FIRST QUANTUM MINERALS REPORTS SECOND QUARTER 2023 RESULTS (In United States dollars, except where noted otherwise)
NEWS RELEASE
23-24
July 25, 2023
www.first-quantum.com
FIRST QUANTUM MINERALS REPORTS SECOND QUARTER 2023 RESULTS
(In United States dollars, except where noted otherwise)
Toronto, Ontario (July 25, 2023) - First Quantum Minerals Ltd. (“First Quantum” or “the Company”) (TSX: FM)
today reports results for the three months ended June 30, 2023 (“Q2 2023” or the "second quarter") of net earnings
attributable to shareholders of the Company of $93 million ($0.13 earnings per share) and adjusted earnings 1 of
$85 million ($0.12 adjusted earnings per share 2).
“After a challenging start to the year, it is pleasing to see the improvements at our three largest operations. During
the second quarter, Sentinel achieved i ts highest monthly production for the year in May and Cobre Panamá and
Kansanshi achieved the same records in June. We remain well on track for a stronger performance in the second
half of the year. Our brownfield projects achieved important milestones dur ing the quarter with the Enterprise
project producing first nickel concentrate and both Enterprise and the CP100 Expansion periodically demonstrating
nameplate capacity," commented Tristan Pascall, Chief Executive Officer. “While we expect the positive
operational momentum to continue into the second half of the year, we are cognizant of the global economic
slowdown. I believe that we are well -positioned to navigate through the near -term challenges with our focus on
improving productivity and unit costs.”
Q2 2023 SUMMARY
In Q2 2023, First Quantum reported gross profit of $265 million, EBITDA 1 of $568 million, net earnings attributable
to shareholders of $0.13 per share, and adjusted earnings of $0.12 per share 2. Relative to the first quarter of this
year (“ Q1 2023”), second quarter financial results benefitted from higher copper sales volumes and lower input
costs, which was partially offset by lower realized copper and nickel prices.
Total copper production for the second quarter was 187,175 tonnes, a 35% increase from Q1 2023. The quarter -
over-quarter increase in production was attributable to an improvement in grades at Cobre Panamá, Kansanshi
and Sentinel and higher throughput at Cobre Panamá and Sentinel.
Copper C1 cash cost 2 of $1.98 per lb for Q2 2023 was $0.26 per lb lower than Q1 2023. The improvement in
copper C1 cash costs2 was related to improved production volumes and lower fuel and explosive costs.
Production at the thre e major copper operations is expected to be higher in the second half of the year. Guidance
for copper, gold and nickel production remains unchanged, however full year production for each metal is expected
to be towards the lower end of guidance to reflect year-to-date production. C1 cash cost 2 and AISC 2 for both
copper and nickel remains unchanged. Unit cash costs 2 are expected to decrease in the second half of the year
with higher production and are expected to be towards the upper end of guidance for the full year.
1 EBITDA and adjusted earnings are non -GAAP financial measures. These measures do not have a standardized meaning prescribed by IFRS and might not be comparable to
similar financial measures disclosed by other issuers. See “Regulatory Disclosures”.
2 Adjusted earnings per share, copper C1 cash cost (copper C1), and all -in sustaining costs (AISC) are non -GAAP ratios which do not have a standardized meaning prescribed
by IFRS and might not be comparable to similar financial measures disclosed by other issuers. See “Regulatory Disclosures”.
First Quantum Minerals Ltd. 23-24
Page 2 of 12
Q2 2023 OPERATIONAL HIGHLIGHTS
Total copper production for Q2 2023 was 187,175 tonnes, up from the 138,753 tonnes reported in Q1 2023 as
each of the Company's three largest operations reported improved grades during the period. Copper sales
volumes in Q2 2023 totalled 177,362 tonnes, 9,813 tonnes lower than production.
