FIRST QUANTUM MINERALS REPORTS THIRD QUARTER 2018 RESULTS (In United States dollars, except where noted otherwise)
NEWS RELEASE
18-24
October 29, 2018
www.first-quantum.com
FIRST QUANTUM MINERALS REPORTS THIRD QUARTER 2018 RESULTS
(In United States dollars, except where noted otherwise)
First Quantum Minerals Ltd. (“First Quantum” or the “Company”, TSX Symbol “FM”) today reported comparative
earnings1 of $128 million ($0.19 per share1), net earnings attributable to shareholders of the Company1 of $61 million ($0.09
per share) and cash flows from operating activities of $439 million ($0.64 per share1) for the three months ended September
30, 2018. The results include a $31 million gain realized under the corporate copper sales hedge program.
SUMMARY:
Operations Continue to Deliver Solid Results; Production Guidance Increased for Copper; Costs remain in-
line with full year guidance
- 151,241 tonnes of copper2 produced:
o Year-over-year production increases at Kansanshi, Sentinel and Guelb Moghrein.
o Copper production guidance for 2018 increased to 595,000 tonnes.
- Scheduled maintenance shutdown at Las Cruces and resolution of grinding thickener issue completed in
September, production remains on-track to deliver on full year guidance.
- Unit cost of copper production3: All-in sustaining cost (“AISC”) = $1.83 per pound; Cash cost (“C1”) = $1.34
per pound; Total cost (“C3”) = $2.14 per pound.
Improved Operating Cash Flows and Continued Strong Liquidity
- $439 million of cash flows generated from operating activities ($0.64 per share) during the quarter, an
increase of 8% compared to the second quarter of 2018 and a 64% increase from the comparable prior year
period.
- Ended the quarter with $ 753 million in net unrestricted cash and cash equivalents, $ 1,120 million of
committed undrawn facilities and in full compliance with all financial covenants.
Key Milestones Achieved at the Cobre Panama Project; Over 80% Complete
- Power station construction completed, commissioning and ramp up progressing.
o Set 1 power station generated power at nameplate capacity of 150MW.
o Set 2 power station successfully completed steam blows.
- Process plant and mine site are 74% complete with commissioning activities continuing in the quarter.
o Conveyor belt pulling commenced in the process plant.
o Mechanical completion of the first in-pit primary crusher.
- Engineering is now considered complete and significant advancement on procurement was achieved.
Other
- In late September 2018, the Government of the Republic of Zambia announced changes to the Zambian
mining tax regime scheduled to take effect January 2019. The Company continues to assess the potential
impact on its Zambian operations and maintains a dialogue with Government. Changes include:
o Increase in mineral royalty rates on copper by 1.5% at all levels of the existing scale;
o Royalties will no longer be tax deductible;
First Quantum Minerals Q3 2018 Financial and Operating Results 18-24
Page 2 of 4
o Introduction of a new fourth tier rate of 10% when copper price exceeds $7,500 per tonne; 5% import
duty on copper and cobalt concentrates; export levy on precious metals including gold of 15%;
o Non-refundable sales tax to replace Value Added Tax with no detail on sales tax levels which is
expected to be introduced in April 2019.
- Also in l ate September 2018, the Supreme Court of Panama announced a ruling in connection with the
constitutionality of Law 94 of 1997.
o The Company understands that the ruling relates to the enactment of Law 9 and not the legality of the
Company’s mining concession contract which remains in effect and allows for the continuation of the
development of Cobre Panama.
o Following the ruling, the Government of Panama issued a news release affirming support for the Cobre
Panama project and that the Ministry of Commerce and I ndustry (MICI) considers the mining
concession contract and its extension to be in effect in all its parts.
o The Company continues to work with appropriate parties to identify suitable remedies and to clarify
the legal position of Law 9 and is confident of a resolution in the near-medium term.
1 Net earnings (loss) attributable to shareholders of the Company has been adjusted to exclude items which are not reflective of
underlying performance to arrive at comparative earnings (loss). 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 unders tanding of results and to provide further
financial information about the results to investors. Refer to the “Regulatory Disclosur es” section in the MD&A for the quarter ended
September 30, 2018 for further information.
2 Production is presented on a copper contained basis, and is presented prior to processing through the Kansanshi smelter.
