First Quantum Minerals Ltd. · TSX:FM
First Quantum Minerals — Investor Presentation (June 2013)
30 slides from First Quantum Minerals's investor presentation, June 2013
Slide 1: The New Leader in Global Copper
The New Leader in Global Copper June, 2013
Slide 2: Cautionary Note Regarding Forward-Looking Statement
Cautionary Note Regarding Forward-Looking 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 for
Slide 3: Strong Q1 2013 Results Despite Lower Year-Over-Year Metal Prices
Strong Q1 2013 Results Despite Lower Year-Over-Year Metal Prices • Copper production 20% higher • Nickel production of 11,072 tonnes; record quarterly production from Ravensthorpe • Gold production 32% higher • Copper production cash costs lower by 4% • Gross profit 15% higher US$ millions Q1 2013 Q
Slide 4: A Significant Step Forward in Our Growth & Diversification Strategy
A Significant Step Forward in Our Growth & Diversification Strategy Australia 10% Australia 19% Europe 8% Africa 36% Europe 10% Americas Africa Americas 45% 71% 92% Europe 9% 1 Mtpa1 300 Ktpa1 1.3 Mtpa 1 2018E Copper production. Source: BrookHunt 4
Slide 5: Geographically Diversified Portfolio of High-Quality Operations & Projects
Geographically Diversified Portfolio of High-Quality Operations & Projects 5
Slide 6: High-Quality, Stable Operations
High-Quality, Stable Operations 6
Slide 7: Kansanshi Cu-Au mine, Zambia
High-Quality, Stable Operations Kansanshi Cu-Au mine, Zambia • 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 • Near mine resource
Slide 8: Kansanshi Cu-Au mine, Zambia: Multi-phase production expansion
High-Quality, Stable Operations Kansanshi Cu-Au mine, Zambia Multi-phase production expansion project underway Expansion Estimate Production – 2012 – 2015 Project Capacity Completion Cost Impact 60% increase in overall (US$M) production capacity Oxide 7.2 mtpa Complete 31 Copper: 10,000 - 15,000 tpa
Slide 9: Guelb Moghrein Cu-Au mine, Mauritania
High-Quality, Stable Operations Guelb Moghrein Cu-Au mine, Mauritania • 100% ownership • Located 250 kilometres northeast of the nation’s capital, Nouakchott • As at December 31, 2012, the estimated minelife was ~nine years (including stockpiles) based on current operations • First production in 200
Slide 10: Guelb Moghrein Cu-Au mine, Mauritania
High-Quality, Stable Operations Guelb Moghrein Cu-Au mine, Mauritania • Stronger, more sustained performance over the past 12 months • Focused on improving plant availability • Evaluating potential to recover magnetite as a by-product • Deposit considered to be an IOCG type deposit - structure and m
Slide 11: Ravensthorpe Ni mine, Australia
High-Quality, Stable Operations Ravensthorpe Ni mine, Australia • Acquired as a decommissioned plant in 2010 • First production within 20 months of purchase • Estimated mine life of 32 years • Commercial production declared Dec 28 2011 • Workforce = ~405 • Q1 ‘12 performance – 9,023 tonnes of contai
Slide 12: Kevitsa Ni-Cu-PGE mine, Finland
High-Quality, Stable Operations Kevitsa Ni-Cu-PGE mine, Finland • Built, commissioned and started commercial operations within 36 months of board approval • Estimated mine life of 29 years • Commercial production declared August 2012 • Workforce = ~290 • Further potential – Process optimization – Ap
Slide 13: Las Cruces Cu mine, Spain
High-Quality, Stable Operations Las Cruces Cu mine, Spain • Acquired in March 2013 • Estimated mine life of 9 years with potential for an additional 10 to 15 years • Average grade of 5.4% copper • Workforce = 250 direct employees; 650 contractors • Annual production capacity – 72,000 tonnes of coppe
Slide 14: Çayeli Cu-Zn mine, Turkey
High-Quality, Stable Operations Çayeli Cu-Zn mine, Turkey • Acquired in March 2013 • Estimated mine life of 6 years with potential for an additional 3 years • Average grade of 3.1% copper and 3.6% zinc • Workforce = 493 employees • Q1 C1 cash cost of US$0.93/lb. copper • 2013 Estimates: – 28,000 – 3
Slide 15: Pyhäsalmi Cu-Zn mine, Finland
High-Quality, Stable Operations Pyhäsalmi Cu-Zn mine, Finland • Acquired in March 2013 • One of the most efficient underground mines in the world • Estimated mine life of 6 years • Average grade of 1.1% copper and 1.9% zinc • Workforce = 261 employees • Q1 C1 cash cost of (US$0.55)/lb. copper • 2013
