First Quantum Minerals Ltd. · TSX:FM
First Quantum Minerals — Q3 2022 Earnings Presentation
44 slides from First Quantum Minerals's earnings presentation, 2022
Slide 1: Responsible Growth: Q3 2022 Financial and Operating Results
TSX FM RESPONSIBLE GROWTH Q3 2022 Financial and Operating Results
Slide 2: Cautionary Statement on Forward-Looking Information
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 i
Slide 3: Opening Remarks
Cobre Panama OPENING REMARKS Tristan Pascall, Chief Executive Officer
Slide 4: Q3 2022 Highlights
Q3 2022 HIGHLIGHTS Recent Developments TOTAL COPPER PRODUCTION • Long-term renewable power contract for CP100, shifting total energy mix at 194,974t Higher than Q2 2022 mainly due to Cobre Panama to ~20% renewable by the end of 2023 • 2023 Zambian National Budget – Restructuring of mineral royalty t
Slide 5: 2022E Guidance
2022E GUIDANCE 2022E Guidance Previous UPDATED • Copper production guidance lowered, mainly PRODUCTION attributable to lower production at Kansanshi Total Copper (kt) 790 – 855 755 – 785 Cobre Panama 330 – 360 340 – 350 • Copper C1 cash cost1 guidance increased due Kansanshi 175 – 195 140 – 150 to l
Slide 6: Q3 2022 ESG Highlights
Q3 2022 ESG HIGHLIGHTS Training Centre for Industrial Professions Revolving Loan Fund The Training Centre offers technical 30% The Revolving Loan Fund was designed to provide + 800 education with qualifications that are Female students community groups with access to financial services Women benefit
Slide 7: Operational Overview
Sentinel OPERATIONAL OVERVIEW Rudi Badenhorst, Chief Operating Officer
Slide 8: Cobre Panama
COBRE PANAMA Q3 2022 COPPER PRODUCTION 2022 Outlook 91,671t Another record production quarter, driven • Full year grades and recoveries are expected to be consistent with 2021 • On track to exit 2021 at a throughput rate of 90 Mtpa by record mill throughput • Biennial maintenance on Unit 2 of the po
Slide 9: Kansanshi
KANSANSHI Q3 2022 COPPER PRODUCTION 2022 Outlook 29,862t Lower than Q2 2022 due to lower grades • Grades are expected to remain low into Q4 2022 and recoveries across all three circuits • Optimization of mine plans to provide flexibility continue • Production volumes are expected to continue at lowe
Slide 10: Sentinel
SENTINEL Q3 2022 COPPER PRODUCTION 2022 Outlook 64,120t Record throughput and higher grades and • Grade expected to improve in Q4 2022 as higher grade ore is exposed in Stage 1 and 2 pits recoveries. 62 Mtpa throughput rate achieved ahead of schedule • Operational focus on mining fleet availability
Slide 11: Other Mines
OTHER MINES Pyhäsalmi Q3 2022 PRODUCTION: 731t Cu Q3 2022 C1 CASH COST1: $(0.13) per lb Cu Las Cruces 2022 PRODUCTION: 2,362t Cu Underground production ended in August; Last Q3 2022 PRODUCTION: 2,341t Cu cathode shipment expected in Q4 2022 Q3 2022 C1 CASH COST1: $4.36 per lb Cu 2022 PRODUCTION GUID
Slide 12: Financial Overview
Kansanshi Smelter FINANCIAL OVERVIEW Ryan MacWilliam, Chief Financial Officer
Slide 13: Q3 2022 Revenues and Costs
Q3 2022 REVENUES AND COSTS REVENUE • Margin compression felt across the mining sector as weak metal prices combine with higher input prices $1.7 billion • Strong correlation between oil prices and other key consumables including diesel, coal, reagents and freight Down 9% quarter-over-quarter • Marke
