2024
Ravensthorpe 25 - 30 25 - 30 25 - 30
Enterprise - 5-10 15 - 20
Guidance for Cobre Panama includes expected commissioning of the 6th ball mill in Q1 2023 with a ramp-up over
the course of the year to achieve a throughput rate of 100 million tonnes per annum (“Mtpa”) by the end of 2023.
Kansanshi copper and gold production in 2024 includes some limited production from the proposed S3 expansion,
with the approval and timing still subject to Board approval.
2023 copper production for Other sites has increased from previous guidance due to the tailings reprocessing at Las
Cruces. Processing of cutback 4 ore at Guelb Moghrein is expected to commence in 2023.
Guidance on nickel production at Enterprise has been included for the first time, with first production assumed during
2023. The development timeline for Enterprise is expected to be approximately twelve months. The development of
the project is still subject to Board approval.
First Quantum Minerals Ltd. 22-01
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Cash cost and all-in sustaining cost
Total Copper ($/lb) 2022 2023 2024
C1 1.30 - 1.50 1.30 - 1.50 1.25 - 1.45
AISC 1.90 - 2.05 1.90 - 2.05 1.85 - 2.00
Ravensthorpe Nickel ($/lb) 2022 2023 2024
C1 5.75 - 6.50 5.75 – 6.50 5.50 – 6.25
AISC 7.00 - 7.75 7.00 - 7.75 6.75 - 7.25
C1 cost guidance for both copper and nickel reflects recent inflationary and commodity price pressures as well as
movement in foreign exchange rates, particularly in Zambia. AISC guidance also reflects higher royalties in Zambia
related to copper prices as well as an increase in sustaining capital expenditures. At this stage, guidance assumes no
change in royalties in Panama. C1 and AISC guidance for 2024 includes contribution from the S3 expansion at
Kansanshi.
Nickel unit cost guidance does not include Enterprise. By 2024, C1 costs at Enterprise is expected to range between
$4.25-5.25/lb.
Capital expenditure
$ million 2022 2023 2024
Capitalized stripping 250 250 275
Sustaining capital 310 290 290
Project capital 690 710 810
Total capital expenditure 1,250 1,250 1,375
The Company has been experiencing cost increases and delays on most current capital project works associated with
shipping, steel price, fuel costs, and labour with the latter often an impact of COVID-19 constraints.
Guidance on 2022 and 2023 capital expenditures has been increased to reflect these inflationary and logistical
pressures, in particular on project expenditures, as well as the inclusion of new projects.
Across the three years of guidance, approximately $700 million will be spent on the Kansanshi S3 project
development with the majority of the spend to occur over 2023 and 2024. Project capital over the guidance period
now includes the South East Dome pit pre-stripping mining activities for a further $100 million.
The total Kansanshi S3 development capital expenditure over the full life of the project is expected to be
approximately $900 million. The commencement of the S3 project will bring forward pre-strip mining activities of the
South East Dome Pit, which is expected to be a further approximately $350 million over five years to 2026. Pre-strip
mining is classified as project capital. Kansanshi S3 development includes the development and construction of the
S3 process plant circuit and mining fleet acquisitions.
Approximately $450 million has been included for the 100 Mtpa expansion at Cobre Panama (“CP100”), including
development of the Colina pit. The CP100 expansion includes ball mill 6, secondary screening, process water
upgrades, overland conveyors, port modifications and the concentrate shed expansion.
First Quantum Minerals Ltd. 22-01
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In addition, approximately $60 million is included in guidance for the development of the Enterprise nickel project.
New projects not previously included in guidance are: 1) the Enterprise nickel project; 2) Guelb Moghrein’s cutback
4 in 2022 that extends the mine life by two years; as well as 3) upgrades to accommodation and camp facilities at
Cobre Panama over the three years. Expenditure over the three years has also been increased for the acquisition of
a fifth rope shovel, eight additional ultra-class haul trucks and port modifications at Cobre Panama. The Las Cruces
underground project has not been included in capital expenditure guidance.
Sustaining capital expenditure is expected to range between $290-310 million over the three years and reflects recent
inflation, an increase in TSF costs, as well as timing of fleet component replacement programmes.
