FIRST QUANTUM MINERALS ANNOUNCES 2023 PRELIMINARY PRODUCTION, 2024-2026 GUIDANCE AND BALANCE SHEET INITIATIVES (In United States dollars, except where noted otherwise)
NEWS RELEASE
24-01
January 15, 2024
www.first-quantum.com
FIRST QUANTUM MINERALS ANNOUNCES 2023 PRELIMINARY
PRODUCTION, 2024-2026 GUIDANCE AND BALANCE SHEET INITIATIVES
(In United States dollars, except where noted otherwise)
Toronto, Ontario (January 15, 2024) - First Quantum Minerals Ltd. (“First Quantum” or “the Company”) (TSX: FM)
announces preliminary production for the three months (“Q4”) and year ended December 31, 2023 , guidance for
production, capital expenditures and costs for the years 2024 to 2026 and an update on balance sheet initiatives.
“With the suspension of production at Cobre Panama, we are taking decisive action to conserve capital, lower costs
and strengthen our financial position. This will enable the continued development of the Kansanshi S3 Expansion,
which will further strengthen our cash flows when commissioned next year. In parallel, we are advancing several
initiatives to give us optiona lity and flexibility in respect to our balance sheet ,” commented Tristan Pascall, Chief
Executive Officer of First Quantum. “We remain committed to Zambia with the improved investment climate . The
strong progress of the S3 Expansion project is a reflection of this. It is also pleasing that recent discussions in
Panama have been constructive regarding the responsible environmental stewardship of the mine.”
Highlights
Q4 and 2023 Production: First Quantum achieved annual copper production of 708 thousand tonnes (“kt”),
a 9% reduction from 2022. After the successful completion of the CP100 Expansion project, Cobre Panama
delivered annual copper production of 331kt before halting operations in November and placing the mine
into a phase of Preservation and Safe Management (“P&SM”). Zambian production of 349kt was 10% lower
than 2022 due to a combination of lower throughput at both sites and lower grades at Kansanshi. Copper
production in Q4 2023 was 160kt, 22% lower than Q4 2022 and 28% lower than Q3 2023 mainly attributable
to the ramp down of operations at Cobre Panama in November.
Three-Year Guidance: When referring to future and prior year production figures , guidance is presented
excluding Cobre Panama. 2024 Copper production guidance is between 370 – 420kt and is expected to
increase to between 400 – 460kt in 2025 and 2026 as the S3 Expansion at Kansanshi comes online. Total
C1 and AISC unit cost ranges are in line with prior year guidance when excluding Cobre Panama.
Improvements in operating costs such as fuel, maintenance, contractors and labour mitigate the impact of
lower by-product credits from Kansanshi and lower production at Sentinel. Guidance for gold production has
been revised at Kansanshi, in line with an improved understanding of the sou rces of sulphide copper -gold
mineralization at depth. Nickel production guidance for Ravensthorpe has been reduced in response to weak
nickel market conditions.
Balance sheet initiatives: The Company has suspended its dividend as a result of Cobre Panama being
in a phase of P&SM . Additionally, planned capital programs have been reduced or re -phased by
approximately $400 million in 2024 and $250 million in 2025. This reflects a halt in capital spend at Cobre
Panama and proactive initiatives to offset capit al inflation in the Zambian business. The Company has
commenced discussions with its banking partners to address and extend its bank loan facilities. The
Company is further evaluating a range of options to maintain a robust financial position and preserve value
for its shareholders, including exploring the sale of smaller mines and interests in its larger mining assets.
Cobre Panama Update
Cobre Panama currently remains in a phase of P&SM with production halted. Approximately 1 ,400 workers remain
on site to run the P&SM program. Further reductions to a headcount below 1,000 workers may follow depending on
environmental stewardship programs . Previous illegal blockages around the mine have been cleared , allowing for
the delivery by road and at port of necessary supplies to conduct the P&SM program.