• Cobre Panamá produced 90,086 tonnes of copper in Q2 2023, an increase of 24,659 tonnes from the
previous quarter as the current quarter saw improved grades and higher tonnes milled from the continued
successful ramp-up of the CP 100 Expansion project. Copper C1 cash cost 1 of $1.71 per lb was $0.06 per
lb higher than the previous quarter due lower gold by -product credits. 2023 Production guidance for Cobre
Panamá remains unchanged at 350,000 to 380,000 tonnes of copper and 140,000 to 160,000 ounces of
gold. For the full year 2023, grades and recoveries are expected to be broadly consistent with 2022
regardless of the increased processing throughput, with some fluctuation from quarter to quarter. Ramp -up
of the CP100 Expansion continues, with the expansion facilities periodically demonstrating nameplate
capacity during the second quarter, and the expansion to 100 m illion tonnes per annum ("Mtpa") remains
on schedule for the end of 2023. Significant progress has been made on the pre -strip work for the Colina
pit and earthworks for the associated overland conveyor and in -pit crushing facility. The first crusher at
Colina is expected to be commissioned in 2024. Construction of the molybdenum recovery circuit is
progressing well with completion of construction and commencement of commissioning expected by the
end of 2023 with first molybdenum concentrate production to commence in the first quarter of 2024.
• Kansanshi’s copper production of 34,657 tonnes in Q2 2023 was 5,974 tonnes higher than the previous
quarter. Kansanshi production improved in the second quarter with mining cutbacks at elevated benches
with historically higher grades, which will continue to be the focus for the remainder of the year. Copper C1
cash cost1 of $2.36 per lb was $0.52 lower than Q1 2023 mainly due to lower fuel costs and improved
production volumes. Production in 2023 is expected to be at the lower end of the guidance range of
130,000 to 150,000 tonnes of copper and 95,000 to 105,000 ounces of gold. Mining fleet deployment
changes over the past six months have enabled the operation to open up mining areas, placing less
reliance on low -grade ore stockpiles. Additionally, mining will focus on cutbacks M15 and M17 at upper
elevations in the main pit, where mineralization is predominantly disseminated in stratigraphy and with
wider veins, and therefore higher grades. This will continue to be a f ocus for the remainder of the year,
which will benefit production through the rest of 2023.
• Sentinel reported copper production of 54,045 tonnes in Q2 2023, 17,813 tonnes higher than the previous
quarter as the operation saw steady improvement after the impact of record heavy rains experienced in the
first quarter. Mining activities continued to be impacted by excess water in the pit until mid -May when
dewatering activities reduced water levels in the pit, allowing operations to regain access to higher -grade
ore. Copper C1 cash cost 1 of $2.04 per lb was $0.66 per lb lower than the preceding quarter, reflecting
lower fuel costs and higher production volumes. As a result of the challenges encountered at the start of
the year, copper production for 2023 is ex pected to be toward the lower end of guidance of 260,000 to
280,000 tonnes. A drilling contractor will be deployed from July alongside the Company’s own drill rigs to
increase stocks of broken material. The focus will remain on blast quality to improve fra gmentation and
mine-to-mill optimization. Production is expected to continue to improve in the second half of the year with
improved milling rates in line with the comparable period in 2022 and with ground water now under control,
providing full access to high-grade ore. Grade improvement is expected to continue for the rest of the year.
• At Enterprise, first production of nickel concentrate was achieved in the second quarter, with nameplate
capacity of the process plant temporarily demonstrated during the s econd quarter, and first concentrate
sale is expected in the third quarter of 2023. The ramp -up continues to commercial production and full
plant throughput in 2024. Oxide material is impacting recoveries of the plant and the ore profile has been
updated t o reflect the classification of material. 2023 production for Enterprise is expected to be at the
lower end of guidance of 5,000 – 10,000 contained tonnes of nickel.
1 C1 cash costs (C1) is a non-GAAP ratio which does not have a standardized meaning prescribed by IF RS and might not be comparable to similar financial measures disclosed
by other issuers. See “Regulatory Disclosures”.
First Quantum Minerals Ltd. 23-16
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COBRE PANAMÁ UPDATE
On March 8, 2023, the Company and the Government of Panamá (the "GOP") reached an agreement in respect of
the terms and conditions for a Refreshed Concession Contract, which is subject to approval by law. The Refreshed
Concession Contract provides for an i nitial 20-year term with a 20 -year extension option and possible additional
extensions for life of mine. The Refreshed Concession Contract has been signed by the GOP and the Company on
June 26, 2023, having completed the public consultation process, and is currently under the ordinary course of
business review by the National Comptroller prior to its countersignature. Once counter signed by the Comptroller,
it is expected to be presented before the National Assembly of Panamá during the current legislative term that
commenced on July 1, 2023.
