FIRST QUANTUM MINERALS

Transcription

1 FIRST QUANTUM MINERALS FIRST QUARTER 2017 CONFERENCE CALL & WEBCAST APRIL 28, 2017 TSX: FM

2 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENT Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forwardlooking 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 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, political stability in Zambia, Peru, Mauritania, Finland, Spain, Turkey, Panama, Argentina and Australia, adverse weather conditions in Zambia, Finland, Spain, Turkey and Mauritania, 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, 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. 2

3 COBRE PANAMA PROGRESS PORT & POWER STATION OVERVIEW 3

4 COBRE PANAMA PROGRESS PORT SUBSTATION 4

5 COBRE PANAMA PROGRESS POWER STATION OVERVIEW Set 1 Set 2 5

6 COBRE PANAMA PROGRESS POWER STATION 6

7 COBRE PANAMA PROGRESS POWER STATION Set 2 Set 1 7

8 COBRE PANAMA PROGRESS POWER STATION Set 1 Set 2 8

9 COBRE PANAMA PROGRESS 230KV SWITCHYARD 9

10 COBRE PANAMA PROGRESS PLANT AREA OVERVIEW 10

11 COBRE PANAMA PROGRESS MILLING SECTION 11

12 COBRE PANAMA PROGRESS BOXCUTS & PRE-STRIP 12

13 COBRE PANAMA PROGRESS TAILINGS MANAGEMENT FACILITY DECANT TUNNEL 13

14 COBRE PANAMA PROGRESS TAILINGS MANAGEMENT FACILITY NORTH WALL 14

15 FINANCIAL REVIEW 15

16 Q HIGHLIGHTS Copper production 11% above Q Copper production below Q as Sentinel transitions to terrace mining Record quarterly smelter production Copper sales reach new quarterly high '000 tonnes Q vs Q vs Q Copper Production (1) Smelter Production Concentrate processed (dmt) Copper anodes produced Copper Sales (1) Excludes smelter production Comparative EBITDA broadly in line with Q Comparative loss per share incurred as no tax credit recognized for sales hedge program losses Successful $2.2bn senior note issue during the quarter results in minimal repayments until 2021 $ million Q Q Q Comparative EBITDA Comparative (loss)/earnings per share (0.04)

17 QUARTERLY PRODUCTION CONTINUING OPERATIONS 1 Copper production 11% above Q Reflects higher Sentinel, Kansanshi and Las Cruces Kansanshi 9% higher from increased milling volumes and improved sulphide circuit recovery Sentinel production 15kt higher than Q following ramp up but below Q due to rainy season and transition to terrace mining Record quarterly smelter throughput with 327kt of concentrate processed Nickel production reflects lower grades and throughput Production 1kt lower than Q lower due to lower grades, equipment maintenance and flooding reducing plant throughput Gold production lower than Q driven by Guelb Moghrein Guelb Moghrein 30% lower due to lower grades and throughput Kansanshi marginally higher than Q Results are presented on a continuing operations basis and therefore exclude Kevitsa. 17

18 Q1 FINANCIAL OVERVIEW Impact of lower realized metal prices and higher depreciation partially offset by higher sales including contribution from Sentinel $ million Q Q Q Revenue Gross Profit Comparative EBITDA 1, Comparative Earnings (Loss) 1,2 (29) Comparative Earnings (Loss) per share (0.04) Net Debt (4,661) (4,381) (4,795) Comparative EBITDA in line with Q as higher sales volumes offset lower realized metal prices including the impact of the sales hedging program Gross profit below Q reflecting commercial production at Sentinel Net debt $280m higher than December 2016 reflecting planned capital expenditure program and early senior note redemption costs Comparative loss incurred as no tax credit recognized on sales hedge program losses Copper Hedge Position Copper hedge price increasing across 2017 Over 80% of 2017 copper sales hedged Currently 4% of 2018 copper sales hedged Additionally 2kt Cu collars per month from July 2017 to February 2018 at $2.62/lb to $2.83/lb 1 Earnings (loss) attributable to shareholders of the Company and EBITDA have been adjusted to exclude items which are not reflective of underlying performance to arrive at comparative earnings (loss) and comparative EBITDA. Items excluded from comparative measures include impairment charges, foreign exchange and revisions in estimates of closed site restoration provisions. A reconciliation of comparative EBITDA and comparative earnings (loss) is provided in the Q MD&A. Results are presented on a continuing operations basis and therefore exclude Kevitsa. 2 Includes post commercial production contribution for Sentinel from November 1,