In January, the Company and Panama’s Ministry of Commerce and Industries (“MICI”) had preliminary discussions
related to the P&SM program and the associated funding of P&SM costs. These costs are expected to range from
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$15 - $20 million per month and further reductions could follow depending on environmental stewardship programs.
On January 11, Cobre Panama hosted a large delegation, including the Ministers from MICI and the Ministry of the
Environment, as well as other government departments and a broad range of civil society organizations , to
demonstrate the measures that are being undertaken as part of the P&SM program. At the request of MICI, Cobre
Panama will deliver a preliminary draft for the first phase of P&SM on January 16. This will be an initial plan that will
require regular adjustments and updates to address additional subsequent project phases and steps as the planning
and preparation requirements evolve.
2023 Preliminary Production
First Quantum achieved annual copper production of 708kt in 2023, which was 68kt lower than in 2022. Copper
production in Q4 2023 was 160kt, 46kt below Q4 2022 and 62kt below Q3 2023. Copper production for the full year
and Q4 2023 was impacted by the ramp down of operations at Cobre Panama in November with the operation placed
in a phase of P&SM. Production guidance for Cobre Panama was duly suspended.
Copper production at Cobre Panama of 331kt for the full year was 19kt lower than 2022. Cobre Panama achieved
record copper production of 310kt to the end of October before ramping down operations in November and entering
a phase of P&SM. Copper production in Q4 2023 of 63kt was a 27kt decrease from Q4 2022 and 50kt lower than
Q3 2023. Approximately 121 thousand dry metric tonnes of copper concentrate remains unsold following disruptions
at the Punta Rincon port.
Kansanshi copper production of 135kt for the full year was 11kt lower than 2022 due to lower feed grades and lower
throughput on the sulphide circuit, particularly from the highly competent ore from lower elevations of M11 in the
main pit. The variability of grades in ore stockpiles also impacted grades. Copper production in Q4 2023 was 32kt,
a 3kt reduction from Q4 2022 and 8kt lower than Q3 2023. Kansanshi production for 2023 was within the revised
guidance range of 130 – 140kt.
Sentinel copper production of 214kt for the full year was 28 kt lower than 2022. Production in Q1 was impacted by
excessive rainfall that resulted in the accumulation of water in the high -grade area of the Stage 1 pit , which was
subsequently cleared by mid-May 2023. Mining volumes and mill throughput improved in H2 2023 but were lower
than anticipated due to the mining of very hard rock in the lower levels of the pit. Q4 2023 copper production of 60kt
was 13kt below Q4 2022 and 4kt lower than Q3 2023. Sentinel production for 2023 of 214kt was lower than the
revised guidance range of 220 – 230kt.
Other sites achieved consolidated copper production of 28kt for the full year, a 10kt reduction from 2022 reflecting
declining production from short life mines. Copper production at the Cobre Las Cruces mine in Spain ceased in Q2
2023. All permits are now in place for the underground development project at Cobre Las Cruces.
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, 2023.
000’s Q4
2023
Q4
2022
Year
2023
Year
2022
Copper production (tonnes) 160 206 708 776
Gold production (ounces) 53 70 227 283
Nickel production (tonnes) 7 6 26 22
Copper (000’s tonnes) Q4
2023
Q4
2022
Year
2023
Year
2022
Cobre Panama 63 90 331 350
Kansanshi 32 35 135 146
Trident - Sentinel 60 73 214 242
Other 5 8 28 38
Production 160 206 708 776
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Gold (000’s ounces) Q4
2023
Q4
2022
Year
2023
Year
2022
Cobre Panama 31 38 130 140
Kansanshi 17 24 69 110
Other 5 8 28 33
Production 53 70 227 283
Nickel production (000’s tonnes) Q4
2023
Q4
2022
Year
2023
Year
2022
Ravensthorpe 4 6 22 22
Trident - Enterprise 3 - 4 -
Production 7 6 26 22
Copper sales (000’s tonnes) Q4
2023
Q4
2022
Year
2023
Year
2022
Total copper 128 199 674 782
2024 – 2026 Guidance
Guidance is based on a number of assumptions and estimates as of December 31, 2023, 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.