Once the agreement is signed and passed into law as expected, payments to cover taxes and royalties up to the
year-end 2022 of approximately $395 million are expected to be made within 30 days of the Refreshed Concessi on
Contract being enacted into law. In addition, past due amounts payable for 2023 corporate tax instalments,
withholding taxes and quarterly royalty payments will also be due 30 days after being enacted, without penalty or
interest. It is intended that th e charge relating to taxes and royalties up to the year -end 2022 be excluded from
2023 adjusted earnings. The expected taxes and royalties to the GOP relating to 2023 is $375 million.
BROWNFIELD PROJECTS
Construction work for the CP100 Expansion project was completed and commissioned in the first quarter. With the
expansion facilities periodically demonstrating nameplate capacity in the second quarter, the ramp up to a
throughput rate of 100 Mtpa remains on schedule for the end of 2023.
At the S3 Expansio n, detailed design is progressing well. Long -lead mining fleet and long -lead process plant
equipment have been ordered with deliveries expected to commence in the second half of 2023. Overall project
procurement is approximately 33% committed as at the end of the quarter. The majority of the capital spend on the
S3 Expansion is expected in late-2023 and 2024.
At Enterprise, nameplate capacity of the process plant was temporarily demonstrated during the second quarter.
First production of nickel concentrate was achieved in the second quarter and first concentrate sale is expected in
the third quarter of 2023. The ramp-up continues to commercial production and full plant throughput in 2024.
At the Las Cruces Underground Project, work continues to advance wit h the release of the NI 43 -101 Technical
Report on Reserves and Resources expected later in the year. The proposed underground project involves
supplementing the existing copper facilities at Las Cruces with additional processing capacity for zinc, silver and
lead. The Las Cruces Underground Project is awaiting Board approval, which is not expected before the end of
2023 and will take into consideration prevailing economic conditions and the Company's debt reduction objectives.
GREENFIELD PROJECTS
The primary Environmental and Social Impact Assessment (“ESIA”) for Taca Taca was submitted to the Secretariat
of Mining of Salta Province in 2019 and supplementary information on tailings and waste management were filed
to the authority during 2022. As a part of t he revision process, in June 2023, the Company received a second set
of observations to the ESIA and is currently working to provide the requested information. Approval of the ESIA is
expected in 2023. The Phase III groundwater exploration campaign success fully concluded during the second
quarter of 2023, with eighteen pumping wells constructed and tested, obtaining positive results. The initial water
use permit applications were submitted during the second quarter of 2023 and the remaining will be submitte d
progressively in 2023.
At Haquira, negotiations for land access to support a drill program were resumed during the second quarter and
agreements were reached with three local communities. The Company is working on upgrading camp facilities,
preparing req uired logistics including local suppliers and workers, renewing and/or progressing applicable
environmental permits, and formalizing access contracts, with the aim of starting an in -fill drilling campaign at
Haquira East deposit during the second half of 2 023. The Company hopes to resume land access discussions with
the remaining communities to extend the drilling program into Haquira West and other targets in the area of the
project.
First Quantum Minerals Ltd. 23-16
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FINANCIAL HIGHLIGHTS
• Gross profit for the second quarter of $265 million was 5% lower than Q1 2023 due to higher depreciation,
while EBITDA1 of $568 million for the same period was 10% higher due to higher sales volumes, partially
offset by lower realized metal prices.
• Cash flows from operating activities of $719 million ($1.04 per share 2) for the quarter were $420 million
higher than Q1 2023 due mainly to working capital movements related to trade and other receivables and
trade and other payables.
• Net debt1 decreased by $130 million during the quarter, taking the net debt 1 balance to $5,650 million as at
June 30, 2023. As at June 30, 2023, to tal debt was $6,528 million (March 31, 2023, total debt was $6,878
million). The decrease in net debt 1 and total debt 1 was attributable to the favourable timing of working
capital cash flows.
