First Quantum Minerals Ltd. · TSX:FM
First Quantum Minerals — Merger or Acquisition (January 2013)
94 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: A Significant Premium Today with Considerable Upside in the Future
A Significant Premium Today with Considerable Upside in the Future C$72.00 per Inmet share, implying a total equity purchase consideration of approximately C$5.1 billion1 Each Inmet shareholder will have the option to elect to receive consideration per Inmet share of: – C$72.00 in cash, or – 3.2
Slide 4: A Compelling Combination
A Compelling Combination & c™ INERALS LTD.
Slide 5: A Vision to Create a Global Copper Leader
A Vision to Create a Global Copper Leader The combination of First Quantum and Inmet will be the largest pure copper player in the sector, with a portfolio of operating and development assets across four continents First Quantum and Inmet are complementary and bringing together the best talents
Slide 6: On the Cusp of a Substantial Re-Rating
On the Cusp of a Substantial Re-Rating Large-Cap Copper Producers P / NAV1 Mid-Cap Copper Producers Southern Copper Antofagasta Pro-forma First Quantum3 PanAust Oz Minerals Freeport4 Lundin Teck First Quantum Hudbay Copper Mountain Inmet2 Taseko Capstone Market Capitalization US$ Bn1 Source: Capital
Slide 7: First Quantum Has Delivered and Continues to Deliver
First Quantum Has Delivered and Continues to Deliver 7
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) Potential for Sierra Gorda (KGHM) significant capital cost savings by adopting Ministro Mina Hales (Codelco) Fi
Slide 9: We Deliver Value to Shareholders
We Deliver Value to Shareholders Total Annualized Shareholder Return1 Jan-2000 – 23-Nov-2012 First Quantum 35% Southern Copper 31% Antofagasta 29% Inmet 27% BHP 18% Teck 15% Freeport 13% Rio Tinto 10% 2 Xstrata 8% 3 Norilsk 7% Anglo American 6% 4 Kazakhmys 5% Source: S&P Capital IQ (1) Based on loca
Slide 10: And Specifically Deliver On Each Project We Take On
And Specifically Deliver On Each Project We Take On US$ Bn 99% 4.0 3.8 3.5 3.0 375% 2.5 2.5 150% 2.0 1.9 1.8 1.5 67% 115% 26% 1.0 1.0 0.9 0.7 0.7 0.7 0.6 0.5 0.5 0.3 ‐‐ Kansanshi Guelb Moghrein Kevitsa1 Trident Ravensthorpe Haquira3 2001 2004 2008 (Sentinel / Enterprise)2 2010 2010 2010 Cost plus Ca
Slide 11: And Exceed Expectations
And Exceed Expectations Delivered Exceeded Project Announced Target Parameter Promised Delivered Target? Expectations? 244,979 tonnes of copper1 Kansanshi February Peak Production 130,000 tonnes of 2004 copper Peak Production 35,000 ounces of gold 112,286 ounces of gold Commissioning Late
Slide 12: First Quantum and Inmet Together Can Deliver Cobre Panama
First Quantum and Inmet Together Can Deliver Cobre Panama 12
Slide 13: First Quantum's Project Philosophy
First Quantum's Project Philosophy Core First Quantum Criteria Core First Quantum Attributes • Set ambitious targets for • Industry leading performance (e.g. schedule, cost and performance capital cost per tonne of output) • Finished project must perform to • Strong track record expectation • Our pr
Slide 14: Traditional Project
Traditional Project Owner EPCM Engineer 14
Slide 15: First Quantum Target Project Model
First Quantum Target Project Model Engineering & Design By FQM 15
Slide 16: Typical First Quantum Project
Typical First Quantum Project Concrete Piping 8% 7% Earthworks E& I 5% 10% Construction Management 4% Transport & Logistics 8% Pre-commissioning & Commissioning 1% Contracts 2% Engineering & Design 5% Procurement 3% Structure/Mechanical/Plate 47% 16
Slide 17: Our Core Project Development Criteria: Finished Project Must Perform
Our Core Project Development Criteria FINISHED PROJECT MUST PERFORM TO EXPECTATION Kevitsa – achieving throughput above design Ravensthorpe – steady state and reliable operation 17
Slide 18: Our Core Project Development Criteria: Adherence to Time Schedule
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.
