FIRST QUANTUM MINERALS REPORTS THIRD QUARTER 2017 RESULTS (In United States dollars, except where noted otherwise)
NEWS RELEASE
17-27
October 26, 2017
www.first-quantum.com
FIRST QUANTUM MINERALS REPORTS THIRD QUARTER 2017 RESULTS
(In United States dollars, except where noted otherwise)
First Quantum Minerals Ltd. (“First Quantum” or the “Company”, TSX Symbol “FM”) today announced a
comparative loss1 of $28 million ($0.04 per share1), net loss from continuing operations attributable to shareholders
of the Company1 of $52 million ($0.08 per share) and cash flows from continuing operating activities of $267 million
($0.39 per share1) for the three months ended September 30, 2017. The results include a $157 million loss realized
under the copper sales hedge program for which no tax credit is available.
THIRD QUARTER 2017 SUMMARY2
Good Overall Operational Performance:
- Continued strong copper production3 with 145,376 tonnes:
The Sentinel mine turned in its strongest performance to date despite reduced power supply for
about a five-week period:
Its throughput increased to 11.4 million tonnes of ore, average recovery improved to 89%,
production reached 53,533 tonnes of concentrate and unit cost lowered to $2.05 and $1.62
per pound for all-in sustaining cost and cash cost, respectively.
- Maintained low unit copper production cost 4: All-in sustaining (“AISC”) = $1.7 5 per pound; Cash
cost (“C1”) = $1.21 per pound; Total cost (“C3”) = $2.03 per pound.
- Set a new quarterly copper sales record of 148,894 tonnes: Reduced copper anode inventory to
approximately 36,000 tonnes from about 56,000 tonnes at the end of the second quarter.
A Robust Project Development Program:
- Cobre Panama development capital estimate revised; project advanced to 63% completion:
Our estimate now stands at $5.7 billion. This includes the cost of rectification of certain
components of the power station, additional spare equipment purchases and several
improvements derived from our experience at both Sentinel and the Kansanshi smelter, which
are expected to benefit start-up, operations and future sustaining capital. We continue to evaluate
other enhancements including the installation of an eighth mill – which would increase
throughput further but together with additional pre-stripping, would add to the current estimate.
Capital estimate for 2017 is now $1,250 million with our share being $750 million assuming the
current 80% ownership.
Commissioning activities for the first generating set of the power station and shared facilities
are progressing well.
The entire project remains scheduled for phased commissioning during 2018, with continued
ramp-up over 2019.
- We are continuing environmental impact assessment studies at our advanced -stage exploration
projects, Haquira and Taca Taca, with the aim of having the necessary information available to
support go-forward decisions in 2019.
First Quantum Minerals Q3 2017 Financial and Operating Results 17-27
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Continuing To Further Strengthen The Balance Sheet And Manage Operational And Price Risk:
On October 19, 2017, we signed an agreement to refinance our corporate facilities with a
new $2.2 billion Facility that has improvements to the interest rate, financial covenants and
amortization schedule.
We continue to advance the process to put in place project financing for the Cobre Panama
project towards completion and drawdown expected in the first quarter of 2018.
At October 26, 2017 , our copper sales hedge program consisted of unsettled and unmargined
sales hedges for 184,250 tonnes with maturities to September 2018 at an average price of $2.51
per pound and zero cost collar unmargined sales contracts for 120,500 tonnes at a spread of
$2.56 - $3.37 per pound with maturities to December 2018.
We remain in full compliance with all financial covenants and ended the quarter with $508
million of committed undrawn facilities and $476 million in net unrestricted cash and net cash
equivalents.
Corporate And Other Developments:
- Kansanshi and Sentinel are being provided unrestricted power for the first time since July 2015:
This follows an agreement on a tariff increase, to approximately $0.09 per kilowatt hour,
provided we can import a portion of our total power requirements from alternative suppliers.
- Increasing our o wnership in Minera Panama, which holds the concession to Cobre Panama, to
90%:
We expect to close this agreement and the associated additional precious metals stream
agreement in the fourth quarter.