• On May 17, the Company announced an offering of $1.3 billion of Senior Notes due 2031. Proceeds from
the offering was used towards the repayment of $970 million of the Company’s existing revolving credit
facility and a $300 million redemption of the Company’s outstanding Senior Notes due 2025.
• On July 25, the Company a nnounced an interim dividend of CDN$0.08 per share, in respect of the
financial year ended December 31, 2023 (July 26, 2022: CDN$0.16 per share), to be paid on September
19, 2023 to shareholders of record on August 28, 2023.
1 EBITDA is a non-GAAP financial measures and net debt is a supplementary financial measure. These measures do not have a standardized me aning prescribed by IFRS and
might not be comparable to similar financial measures disclosed by other issuers. See “Regulatory Disclosures”
2 Cash flows from operating activities per share, copper C1 cash cost (copper C1), and copper all -in sustaining cost (copper AISC) are non -GAAP ratios which do not have a
standardized meaning prescribed by IFRS and might not be comparable to similar financial measures disclosed by other issuers. See “Regulatory Disclosures”.
First Quantum Minerals Ltd. 23-16
Page 5 of 12
CONSOLIDATED OPERATING HIGHLIGHTS
QUARTERLY
Q2 2023 Q1 2023 Q2 2022
Copper production (tonnes)1 187,175 138,753 192,668
Cobre Panamá 90,086 65,427 90,778
Kansanshi 34,657 28,683 39,719
Sentinel 54,045 36,232 52,447
Other Sites 8,387 8,411 9,724
Copper sales (tonnes) 177,362 150,287 187,642
Cobre Panamá 86,964 70,028 90,568
Kansanshi2 30,732 31,538 35,966
Sentinel 51,135 40,313 50,912
Other Sites 8,531 8,408 10,196
Gold production (ounces) 52,561 47,874 74,959
Cobre Panamá 28,994 23,878 36,931
Kansanshi 16,346 15,960 27,937
Guelb Moghrein 6,686 7,585 9,060
Other sites 535 451 1,031
Gold sales (ounces)3 48,640 51,941 69,998
Cobre Panamá 26,881 28,853 35,251
Kansanshi 15,825 17,244 26,775
Guelb Moghrein 5,233 5,482 6,974
Other sites 701 362 998
Nickel production (contained tonnes)4 5,976 5,917 4,853
Nickel sales (contained tonnes) 5,906 5,846 2,892
Cash cost of copper production (C1) (per lb)5,6 $1.98 $2.24 $1.74
Total cost of copper production (C3) (per lb)5,6,7 $2.92 $3.30 $2.73
Copper all-in sustaining cost (AISC) (per lb)5,6,7 $2.64 $2.87 $2.37
1 Production is presented on a contained basis, and is presented prior to processing through the Kansanshi smelter.
2 Sales include third -party sales of concentrate, cathode and anode attributable to Kansanshi. Sales exclude the sale of copper anode produced from third-party concentrate
purchased at Kansanshi. Sales of copper anode attributable to third party concentrate purchases were 8,821 tonnes for the thr ee months ended June 30, 2023 (580 tonnes for
the three months ended June 30, 2022).
3 Excludes refinery-backed gold credits purchased and delivered under the precious metal streaming arrangement (see “Precious Metal Stream Arrangement”).
4 Nickel production includes 220 tonnes of pre-commercial production from Enterprise, which is not included in earnings or C1, C3 a nd AISC calculations.
5 Copper all-in sustaining cost (copper AISC), copper C1 cash cost (copper C1), and total cost of copper (copper C3) are non -GAAP ratios, which do not have a standardized
meaning prescribed by IFRS and might not be comparable to similar financial measures disclosed by other issuers. See “Regulatory Disclosures”.
6 Excludes the sale of copper anode produced from third -party concentrate purchased at Kansanshi. Sales of copper anode attributable to third party concentrate purchases
were 8,821 tonnes for the three months ended June 30, 2023 (580 tonnes for the three months ended June 30, 2022).
7 Copper C3 and AISC for the three months ended June 30, 2023 exclude $18 million royalty attributable to ZCCM -IH relating to the year ended December 31, 2022.