Slide 14: Copper C1 Cash Cost Waterfall
COPPER C1 CASH COST¹ WATERFALL • Impact of higher costs are main drivers for the increase in Q3 2022 1.80 +$0.01/lb Fuel 1.70 +$0.01/lb Explosives +$0.01/lb Grinding Media +$0.07/lb Fuel +$0.01/lb Explosives 2022 Guidance range ¹ C1 cash cost (C1) is a non-GAAP ratio which does not have a standardiz
Slide 15: Q3 2022 Earnings and EBITDA
Q3 2022 EARNINGS AND EBITDA1 EBITDA¹ Q3 2022 Financial Highlights $583 million • Q3 2022 financial results were impacted by weak copper and gold prices and continued cost inflation Down 36% quarter-over-quarter • Cash flow from operating activities of $525 million • Interim dividend CDN$0.16 per sha
Slide 16: EBITDA Waterfall
EBITDA¹ WATERFALL • EBITDA¹ $323 million lower than Q2 2022, reflecting decline in copper prices, despite higher copper and nickel sales External Factors (-$176 million) Internal Factors (-$98 million) External Factors (-$353 million) Internal Factors (+$30 million) ($104 million) Copper ($25 millio
Slide 17: Zambian Royalty Update
ZAMBIAN ROYALTY UPDATE • Zambia 2023 Budget announced on September 30, 2022 includes an amendment to the calculation of mineral royalty tax to be on an incremental basis • These changes, in conjunction with the removal of the non-deductibility of mineral royalty tax in 2022, bring the Zambian fiscal
Slide 18: Net Debt Evolution
NET DEBT¹ EVOLUTION • Net debt¹ decreased by $10 million this quarter and $2.3 billion since Q2 2020 • $1 billion in 2023 senior notes redeemed YTD • $2.4 billion in available liquidity • Upgraded ratings in February by S&P and Fitch from B to B+ 6.0x 7,800 7,658 7,545 7,409 7,062 Net Debt¹ Leverage
Slide 19: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES PRIORITIES EXCESS CASH DEBT REPAYMENT Further debt reduction likely post debt reduction targets achieved RE-INVESTING IN THE BUSINESS Sustaining and stripping capital INORGANIC PROJECTS BALANCE SHEET PRESERVATION Target opportunities where First Quantum can Net debt red
Slide 20: Closing Remarks
CP100 Expansion Feed Conveyors to Screen and Bin Building CLOSING REMARKS Tristan Pascall, Chief Executive Officer
Slide 21: CP100 Expansion
CP100 EXPANSION CP100 Expansion Works Progress YTD Outlook • Process water upgrades • All key project components on site • Rope shovel to be operational by • 7 ultra-class haul trucks commissioned year end 2022 • Additional ball mill (Ball Mill 6) • Ball Mill 6 mill shells installed • All CP100 Expa
Slide 22: S3 Expansion
S3 EXPANSION S3 Expansion Works Progress YTD Outlook • Additional concentrator • Board approval in May 2022 • Mining fleet procured; deliveries capacity • Long-lead items procured (primary commencing H2 2023 • Additional SAG and ball mill crusher, mills and fleet) • Plant commissioning and first • E
Slide 23: Enterprise
ENTERPRISE Enterprise Works Progress YTD Outlook • Main workstream is pre-strip • Board approval in May 2022; pre-stripping • Plant refurbishment, completion and commenced commissioning activities on • 4 Mtpa processing circuit • Mine facilities (satellite administration schedule mainly constructed
Slide 24: Capital Allocation - 2022 and Beyond
