First Quantum Minerals Ltd. · TSX:FM
First Quantum Minerals — Merger or Acquisition (January 2013)
93 slides from First Quantum Minerals's merger presentation, Jan 29, 2013
Slide 1: An Opportunity to Create a New Leader in Global Copper
An Opportunity to Create a New Leader in Global Copper A Combination of First Quantum and Inmet January 2013 Global Diversified TSX: FM; LSE: FQM
Slide 2: Cautionary Statement
Cautionary Statement Certain statements and information contained in this presentation, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or info
Slide 3: Significant Premium Today with Considerable Upside in the Future
A Significant Premium Today with Considerable Upside in the Future The Offer C$72.00 per Inmet share, implying a total equity purchase consideration of approximately 5.1 billion1 Each Inmet shareholder will have the option to elect to receive consideration per Inmet share of: – C$ 72.00 in cash, or
Slide 4: Compelling Combination
A Compelling Combination
Slide 5: A Vision to Create a Global Copper Leader
A Vision to Create a Global Copper Leader The combination of First Quantum and Inmet will be the largest pure copper player in the sector, with a portfolio of operating and development assets across four continents First Quantum and Inmet are complementary and bringing together the best talents of e
Slide 6: On the Cusp of a Substantial Re-Rating
On the Cusp of a Substantial Re-Rating P / NAV1 1.2x 1.1x 1.0x 0.9x 0.8x 0.7x 0.6x 0.5x - 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 Mid-Cap Copper Producers Pro-forma First Quantum3 PanAust Oz Minerals Lundin Hudbay Copper Mountain Inmet2 Taseko Capstone Large-Cap Copper Producers Antofagasta Teck Sout
Slide 7: First Quantum Has Delivered and Continues to Deliver
First Quantum Has Delivered and Continues to Deliver
Slide 8: We Build Projects Efficiently and Well Below Industry Norms
We Build Projects Efficiently and Well Below Industry Norms Capital Intensity (US$ / t) Cobre Panama (Inmet) Galeno (Minmetals) Las Bambas (Xstrata) Tampakan (Xstrata) Toromocho (Chinalco) Sierra Gorda (KGHM) Ministro Mina Hales (Codelco) Oyu Tolgoi (Rio Tinto) Los Bronces (Anglo American) Las Cruce
Slide 9: We Deliver Value to Shareholders
We Deliver Value to Shareholders Total Annualized Shareholder Return1 Jan-2000 – 23-Nov-2012 Southern Copper Antofagasta Inmet BHP Teck Freeport Rio Tinto Xstrata2 Norilsk3 Anglo American Kazakhmys4 35% 31% 29% 27% 18% 15% 13% 10% 8% 7% 6% 5% Source: S&P Capital IQ (1) Based on local currency basis
Slide 10: And Specifically Deliver On Each Project We Take On
And Specifically Deliver On Each Project We Take On US$ Bn 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 – Kansanshi 2001 Guelb Moghrein 2004 Kevitsa1 2008 Trident (Sentinel / Enterprise)2 2010 Ravensthorpe 2010 Haquira3 2010 99% 3.8 1.9 115% 0.7 0.3 150% 1.8 0.7 375% 2.5 0.5 26% 0.9 0.7 67% 1.0 0.6 Cost plus Cap
Slide 11: And Exceed Expectations
And Exceed Expectations Project Kansanshi Guelb Moghrein Production Ravensthorpe Kevitsa Announced February 2004 June 2004 February 2010 November 2009 Target Parameter Peak Production Peak Production Commissioning Commercial Production Minimum Copper Production Minimum Gold Commercial Production Com
Slide 12: First Quantum and Inmet Together Can Deliver Cobre Panama
First Quantum and Inmet Together Can Deliver Cobre Panama
Slide 13: First Quantum's Project Philosophy
First Quantum’s Project Philosophy Core First Quantum Criteria • Set ambitious targets for schedule, cost and performance • Finished project must perform to expectation • Adherence to time schedule • Adherence to capital cost budget Core First Quantum Attributes • Industry leading performance (e.g.
Slide 14: Traditional Project
Traditional Project Owner EPCM Engineer
Slide 15: First Quantum Target Project Model
First Quantum Target Project Model Engineering & Design By FQM
Slide 16: Typical First Quantum Project
Typical First Quantum Project Transport & Logistics 8% Contracts 2% Earthworks 5% Concrete 8% Piping 7% E & I 10% Construction Management 4% Pre-commissioning & Commissioning 1% Engineering & Design 5% Procurement 3% Structure/Mechanical/Plate 47%
Slide 17: Our Core Project Development Criteria
Our Core Project Development Criteria FINISHED PROJECT MUST PERFORM TO EXPECTATION Kevitsa – achieving throughput above design Ravensthorpe – steady state and reliable operation
Slide 18: Our Core Project Development Criteria
Our Core Project Development Criteria ADHERENCE TO TIME SCHEDULE Kevitsa First Quantum news release Nov 30, 2009 : “Commercial production target mid 2012” Actual achievement August 2012 Ravensthorpe First Quantum news release February 10, 2010 : “Approx. 18 months construction and ramp up” (i.e. Aug
Slide 19: Our Core Project Development Criteria
Our Core Project Development Criteria ADHERENCE TO CAPITAL COST BUDGET Since 2003 Over $2.3B of projects delivered within 6% of capex budget Different countries, different technologies, different contracting requirements, different conditions
Slide 20: Others?
