First Quantum Minerals Ltd. · TSX:FM
First Quantum Minerals — Q2 2019 Earnings Presentation
28 slides from First Quantum Minerals's earnings presentation, 2019
Slide 1: First Quantum Minerals Second Quarter 2019
FIRST QUANTUM MINERALS Second Quarter 2019
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
Slide 3: Clive Newall, President and Director
Clive Newall President and Director 3
Slide 4: 2019 – The Transformational Year Continues
2019 – THE TRANSFORMATIONAL YEAR CONTINUES Q2 Summary* Comparative Earnings $87 million Comparative Earnings Per Share $0.13 Copper Production 168,399 tonnes including 30,896 tonnes of pre-commercial production Copper Sales 149,333 tonnes including 6,542 tonnes of pre-commercial sales All-in Sustain
Slide 5: Other Developments
OTHER DEVELOPMENTS Las Cruces • July 11 - mining activities resumed after regulatory approvals received. Phase 6 mining expected to commence in August. Zambia • On July 24, Kalumbila Minerals Ltd reached a settlement with the Zambia Revenue Authority with respect to the assessment claim on duties. •
Slide 6: Cobre Panama Production on Track
COBRE PANAMA PRODUCTION ON TRACK Cobre Panama statistics Q1 2019 Q2 2019 YTD 2019 Mining Waste mined (000’s tonnes) 18,815 18,590 37,405 Ore mined (000’s tonnes) 8,841 11,580 20,421 Processing Copper ore processed (000’s tonnes) 1,055 8,223 9,278 Copper ore grade processed (%) 0.43 0.43 Recovery (%)
Slide 7: Cobre Panama – Concentrate shipping commenced in the quarter
Cobre Panama – Concentrate shipping commenced in the quarter 7
Slide 8: Cobre Panama - Concentrate Loading
Cobre Panama - Concentrate Loading 8
Slide 9: Cobre Panama - Secondary Crusher
Cobre Panama - Secondary Crusher 9
Slide 10: Cobre Panama – Plant conveyors are all operational
Cobre Panama – Plant conveyors are all operational 10
Slide 11: Cobre Panama – 140,000–175,000 tonnes of production expected in 2019
Cobre Panama – 140,000 – 175,000 tonnes of production expected in 2019 11
Slide 12: Financial Review
e. FIRST QUANTUM Se aay oe, ee _ FINANCIAL REVI
Slide 13: Hannes Meyer, Chief Financial Officer
Hannes Meyer Chief Financial Officer 13
Slide 14: Quarterly Production
QUARTERLY PRODUCTION¹ Record copper production up 12% on Q2 2018 Panama ramp-up is progressing well 2 • Record quarterly copper production of 168kt, 12% higher than Q2 2018, including 31kt of pre-commercial copper produced at Cobre Panama. • Cobre Panama achieved its first full quarter of pre-commer
Slide 15: Financial Overview
FINANCIAL OVERVIEW Solid results excluding Las Cruces impact and lower metal prices $ million (except per share numbers) Q2 2018 Q1 2019 Q2 2019 Revenue1 1,049 857 939 Gross Profit 271 185 196 Comparative EBITDA2 466 368 376 Comparative Earnings2 128 95 87 Comparative Earnings per share $ 0.19 0.14
Slide 16: Quarterly Unit Cash Costs
QUARTERLY UNIT CASH COSTS Q2 2019 C1 cost¹ and AISC¹ within full year guidance C1 costs AISC • Q2 2019 C1 cost is $0.04/lb higher than Q2 2018 and • AISC in Q2 2019 is broadly in line with both Q2 2018 $0.02/lb lower than Q1 2019. and Q1 2019. • The increase from Q2 2018 is driven by lower • Despite
Slide 17: Debt and Liquidity Profile at June 30, 2019
DEBT AND LIQUIDITY PROFILE AT JUNE 30, 2019 Liquidity at June 30, 2019 Undrawn RCF $290m $1.1bn Net unrestricted cash $802m Net debt/EBITDA covenant ratio at June 30, Covenant Ratio 2019 of 4.42x, well below covenant requirement of 5.75x. July 30, 2019 17
Slide 18: Copper Hedging Program Outlook
COPPER HEDGING PROGRAM OUTLOOK¹ Average copper hedge floor of $2.84/lb for remainder of 2019 The Company also has unmargined nickel forward sales contracts for 7,008 tonnes at an average price of $6.53 per lb outstanding with maturities to February 2021. ¹ Hedging outlook as at July 30, 2019. July 3
Slide 19: Capital Expenditure
CAPITAL EXPENDITURE 2019 YTD 2019 2020 2021 $ million Capital Expenditure Actual Guidance Guidance Guidance Cobre Panama Project 371 630 - - Cobre Panama First Quantum share of Cobre Panama Project 336 595 - - Funding ($bn) Capitalized stripping costs 94 200 250 250 Sustaining capital and other proj
Slide 20: Appendix
APPENDIX & FIRST QUANTUM.