Guidance for 2024 to 2026 is presented excluding Cobre Panama.
Production guidance
000’s 2024 2025 2026
Copper (tonnes) 370 - 420 400 - 460 400 - 460
Gold (ounces) 95 - 115 120 - 140 140 - 165
Nickel (tonnes) 22 - 37 26 - 41 36 - 51
Production guidance by operation
Copper
000’s tonnes 2024 2025 2026
Kansanshi 130 - 150 170 - 200 180 - 210
Trident - Sentinel 220 - 250 210 - 240 210 - 240
Other sites 20 20 10
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Gold
000’s ounces 2024 2025 2026
Kansanshi 65 - 75 85 - 95 90 - 105
Guelb Moghrein 28 - 38 34 - 44 49 - 59
Other sites 2 1 1
Nickel
000’s tonnes 2024 2025 2026
Ravensthorpe
12 - 17 11 - 16 11 - 16
Trident - Enterprise 10 - 20 15 - 25 25 - 35
Kansanshi copper production in 2024 is in line with prior year guidance and is higher in 2025 from prior year
guidance, reflecting the continued strong progress of the S3 Expansion project. Through the course of 2023, the
project achieved key milestones of commissioning approximately 30% of the fleet, progressing 80% of the
engineering, and earthworks and civil works are ahead of schedule. The progressive increase in copper production
over the three-year guidance period is attributable to the S3 Expansion, which is expected to come online during the
second half of 2025. A proportion of the initial feed for S3 will be sourc ed from lower grade stockpiles in order to fill
the concentrator, reducing feed grade. Production is expected to increase from 2027 as increased ore from the South
East Dome deposit at in-situ grades is fed into the plant, replacing the stockpile feed. Gold production at Kansanshi
has been revised from prior year’s guidance , in line with an improved understanding of the sources of sulphide
copper-gold mineralization at depth.
Sentinel copper production has been adjusted to ensure a more even mining sequence for ore and waste movement
and sustaining capital requirements, in particular the ongoing opening up of the pit at Phase 3 in 2024 and looking
ahead to Phase 4 in future years. This approach provides for improved mining productivities, trolley assist and waste
dump profiles and also improves storm-water management and the sequencing of in-pit crusher moves. As such,
year-on-year guidance for Sentinel is based on an optimal and sustainable balance of grades and volumes , with
slightly lower grades expected in 2025 and 2026 than 2024.
Guelb Moghrein gold production reflects the commissioning of the Carbon -in-Leach plant in the first half of 2024.
Gold production in 2024 for other sites is in line with prior year guidance.
At Ravensthorpe, weak nickel prices, lower payabilities and high operating costs have resulted in significant margin
pressure leading to the decision to scale back operations . The priority is to improve margins while still maintaining
asset integrity to avoid compromising the future operation of the mine at full capacity. Mining at Shoemaker-Levy will
be suspended and both High Pressure Acid Leach circuits will be bypassed. Existing ore stockpiles will be processed
through the Atmospheric Leach circuit. This will substantially reduce mining and processing cost s, albeit at slightly
lower recoveries in the process plant . Stockpiles are sufficient for eighteen months of production, after which time
Hale Bopp and Halley’s ore bodies will be mined. The change in strategy results in a decrease in nickel production
guidance with grades and recoveries impacted, while at the same time preserving the higher-grade Shoemaker Levy
orebody until nickel prices recover and operating margins improve.
