First Quantum Minerals Announces 2022 Preliminary Production and 2023-2025 Guidance
NEWS RELEASE
23-03
January 16, 2023
www.first-quantum.com
FIRST QUANTUM MINERALS ANNOUNCES 2022 PRELIMINARY
PRODUCTION AND 2023-2025 GUIDANCE
TORONTO, Ontario (January 16, 2023) - First Quantum Minerals Ltd. ("First Quantum" or the "Company") (TSX:FM)
announces preliminary production for the three months (“Q4”) and year ended December 31, 2022 and guidance for
production, capital expenditure and costs for the years 2023 to 2025.
“It is pleasing to see that the focus on operational improvements has resulted in a strong end to 2022. We continue
to monitor the macroeconomic conditions closely and debt reduction remains a priority,” commented Tristan Pascall,
Chief Executive Officer. “Disciplined and responsible growth continue to be a focus at First Quantum. The CP100
Expansion remains on schedule to exit 2023 at 100 million tonnes per annum and work is well underway for the S3
Expansion. We are also pleased that the Enterprise nickel project will enter first production this year. These projects
are a key part of the Company’s brownfield growth strategy over the next several years.”
HIGHLIGHTS
Q4 and 2022 Production: First Quantum achieved annual copper production of 776 thousand tonnes (“kt”) a
5% reduction from 2021. Cobre Panamá delivered record annual production of 350kt, while Sentinel saw a year-
on-year increase to 242kt. Kansanshi production of 146kt was lower than 2021 due to lower grades. Copper
production in Q4 2022 was 206kt, 2% higher than Q4 2021 and 6% higher than Q3 2022 with record quarterly
production achieved at Sentinel.
Three–year guidance: Copper and nickel production are forecast to grow to between 775-865kt and 45-60kt,
respectively, by 2025. Capital expenditure guidance has increased to $1.6 billion in 2023 and $1.8 billion in 2024,
reducing to $1.5 billion in 2025 with the completion of the S3 Expansion project at Kansanshi. Increases in 2023
and 2024 are principally due to inflationary pressures on sustaining capital and timing of expenditures for project
capital. This includes the re-phasing of the S3 Expansion, and higher costs for crusher relocations at the mine
sites.
Cobre Panam á: As per the news release on January 10, 2023, First Quantum continues to engage with the
Government of Panamá and remains ready to reach an agreement that is fair and equitable to both parties . The
Company had indicated to the Government of Panama that it is prepared to accept and pay a minimum of $375
million per year to the Government of Panama, comprised of corporate taxes and a profit-based mineral royalty
of 12 to 16 percent, with downside protections. As previously announced, Minera Panamá, S.A. (“MPSA ”) is
working through a number of steps to address the resolution from the National Directorate of Mineral Resources
of the Ministry of Commerce and Industries (“the Ministry”) requiring MPSA to suspend commercial operations
at Cobre Panam á. At this time, the timing and impact of any care and maintenance regime enacted by the
Ministry remain uncertain. Given this, production guidance is based on normal operations with no disruption to
production.
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2022 PRELIMINARY PRODUCTION AND 2023 – 2025 GUIDANCE
2022 Preliminary Production
First Quantum achieved annual copper production of 776kt that was within the 2022 revised guidance range of 755kt
to 785kt. Copper production in Q4 2022 was 206kt, 4kt above Q4 2021 and 11kt above Q3 2022.
Cobre Panamá achieved record copper production of 350kt for the full year, 19kt more than 2021. Copper production
in Q4 2022 of 90kt was an increase of 10kt from Q4 2021, but 2kt lower than Q3 2022 due to a total plant shutdown
in November for planned maintenance . Cobre Panamá’s performance for the last three quarters remained strong
and achieved new weekly and monthly throughput records in December.
Sentinel achieved copper production of 242kt for the full year, 9kt higher than 2021, and record quarterly production
of 73kt in Q4 2022, 13kt higher than Q4 2021 and 9kt higher than Q3 2022. Production was impacted in Q1 2022 by
a delay to Stage 2 North -wall stripping due to wet underfoot conditions during an extended rainy season but has
improved each quarter since then. Throughput has also been strong, achieving monthly and quarterly records in Q4
2022 and an annual record in 2022.
