First Quantum Minerals Ltd. · TSX:FM
First Quantum Minerals — Investor Presentation (January 2010)
43 slides from First Quantum Minerals's investor presentation, January 2010
Slide 1: First Quantum Minerals January 2010
TSX: FM LSE: FQM www.first-quantum.com January 2010
Slide 2: Cautionary Note Concerning Forward-Looking Statements
Cautionary Note Concerning Forward-Looking Statements Some of the statements contained in the following material are forward-looking statements and not statement of facts. Such statements are based on the current beliefs of management, as well as assumptions based on management information currently
Slide 3: First Quantum's Core Strength
First Quantum’s Core Strength Core Strength Discovering, developing and operating base metal mines efficiently and cost-effectively 3
Slide 4: First Quantum's Project Model
First Quantum’s Project Model Traditional Project FQM Project BY OWNER BY OTHERS EPCM ENGINEER BY FQM Maximize in-house work 4
Slide 5: Company Built on Discoveries and Acquisitions
Company Built on Discoveries and Acquisitions DISCOVERIES ACQUISITIONS Frontier Kansanshi Kolwezi Ravensthorpe* Bwana-Lonshi Guelb Moghrein Kevitsa Kiwara* Fishtie Mopani Copper Mines * Transactions to be finalized in Q1 2010 5
Slide 6: Produced Impressive Results
Produced Impressive Results Copper Production Earnings Operating Cash Flow 000’s tonnes $ millions $ millions 520 772 334 637 399 564 227 300* 183 119 155 237 42 30 28 46 5 18 ’03 ’04 ’05 ’06 ’07 '08 ’03 ’04 ’05 ’06 ’07 '08 ’03 ’04 ’05 ’06 ’07 '08 * Before impairment charge 6
Slide 7: Momentum Continues in 2009
Momentum Continues in 2009 Copper Production Gold Production Average Cash Unit Cost tonnes Ounces $/lb $1.26 275,412 130,609 238,780 -18% $0.95 +15% +71% 76,533 9 Mths '08 9 Mths '09 9 Mths '08 9 Mths '09 Q4'08 Q3'09 7
Slide 8: Solid Nine Months 2009 Financial Results
Solid Nine Months 2009 Financial Results Net profit $236.2M* EPS $3.17 Operating cash flow $407.3M CPS $5.46 *Net of hedging losses of $98M after tax 8
Slide 9: Strong Balance Sheet to Fund Growth
Strong Balance Sheet to Fund Growth As at September 30, 2009 Cash on hand $808M Product inventory $169M Term debt $197M Convertible bonds $500M Available credit facilities $300M 9
Slide 10: Diversifying & Expanding the Asset Base
Ravensthorpe Kiwara Diversifying & Expanding Lonshi Kevitsa the Asset Base Kolwezi Exploration 10
Slide 11: Ravensthorpe Nickel Operation (100%), Australia
Ravensthorpe Nickel Operation (100%), Australia Binding agreement to acquire the operation for $340 million Subject to approval by Foreign Investment Review Board and the West Australian Minister of Mines and Petroleum; expected in Q1 2010 Open cut mine and hydrometallurgical process plant R
Slide 12: Ravensthorpe Nickel Operation
Ravensthorpe Nickel Operation
Slide 13: Kevitsa Nickel-Copper Project (100%), Finland
Kevitsa Nickel-Copper Project (100%), Finland Located 142 kilometres north of Rovaniemi, the capital of Finnish Lapland Estimated mine life of over 20 years; robust economics Life of mine C1 cash operating cost approx. $2.50 per pound nickel, net of by product credits Capital cost estimate o
Slide 14: Kevitsa Nickel-Copper Project
Kevitsa Nickel-Copper Project
Slide 15: Offer to Acquire Kiwara PLC, Zambia
Offer to Acquire Kiwara PLC, Zambia Cash and share offer valued at approx. US$260.2M Kiwara’s asset is a controlling interest in mineral prospecting licences covering 2,850 km2 on the periphery of the Kabombo Dome Includes the Kalumbila copper deposit – undergoing infill drill program to estab
Slide 16: Lonshi Underground Project (100%), DRC
Lonshi Underground Project (100%), DRC Located in the Katanga province within three kilometres from the DRC\Zambia border Open pit oxide mineral resource depleted in 2008 Sulphide extension of the deposit extends to a depth of at least 350 metres below the depleted open pit Program underway
Slide 17: Lonshi Exploration
Lonshi Exploration Geology Model of the Lonshi target horizon in relation to the pit and drilling Lonshi Pit LONSHI FAULT OPEN LONSHI Downthrown LC CONGLOMERATE (green) OPEN OPEN Ore Zone has short range variability in width and grade but the same horizon appears to be consistently mineralized on a
Slide 18: Lonshi Underground Project
Lonshi Underground Project 18
Slide 19: Kolwezi Copper-Cobalt Project (65%), DRC