Slide 19: Our Core Project Development Criteria: Adherence to Capital Cost Budget
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 19
Slide 20: Cost overrun is common in infrastructure projects
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 Zimbabwe United Kingdom Brazil Ghana Germany Mexico Namibia Norway Botswana Italy Australasia Australia 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 23
Slide 24: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate 24
Slide 25: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate 25
Slide 26: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate 26
Slide 27: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate 27
Slide 28: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate 28
Slide 29: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate 29
Slide 30: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate 30
Slide 31: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate 31
Slide 32: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate 32
Slide 33: The Diverse Environment in Which We Operate
The Diverse Environment in Which We Operate 33
Slide 34: Development Expertise – Technical
Development Expertise – Technical 34
Slide 35: Development Expertise – Technical
Development Expertise – Technical 35
Slide 36: Development Expertise – Technical
Development Expertise – Technical 36
Slide 37: Development Expertise – Technical
Development Expertise – Technical 37
Slide 38: Development Expertise – Technical
Development Expertise – Technical 38
Slide 39: Development Expertise – Technical
Development Expertise – Technical 39
Slide 40: Development Expertise – Technical
Development Expertise – Technical 40
Slide 41: Development Expertise – Technical
Development Expertise – Technical 41
Slide 42: Development Expertise – Technical
Development Expertise – Technical 42
Slide 43: A 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 44: 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 o
Slide 45: Sentinel Project
Sentinel Project & INERALS LTD.
Slide 46: Sentinel Copper Concentrator Simplified Flowsheet
Sentinel Copper Concentrator Simplified Flowsheet Crushing and Conveying Stockpile and Reclaim Milling Flotation Filtration and Copper Concentrate Product 46
Slide 47: 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
Slide 48: 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 48
Slide 49: Efficient Site Manning
Efficient Site Manning FQML Expat 1% FQM Roads Expat Infra Expat 1% Operations & 1% Support Expat Infra Filipinos 1% 8% Infra Local FQML Plant 27% Filipinos / Indonesians 14% FQMO Roads Local FQML Plant Local 11% 16% Operations & Support Local 19% Filipinos / Department Local Expat TOTAL Indonesians
Slide 50: Rapid Ramp-up of Site Manpower
Rapid Ramp-up of Site Manpower Data Date (28 Jan 13) 50
Slide 51: Sentinel On Schedule and On Budget
Sentinel On Schedule and On Budget Data Date (28 Jan 13) Overall Progress: Actual = 19.18% Plan = 19.07% Commitments Budget Sentinel Capex $950M $1,885M 51
Slide 52: The Planning (2011)
The Planning (2011) & FIRST QUANTUM (s2) INERALS LTD.
Slide 53: Sentinel Mill Area (June 2012)
Sentinel Mill Area (June 2012) 53
Slide 54: Sentinel Mill Area (July 2012)
Sentinel Mill Area (July 2012) 54
Slide 55: Sentinel Mill Area (August 2012)
Sentinel Mill Area (August 2012) 55
Slide 56: Sentinel Mill Area (September 2012)
Sentinel Mill Area (September 2012) 56
Slide 57: Sentinel Mill Area (October 2012)
Sentinel Mill Area (October 2012) 57
Slide 58: Sentinel Mill Area (November 2012)
Sentinel Mill Area (November 2012) 58
Slide 59: Sentinel Mill Area (December 2012)
Sentinel Mill Area (December 2012) 59
Slide 60: Sentinel Mill Area (January 2013)
Sentinel Mill Area (January 2013) 60
Slide 61: Sentinel Mill Area (January 2013)
Sentinel Mill Area (January 2013) 61
Slide 62: Sentinel Mill Area (January 2013)
Sentinel Mill Area (January 2013) 62
Slide 63: First Mill Shell Delivery
(> carriers - &logistics \\ 65511) — | FIRST QUANTUM (63) MINERALS LTD.
