First Quantum Minerals Ltd. · TSX:FM
First Quantum Minerals — Investor Presentation (May 2015)
32 slides from First Quantum Minerals's investor presentation, May 2015
Slide 1: First Quantum Minerals Ltd. May 2015
FIRST QUANTUM MINERALS LTD.
Slide 2: Cautionary Note Regarding Forward-Looking Statement
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENT Some of the statements contained in the following material are forward-looking statements and not statement of facts. Such statements are based on the current beliefs of management, as well as assumptions based on management information currently a
Slide 3: Building a Leading Global Copper-Focused Company
BUILDING A LEADING GLOBAL COPPER-FOCUSED COMPANY Delivering new production capacity Maintaining a healthy balance sheet Enhancing our growth pipeline Operating safe and efficient mines 3
Slide 4: Delivering New Production Capacity: Smelter Ramping-up
DELIVERING NEW PRODUCTION CAPACITY Smelter Ramping-up Ahead of Expectations Already operating at ~65% of capacity Releasing copper concentrate inventory Sulphuric acid by-product reducing 3rd party purchases Benefiting from: Extensive planning & built-in contingencies Focus on operator tra
Slide 5: Smelter Ramping-up Ahead of Expectations
SMELTER RAMPING-UP AHEAD OF EXPECTATIONS 5
Slide 6: Smelter Ramping-up Ahead of Expectations
SMELTER RAMPING-UP AHEAD OF EXPECTATIONS 6
Slide 7: Smelter Ramping-up Ahead of Expectations
SMELTER RAMPING-UP AHEAD OF EXPECTATIONS 7
Slide 8: Sentinel Mine Making Steady Progress
DELIVERING NEW PRODUCTION CAPACITY Sentinel Mine Making Steady Progress Pace of ramp-up improving with start of drier weather Train 1 achieving periods of above design throughput Train 2 being commissioned All required power on track to be connected by August 2015 Commercial production exp
Slide 9: Sentinel Mine Making Steady Progress
SENTINEL MINE MAKING STEADY PROGRESS 9
Slide 10: Sentinel Mine Making Steady Progress
SENTINEL MINE MAKING STEADY PROGRESS 10
Slide 11: Sentinel Mine Making Steady Progress
SENTINEL MINE MAKING STEADY PROGRESS 11
Slide 12: Cobre Panama Progressing Strongly & Under Good Control
DELIVERING NEW PRODUCTION CAPACITY Cobre Panama Progressing Strongly & Under Good Control Engineering of all major areas ahead of site requirements Port Earthworks complete Concrete pouring for powerstation Material offloading facility complete Structural steel erection underway Tailin
Slide 13: Cobre Panama Progressing Strongly & Under Good Control
COBRE PANAMA PROGRESSING STRONGLY & UNDER GOOD CONTROL 13
Slide 14: Cobre Panama Progressing Strongly & Under Good Control
COBRE PANAMA PROGRESSING STRONGLY & UNDER GOOD CONTROL 14
Slide 15: Cobre Panama Progressing Strongly & Under Good Control
COBRE PANAMA PROGRESSING STRONGLY & UNDER GOOD CONTROL 15
Slide 16: Enterprise Development Continuing
DELIVERING NEW PRODUCTION CAPACITY Enterprise Development Continuing Concrete works essentially complete SAG and ball mills installed Structural and tank works underway Production pre-strip ready by Q3 2016 Flexible 4 mtpa processing plant can be used for copper production at Sentinel Ma
Slide 17: Maintaining a Healthy Balance Sheet
MAINTAINING A HEALTHY BALANCE SHEET Cash Flow Capability Increases With Ramp-up of Smelter and Sentinel As at March 31, 2015 Cash = $302M; Available facilities = $744M • Financial covenants revised to reflect adverse impact of recent decline in metal prices and higher royalty in Zambia. Complian
Slide 18: Operating Safe & Efficient Mines
OPERATING SAFE & EFFICIENT MINES Q1 Performance In-line with Guidance Kansanshi’s production intentionally limited in Q1 Going forward, smelter operations expected to: Further release concentrate inventory Allow greater utilization of CCD capacity Remove smelter capacity constraints Rave
Slide 19: Enhancing Our Growth Pipeline
ENHANCING OUR GROWTH PIPELINE Taca Taca project acquired in August 2014 Located in the Puna region of Salta Province, Argentina Detailed review of geology, exploration and development options now underway 19
Slide 20: Taca Taca Project
TACA TACA PROJECT FIRST QUANTUM 20
Slide 21: Zambian Developments
ZAMBIAN DEVELOPMENTS • Zambian royalty regime effective January 1, 2015 Corporate tax 0% Royalty 20% Decreased EBITDA at Zambian operations Expected to be abolished July 1, 2015 • Proposed tax regime Corporate tax 30% Royalty 9% Variable tax up to 15% Expected to take effect July 1,
Slide 22: Strong Long-Term Fundamentals for Copper Intact
STRONG LONG-TERM FUNDAMENTALS FOR COPPER INTACT 22
Slide 23: What Has Changed?
