Slide 1: Second Quarter 2016 Conference Call & Webcast
SECOND QUARTER 2016 CONFERENCE CALL & WEBCAST TSX: FM JULY 28, 2016
Slide 2: Cautionary Note Regarding Forward-Looking Statement
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENT 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. These forward-looking statements
Slide 3: Cobre Panama – Power Plant & Port Overview #1
COBRE PANAMA – POWER PLANT & PORT OVERVIEW #1 3
Slide 4: Cobre Panama – Power Plant & Port Overview #2
COBRE PANAMA – POWER PLANT & PORT OVERVIEW #2 4
Slide 5: Cobre Panama – Power Plant – 150 MW Unit 1
COBRE PANAMA – POWER PLANT – 150 MW UNIT 1 5
Slide 6: Cobre Panama – Power Plant – Turbine Installation
COBRE PANAMA – POWER PLANT – TURBINE INSTALLATION 6
Slide 7: Cobre Panama – Mill Area – West Side
COBRE PANAMA – MILL AREA – WEST SIDE 7
Slide 8: Cobre Panama – Ball Mill and Motor Installation
COBRE PANAMA – BALL MILL AND MOTOR INSTALLATION 8
Slide 9: Cobre Panama – Thickener Installation
COBRE PANAMA – THICKENER INSTALLATION 9
Slide 10: Financial Review & First Quantum
& FIRST QUANTUM Maen a
Slide 11: Q2 2016 Highlights – Continuing operations
Q2 2016 Highlights – Continuing operations1 Record quarterly copper production with pre- Production Q2 2016 vs Q1 2016 vs Q2 2015 commercial Sentinel production and higher Copper ('000 tonnes) 131.3 +12.1 +31.4 Kansanshi Nickel ('000 tonnes) 5.0 -2.1 -2.1 Gold ('000 ounces) 50.6 -5.6 -3.2 Sales Q2 2
Slide 12: Production – Continuing operations
Production – Continuing operations1 Copper production 31% above Q2 2015 • Primarily reflects continued ramp up of Sentinel to increasingly higher operating levels and strong performance across continuing operations • Sentinel production of 32kt (Q2 2015: 6kt) • Kansanshi production of 62kt was 9% hi
Slide 13: Financial Overview – Continuing operations
Financial Overview – Continuing operations1 Impact of lower market metal prices more than offset by cost savings, higher sales volumes, lower royalties and sales hedges $ million Q2 2016 Q1 2016 Q2 2015 Gross profit $48m above Q2 2015 as the impact of lower market prices Revenue 659 720 558 prices a
Slide 14: Cash Costs – Continuing operations
Cash Costs – Continuing operations Copper C1 cost ($/lb) Copper AISC ($/lb) Q2 2016 copper C1 cost 20% lower than Q2 2015 Q2 2016 AISC 35% lower than Q2 2015 Continued focus on cost reductions and efficiencies Lower C1 cost Lower fuel costs Lower royalty costs - 20% Zambian royalty effective
Slide 15: Q2 2016 Gross Profit versus Q2 2015
Q2 2016 Gross Profit versus Q2 2015 – Continuing operations Gross profit $48m above Q2 2015 as lower realized metal prices are more than offset by cost savings, higher sales volumes, favorable FX and reduced royalties 109 38 102 54 (61) 103 $ million 11 (152) Gross Sales Q2 2015 realized FX Costs De
Slide 16: Q2 2016 vs. Q2 2015 Cost Savings
Q2 2016 vs. Q2 2015 Cost Savings1 2% Net acid costs $39m lower driven by Kansanshi smelter production of sulphuric acid $119m Q2 on Lower employee, contractor and Q2 ‘15 savings maintenance costs Lower consumable, fuel, power and freight costs across the group General and administration and
Slide 17: Capital Expenditure - Total capital spend within guidance
Capital Expenditure - Total capital spend within guidance US$ million Q2 2016 YTD 2016 Cobre Panama capex on Cobre Panama 187 341 track with full year Net to First Quantum 112 205 guidance Trident project 26 54 Stripping costs 27 43 Cobre Panama Funding ($bn) Other sustaining capex and other project
Slide 18: Long Term Debt Profile
Long Term Debt Profile Debt Maturity Profile ($m) Covenant Ratio Liquidity No bond principle due Net debt/EBITDA covenant Q2 2016 liquidity: until 2019 ratio of 4.0x - within bank $895m unrestricted cash covenant of 5.5x $593m undrawn RCF (expires 2019) 18
Slide 19: Zambian Developments
Zambian Developments • Changes to the mining tax regime were approved by Parliament with the effective date of June 1, 2016 • Copper mineral royalties reduced to 4-6% sliding scale based on monthly average LME price • Corporate tax retained at 30% Previous From June 1, 2016 Royalty Rate 9% 4-6% Corp
Slide 20: Market Guidance 2016
Market Guidance 2016 2016 Production guidance from continuing operations • Production guidance is shown for continuing operations and therefore excludes Kevitsa • Overall group production guidance for all metals on a continuing basis is unchanged Cu production1 Sentinel Cu production Ni production Z
Slide 21: Appendix
APPENDIX 21
Slide 22: Quarterly Net Debt Movement
Quarterly Net Debt Movement Opening Net Debt at March 31, 2016 ($ million) (4,795) Comparative EBITDA 257 Working capital 23 Gross capital expenditure including pre-commercial (305) Net interest1 (98) Payment of ENRC promissory note 32 Franco-Nevada 38 KMPC contribution 38 Initial proceeds on sale o
Slide 23: Second Quarter 2016 Conference Call & Webcast
SECOND QUARTER 2016 CONFERENCE CALL & WEBCAST TSX: FM JULY 28, 2016