Others? “Cost overrun is common in infrastructure, building and technology projects. One of the most comprehensive studies of cost overrun that exists found that 9 out of 10 projects had overrun; overruns of 50 to 100 percent were common; overrun was found in each of 20 nations and five continents c
Slide 21: First Quantum Key Project Staff Have Worked in Latin America and Globally
First Quantum Key Project Staff Have Worked in Latin America and Globally Latin America Chile Africa Zambia Europe France Argentina Mauritania Spain Peru DRC Finland Brazil Zimbabwe United Kingdom Mexico Ghana Germany Namibia Norway Australasia Australia Botswana Italy Mozambique Bulgaria New Zealan
Slide 22: Country, Logistical and Technical Challenges
Country, Logistical and Technical Challenges January 24 News Release: “First Quantum has built mines around the world, applying its development expertise to some of the industry’s most challenging projects, in the hottest and coldest, driest and wettest climates, spanning sophisticated first-world l
Slide 23: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate
Slide 24: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate
Slide 25: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate
Slide 26: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate
Slide 27: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate
Slide 28: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate
Slide 29: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate
Slide 30: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate
Slide 31: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate
Slide 32: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate
Slide 33: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate
Slide 34: Development Expertise – Technical
Development Expertise – Technical
Slide 35: Development Expertise – Technical
Development Expertise – Technical
Slide 36: Development Expertise – Technical
Development Expertise – Technical
Slide 37: Development Expertise – Technical
Development Expertise – Technical
Slide 38: Development Expertise – Technical
Development Expertise – Technical
Slide 39: Development Expertise – Technical
Development Expertise – Technical
Slide 40: Development Expertise – Technical
Development Expertise – Technical
Slide 41: Development Expertise – Technical
Development Expertise – Technical
Slide 42: Flexible, Efficient and Transferable Approach to Projects
A Flexible, Efficient and Transferable Approach to Projects • Define and plan, set contracting strategy early • Identify risks, and identify opportunities • Copy existing designs, duplication, standardization, brainstorm • Maximize commonality of equipment • Maximize in house work and leverage off o
Slide 43: Over the Last ~12 Months
Over the Last ~12 Months RAVENSTHORPE Commissioning and commercial production achieved on December 28, 2011 KEVITSA Completion of construction, commissioning and commercial production achieved on August 18, 2012 KANSANSHI Numerous improvement projects 1,000tpd Acid Plant 5 – commissioned and operati
Slide 44: Sentinel Project
Sentinel Project
Slide 45: Sentinel Copper Concentrator Simplified Flowsheet
Sentinel Copper Concentrator Simplified Flowsheet Crushing and Conveying Stockpile and Reclaim Milling Flotation Filtration and Copper Concentrate Product
Slide 46: Key Recent Accomplishments
Key Recent Accomplishments Total Sentinel project progress to date is 19.2% cumulative Record construction progress in earthworks and concrete 50% concrete poured (36,600m3) Over 6,600t of structural steel issued Approved For Construction (>50%), over 2,000t fabricated, over 1,000t erected Approx 70
Slide 47: Key Recent Accomplishments
Key Recent Accomplishments Merged all execution areas to common project schedule Completed quarry mining balance of project concrete requirements Increased to 74% Zambian project content (+6% from December 2012) First houses ready for occupation
Slide 48: Efficient Site Manning
Efficient Site Manning FQML Plant Local 16% FQML Plant Filipinos / Indonesians 14% Infra Filipinos 8% Infra Expat 1% FQML Expat 1% FQM Roads Expat 1% Operations & Support Expat 1% Infra Local 27% FQMO Roads Local 11% Operations & Support Local 19% Department Local Expat Filipinos / Indonesians TOTAL
Slide 49: Rapid Ramp-up of Site Manpower