Cash cost and all-in sustaining cost
Total Copper ($/lb) 2024 2025 2026
C1 1.80 - 2.05 1.80 - 2.05 1.80 - 2.05
AISC 2.70 - 3.00 2.85 - 3.15 2.80 - 3.10
Total Nickel ($/lb) 2024 2025 2026
C1 7.00 - 8.50 5.50 - 7.00 5.00 - 6.25
AISC 8.40 - 10.40 7.70 - 9.70 6.50 - 7.80
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C1 copper cash cost guidance has increased as a result of the production impacts from the suspension of operations
at Cobre Panama. Excluding Cobre Panama, C1 cash costs for 2024 are in line with prior year as current inflationary
pressures, lower copper production from Sentinel and reduced by-product gold credits from Kansanshi are offset by
cost saving initiatives, lower fuel prices and a weaker Zambian kwacha.
AISC cash cost guidance has increased to reflect the volume impact of the absence of Cobre Panama production ,
coupled with higher royalties in line with increased copper price assumptions. The higher AISC in 2025 reflects
increased capital expenditures for fleet replacement at Kansanshi before no rmalizing in 2026 as production
increases.
Unit cost guidance assumes a gold price of $1,800 per ounce , average Brent crude oil price of $90 per barrel,
Zambian kwacha/USD exchange rate of 21 and royalties based on consensus copper prices. Unit cost guida nce
assumes a sulphur price of $150 per tonne at Ravensthorpe.
Total nickel unit cost guidance excludes Enterprise in 2024. Enterprise nickel unit cost guidance is included from its
expected first full year of commercial production in 2025 with C1 nickel cash costs of $4.00 to $6.00 per lb and $3.50
to $6.00 per lb in 2026. Commercial production is expected during 2024.
Capital expenditure
$ million 2024 2025 2026
Project Capital 810 - 880 570 - 590 290 - 320
Sustaining capital 260 - 290 450 - 480 280 - 320
Capitalized stripping 180 - 230 180 - 230 280 - 310
Total capital expenditure 1,250 - 1,400 1,200 - 1,300 850 - 950
Capital expenditure continues to experience inflationary cost increases driven by higher shipping rates, steel prices,
power costs, labour rates and general inflation. Guidance reflects these cost increases as well as additional scope
increases and the timing of expenditures, including approximately $235 million of expenditure carried over from 2023
related mainly to the S3 Expansion and smelter expansion projects at Kansanshi , in -pit crusher relocations at
Sentinel, as well as other sustaining capital mostly related to mobile fleet replacements. However, strategic measures
have been implemented to offset the impact of these inflationary increases and deferred expenditure through
optimizing and prioritizing capital expenditure.
Total capital expenditure for the S3 Expansion project remains unchanged at $1.25 billion, with approximately $215
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, capital expenditure for the S3 Expansion project
is expected to be approximately $780 million with the majority of the spend planned over 2024 and 2025. Pre-strip
activities for the South East Dome pit are expected to continue through 2025, of which $220 million is included in the
S3 project capital within the guidance period. First production from S3 continues to be expected in H2 2025.
In addition to the S3 Expansion project, project capital in the three-year guidance period includes approximately:
$200 million at Kansanshi for the expansion of the smelter, expansion of the tailings facility and the relocation
of an in-pit crusher,
$130 million in capital expenditures at Sentinel for the relocation of in-pit crushers,
$100 million for La Granja development, with a majority of the spending occurring in the back end of the
guidance period, predominantly on community engagement, metallurgical and feasibility studies,
$45 million for additional trolley line installations across Kansanshi and Sentinel.
The three-year guidance includes capital expenditure that is expected to drive better sustainability performance as
well as improving the cost structures 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,
Expansion of trolley assist infrastructure across the Zambian operations to lower diesel consumption and
associated mine fleet greenhouse gas emissions, as well as offering the potential for future integration with
battery mining trucks,
Relocation and installation of in-pit crushers at the Zambian operations to optimize haul cycle efficiency and
reduce mine fleet diesel consumption,
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Investments at Trident to enhance the social infrastructure serving both our workforce and local
communities,
Water initiatives at various operations for the management of water quality and reuse by operations, an d
Community engagement in relation to the La Granja development project in Peru.
