First Quantum Minerals Ltd. · TSX:FM
First Quantum Minerals — Q4 2015 Earnings Presentation
22 slides from First Quantum Minerals's earnings presentation, Feb 19, 2016
Slide 1: Fourth Quarter 2015 Conference Call & Webcast
FOURTH QUARTER 2015 CONFERENCE CALL & WEBCAST FEBRUARY 19, 2016 TSX: FM; LSE: FQM
Slide 2: Cautionary Note Regarding Forward-Looking Statement
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENT 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
Slide 3: Strong 2015 Financial Results
STRONG 2015 FINANCIAL RESULTS • Comparative earnings* = $267 million • Cash flows from operations = $1,191 million • Achieved through: • strong performances at all the operations, • the increasing realization of benefits from operating our own smelter in Zambia, • the on-going company-wide cost redu
Slide 4: Plan to Reduce Debt Position Advancing
PLAN TO REDUCE DEBT POSITION ADVANCING • Initiatives expected to be finalized at various times over the next several months • Secured lenders remain supportive GOALS: A lower debt position & A capital structure better suited to the development and start-up timetable of our Cobre Panama project 4
Slide 5: Cobre Panama Capex Reduced to $5.48B
COBRE PANAMA CAPEX REDUCED TO $5.48B Total reduction of 15% from our original estimate of $6.42B Savings mostly from: efficiencies achieved to date in the critical earthworks, concrete and construction phases of the project, better pricing for equipment and materials, plus savings in some
Slide 6: Cobre Panama – Power Plant Overview
COBRE PANAMA – POWER PLANT OVERVIEW 6
Slide 7: Cobre Panama – Port Facility and Jetty Construction
COBRE PANAMA – PORT FACILITY AND JETTY CONSTRUCTION 7
Slide 8: Cobre Panama – Process Plant Overview
COBRE PANAMA – PROCESS PLANT OVERVIEW 8
Slide 9: Financial Review
& FIRST QUANTUM Maen g
Slide 10: 2015 Highlights
2015 Highlights Production increases in second half of Production H1 2015 H2 2015 year with increased contribution from Copper ('000 tonnes) 201 227 Nickel ('000 contained tonnes) 15 20 Kansanshi and increased pre-commercial Gold ('000 ounces) 110 114 production at Sentinel Copper C1 cost below orig
Slide 11: $452m annualized cost savings excluding FX based on Q4 15 vs. Q4 14
$452m annualized cost savings excluding FX based on Q4 15 vs. Q4 14 2% Net acid costs $134m lower driven by Kansanshi smelter production of sulphuric acid Fuel costs $55m lower across the group $452m General and administration and annualized exploration costs $80m lower savings including lower
Slide 12: $1.74bn reduction in future capex vs prior year plan
$1.74bn reduction in future capex vs prior year plan Reduction and re-phasing of $1.74bn in future capital expenditure –2% including a $940m reduction in Cobre Panama from the initial estimated project cost of $6.42bn to $5.48bn – see table below. The remaining $800m of savings primarily relates
Slide 13: Q4 2015 Highlights
Q4 2015 Highlights Cu production above Q4 2014 and Q3 2015 with Production Q4 2015 vs Q3 2015 vs Q4 2014 pre-commercial Sentinel production. Copper ('000 tonnes) 120.2 +12.7 +15.0 Ni production ahead of Q3 2015 and Q4 2014 Nickel ('000 contained tonnes) 10.2 +0.2 +0.3 driven by Kevitsa. Copper sales
Slide 14: Financial Overview
Financial Overview Comparative EBITDA impact of lower metal prices partly offset by cost savings Gross profit against Q3 2015 higher due to $ million Q4 2015 Q3 2015 Q4 2014 higher sales volumes and favourable FX, Revenue 765 673 821 partly offset by lower realized prices. Gross Profit 110 103 183 1
Slide 15: C1 Cost
C1 Cost Copper C1 cost ($/lb) Nickel C1 cost ($/lb) Q4 2015 copper C1 cost 21% down Q4 2015 nickel C1 cost lower than Q3 2015 and Q4 2014 Continued focus on cost reductions and efficiencies Cost saving initiatives Lower mining and processing costs Lower sulphur costs Savings on acid cost a
Slide 16: Q4 2015 Gross Profit versus Q4 2014
Q4 2015 Gross Profit versus Q4 2014 Gross profit below Q4 2014 driven by lower realized metal prices partially offset by cost savings, higher sales volumes and favourable FX 183 93 110 (11) (13) $ million 67 40 (249) Gross Sales Q4 2014 realized FX Costs Depreciation Royalty Q4 2015 Volumes price 16
Slide 17: Long Term Debt Profile
Long Term Debt Profile Debt Maturity Profile ($m) Covenant ratio Q4 2015 Liquidity No Bond Principle due Net debt/EBITDA covenant Q4 2015 Liquidity: until 2019 ratio of 5.8x - within bank $365m unrestricted cash covenant of 7.5x $1.80bn undrawn RCF (expires 2019) 17
Slide 18: Projects
Capital Expenditure - $1.74bn reduction in Total Capital spend Cobre Panama total capex 2015 2016 2017 2018 US$ billon Actual Guidance Guidance Guidance reduced from $6.42bn to $5.48bn with savings on Cobre Panama 0.61 0.65 0.80 0.80 earthworks, material and Net to First Quantum 0.37 0.39 0.48 0.48
Slide 19: Market Guidance
Market Guidance Production guidance for copper increasing against 2015 Copper production1 Sentinel Copper production1 Nickel production 2016: 400k tonnes 2016: 135 - 155k tonnes 2016: 40k contained tonnes 2017: 400k tonnes 2017: 210 - 240k tonnes 2017: 40k contained tonnes 2018: 407k tonnes 2018: 23
Slide 20: Appendix
APPENDIX 20
Slide 21: Quarterly Net Debt Movement
Quarterly Net Debt Movement Opening Net Debt at October 1, 2015 ($ million) (5,053) Comparative EBITDA 230 Working capital and tax 192 Franco-Nevada 338 Capital expenditure (399) Net interest paid(1) (55) Part repayment of ENRC promissory note and prepaid interest 23 Other 28 Net debt movement 357 C
Slide 22: Fourth Quarter 2015 Conference Call & Webcast
FOURTH QUARTER 2015 CONFERENCE CALL & WEBCAST FEBRUARY 19, 2016 TSX: FM; LSE: FQM
First Quantum Minerals — Q4 2015 Earnings Presentation on 6ix