CLIMATE CHANGE REPORT AND GHG REDUCTION TARGETS
First Quantum today released the Company’s inaugural Climate Change Report (“The Report”). This report, in keeping
with our commitment to the ongoing development of our Environmental, Social and Governance reporting,
demonstrates our continued commitment to communicate consistently and transparently. The Report is aligned with
the Task Force on Climate-related Financial Disclosures and sets out the Company’s climate strategy and resilience
to the impacts of climate changes as well as outlining our targets to reduce GHG emissions while delivering
responsible production growth in the metals that are essential to the global transition to a low carbon economy.
In The Report, First Quantum has set tangible targets and identified a realistic path to reduce our GHG emissions.
The achievement of these targets is not expected to result in significant capital expenditures over the lives of mine
or significant increases in operating costs based on the current cost of electricity at each location. The Report is
consistent with our Climate Change Position Statement that can be found on our website.
The reduction of our carbon footprint includes, but is not limited to, the following actions:
The expansion to 100 Mtpa at Cobre Panama is expected to be powered by renewable energy by 2023,
saving approximately 70,000 tonnes of CO 2e per year.
By 2025, First Quantum expects to be able to source alternative supply options of up to 50% of the energy
currently provided by the Panama power station with renewable energy. This will contribute to a 30%
reduction in the Company’s absolute GHG emissions.
By 2030, First Quantum expects to reduce its absolute GHG emissions and GHG intensity of our copper
production by 50% as it aims to increase the use of alternative power and further reduce reliance on coal at
Cobre Panama while maintaining our production through the Kansanshi S3 expansion and the Cobre Panama
CP100 expansion.
As we remain focused on responsible growth in copper production, we have implemented a carbon price for
the evaluation of new projects to incentivize the use of lower carbon technologies and renewable sources of
power as we seek to lower the GHG intensity of our production.
First Quantum will continue to embrace innovation and the development of new technologies for optimising
productivity, profitability and environmental impact through, for example, the expansion of our trolley assist
infrastructure, expansion of in-pit crushing and conveying systems and increased use of electrical mining
equipment.
The Company’s GHG emissions reduction targets have an identified pathway to achievement and are based on
commercially available solutions. For this reason, we have not made a net zero commitment at this time. We will
continue to monitor the development of new technologies for implementation at our operations as they become
commercially viable and we will update our GHG emissions reduction targets accordingly.
First Quantum Minerals Ltd. 22-01
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UPDATED FINANCIAL POLICY
First Quantum has updated its corporate Financial Policy, reflecting continued higher commodity prices, continued
strong operational performance and an accelerated reduction of Group debt since the second quarter of 2020. First
Quantum’s Financial Policy underlines its confidence in the future of the business whilst still enabling the Company
to advance its strong portfolio of growth projects.
In the near term, First Quantum’s focus remains:
1. Debt reduction: Our commitment is to reduce total debt to levels appropriate for our business. The targeted
debt reduction programme of $2 billion is expected to be completed by H1 2022. This debt reduction target
has been extended by a further $1 billion in the short to medium term.
Our longer-term policy objective is a through-the-commodity-cycle Net debt/EBITDA ratio of less than 2
times.
2. Investment in the business: Disciplined business and growth investments will be considered in line with the
Financial Policy leverage limits. This will include investment in brownfield projects to add incremental value
at our existing mines. Capital investment in greenfield projects towards creating a third major production
centre will remain limited whilst we first deliver on debt reduction and advance our brownfield projects.
3. Increasing cash returns to shareholders: Given the outlook for strong ongoing earnings from the business,
the Board intends to commence a cautious increase in shareholder dividends.
The Board has adopted a new dividend policy comprising:
A Performance Dividend so that an aggregate of 15% of available cash flows generated after planned
capital spending and distributions to non-controlling interests are allocated to shareholder returns.
Within the Performance Dividend there is expected to be a minimum Annual Base Dividend of C$0.10
per share, comprising of biannual dividends of C$0.05 per share.
The Board expects the Base Dividend to be sustainable in a range of market conditions whilst acknowledging the
cyclical nature of the industry. Through the Performance Dividend, the Board will maintain an appropriate capital
allocation between debt reduction, investment in the future of the business and cash returns to shareholders. The
declaration of dividends remains at the discretion of the Board.
Interim dividend: to be announced with second quarter and half year results, and paid in September
Final Dividend: to be announced with fourth quarter and full year results, and paid in March
Available free cash flows for assessment of Performance Dividends will be reviewed at least annually.