19 QUARTERLY UNIT CASH COSTS Copper C1 cost ($/lb) Copper AISC ($/lb) Q Q Q Q Q Group excl Sentinel Q C1 cost above Q Sentinel Impact Inclusion of Sentinel for three months as opposed to two in Q Excluding Sentinel, C1 reduced from $1.16/lb to $1.12/lb Q Q Q Q Q Group excl Sentinel Q AISC lower than Q Sentinel AISC lower than Q due to lower sustaining capex Reduction in sustaining capex reflects timing of major mining fleet spend during Q

20 $ million Q GROSS PROFIT VS Q Gross profit $36m below Q as lower realized metal prices, including the impact of the sales hedge program, and higher depreciation is partially offset by higher sales volumes (21) (88) Q Metal Price FX Sales Volumes 1 Costs Depreciation Royalty Q

21 LONG TERM DEBT PROFILE Debt Maturity Profile No senior note principle due until 2021 Covenant Ratio Net debt/ebitda covenant ratio of 4.75x - within bank covenant of 5.5x Liquidity March 31, 2017 liquidity: $449m net unrestricted cash $938m undrawn RCF (expires 2019) Debt Maturity Profile at 31 March $1.4bn 21

22 COBRE PANAMA PROJECT FINANCING UPDATE Good progress made on project financing Project financing for Cobre Panama was launched to ECA s in December 2016 Discussions with a number of ECA s across Asia and Europe going well Expected long term debt of up to $2.5 billion Site visit in Panama and term sheet discussions were held in March with follow up discussions ongoing Next round of negotiations scheduled for May Targeted completion of the second half of

23 COBRE PANAMA CAPITAL EXPENDITURE 1 $ million Q Actual 2017 Guidance 2018 Guidance 2019 Guidance Total Cobre Panama 243 1, First Quantum share of Cobre Panama (90) Stripping costs Other sustaining capex and other projects Total First Quantum net capital spend , Cobre Panama Funding ($bn) Funded by $ billion First Total Quantum 3rd Party Cobre Panama project Capital spend to December Capital spend to December Capital spend to March Estimated 2017 capital spend Estimated 2018 to completion capital spend Total Cobre Panama $5.48bn First Quantum incurred 3rd Party incurred First Quantum to spend 3rd Party to spend 1 Capital expenditure excludes capitalized interest and capitalized pre-commercial costs. 23

24 APPENDIX 24

25 MARKET GUIDANCE Total guidance unchanged Production 1 (000 s) 2017 Guidance 2018 Guidance 2019 Guidance Copper tonnes Nickel contained tonnes Gold ounces Zinc tonnes C1 Cash Cost 2 ($ per pound) Copper Nickel All-in sustaining costs 3 ($ per pound) Copper Nickel Copper production excludes Cobre Panama. 2 C1 and AISC cost guidance excludes Cobre Panama in 2018 and All-in sustaining costs includes C1, royalties, allocation of general and administrative expenses and sustaining capital expenditure including stripping costs. 25

26 QUARTERLY NET DEBT MOVEMENT Opening Net Debt at December 31, 2016 ($ million) (4,381) Comparative EBITDA 265 Working capital (36) Gross capital expenditure including pre-commercial (311) Net interest 1 (138) Franco-Nevada precious metal stream 50 KMPC contribution 50 Loss on extinguishment of senior notes (84) Movement on restricted cash (52) Taxes paid (45) Other 21 Closing Net Debt at March 31, 2017 ($ million) (4,661) Net Debt comprised of: Net Cash & cash equivalents Total debt (5,110) Available committed undrawn debt facilities at March 31, Includes $124m of capitalized interest 2 Excludes $122m restricted cash 3 $938m on the senior debt facility 26

27 FIRST QUANTUM MINERALS FIRST QUARTER 2017 CONFERENCE CALL & WEBCAST APRIL 28, 2017 TSX: FM