Kansanshi copper production of 146kt for the full year was 56kt lower than 202 1. The lower production reflects a
combination of lower sulphide grades from narrow-veined regions, depleting oxide ore and restricted access to high-
grade blocks due to an accumulation of water in the main pit in the second and third quarters of 2022 . Copper
production in Q4 2022 was 35kt, a reduction of 17kt from Q4 2021, but 5kt higher than Q3 2022 as access to high-
grade areas improved following successful dewatering of the pit.
Other sites achieved consolidated copper production of 38kt for the full year, a 12kt reduction from 2021, resulting
from declining production from short life mines. Copper production at the Pyhäsalmi mine in Finland ceased at the
end of Q3 2022.
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, 2022.
000’s Q4
2022
Q4
2021
Year
2022
Year
2021
Copper production (tonnes) 206 202 776 816
Gold production (ounces) 73 75 286 312
Nickel production (tonnes) 6 3 22 17
Copper (000’s tonnes) Q4
2022
Q4
2021
Year
2022
Year
2021
Cobre Panamá 90 80 350 331
Kansanshi 35 52 146 202
Trident - Sentinel 73 60 242 233
Other 8 10 38 50
Production 206 202 776 816
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Gold (000’s ounces) Q4
2022
Q4
2021
Year
2022
Year
2021
Cobre Panamá 38 33 140 142
Kansanshi 24 35 110 128
Other 11 7 36 42
Production 73 75 286 312
Nickel production (000’s tonnes) Q4
2022
Q4
2021
Year
2022
Year
2021
Ravensthorpe 6 3 22 17
Copper sales (000’s tonnes) Q4
2022
Q4
2021
Year
2022
Year
2021
Total copper 199 213 782 822
2023 – 2025 Guidance
Guidance is based on a number of assumptions and estimates as of December 31, 202 2, including among other
things, assumptions about metal prices and anticipated costs and expenditures. Guidance involves estimates of
known and unknown risks, uncertainties and other factors, which may cause the actual results to be materially
different.
As per the news release on January 10, 2023, First Quantum cont inues to engage with the Government of Panama
and the Company remains ready to reach an agreement that is fair and equitable to both parties. The Company had
indicated to the Government of Panama that it is prepared to accept and pay a minimum of $375 million per year to
the Government of Panama, comprised of corporate taxes and a profit -based mineral royalty of 12 to 16 percent,
with downside protections. As previously announced, MPSA is working through a number of steps to address the
resolution from the Ministry requiring MPSA to suspend commercial operations at Cobre Panama. At this time, the
timing and impact of any care and maintenance regime enacted by the Ministry remain uncertain. Given this,
production guidance for Cobre Panama is based on normal operations with no disruption to production.
Production guidance
000’s 2023 2024 2025
Copper (tonnes) 770 - 840 765 - 835 775 - 865
Gold (ounces) 265 - 295 290 - 320 305 - 345
Nickel (tonnes) 28 - 38 34 - 49 45 - 60
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Production guidance by operation
Copper
000’s tonnes 2023 2024 2025
Cobre Panamá 350 - 380 370 - 400 370 - 400
Kansanshi 130 - 150 130 - 150 140 - 180
Trident - Sentinel 260 - 280 245 - 265 245 - 265
Other sites 30 20 20
Gold
000’s ounces 2023 2024 2025
Cobre Panamá 140 - 160
150
155 - 175 155 - 175
Kansanshi 95 - 105 95 - 105 110 - 130
Other sites 30 40 40
Nickel
000’s tonnes 2023 2024 2025
Ravensthorpe
23 - 28 24 - 29 25 - 30
Enterprise 5 - 10 10 - 20 20 - 30
Production for 2023 for Cobre Panam á includes commissioning in Q1 2023 with a ramp -up over the course of the
year to achieve an annualized throughput rate of 100 million tonnes per annum by the end of 2023.
Kansanshi copper production in 2023 and 2024 reflects similar levels as 2022 with lower oxide grades and sulphide
grades while mining vein -hoisted areas. Copper and gold production in 2025 includes some limited production
associated with the S3 Expansion, expected to commence in the second half of 2025.