REALIZED METAL PRICES1
QUARTERLY
Q2 2023 Q1 2023 Q2 2022
Average LME copper cash price (per lb) $3.84 $4.05 $4.31
Realized copper price (per lb) $3.75 $3.95 $4.19
Treatment/refining charges (“TC/RC”) (per lb) ($0.15) ($0.14) ($0.14)
Freight charges (per lb) ($0.03) ($0.02) ($0.03)
Net realized copper price1 (per lb) $3.57 $3.79 $4.02
Average LBMA cash price (per oz) $1,976 $1,890 $1,872
Net realized gold price1,2 (per oz) $1,797 $1,766 $1,736
Average LME nickel cash price $10.12 $11.79 $13.13
Net realized nickel price1 $9.50 $10.25 $10.09
1 Realized metal prices are a non-GAAP ratio, do not have standardized meanings under IFRS and might not be comparable to similar financial measures disclosed by other
issuers. See “Regulatory Disclosures” for further information.
2 Excludes gold revenues recognized under the precious metal stream arrangement.
First Quantum Minerals Ltd. 23-16
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CONSOLIDATED FINANCIAL HIGHLIGHTS
QUARTERLY
Q2 2023 Q1 2023 Q2 2022
Sales revenues 1,651 1,558 1,904
Gross profit 265 280 629
Net earnings attributable to shareholders of the Company 93 75 419
Basic earnings per share $0.13 $0.11 $0.61
Diluted earnings per share $0.13 $0.11 $0.60
Cash flows from operating activities 719 299 904
Net debt1 5,650 5,780 5,339
EBITDA2,3 568 518 906
Adjusted earnings2 85 76 337
Adjusted earnings per share4 $0.12 $0.11 $0.49
Realized copper price (per lb)4 $3.75 $3.95 $4.19
Net earnings attributable to shareholders of the Company 93 75 419
Adjustments attributable to shareholders of the Company:
Adjustment for expected phasing of Zambian value-added tax (“VAT”) receipts (31) (23) 106
Total adjustments to EBITDA2 excluding depreciation 15 22 (238)
Tax and minority interest adjustments 8 2 50
Adjusted earnings2 85 76 337
1 Net debt is a supplementary financial measure which does not have a standardized meaning under IFRS, and might not be compara ble to similar financial measures disclosed
by other issuers. See “Regulatory Disclosures.
2 EBITDA and adjusted earnings are non -GAAP financial measures, which do not have a standardized meaning under IFRS and might not be comparable to similar financial
measures disclosed by other issuers. Adjusted earnings have been adjusted to exclude items fr om the corresponding IFRS measure, net earnings attributable to shareholders
of the Company, which are not considered by management to be reflective of underlying performance. The Company has disclosed these measures to assist with the
understanding of results and to provide further financial information about the results to investors and may not be comparable to similar financi al measures disclosed by other
issuers. The use of adjusted earnings and EBITDA represents the Company’s adjusted earnings metrics. See “Regulatory Disclosures”.
3 Adjustments to EBITDA in 2023 relate principally to royalties payable to ZCCM -IH for the year ended December 31, 2022, and foreign exchange revaluations (2022 - foreign
exchange revaluations).
4 Adjusted earnings per share, realized metal prices, copper all-in sustaining cost (copper AISC), copper C1 cash cost (copper C1), and total cost of copper (copper C3) are non -
GAAP ratios which do not have a standardized meaning prescribed by IFRS and might not be comparable to simil ar financial measures disclosed by other issuers. See
“Regulatory Disclosures”.
First Quantum Minerals Ltd. 23-16
Page 7 of 12
2023 GUIDANCE
Production at the three major copper operations is expected to be higher in the second half of the year following a
challenging start to the year. Guidance for copper, gold and nickel production remains unchanged, however, full
year production for each met al is expected to be towards the lower end of guidance to reflect year -to-date
production.
C1 cash cost 1 and AISC1 for both copper and nickel remains unchanged, however, full year costs are expected to
be towards the upper end of guidance. Unit cash costs 1 are expected to decrease in the second half of the year
with higher production.
Any non-profit based top-up tax to meet the minimum contribution at Cobre Panamá is expected to be recognized
within operating profit and AISC 1. The AISC1 range remains unchanged and is able to accommodate the expected
impact of between $0.00 per lb to $0.05 per lb.
