First Quantum Minerals Ltd. · TSX:FM
First Quantum Minerals — Investor Presentation (February 2012)
42 slides from First Quantum Minerals's investor presentation, February 2012
Slide 1: A Rapidly Growing Metals & Mining Company
A Rapidly Growing Metals & Mining Company www.first-quantum.com TSX: FM LSE: FQM LuSE: FQMZ February 2012 1
Slide 2: Cautionary Note Concerning Forward-Looking Statements
Cautionary Note Concerning Forward-Looking Statements 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
Slide 3: What Do Our Shareholders Own?
First Quantum What Do Our Shareholders Own? • A substantial copper producer with a pipeline of expansions and new projects • An emerging nickel producer with growth opportunities • A strong balance sheet • Production in an industry with strong fundamentals • Most importantly, the ability to add valu
Slide 4: What We Have Delivered So Far
What We Have Delivered So Far Copper Growth (1) Total Annualised Shareholder Return (2) 2000-2011 CAGR (%) January 2000 – December 2011 (%) Barrick 34% First Quantum 32% Inmet 24% Southern Copper 23% Southern Peru 22% First Quantum 22% Antofagasta 21% Xstrata 20% Norilsk 15% Teck 18% Vale 12% BHP Bi
Slide 5: Long-Term Targets
Long-Term Targets 1000 Copper Production 125 Nickel Production 000’s tonnes 000’s tonnes 800 100 600 75 400 50 200 25 0 0 04 06 08 10 12F 14F 16F 18F 04 06 08 10 12F 14F 16F 18F Base Projects Base Projects Optional 5
Slide 6: What We Are Looking to Deliver: Copper Growth Remains Best in Class
What We Are Looking to Deliver: Copper Growth Remains Best in Class 2016 Copper Producer Landscape Copper Growth (Mt) 6th Largest Global 13th Largest Global 2011 – 2016 CAGR (%) Copper Producer Copper Producer FQM 29.2% by 2016 Currently Vale S Copper Xstrata Glencore Rio Tinto Kazakhmys 1.0 Barrick
Slide 7: Tripling Copper Production Capacity
Tripling Copper Production Capacity
Slide 8: Kansanshi Copper-Gold Mine
Kansanshi Copper-Gold Mine • Located near Solwezi in the North Western Province of Zambia • First production in 2005 • Open pit mining • Flexible ore treatment to allow for variation in ore type – Sulphide circuit – Oxide circuit – Gold facility • On-going program of resource development and explora
Slide 9: Kansanshi Mining Volumes & Strip Ratio
Kansanshi Mining Volumes & Strip Ratio 9
Slide 10: Kansanshi Sulphuric Acid Supply
Kansanshi Sulphuric Acid Supply 10
Slide 11: Kansanshi Improving Ore Availability
Kansanshi Improving Ore Availability 11
Slide 12: Kansanshi Multi-Phase Expansion
Kansanshi Multi-Phase Expansion Expansion Estimate Project Capacity Completion Cost Production Impact ($ millions) Acid Plant 5 1000t/day 2012 18 Oxide 7.2 mtpa 2012 31 Copper: 10,000 - 15,000 tpa Oxide 12 mtpa 2013 - 2014 200 Copper: 60,000 - 75,000 tpa Smelter 1.2 mtpa 2014 635 Smelter Acid - 900,
Slide 13: Kansanshi Copper Smelter Project Parameters
Kansanshi Copper Smelter Project Parameters • Concentrate feed rate 1.2 Mtpa —67% Sentinel —33% Kansanshi —Average copper grade 26% • Blister copper production 300,000 tpa • Acid production 1.0 Mtpa 13
Slide 14: Kansanshi Copper Smelter Project Key Estimates
Kansanshi Copper Smelter Project Key Estimates • Capital cost of US$635M • Commissioning from mid 2014 • Operating cost US$69/t of concentrate 14
Slide 15: Economic Benefits of the Copper Smelter
Economic Benefits of the Copper Smelter Transport Kansanshi 100% to Zambian Smelters Sentinel 900,00 – 1,200,000 to export less 300,000 t Blister Cost per annum @ $220/t: $130M to $ 200M Export Levy Current 10% of export value Sentinel Annual export 230,000 – 310,000 copper in concentrate Cost per a
Slide 16: Guelb Moghrein Copper-Gold Mine
Guelb Moghrein Copper-Gold Mine • 100% ownership • Located 250 kilometres northeast of the nation’s capital, Nouakchott • As at December 31, 2011, the estimated minelife was approximately 10 years (including stockpiles) • First production in 2006 • Workforce of ~1,200 16