WHAT HAS CHANGED? Reuters Poll January April • Consensus surplus for this year shrinks to 105kt – minimal in context of 23Mt 2015 Market market 221 kt 105 kt Surplus • Dollar appreciation slowing, taking some pressure off copper prices 23
Slide 24: What Has Changed?
WHAT HAS CHANGED? • Chinese economy continues to decelerate but officials indicate they have the means to China Economic Policy News stimulate growth and intend to use them 30 Mar - Eased lending and tax policies on real estate. • Antaike (state-owned market research company) forecast of copper cons
Slide 25: Rebound in Copper Price Has Taken Pressure Off Cost Curve
REBOUND IN COPPER PRICE HAS TAKEN SOME PRESSURE OFF THE UPPER END OF COST CURVE $2.80/lb $2.50/lb ~200kt Note: C1 excludes royalties 25
Slide 26: Market Balance: A Race Between Easing Demand and Supply Growth
MARKET BALANCE: A RACE BETWEEN EASING DEMAND GROWTH AND EASING SUPPLY GROWTH THE DOWNSIDE THE UPSIDE • Chinese slowdown deeper than forecast • Disruptions to supply slightly ahead of • Rate of decline of home prices forecast pace slowing but property market glut • WoodMac assume 5% for the year cont
Slide 27: No Reason for This Cyclical Dip to Behave Differently
NO REASON FOR THIS CYCLICAL DIP TO BEHAVE SIGNIFICANTLY DIFFERENTLY FROM PREVIOUS ONES • 90th percentile C1 ($2.00/lb) should provide floor on a quarterly basis • Cannot rule out repeat of January dip but would be short-lived • Will take some time for the market to be convinced the global economy ha
Slide 28: Near-Term Price at Lower End of Range; Bullish Long-Term View
NEAR-TERM PRICE AT LOWER END OF RANGE DUE TO DEMAND HEADWINDS; BULLISH LONG-TERM VIEW REMAINS INTACT $4.00/lb 2017-2021 Price Range $3.50/lb In 2016, markets could look through 2015-2016 Price Range current weakness Consensus to impending 2015 2016 deficits in 2017- $2.80/lb $2.89/lb Analyst LT Cons
Slide 29: Growth Supported by High-Quality Efficient Operations
GROWTH SUPPORTED BY HIGH-QUALITY EFFICIENT OPERATIONS 29
Slide 30: Full Year Guidance
FULL YEAR GUIDANCE PRODUCTION RANGES CASH COST OF PRODUCTION Copper 410,000 - 440,000 tonnes RANGES Nickel 32,000 - 40,000 tonnes Copper $1.30 and $1.55 per Gold 218,000 - 247,000 ounces pound, inclusive of post- commercial production at Sentinel Zinc 40,000 - 45,000 tonnes Nickel $4
Slide 31: Building a Leading Global Copper-Focused Company
BUILDING A LEADING GLOBAL COPPER-FOCUSED COMPANY • Top 10 copper producer with significant nickel and gold production • Operations and projects in 9 countries • High-quality, efficient operations • Healthy balance sheet • Industry-leading growth • Unique core strength of in-house project development
Slide 32: First Quantum Minerals Ltd. May 2015
FIRST QUANTUM MINERALS LTD.
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