Rapid Ramp-up of Site Manpower Man-Hours Worked Data Date (28 Jan 13) DESCRIPTION TOTAL to DATE Jan12 Feb12 Mar12 Apr12 May12 Jun12 Jul12 Aug12 Sep12 Oct12 Nov12 Dec12 Jan13 Man-Hours Worked 3,181,915 70,704 71,578 53,024 53,818 63,810 92,525 126,970 233,310 332,260 459,826 563,912 493,887 566,291 L
Slide 50: Sentinel On Schedule and On Budget
Sentinel On Schedule and On Budget % Progress 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Plan Actual Data Date (28 Jan 13) Overall Progress: Actual = 19.18% Plan = 19.07% May12 Jun12 Jul12 Aug12 Sep12 Oct12 Nov12 Dec12 Jan13 Feb13 Mar13 Apr13 May13 Jun13 Jul13 Aug13 Sep13 Oct13 Nov13 Dec13 Jan
Slide 51: The Planning (2011)
The Planning (2011)
Slide 52: Sentinel Mill Area (June 2012)
Sentinel Mill Area (June 2012)
Slide 53: Sentinel Mill Area (July 2012)
Sentinel Mill Area (July 2012)
Slide 54: Sentinel Mill Area (August 2012)
Sentinel Mill Area (August 2012)
Slide 55: Sentinel Mill Area (September 2012)
Sentinel Mill Area (September 2012)
Slide 56: Sentinel Mill Area (October 2012)
Sentinel Mill Area (October 2012)
Slide 57: Sentinel Mill Area (November 2012)
Sentinel Mill Area (November 2012)
Slide 58: Sentinel Mill Area (December 2012)
Sentinel Mill Area (December 2012)
Slide 59: Sentinel Mill Area (January 2013)
Sentinel Mill Area (January 2013)
Slide 60: Sentinel Mill Area (January 2013)
Sentinel Mill Area (January 2013)
Slide 61: Sentinel Mill Area (January 2013)
Sentinel Mill Area (January 2013)
Slide 62: First Mill Shell Delivery
First Mill Shell Delivery
Slide 63: First Mill Shell Delivery
First Mill Shell Delivery
Slide 64: 1,000 Man Construction Site
1,000 Man Construction Site
Slide 65: River Diversion
River Diversion
Slide 66: River Diversion
River Diversion
Slide 67: Aerial Plant Site (November 2012)
Arial Plant Site (November 2012)
Slide 68: Aerial Plant Site (November 2012)
Arial Plant Site (November 2012)
Slide 69: Aerial Plant Site (November 2012)
Arial Plant Site (November 2012)
Slide 70: Aerial Plant Site (November 2012)
Arial Plant Site (November 2012)
Slide 71: Aerial Plant Site (November 2012)
Arial Plant Site (November 2012)
Slide 72: Sentinel Tails Thickening (January 2013)
Sentinel Tails Thickening (January 2013) FIRST QUANTUM
Slide 73: Sentinel Main Warehouse (January 2013)
Sentinel Main Warehouse (January 2013) FIRST QUANTUM
Slide 74: Concrete Batch Plant
Concrete Bench Plant
Slide 75: Quarry for Concrete Aggregates
Quarry for Concrete Aggregates
Slide 76: Block Making Machine for Housing
Block Making Machine for Housing
Slide 77: Block Making Machine for Housing
Block Making Machine for Housing
Slide 78: Truss Making Machine for Housing
Truss Making Machine for Housing
Slide 79: Truss Making Machine for Housing
Truss Making Machine for Housing
Slide 80: Senior Housing and Golf Course
Senior Housing and Golf Course
Slide 81: Accommodation and Messing
Accommodation and Messing
Slide 82: Senior Housing
Senior Housing
Slide 83: Senior Housing
Senior Housing
Slide 84: Senior Housing
Senior Housing
Slide 85: Senior Housing
Senior Housing
Slide 86: Senior Housing
Senior Housing
Slide 87: Senior Housing
Senior Housing
Slide 88: Senior Housing
Senior Housing
Slide 89: Senior Housing
Senior Housing
Slide 90: Sentinel is Not Cobre Panama – But it is Comparable
Sentinel is Not Cobre Panama – But it is Comparable A project’s size is defined not by how much you spend on it Main Project Elements Throughput Output (LOM Average) Year of First Production Process Plant Site and Services Mine Equipment Mining Other Owners Costs Construction Indirects EPCM Power Su
Slide 91: Sentinel is Not Cobre Panama – But it is Comparable
Sentinel is Not Cobre Panama – But it is Comparable Throughput (Mtpa) Copper Production (ktpa) Total Capex Process Plant and Mining Equipment Mine other, Dewatering, Pre-strip Infrastructure Site & Services EPCM Other Indirects & Contingency Sentinel $ m 1,885 1,146 91 147 199 82 220 55 270-300 % 10
Slide 92: A Highly Attractive Offer
A Highly Attractive Offer C4 FIRST QUANTA ®
Slide 93: A Vision to Create a Global Copper Leader
A Vision to Create a Global Copper Leader Š Combination of First Quantum and Inmet expected to be the new go-to copper producer Š Combination creates significant value Š Combination expected to be re-rated upwards Š Combination with a long standing commitment to social and environmental excellence Š
First Quantum Minerals — Merger or Acquisition (January 2013) on 6ix