Higher gold production in 2024 for other sites is due to higher production expected at Guelb Moghrein with the
expansion of the Carbon-in-Leach plant, to be complete in the first half of 2024, and the inclusion of Cutback 4.
Nickel production at Enterprise is expected to commence in the first half of 2023 with ramp up to full plant
throughput and recovery in 2024 . 2023 p roduction guidance for Enterprise includes 5kt of pre -commercial
production results.
Cash cost and all-in sustaining cost
Total Copper ($/lb) 2023 2024 2025
C1 1.65 - 1.85 1.65 - 1.85 1.60 - 1.85
AISC 2.25 - 2.45 2.25 - 2.45 2.20 - 2.45
Ravensthorpe Nickel ($/lb) 2023 2024 2025
C1 7.00 - 8.50 6.75 - 8.00
8.2.57.75
6.75 - 8.00
AISC 9.00 - 10.50 8.50 - 9.75 8.50 - 9.75
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Enterprise Nickel ($/lb) 2023 2024 2025
C1 - 4.00 - 6.00
7.00005.75
– 6.50
4.00 - 6.00
AISC - 6.50 - 9.50
10.00
6.50 - 9.50
C1 cost guidance for both copper and nickel reflects recent inflationary and commodity price pressures . AISC
guidance reflects higher sustaining capital expenditure , partly mitigated by a decrease in royalties specifically in
Zambia relating to recent changes announced by the Zambian government. The Zambian import duty on fuel was
reinstated on January 1, 2023, however this reinstatement was at a ‘free rate’, resulting in a nil impact on costs.
Unit cost guidance for the three-year guidance period is based on an assumed gold price of between $1,700/oz and
$1,750/oz, average Brent crude oil price of $100/barrel and Zambian kwacha/US dollar exchange rate of 16. A coal
price of $150/tonne is assumed for 2024 and 2025.
Enterprise unit cost guidance if provided from its first full year of production in 2024. First production at Enterprise
is expected in the first half of 2023. Ravensthorpe unit cost guidance is based on a sulphur price of $150/tonne.
Collective Bargaining Agreement negotiations at Sentinel, Kansanshi, FQMO and Ent erprise are expected to close in
the first half of 2023. Anticipated labour cost increases have been included in cost estimates.
Capital expenditure
$ million 2023 2024 2025
Capitalized stripping 300 300 300
Sustaining capital 430 475 500
Project capital 870 1,025 700
Total capital expenditure 1,600 1,800 1,500
Capital expenditures have been experiencing inflationary cost increases, including higher shipping rates, steel prices,
fuel costs, and labour rates. Guidance on capital expenditures for 2023 and 2024 has increased to reflect such cost
increases as well as additional increases arising f rom scope definition, expansion of Environmental, Social and
Governance (“ESG”) initiatives and the timing of expenditures, including some expenditure carried over from 2022
and the acceleration of some expenditure related to the Kansanshi S3 Expansion pro ject.
Total capital expenditure for the S3 Expansion project remains unchanged at $1.25 billion, with approximately $40
million spent to date. The S3 Expansion includes the development and construction of the S3 process plant circuit
and mining fleet acquisitions. Across the three year guidance period, project capital expenditures for the S3 Expansion
project are expected to be approximately $900 million, with the majority of the spend to occur over 2023 and 2024.
Pre-strip activities for the South East Dome pit is expected to continue through to 2027, of which $300 million is
included in the three-year capital budget for the S3 Expansion.
Project capital in the three-year guidance period includes:
Additional capital expenditures at Kansanshi, including the expansion of the tailings facility and smelter of
approximately $300 million,
$650 million in capital expenditures at Cobre Panamá for the development of the Colina pit, work on the
West Dam, purchase of additional mining fleet, expansion of camp facilities and assembly of the
molybdenum flotation and filtration plant,
$200 million in capital expenditures at Sentinel for the relocation of in -pit crusher 2 and the purchase of
additional mining equipment, and
$35 million for the completion of the Enterprise nickel project.