- Ravensthorpe Placed On Care And Maintenance Effective October 2017:
No impairment of the operation has been recognized based on the higher longer term consensus
nickel price.
We are reviewing market conditions regularly for the potential restart of operations while
continuing with the permitting process for the Shoemaker Levy deposit.
1 Net earnings (loss) attributable to shareholders of the Company and Earnings before interest, tax, depreciation, amortization
and impairment (“EBITDA”) have been adjusted to exclude items which are not reflective of underlying performance to arrive
at comparative earnings (loss) and comparative EBITDA. EBITDA, comparative earnings (loss), comparative earnings (loss)
per share , comparative EBITDA and cash flows per share are not measures recognized under IFRS and do not have a
standardized meaning prescribed by IFRS. The Company has disclosed these measures to assist with the understanding of results
and to provide further financial information about the results to investors. Refer to the “Regulatory Disclosures” section in the
MD&A for the quarter ended September 30, 2017 for further information.
2 On June 1, 2016 the sale of the Kevitsa mine was completed. In accordance with the requirements of IFRS 5 - Non-current
assets Held for Sale and Discontinued Operations, the financial and operating information presented for 2016 exclude the
Kevitsa mine.
3 Production is presented on a copper contained basis, and is presented prior to processing th rough the Kansanshi smelter.
4 AISC, C1 and C3 cost per pound are not recognized under IFRS. Refer to the “Regulatory Disclosures” section in the MD&A
for the quarter ended September 30, 2017 for further information.
CEO’S COMMENTS
“This was a very constructive quarter for First Quantum as we made significant progress towards several of our key
objectives,” noted Philip Pascall, Chairman and CEO.
“On our copper growth objective, it is pleasing to see Sentinel’s performance as the steps taken earlier this year gain
traction. The mine has already made a meaningful impact on our production and sales volumes, and we have set yet
another quarterly benchmark. With unrestricted power now being provided to both our operations in Zambia,
Sentinel is well positioned to be one of the pillars in the Company’s production.
First Quantum Minerals Q3 2017 Financial and Operating Results 17-27
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“Like many in our industry, strengthening the financial position has been a key objective. Our recent refinancing,
together with other initiatives successfully executed over the past two years , has accomplished a lot in that regard.
Our copper sales hedge program was important to protect financial covenants in the turbulent price environment of
the past few years . However, with our much improved financial position and the more positive sentiment for base
metals, it is now appropriate to employ other financial instruments to protect against the downside risk while enabling
our shareholders to benefit more from the better market conditions.
“First Quantum’s growth in copper is set to continue in the near -term with the construction of our tier-one Cobre
Panama project which is expected to start phased commissioning within 12 months. Our imminent acquisition of an
additional 10% interest in the project reinforces our confidence not only in this project, but also in the strong
fundamentals for copper. We are very pleased that this opportunity became available when it did and that we have
been able to reach agreement with LS -Nikko Copper on terms that match the timetable for the development and
commissioning of Cobre Panama,” Mr. Pascall concluded.