Slide 17: Guelb Moghrein Copper-Gold Mine
Guelb Moghrein Copper-Gold Mine • 2011 production challenged with plant utilization issues but tonnage increases evident at year end • Mining side performed positively • 2012 focus on improved throughput and recoveries to increase copper production 17
Slide 18: Guelb Moghrein - Outlook
Guelb Moghrein - Outlook • Feed tonnage rising during operating Average tonnes per hours with improved grinding and operating hour HPGR operation 500 450 • Additional mill and further 400 modifications to existing circuits 350 expected to achieve desired tonnage 300 targets. 250 200 • Improvements t
Slide 19: Ravensthorpe Nickel Operation: Months from Purchase to Production
Ravensthorpe Nickel Operation 20 Months from Purchase to Production • Purchased in February 2010 for US$340M • Design phase – February – December 2010 • Modifications – July 2010 – September 2011 • Commissioning – June – December 2011 • First product – 4 October 2011 • First exports – 25 November 20
Slide 20: Ravensthorpe Making it Work
Ravensthorpe Making it Work • Front-end materials handling • Dewatering • Buffer storage capacity • Refurbish existing plant • Tailings Storage Facility 20
Slide 21: Ravensthorpe Operational Achievements
Ravensthorpe Operational Achievements • Crushing: – SAP and LIM achieved design of 2000 tph • Beneficiation: – SAP – 550 tph vs design of 455 tph – LIM – 1200 tph vs design of 1177 tph • Atmospheric Leach: – 180 tph vs design of 135 tph • PAL Trains: – 150 tph vs design of 150 tph • MHP Loadout: – 1
Slide 22: Ravensthorpe Going Forward
Ravensthorpe Going Forward Target operations: 39 ktpa for the first five years; 28 ktpa over the life of mine; C1 cost of ~$7.00 per lb (1) • Expected mine life >30 years • Three ore bodies: Halleys, Hale-Bopp, Shoemaker-Levy • 480 staff (1) At current sulphur prices 22
Slide 23: Kevitsa Nickel-Copper-PGE Project
Kevitsa Nickel-Copper-PGE Project • 100% owned; Acquired in 2008 • Large undeveloped sulphide nickel deposit suitable for open cast mining • 240M tonnes @ 0.30% Ni (0.28 NiSulphide) and 0.41% Cu • Initial ore feed of 5.5 mt/yr with intention to expand by ~50% in 2013 • On-going drill program continu
Slide 24: Kevitsa Nickel-Copper-PGE Project
Kevitsa Nickel-Copper-PGE Project • First product expected in May, sales in July, 2012 • Target operations: 10 ktpa nickel @ ~$6.70 / lb 20 ktpa copper @ ~$1.10 / lb • Workforce primarily from Lapland; FQM technical staff in key areas • Preliminary mining, process and engineering staff establish
Slide 25: Sentinel Copper Project
Sentinel Copper Project • Located ~ 140 km northwest of Solwezi, Northern Zambia • Resource update being finalized • EIA and land use agreement obtained • Estimates: – Production to start at 150 ktpa copper concentrate initially, rising up to 300 ktpa – Strip ratio 2:1 – Mine life over 20 years – C1
Slide 26: Sentinel Copper Project
Sentinel Copper Project Project Total Nominal Nominal Cost 20Mtpa Plant 40Mtpa Plant Mining 299 495 Treatment 393 645 Plant Infrastructure 217 335 Indirects 169 250 Total 1,078 1,725 26
Slide 27: Sentinel Copper Project Project Status
Sentinel Copper Project Project Status • Committed deliveries for mills, gearless mill drives, crushers and mining fleet • Flowsheets completed • Concept layouts and detailed estimates complete • Equipment list complete • 300-man construction camp complete 27
Slide 28: Sentinel Copper Project Project Status
Sentinel Copper Project Project Status • Power scope defined and commercial discussions are continuing • Mine planning commenced • Internal reviews undertaken • Site access complete • Pending Board approval 28
Slide 29: Enterprise Nickel Project
Enterprise Nickel Project • Located 12 km northwest of Sentinel • High grade sulphide nickel – open pit potential • Potential to produce 40 - 70 ktpa of Ni vaesite nickeloan pyrite 29
Slide 30: Enterprise Nickel Project