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The three-year guidance includes ESG-related projects within the $2. 6 billion project capital expen ditures. Each of
these projects are expected to also improve cost structure, safety and productivity of the business. These include ;
Upgrade of the Kansanshi smelter to increase processing capacity, which reduces downstream greenhouse
gas emissions from the transport and refining of copper concentrate produced by Kansanshi and Sentinel,
A wind farm at Ravensthorpe to reduce reliance on power from diesel back -up generators, subject to final
approval,
Expansion of trolley assist infrastructure across the Company’s three largest mines to lower diesel
consumption and associated mine fleet greenhouse gas emissions,
Relocation and installation of in -pit crushers to optimize haul cycle efficiency and reduce mine fleet diesel
consumption,
Investments at Cobre Panam á and Trident to enhance the social infrastructure serving both our workforce
and local communities, and,
Water initiatives at various operations for the management of water quality and reuse by operations.
Three-year guidance for project capital expenditure does not include any development expenditure for the Las Cruces
Underground Project, Taca Taca or Hacquira.
All of our Company’s major operations have planned for increases in sustaining expendi ture, which has been
impacted by significant cost inflation as well as an increase in TSF costs and increase in fleet replacement programs.
Capital expenditure guidance excludes capitalized pre-commercial production results.
For further information visit our website at www.first-quantum.com
Contact: Bonita To, Director, Investor Relations
Tel: (416) 361-3400 Toll free: 1 (888) 688-6577
E-Mail: [email protected]
First Quantum Minerals 23-03
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CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-
looking information within the meaning of applicable securities laws. The forward-looking statements include estimates, forecasts and statements
as to the Company’s expectations of production and sales volumes, the Company’s ability to reach an agreement with the Government regarding
the long term future of Cobre Panamá (and the delivery by MPS A of a “care and maintenance plan” and the enactment by the Ministry of any
such plan), expected timing of completion of project development at Enterprise and are subject to the impact of ore grades on future production,
the potential of production disrupt ions, potential production, operational, labour or marketing disruptions as a result of the COVID -19 global
pandemic, capital expenditure and mine production costs, the outcome of mine permitting, other required permitting, the outco me of legal
proceedings which involve the Company, information with respect to the future price of copper, gold, nickel, silver, iron, cobalt, pyrite , zinc and
sulphuric acid, estimated mineral reserves and mineral resources, First Quantum’s exploration and development program, estimated future
expenses, exploration and development capital requirements, the Company’s hedging policy, and goals and strategies. Often, bu t not always,
forward-looking statements or information can be identified by the use of words such as “plans”, “ex pects” or “does not expect”, “is expected”,
“budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes” or variation s of such words and
phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.
With respect to forward-looking statements and information contained herein, the Company has made numerous assumptions including among
other things, assumptions about continuing production at all operating facilities, the price of copper, gold, nickel, sil ver, iron, cobalt, pyrite, zinc
and sulphuric acid, anticipated costs and expenditures and the ability to achieve the Company’s goals. Forward -looking statements and
information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements, or industry results, to be materially different from any future results, perform ance or achievements
expressed or implied by such forward-looking statements or information. These factors include, but are not limited to, future production volumes
and costs, the temporary or permanent closure of uneconomic operations, costs for inputs such as oil, power and sulphur, poli tical stability in
Panama, Zambia, Peru, Mauritania, Finland, Spain, Turkey, Argentina and Australia, adverse weather conditions in Panama, Zambia, Finland, Spain,
Turkey, Mauritania and Australia, labour disruptions, potential social and environmental challenges (including the impact of climate change),
power supply, mechanical failures, water supply, procurement and delivery of parts and supplies to the operations, the produc tion of off-spec
material and events generally impacting global economic, political and social stability.
See the Company’s Annual Information Form for additional information on risks, uncertainties and other factors relating to the forward -looking
statements and information. Although the Company has attempted to identify factors that would cause actual actions, events or results to differ
materially from those disclosed in the forward -looking statements or information, there may be other factors that cause actual results,
performances, achievements or events not to be anticipated, estimated or intended. Also, many of these facto rs are beyond First Quantum’s
control. Accordingly, readers should not place undue reliance on forward -looking statements or information. The Company undertakes no
obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except
as may be required by law. All forward-looking statements and information made herein are qualified by this cautionary statement.