CAPITAL ALLOCATION - 2022 AND BEYOND Focus on debt reduction, consistent operational performance and execution of brownfield expansions 1. Balance Sheet 2. Brownfield 3. Greenfield Debt Reduction Cobre Panama CP100 Expansion Cautious approach to greenfield • Remains a priority • On track for 100 Mtp
Slide 25: Upcoming Events in 2023
UPCOMING EVENTS IN 2023 January 16, 2023 • 2022 PRELIMINARY PRODUCTION, 2023-2025 GUIDANCE February 14, 2023 • Q4/22 FINANCIAL AND OPERATING RESULTS (Conference call February 15, 2023) April 25, 2023 • Q1/23 FINANCIAL AND OPERATING RESULTS (Conference call April 26, 2023) May 4, 2023 • ANNUAL GENERA
Slide 26: Appendix
Cobre Panama Appendix
Slide 27: Quarterly Net Debt Movement
QUARTERLY NET DEBT MOVEMENT • Net debt decreased by $10 million, with lower EBITDA margins this quarter on the back of reduced metal prices ¹ EBITDA is a non-GAAP financial measure that does not have a standardized meaning prescribed by IFRS and might not be comparable to similar financial measures
Slide 28: Debt Maturity Profile as at September 30, 2022
DEBT MATURITY PROFILE AS AT SEPTEMBER 30, 2022 1,838 1,500 1,305 $ Millions 1,350 1,000 850 1,500 455 256 1,000 28 455 455 488 228 2022 2023 2024 2025 2026 2027 Trident (previously KML) Senior Notes Term Loan Funding available up to $1.3 billion in Revolving Credit Facility expiring 2025, with $710
Slide 29: Copper Cash Cost and AISC
COPPER CASH COST¹ AND AISC¹ • Year-to-date copper C1 The First Quantum cash cost¹ Financial and AISC¹ of $1.72/lb and $2.33/lb, impacted by inflationary pressures and lower Policy production COPPER C1 CASH COST¹ ($/lb) COPPER AISC¹ ($/lb) 2.45 1.80 2.35 1.70 2.27 2.37 2.34 2.33 1.74 1.82 1.72 2.05 1
Slide 30: Financial Summary
FINANCIAL SUMMARY • Financials impacted by The First Quantum reducedPolicy Financial metal prices realized and impact of inflationary cost increases $ Million (except per share numbers) Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Sales revenues³ 1,727 1,904 2,163 2,061 1,747 Gross profit 302 629 908 784
Slide 31: Quarterly Net Debt Movement
QUARTERLY NET DEBT MOVEMENT Quarterly Year-to-date movement movement Closing Net debt¹ at June 30, 2022/ December 31, 2021 (5,339) (6,053) ($ million) EBITDA¹ 583 2,669 Working capital² 22 5 Capital expenditure (296) (850) Interest paid³ (141) (382) Taxes paid (74) (506) Dividends paid (72) (75) Oth
Slide 32: Precious Metal Stream Arrangement
PRECIOUS METAL STREAM ARRANGEMENT • Cobre Panama gold and silver revenues consist of revenues derived from the sale of metals produced by the mine, as well as revenues recognized from the amortization of the precious metal stream arrangement • Stream gold and silver revenues are indexed to copper so
Slide 33: Non-GAAP EBITDA and Adjusted Earnings Reconciliation
NON-GAAP EBITDA¹ AND ADJUSTED EARNINGS¹ RECONCILIATION $ Million (except per share numbers) Q3 2022 Q3 2021 YTD 2022 YTD 2021 Operating profit 289 775 1,927 1,876 Depreciation 320 288 903 860 Foreign exchange (gain) loss (26) (180) (209) (146) Other expense 3 4 51² 8 Revisions in estimates of restor
Slide 34: Non-GAAP Measures Reconciliation C1 and AISC
NON-GAAP MEASURES RECONCILIATION C1 AND AISC Guidance$ million for the upcoming three years is provided annuallyQ3as2022 Q3 2021 reporting. part of year-end YTD 2022On a YTD 2021 quarterly basis, The First guidance Quantum for Cost Financial Policy the current year will b updated as necessary or (1,