The Company has established a Dividend Reinvestment and Share Purchase Plan (the "Plan") for its Canadian resident
shareholders ("Eligible Shareholders"). The Plan enables Eligible Shareholders to reinvest the cash dividends paid on
all or a portion of their Common Shares into additional Common Shares, which will be issued at 97% of the Average
Market Price (as defined in the Plan) and provides the opportunity to make optional cash purchases of additional
Common Shares on a semi-annual basis, on dividend payment dates.
To participate in the Plan, registered Eligible Shareholders must deliver a properly completed enrolment form to
Computershare Trust Company of Canada ("Computershare") (in its capacity as "Plan Agent" under the Plan), as
directed under the Plan, by no later than 4:00 p.m. Eastern time on the fifth business day immediately preceding a
dividend record date in order for the cash dividend to which such record date relates to be reinvested under the
Plan.
First Quantum Minerals Ltd. 22-01
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UPDATED NI 43-101 RESOURCE FOR THE LAS CRUCES UNDERGROUND PROJECT
First Quantum today announced the filing of an updated NI 43-101 Technical Report dated December 31, 2021 for
the Las Cruces operations (“The Technical Report”). Las Cruces was an open-pit copper mine and hydrometallurgical
plant operating in Sevilla Province, Southern Spain. The Technical Report documents an updated Mineral Resource
estimate that upgrades the previous PPS Inferred Mineral Resources to 41.2 million tonnes of PPS Measured and
Indicated Mineral Resources which includes 5.02 million tonnes of Indicated Mineral Resources tabled as stockpiles.
There is an additional 7.1 million tonnes of Inferred Mineral Resources.
Las Cruces successfully operated its open pit mine and hydrometallurgical plant over the last 12 years. Operations
have depleted the remaining secondary sulfide resources and reserves, which was the subject of the previous NI 43-
101 Technical Report dated June 2015. This previous NI 43-101 disclosed 35.8 million tonnes of Inferred PPS Mineral
Resources. Since June 2015, Las Cruces has continued to extend and improve confidence in the PPS mineralisation.
Extensive geological drilling, mine planning studies, metallurgical testwork and pilot plant studies have provided
sufficient detail to support a confident PPS Mineral Resource estimate. The geological drilling involved the addition
of 229 diamond core drilled holes for 44,875 added metres of core. The added data has improved overall
understanding of the prevailing PPS geological and grade continuity.
The positive findings of these works form the basis to continue to conduct further detailed technical work for
converting Mineral Resources to Mineral Reserves as part of the Las Cruces Underground Project.
The Technical Report was prepared for First Quantum’s Cobre Las Cruces operation in Spain, Andalucia. The Technical
Report was prepared by Mr. Juan Manuel Escobar Torres (European Federation of Geologists), Mr. David Gray (Fellow
of the Australian Institute of Geoscientists) and Mr. Robert Stone (Chartered Engineer of the Institute of Materials,
Minerals and Mining), all full time employees of First Quantum and each Qualified Persons (QP) as defined by the
National Instrument 43-101’s Rules and Policies. The QP’s have reviewed this news release and declare its technical
content to be a correct reflection of The Technical Report.
Cobre Las Cruces Mineral Resource statement as at December 31, 2021
For further information, visit our website at www.first-quantum.com or contact:
Bonita To, Director, Investor Relations
(416) 361-6400 Toll-free: 1 (888) 688-6577
E-Mail: [email protected]
Classification Tonnes (Mt) CuEq %* Cu (%) Pb (%) Ag (g/t) Zn (%)
Total Measured 18.32 2.81 1.27 1.37 33.39 3.11
Total Indicated 17.92 2.20 1.24 0.89 25.36 1.87
Sub Total Measured and Indicated 36.24 2.51 1.26 1.13 29.42 2.50
Indicated Stockpiles 5.02 2.46 1.19 1.63 29.40 2.21
Total Measured and Indicated 41.26 2.50 1.25 1.19 29.42 2.46
Total Inferred 7.09 1.93 1.23 0.73 29.47 1.12
Polymetallic Primary sulphide (1% CuEq cutoff grade*)
*Resource estimates for the polymetallic primary sulphide and stockwork material are based on a cut-
off grade of 1.0 % copper equivalent (CuEq) based upon the following formula which accounts for metal
price ($3.37/lb copper, $1.1/lb zinc, $0.91/lb lead and $21.23 silver) , metallurgical recoveries and
amounts payable by the Smelter:
CuEq = [Tcu% + (Zn% x 0.339) + (Pb% x 0.227) + (Ag ppm x 0.005)]