Sustaining capital expenditure ranges between $2 60 million and $ 480 million over the guidance period with an
increase at Kansanshi in 2025 reflecting increased fleet replacement programs.
Capital expenditure guidance excludes capitalized pre-commercial production results.
Balance Sheet Initiatives
With Cobre Panama in a phase of P&SM, First Quantum is employing a number of measures to prudently allow for
the planned capital spending for the S3 Expansion project at Kansanshi to continue , while comprehensively
addressing the Company’s leverage. The Company has a number of options that it is actively pursuing in this regard.
These initiatives include:
Dividend suspension: The Board has suspended the semi -annual divide nd. The Board will review the
Company’s financial policy on an ongoing basis and adjust the dividend approach when appropriate.
Capital expenditure reductions: Planned capital programs across the Company have been reduced or re-
phased by approximately $400 million in 2024 and $250 million in 2025. This reflects a halt in capital spend
at Cobre Panama and proactive initiatives to offset capital inflation in the Zambian business. The Company
remains committed to delivering the S3 Expansion project at Kansanshi in H2 2025.
Operating costs and other re ductions: Following a detailed review of all operating and administrative
costs, the Company has identified savings which will offset the inflationary impact on operating costs. The
cost savings initiatives include a change in strategy at Ravensthorpe to t emporarily remove higher cost
production.
Working Capital: The Company is also targeting reductions in its working capital requirements and savings
in the procurement of materials, supplies and third party service costs where possible.
Asset and stake sales: A process is currently underway to sell some of the Company’s smaller mining
assets. Following a number of inbound expressions of interest, the Company is also evaluating the possibility
of investments by strategic investors in its larger mining assets.
Financing activity: The Company is taking a proactive approach to managing its balance sheet and the
refinancing of its near-term debt maturities. The Company has commenced constructive discussions with its
banking partners to address and extend its bank loan facilities. The Company will continue to evaluate a
range of options across the capital markets to maintain a robust financial position and preserve value for its
shareholders.
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]
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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 of copper, gold and nickel at its projects (excluding Cobre Panam a), capital expenditures and
cash costs and all -in sustaining costs in each of 2024, 2025 and 2026; the timin g and effect on cash flows of the commissioning of the S3
Expansion at Kansanshi; the success of reductions or rephasing of planned capital programs; steps the Company make take to maintain a robust
financial position; the P&SM program at Cobre Panama, including expected costs thereof; the delivery of a draft for the first phase of P&SM and
the process of adjusting and updating such plan; the mining plan at Ravensthorpe and its effect on mining and processing cost s; the expected
entry of Enterprise into commercial production; the amounts and timing of total capital expenditures for the S3 Expansion; and anticipated capital
expenditures associated with project works and the effects thereof. Often, but not always, forward -looking statements or information can be
identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estima tes”, “forecasts”,
“intends”, “anticipates” or “does not anticipate” or “believes” or variations 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 (other than Cobre Panam a), the prices of copper, gold, nickel;
anticipated costs and expenditures (including the average Brent crude oil price the amounts payable under ce rtain royalties, and the sulphur
price, shaipping rates, steel prices, labour rates, power costs and general inflation); the Zambian zwacha-to-U.S. dollar exchange rate; the timing
of, and costs associated with, the completion of the S3 Expansion; 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, performance or
achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to, the prices of
copper, gold and nic kel, future production volumes and costs, the temporary or permanent closure of uneconomic operations, costs for inputs
such as oil, power and sulphur, political stability in Zambia, Peru, Mauritania, Finland, Spain, Turkey, Argentina and Austra lia, adverse weather
conditions in Zambia, Finland, Spain, Turkey, Mauritania and Australia, labour disruptions, potential social and environmenta l challenges
(including the impact of climate change), power supply, mechanical failures, water supply, procurement and delivery of parts and supplies to the
operations, the production 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 th e forward-looking
statements and information. Although the Company has attempted to identify factors that would cause actual action s, 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 factors 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.