Slide 21: 2019 Guidance
2019 GUIDANCE Unchanged Production Guidance¹ 2019 Total copper production (tonnes) including Cobre Panama² 700 – 735 Copper (tonnes) – Cobre Panama² 140 – 175 Copper (tonnes) excluding Cobre Panama 560 Gold (ounces) – excluding Cobre Panama 185 Zinc (tonnes) 12 Commercial production at Cobre Panama
Slide 22: 2019 Guidance
2019 GUIDANCE Unchanged Costs ($/lb) Guidance 2019 C1 - excluding Cobre Panama and Zambian sales tax 1.20 – 1.40 AISC - excluding Cobre Panama and Zambian sales tax 1.70 – 1.85 Impact of Zambian sales tax from September 1, 2019 on full year C1 and AISC ~ 0.07 Depreciation – excluding Cobre Panama ($
Slide 23: 2019 Guidance
2019 GUIDANCE Capital expenditure guidance increased on Cobre Panama project 2019 Total Cobre Panama project 630 Third party contribution (35) First Quantum’s share of Cobre Panama project 595 Capitalized stripping 200 Sustaining capital and other projects 650 Total net capital expenditure 1,445 Gui
Slide 24: Franco-Nevada Overview
FRANCO-NEVADA OVERVIEW TRANCHE 1 (80%) TRANCHE 2 (20%) Gold Silver Gold Silver Deposit received $1bn $356m Deferred revenue at 30 June 2019 $1,135m $384m Fixed payment stream received from FN ² ³ $418.27/oz¹ $6.27/oz¹ 20% of spot 20% of spot Amortized by units of Au and Ag delivered respectively ove
Slide 25: Quarterly Net Debt Movement
QUARTERLY NET DEBT MOVEMENT Opening Net Debt at March 31, 2019 ($ million) (7,007) Comparative EBITDA 376 Working capital (109) Capital expenditure (including capitalized losses) (413) Interest paid and capitalized to property, plant and equipment (71) Taxes paid (84) Other 4 Closing Net Debt at Jun
Slide 26: Non-GAAP Measures Reconciliation – Comparative EBITDA and Comparative Earnings
NON-GAAP MEASURES RECONCILIATION – COMPARATIVE EBITDA AND COMPARATIVE EARNINGS Comparative EBITDA $m Q2 2019 YTD 2019 Operating profit 144 297 Depreciation 198 392 Write off of assets and other costs associated with land slippage - 13 Foreign exchange loss 33 37 Loss on disposal of assets 1 3 Revisi
Slide 27: Non-GAAP Measures Reconciliation – C1 and AISC
NON-GAAP MEASURES RECONCILIATION – C1 AND AISC $m Q2 2019¹ YTD 2019¹ Cost of sales (743) (1,415) Depreciation 198 392 By-product credits 103 190 Royalties 56 110 Treatment and refining charges (33) (63) Freight costs (12) (20) Finished goods 37 6 Other¹ 8 21 C1 Cost (386) (779) General and administr
Slide 28: First Quantum Minerals
FIRST QUANTUM MINERALS TSX:FM info@fqml.com 416-361-6400 1-888-688-6577 28
First Quantum Minerals — Q2 2019 Earnings Presentation on 6ix