Slide 64: First Mill Shell Delivery
FIRST QUANTUM (64) MINERALS LTD.
Slide 65: 1,000 Man Construction Camp
1,000 Man Construction Camp 65
Slide 66: River Diversion
River Diversion FIRST QUANTUM MINERALS LTD.
Slide 67: River Diversion
& FIRST QUANTUM MINERALS LTD.
Slide 68: Arial Plant Site (November 2012)
Arial Plant Site (November 2012) 68
Slide 69: Arial Plant Site (November 2012)
Arial Plant Site (November 2012) 69
Slide 70: Arial Plant Site (November 2012)
Arial Plant Site (November 2012) 70
Slide 71: Arial Plant Site (November 2012)
Arial Plant Site (November 2012) 71
Slide 72: Arial Plant Site (November 2012)
Arial Plant Site (November 2012) 72
Slide 73: Sentinel Tails Thickening (January 2013)
Sentinel Tails Thickening (January 2013) 73
Slide 74: Sentinel Main Warehouse (January 2013)
Sentinel Main Warehouse (January 2013) 74
Slide 75: Concrete Bench Plant
Concrete Bench Plant & FIRST QUANTUM MINERALS LTD.
Slide 76: Quarry for Concrete Aggregates
Quarry for Concrete Aggregates 76
Slide 77: Block Making Machine for Housing
Block Making Machine for Housing 77
Slide 78: Block Making Machine for Housing
Block Making Machine for Housing 78
Slide 79: Truss Making Machine for Housing
Truss Making Machine for Housing 79
Slide 80: Truss Making Machine for Housing
Truss Making Machine for Housing 80
Slide 81: Senior Housing and Golf Course
Senior Housing and Golf Course 81
Slide 82: Accommodation and Messing
Accommodation and Messing 82
Slide 83: Senior Housing
. 4 ike ** Se Mi % Wi) me ~ 7 = | aw _! Te ‘ & FIRST QUANTUM MINERALS LTD.
Slide 84: Senior Housing
& FIRST QUANTUM (#4) MINERALS LTD.
Slide 85: Senior Housing
Hagley +i aan eats et - Se at ee 7 Rei a ce, SME PF ES 7 FIRST QUANTUM MINERALS LTD.
Slide 86: Senior Housing
Senior Housing 86
Slide 87: Senior Housing
Senior Housing 87
Slide 88: Senior Housing
Senior Housing 88
Slide 89: Senior Housing
& FIRST QUANTUM MINERALS LTD.
Slide 90: Senior Housing
Senior Housing 90
Slide 91: 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 Sentinel Cobre Panama (excl. Enterprise) Throughput 55 Mtpa 60 Mtpa Output (LOM Average) 270 – 300 ktpa 266 ktpa Year of First Production 2014 2016 Process Plant $713
Slide 92: Sentinel is Not Cobre Panama – But it is Comparable
Sentinel is Not Cobre Panama – But it is Comparable Sentinel Frontier Cobre Panama Throughput (Mtpa) 55 10 60 Copper Production (ktpa) 270-300 96 266 $m % $m % $m % Total Capex 1,885 100% 226 100% 6,182 100% Process Plant and Mining 1,146 61% 156 69% 1,531 25% Equipment Mine other, Dewatering, Pre-
Slide 93: A Highly Attractive Offer
A Highly Attractive Offer BO INERALS LTD.
Slide 94: A Vision to Create a Global Copper Leader
A Vision to Create a Global Copper Leader Combination of First Quantum and Inmet expected to be the new go-to copper producer Combination creates significant value Combination expected to be re-rated upwards Combination with a long standing commitment to social and environmental excellence
First Quantum Minerals — Merger or Acquisition (January 2013) on 6ix