Guidance for total capital expenditure remains unchanged at $1,600 million. Guidance excludes any capitalized
pre-commercial production costs. Capital expenditure for the three and six months ended June 30, 2023 was $321
million and $586 million, respectively. Expenditure on the S3 Expansion project to date is approximately $76
million, with $35 million spent this year.
Interest expense on debt for the full year 20 23 is expected to be approximately $510 million and excludes interest
accrued on related party loans to Cobre Panamá and Ravensthorpe, a finance cost accreted on the precious metal
streaming arrangement, capitalized interest expense and accretion on asset retirement obligation (“ARO”). Cash
outflow on interest paid is expected to be approximately $505 million for the full year 2023.
The full year 2023 depreciation expense is expected to be between $1,250 million to $1,275 million.
At current consensus pric ing, the adjusted effective tax rate for the Company for the full year 2023 is expected to
be between 35% and 40%. It is anticipated that the effective tax rate for the Group in the second half of the year
will be higher than this rate as the income tax ex pense is adjusted to the full year rate under the Refreshed
Concession Contract when the agreement is passed into law, rather than the Law 9 basis used in the current
quarter.
PRODUCTION GUIDANCE
000’s 2023
Copper (tonnes) 770 – 840
Gold (ounces) 265 – 295
Nickel (contained tonnes) 28 – 38
PRODUCTION GUIDANCE BY OPERATION2
Copper production guidance (000’s tonnes) 2023
Cobre Panamá 350 – 380
Kansanshi 130 – 150
Sentinel 260 – 280
Other sites 30
Gold production guidance (000’s ounces)
Cobre Panamá 140 – 160
Kansanshi 95 – 105
Other sites 30
Nickel production guidance (000’s contained tonnes)
Ravensthorpe 23 – 28
Enterprise 5 – 10
1 C1 cash cost (C1), and all-in sustaining cost (AISC) are non-GAAP ratios, and do not have a standardized meaning prescribed by IFRS and might not be comparable to similar
financial measures disclosed by other issuers. See “Regulatory Disclosures”
2 Production is stated on a 100% basis as the Company consolidates all operations.
First Quantum Minerals Ltd. 23-16
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CASH COST AND ALL-IN SUSTAINING COST1
Copper 2023
C11 (per lb) $1.65 – $1.85
AISC1 (per lb) $2.25 – $2.45
Ravensthorpe Nickel 2023
C11 (per lb) $7.00 – $8.50
AISC1 (per lb) $9.00 – $10.50
1 C1 cash cost (C1), and all-in sustaining cost (AISC) are non-GAAP ratios, and do not have a standardized meaning prescribed by IFRS and might not be comparable to similar
financial measures disclosed by other issuers. See “Regulatory Disclosures”
ENVIRONMENT, SOCIAL AND GOVERNANCE (“ESG”)
The Company published its primary sustainability report, the 2022 ESG Report, as well as the 2022 Tax
Transparency and Contributions to Governments Report, in May 2023. The latest reports can be found in the ESG
Analyst Centre on the Company’s website: https://www.first-quantum.com/English/sustainability/esg-analyst-
centre/default.aspx. These include the TCFD -aligned Climate Change Reports, ESG Reports, Tax Transparency
and Contributions to Government Reports, as well as the Company’s sustainability policies. Following the
publication of the 2022 ESG Report, the Company hosted its inaugural virtual ESG Day in June 2023. A replay of
the webcast can be found on the Presentations and Events page of the Company’s website: https://first-
quantum.com/English/investors/presentations-and-events/default.aspx.
COMPLETE FINANCIAL STATEMENTS AND MANAGEMENT’S DISCUSSION AND ANALYSIS
The complete Consolidated Financial Statements and Management’s Discussion and Analysis for the three and six
months ended June 30, 2023 are available at www.first-quantum.com and at www.sedar.com and should be read
in conjunction with this news release.
CONFERENCE CALL DETAILS
The Company will host a conference call and webcast to discuss the results on Wednesday, July 26, 2023 at 9:00
am (ET).
Conference call and webcast details:
Toll-free North America: 1-800-319-4610
Toll-free International: +1-604-638-5340
Webcast: Direct link or on our website
A replay of the webcast will be available on the First Quantum website.
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]