Slide 35: EBITDA Sensitivity
EBITDA¹ SENSITIVITY Guidance for the upcoming three years is provided annually as part of year-end reporting. On a quarterly basis, The First Quantum guidance Financial for the current yearPolicy will b updated as necessary or re-affirmed. Impact on YTD Actual price/rate EBITDA¹ of a 10% Assumption
Slide 36: Three-Year Guidance
THREE-YEAR GUIDANCE PRODUCTION GUIDANCE COST AND CAPEX GUIDANCE 2022E 2023E 2024E Copper Cost Guidance ($/lb) 2022E 2023E 2024E Cobre Panama 340 - 350 350 - 380 370 - 400 1.70 - 1.80 C1 1.30 - 1.50 1.25 - 1.45 Kansanshi 140 - 150 190 - 210 205 - 220 AISC 2.35 - 2.45 1.90 - 2.05 1.85 - 2.00 Sentinel
Slide 37: Summary of Brownfield Projects
SUMMARY OF BROWNFIELD PROJECTS COBRE PANAMA plus CP100 KANSANSHI plus S3 ENTERPRISE LAS CRUCES UNDERGROUND Commodity Cu, Au, Ag, Mo Cu, Au Ni Cu, Zn, Pb, Ag Mine Type Open Pit Open Pit Open Pit Underground Total Production 400 ktpa Cu 250 ktpa Cu 30 ktpa Ni 45 ktpa CuEq • Strong team in place • Stro
Slide 38: Cobre Panama, Including CP100 Expansion
COBRE PANAMA, INCLUDING CP100 EXPANSION Ownership Location Mine Type Processing Rate 90% First Quantum Colon Province, Panama Open Pit 85 Mtpa Sulphide circuit 10% KOMIR 25km from coast where Cu-Au-Ag-Mo Porphyry CP100 Expansion to 100 wholly owned power plant Mtpa (end of 2023) and port are located
Slide 39: Kansanshi, Including S3 Expansion
KANSANSHI, INCLUDING S3 EXPANSION Ownership Location Mine Type Processing Rate 80% First Quantum Solwezi, Zambia Open Pit 7 Mtpa Oxide circuit 20% ZCCM-IH Vein deposit; Primary 8 Mtpa Mixed circuit sulphide, mixed supergene 15 Mtpa Sulphide circuit and oxide Adjacent 1.35 Mtpa smelter S3 25 Mtpa Exp
Slide 40: Sentinel and Enterprise
SENTINEL AND ENTERPRISE Ownership Location Mine Type Processing Rate 100% First Quantum Kalumbila, Zambia Open Pit Sentinel: 62 Mtpa Sulphide circuit 150 km west of Kansanshi Sentinel: primary sulphide copper Enterprise 4 Mtpa sulphide circuit Enterprise: hydrothermal SENTINEL & sulphide nickel ENTE
Slide 41: Las Cruces Underground Project
LAS CRUCES UNDERGROUND PROJECT Las Cruces Underground Resource Classification • Benefits from existing team, workforce and infrastructure • Indicative details (not included in 3-year guidance) • 3-4 year development • Mine life >15 years • Annual production ~45 kt CuEq • Environmental permits receiv
Slide 42: Taca Taca
TACA TACA 275,000 Low 32 Years US$3.6 Billion Tonnes of Cu C1 Cash Costs Mine Life Capital Per Year (Peak) Investment 50 - 200 Megawatts of Renewable Energy Sanction decision not expected before 2024, conditional on market conditions Copper (ktpa) Gold (kozpa) Molybdenum (ktpa) 300 K Tonnes (Cu, Mo)
Slide 43: Haquira Overview
HAQUIRA OVERVIEW • Large scale porphyry copper project in Apurímac, Southern Peru • Acquired in December 2010 • One of the world’s major undeveloped copper deposits • M&I resource of 3.7 million tonnes of contained copper equivalent plus an inferred resource of 2.4 million tonnes of copper equivalen
Slide 44: First Quantum Minerals Ltd.
TSX FM First Quantum Minerals Ltd. info@fqml.com 416-361-6400 1-888-688-6577
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