Enterprise Nickel Project • Current focus – continue to define resource, design the mine and confirm process route • Campaign treatment at the Sentinel facilities significantly reduces capital – utilization of re-grind mills and cleaner circuits • Open pit mining – potential one-off pre-strip utiliz
Slide 31: Haquira Copper Project
Haquira Copper Project • Acquired in December 2010 • Large scale copper project located in southern Peru M&I resource of 3.7 Mt of copper equivalent and an inferred resource of 2.4 Mt of copper equivalent • Currently focused on: Community relations and land access Expanding infill and condemna
Slide 32: Long-term Copper Dynamics
Long-term Copper Dynamics 15
Slide 33: Copper Price Estimates Over Time
Copper Price Estimates Over Time 4.50 Copper Price (US$ / lb Cu) 2009 4.00 2011 3.50 2010 3.00 Actual 2008 2.50 2011 2.00 2007 Long Term 2010 LT 2009 LT 1.50 2008 LT 2004 2006 2007 LT 1.00 2002 2003 2005 2006 LT 2001 2002 LT 2004 LT 2000 2001 LT 2003 LT 2005z LT 0.50 2000 LT 0.00 Long Term Price Est
Slide 34: Surpluses Overestimated & Deficits Underestimated
Surpluses Overestimated & Deficits Underestimated Brook Hunt Supply / Demand – Forecast vs. Actual Supply / Demand Surplus (Deficit) (ktpa) Copper Demand (ktpa) 1,500 19,000 1,137 960 1,000 737 648 18,000 500 424 295 236 0 78 0 17,000 (77) (134) (135) (293) (334) (500) (422) 16,000 (1,000) (1,080) (
Slide 35: Copper Grades Have Declined Significantly
Copper Grades Have Declined Significantly Grades of Global Copper Mined % Cu 1.60 1.40 Lack of sizeable, high quality production coming on-stream… 1.20 Initial production of Grasberg 1.00 and Escondida 0.80 0.60 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Source: Brook Hunt. Broker Research 35
Slide 36: Emerging Markets – Substantial Growth Ahead
Emerging Markets – Substantial Growth Ahead GDP per Capita US$ 35,000 USA 30,000 25,000 UK 20,000 15,000 10,000 Brazil 5,000 China Russia 0 1835 1855 1875 1895 1915 1935 1955 1975 1995 Source: Maddison 36
Slide 37: Projected Impact on the Copper Market
Projected Impact on the Copper Market Key Points Intensity of Refined Copper Consumption (1) Multiple of India, Brazil, China kg Cu per capita 7.1x Should China, India and Brazil all 25 Average Intensity of Use (x) grow in line with population Aggregate Copper Use 6.1x 21.50 forecasts and reach co
Slide 38: Projects Less Sensitive to Copper Prices
Projects Less Sensitive to Copper Prices Top 25 Copper Projects Capex Intensity (US$ / t) Minimum Required Copper Price to Generate 15% IRR (US$ / tonne Cu) Cobre Panama (Inmet) $ 21,622 Caracoles (Antofagasta) $ 20,421 Caserones (JX Nippon) $ 20,045 Sierra Gorda (Quadra FNX) $ 19,895 El Moro (GoldC
Slide 39: Agreement to Dispose of DRC Assets
Agreement to Dispose of DRC Assets • Agreement with ENRC to dispose of all residual claims and assets • Total consideration of $1.25B – consisting of: – $750M payable on closing – $500M three-year promissory note with a 3% interest coupon • Condition of closing – FQM, ENRC and DRC government will se
Slide 40: A Rapidly Growing Mining & Metals Company
A Rapidly Growing Mining & Metals Company • Unique core technical strength behind the strong track record of value creation • Existing operations provide a solid platform to support growth • Strong financial position and cash flow • ~$5 billion investment in growth over 2012 – 2016 to significantly
Slide 41: A Rapidly Growing Metals & Mining Company
A Rapidly Growing Metals & Mining Company www.first-quantum.com TSX: FM LSE: FQM LuSE: FQMZ February 2012 1
Slide 42: Corporate Profile
Corporate Profile Stock exchange listings & symbols – (S&P/TSX 60 Index) TSX: FM LSE: FQM LuSE: FQMZ Shares issued and outstanding 476.3 million Fully diluted 476.3 million 52-week share price range C$29.60 – C$12.60 Recent share price – February 17, 2012 C$22.24 Market capitalization – $ millions C
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