Slide 16: Outlook for 2013
Outlook for 2013 Production Copper Nickel Gold Zinc (000’s tonnes) (000’s contained tonnes) (000’s ounces) (000’s tonnes) Group 384 - 416 40 - 45 193 - 213 41 - 48 Kansanshi 250 - 270 - 126 - 140 - Guelb Moghrein 37 - 41 - 56 - 61 - Ravensthorpe - 31 - 35 - - Kevitsa 15 - 16 9 - 10 11 - 12 - Çayeli1
Slide 17: Our Project Pipeline
Our Project Pipeline Development Projects
Slide 18: Copper Smelter, Zambia
Our Project Pipeline Copper Smelter, Zambia • Processing capacity of 1.2 Mtpa —71% Sentinel —100% Kansanshi —Average copper grade 26% • Blister copper production 300,000 tpa; acid production 1.0 Mtpa • Estimates: − Capital cost of US$650M − Operating cost US$69/tonne of concentrate − Commissioning f
Slide 19: Sentinel Cu project, Zambia
Our Project Pipeline Sentinel Cu project, Zambia • Located ~ 140 km northwest of Solwezi, northern Zambia • M&I resource of 1,027 Mt at 0.51% Cu grade, containing 5.2 Mt Cu • Estimates: – 2.2:1 LOM strip ratio – >15 years mine life – US$2.0 billion capex – Annual production up to 300,000 tonnes 19
Slide 20: Cobre Panama Cu project, Panama
Our Project Pipeline Cobre Panama Cu project, Panama • Acquired March 2013 • Large open pit copper project • Larger project than the Panama Canal • Major aspect in our acquisition decision • Est. mine life of 40 years • Est. average annual production of 260,000 tonnes copper • Speeding up access to
Slide 21: Haquira Cu project, Peru
Our Project Pipeline Haquira Cu project, Peru • Focused on community & environmental aspects • Potential: - 20 year mine life – Avg 190k tonnes of copper production per year 21
Slide 22: One of the Few Mining Companies Investing in Building Capacity
One of the Few Mining Companies Investing in Building Capacity
Slide 23: Metals & Mining Capital Expenditure Has Peaked
Metals & Mining Capital Expenditure Has Peaked (US$ MM) 90,000 Capital Expenditure by Major Mining Companies 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 -- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E Source: Company information, CapIQ Note: Includes
Slide 24: Junior Miners Struggling to Access Capital
Junior Miners Struggling to Access Capital Troubled Financing Landscape Has Created a Funding Gap for Junior Mining Companies IPO Proceeds Volume (US$ Bn) (Deals) 40-50% reductions in new issues and follow-on 25 proceeds providing little support for Juniors from the 300 equity markets 250 20 200 15
Slide 25: Focus on Capital Structure, Not Capital Spending
Focus on Capital Structure, Not Capital Spending Two-tier market: Bond Proceeds (US$ Bn) Volume (Deals) the largest 120 200 borrowing large; 100 160 Proceeds Volume the rest 80 120 borrowing little 60 or not at all 40 80 20 40 Over 50% of -- -- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2
Slide 26: First Quantum: Success Through Project Development
First Quantum: Success Through Project Development We spend a 70% Capital Expenditure as a Percentage of Revenue (2005-2013) disproportionally high 60% amount on growth First Quantum Copper Peers Majors 50% projects 40% 30% This approach has 20% been a key driver behind our success as 10% a comp
Slide 27: Total Annualized Shareholder Return
Total Annualized Shareholder Return January 2000 – March 2013 First Quantum 33% Southern Copper 27% Antofagasta 23% Vale 22% BHP Billiton 16% Vedanta 15% Lundin 13% Teck 12% Freeport 11% Rio Tinto 9% HudBay 7% Anglo American 5% Eramet SA 5% Norilsk 3% Kazakhmys (5%) ENRC (15%) Glencore (21%) Source:
Slide 28: Leading Copper Growth
Freeport-McMoRan 1.8 Glencore Xstrata 1.5 Codelco 1.5 First Quantum 1.3 BHP Billiton 1.2 Leading Copper Growth Southern Copper 0.9 Rio Tinto 0.8 Anglo American 0.8 KGHM 0.6 Source: BrookHunt Kazakhmys 0.5 2018E Copper Production, Mt Teck Resources 0.5 Vale 0.5 Antofagasta 0.4 Norilsk 0.4 First Quant
Slide 29: The New Global Copper Leader
The New Global Copper Leader The New Go-To Copper Producer Attractive Diverse Geographic Exposure A Long-Standing Commitment to Social and Environmental Excellence Creating Value with Our Project Development Expertise An Exciting Future Ahead 29
Slide 30: The New Leader in Global Copper
The New Leader in Global Copper June, 2013
First Quantum Minerals — Investor Presentation (June 2013) on 6ix