OPERATING HIGHLIGHTS4
Three months ended
September 30
Nine months ended
September 30
(U.S. dollars where applicable)
2017
2016 2017 2016
COPPER
- Production (tonnes)
145,376 142,721 419,644 393,357
- Sales (tonnes)
148,894 136,051 428,225 399,348
- Cost of production:
o AISC (per lb)
$1.75 $1.36 $1.62 $1.35
o C1 (per lb)
$1.21 $0.97 $1.20 $0.99
o C3 (per lb)
$2.03 $1.74 $2.01 $1.80
- Realized price (per lb)
$2.37 $2.23 $2.28 $2.27
NICKEL
- Production (contained tonnes)
6,325
5,330
17,837
17,418
- Sales (contained tonnes)
7,099 5,454 17,818 19,809
- Cost of production:
o AISC (per lb)
$4.67
$5.90
$5.32
$5.39
o C1 (per lb)
$4.16 $5.01 $4.46 $4.72
o C3 (per lb)
$5.77 $6.71 $6.12 $6.40
- Realized price (per payable lb)
$4.77 $4.68 $4.63 $4.17
GOLD
- Production (ounces)
47,213 52,957 147,832 159,778
- Sales (ounces)
51,729 54,124 150,653 187,163
FINANCIAL HIGHLIGHTS
Three months ended
September 30
Nine months ended
September 30
(U.S. dollars millions, except where noted otherwise)
2017
2016 2017 2016
Sales revenues
877
605
2,425
1,984
Gross profit 83 80 218 287
Net earnings (loss) from continuing operations attributable to
shareholders of the Company
(52)
36
(201)
210
Net loss from discontinued operations - - - (267)
First Quantum Minerals Q3 2017 Financial and Operating Results 17-27
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FINANCIAL HIGHLIGHTS (CONTINUED)
Three months ended
September 30
Nine months ended
September 30
(U.S. dollars millions, except where noted otherwise)
2017
2016 2017 2016
Net earnings (loss) per share from continuing operations
attributable to shareholders of the Company
Net earnings (loss) per share5
($0.08)
($0.08)
$0.05
$0.05
($0.29)
($0.29)
$0.31
($0.08)
Basic and diluted earnings (loss) per share5 ($0.08) $0.05 ($0.29) ($0.08)
Comparative EBITDA 304 220 836 746
Comparative earnings (loss) (28) 37 (75) 138
Comparative earnings (loss) per share ($0.04) $0.05 ($0.11) $0.20
Cash flows from continuing operating activities
267
263
711
821
5 2016 figures include discontinued operations.
CONFERENCE CALL & WEBCAST
Conference call and webcast details are as follows:
Date: October 27, 2017
Time: 9:00 am (Eastern); 2:00 pm (British); 6:00 am (Pacific)
Webcast: www.first-quantum.com
Dial in: North America: (toll free) 1 877 291 4570
North America and international: 1 647 788 4919
United Kingdom: (toll free) 0 800 051 7107
Replay: Available from noon (Eastern) on October 27 until 11:59 pm (Eastern) on November 10, 2017
North America: (toll free) 1 800 585 8367
North America and international: 1 416 621 4642
Passcode: 1057757
COMPLETE FINANCIAL STATEMENTS AND MANAGEMENT’S DISCUSSION AND ANALYSIS
The complete unaudited consolidated financial statements and Management’s Discussion and Analysis for the
quarter ended September 30, 2017 are available at www.first-quantum.com and should be read in conjunction with
this news release.
On Behalf of the Board of Directors of First Quantum Minerals Ltd.
G. Clive Newall
President
For further information visit our website at www.first-quantum.com
North American contact: Sharon Loung, Director, Investor Relations
Tel: (647) 346-3934 Fax: (604) 688-3818 Toll Free: 1 (888) 688-6577 E-Mail: [email protected]
United Kingdom contact: Clive Newall, President
Tel: +44 140 327 3484 Fax: +44 140 327 3494 E-Mail: [email protected]
First Quantum Minerals Q3 2017 Financial and Operating Results 17-27
Page 5 of 5
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, and expected timing of completion of project development at Cobre Panama and Enterprise and are
subject to the impact of ore grades on future production, the potential of production disruptions, capital expenditure
and mine production costs, the outcome of mine permitting, the outcome of legal proceedings which involve the
Company, information with respect to the future price of copper, gold, nickel, zinc, pyrite, cobalt 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, 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”, “estimates”, “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, the
price of copper, gold, nickel, zinc, pyrite, cobalt 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,
performance or achievements expressed or implied by such forward-looking statements or information. These factors
include, but a re 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, political stability in Zambia, Peru,
Mauritania, Finland, Spain, Turkey, Panama, Argentin a and Australia, adverse weather conditions in Zambia,
Finland, Spain, Turkey, Mauritania and Panama, labour disruptions, power supply, mechanical failures, water
supply, procurement and delivery of parts and supplies to the operations, and the production of off-spec material.
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, estima ted 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 st atements 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.