3 AISC, C1 and C3 costs per pound are not recognized under IFRS. Refer to the “Regulatory Disclosures” section in the MD&A for the
quarter ended September 30, 2018 for further information.
4Law 9 was passed by the Panamanian National Assembly on February 26, 1997, and granted the status of national law to the mini ng
concession contract relating to the Cobre Panama project.
CEO’S COMMENTS
“Our operations continued to deliver in the third quarter relative to plan. Development of our Cobre Panama project
progressed on schedule with some significant milestones achieved ,” noted Philip Pascall, Chairman and CEO. “Our
financial results reflect the positive operational quarter, increased sales volumes and a higher realized copper price which
was positively affected by our copper sales hedge program.
“The success in the quarter provided the opportunity to increase ou r copper and zinc production guidance, slightly adjust
our gold production expectation while maintaining our projected low unit cost of production. We also remain on track to
deliver significant production growth in the coming years with the development of Cobre Panama.” Mr. Pascall concluded.
OPERATING HIGHLIGHTS
Three months ended
September 30
Nine months ended
September 30
(U.S. dollars where applicable) 2018 2017 2018 2017
COPPER
- Production (tonnes)
151,241
145,376
447,549
419,644
- Sales (tonnes) 151,342 148,894 441,766 428,225
- Cost of production:
o AISC (per lb)
$1.83
$1.75
$1.77
$1.62
o C1 (per lb) $1.34 $1.21 $1.30 $1.20
o C3 (per lb) $2.14 $2.03 $2.13 $2.01
- Realized price (per lb) $2.84 $2.37 $2.85 $2.28
First Quantum Minerals Q3 2018 Financial and Operating Results 18-24
Page 3 of 4
GOLD
- Production (ounces) 44,979 47,213 137,375 147,832
- Sales (ounces) 42,864 51,729 139,851 150,653
FINANCIAL HIGHLIGHTS
Three months ended
September 30
Nine months ended
September 30
(U.S. dollars millions, except where noted otherwise)
2018
2017
2018
2017
Sales revenues
Gross profit
Net earnings (loss) attributable to shareholders of the Company
Basic and diluted earnings (loss) per share
Comparative EBITDA1
Comparative earnings (loss)1
Comparative earnings (loss) per share1
Cash flow from operating activities
978
246
61
$0.09
427
128
$0.19
439
877
83
(52)
($0.08)
304
(28)
($0.04)
267
2,912
698
243
$0.35
1,256
305
$0.44
1,642
2,425
218
(201)
($0.29)
836
(75)
($0.11)
711
CONFERENCE CALL & WEBCAST
Conference call and webcast details are as follows:
Date: October 30, 2018
Time: 9:00 am (EDT); 1:00 pm (GMT); 6:00 am (PDT)
Please note the time of the call in the United Kingdom reflects the reversion to GMT.
Webcast: www.first-quantum.com
Dial in: North America: (toll free) (877) 291-4570
North America and international: 1 (647) 788-4919
United Kingdom: (toll free) 0-800-051-7107
Replay: Available from noon (EDT) on October 30, 2018 until 11:59 pm (EST) on November 13, 2018
North America: (toll free) (800) 585-8367
North America and international: 1 (416) 621-4642
Passcode: 5499405
COMPLETE FINANCIAL STATEMENTS AND MANAGEMENT’S DISCUSSION AND ANALYSIS
The complete consolidated financial statements and Management’s Discussion and Analysis for the quarter ended
September 30, 2018 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
First Quantum Minerals Q3 2018 Financial and Operating Results 18-24
Page 4 of 4
North American contact: Lisa Doddridge, Director, Investor Relations
Tel: (416) 361-3752 Toll Free: 1 (888) 688-6577 E-Mail: [email protected]
United Kingdom contact: Clive Newall, President
Tel: +44 140 327 3484 E-Mail: [email protected]
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, other required permitting, the outcome of legal proceedings which involve the Company,
information with respect to the future price of copper, gold, nickel, zinc, pyrite, cobalt, iron 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, an d 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”, “anti cipates”
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 stateme nts 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, iron 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 are no t 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, Argentina and
Australia, adverse weather conditions in Zambia, Finland, Spain, Turkey, Mauritania and Panama, labour disruptions,
potential social and environmental challenges, 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, achieve ments 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 oblig ation
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.