Kolwezi Copper-Cobalt Project (65%), DRC C1 Costs Expected to be in Lower Quartile Located in the Katanga province Estimated capital investment of $553M Initial annual capacity of 35,000 tonnes of copper and 7,000 tonnes of cobalt hydroxide 22-year mine life at expanded capacity Constructi
Slide 20: Update on Contract Revisitation
Update on Contract Revisitation Construction suspended following order by General Prosecutor of Katanga to seal KMT’s facilities Company has been advised, by its lawyers, that such an order is illegal In receipt of letter from Government that essentially proposes the return of the exploitation
Slide 21: Kolwezi Copper-Cobalt Project
Kolwezi Copper-Cobalt Project 21
Slide 22: 2009 Exploration Program
2009 Exploration Program Focus on adding value to our mines – in pit and satellite exploration – recent drilling at Kansanshi, Frontier and Lonshi all show potential for expansion of current resource Built a geological model for all of our major deposits Focus on drilling in Finland – excellen
Slide 23: Exploration Priorities for 2010
Exploration Priorities for 2010 Copperbelt Drill shortlisted prospects in DRC for Frontier ‘analogue’ Initial drill test of five new targets in Southern DRC Expand exploration program around Kansanshi (30,000m+) Step out drilling at Lonshi Continue Frontier South definition drilling Finlan
Slide 24: Existing Operations Provide a Solid Platform
KANSANSHI Existing Operations Provide a FRONTIER Solid Platform GUELB MOGHREIN 24
Slide 25: 2009 Production and Cost Outlook
2009 Production and Cost Outlook Copper production up almost 12% Copper Gold (000’s tonnes) (000’s ounces) to 374,000 tonnes Gold production up over 75% to 400 240 205,000 ounces Average C1 of $0.92 per pound 300 180 200 120 100 60 0 0 '03 '04 '05 '06 '07 '08 '09F Copper production Gold produc
Slide 26: Kansanshi Copper-Gold Mine: The Flagship Operation
Kansanshi Copper-Gold Mine: The Flagship Operation 80% owned, in Zambia Located in the North Western Province Zambia Achieved commercial production in 2005 Long-life operation with an estimated 13-year mine life 26
Slide 27: Kansanshi Copper-Gold Mine (80%), Zambia
Kansanshi Copper-Gold Mine (80%), Zambia Modified operating plans Copper Production Increase cutoff grades (000’s tonnes) Reduce material mined by 40% 250 Exploit processing flexibility 200 Recently-expanded cathode production facility Concentrator expansion 150 HPL facility 100 2009 targe
Slide 28: Kansanshi Copper-Gold Mine
Kansanshi Copper-Gold Mine 28
Slide 29: Frontier Copper Mine: Newest Producing Mine
Frontier Copper Mine: Newest Producing Mine 95% owned, in DRC DRC Located within two kilometres of the Zambian border Achieved commercial production in Q4 2007 Open pit mine with an estimated 19-year mine life 29
Slide 30: Frontier Copper Mine (95%), DRC
Frontier Copper Mine (95%), DRC Modified operating plans Copper Production Optimize grade and tonnage (000’s tonnes) 100 Efficiency improvements in the processing plant 80 Greater use of local smelters 60 2009 targets 40 Average C1 cost of $1.03/lb 20 92,300 tonnes of copper production 0 '07
Slide 31: Frontier Copper Mine
Frontier Copper Mine 31
Slide 32: Guelb Moghrein Copper-Gold Mine: Doubling Capacity
Guelb Moghrein Copper-Gold Mine: Doubling Capacity Mauritania 80% owned, in Mauritania Located in the northeast region Achieved commercial production in 2006 Open pit mine with an estimated 9-year mine life 32
Slide 33: Guelb Moghrein Copper-Gold Mine (80%), Mauritania
Guelb Moghrein Copper-Gold Mine (80%), Mauritania Modified operating plans Copper Gold (000’s tonnes) New more fuel-efficient mining (000’s ounces) fleet – Fewer vehicles 40 100 – Less maintenance required Greater use of heavy fuel oil to reduce power expense 30 75 Benefits from low-cost project
Slide 34: Guelb Moghrein Expansion
Guelb Moghrein Expansion 34
Slide 35: Diversifying and Expanding
Diversifying and Expanding Copper Production Nickel Production 000’s tonnes 000’s tonnes 600 60 400 40 200 20 0 0 ’04 ’05 ’06 ’07 '08 ’09F ’10F ’11F '12F '13F '11F '12F '13F Kansanshi Guelb Moghrein Frontier Kolwezi Fishtie Kevitsa Ravensthorpe Note: Contribution from Kolwezi assumes commissioning i
Slide 36: Corporate and Social Responsibility: Investing in the Communities
Corporate and Social Responsibility: Investing in the Communities Focused mainly on education and health Malaria and HIV/Aids programs Rehabilitation of hospital wards and clinics Construction of classrooms University scholarship programs Provide access to clean water supply 36
Slide 37: Goal: A Globally Diversified Mining Company
Goal: A Globally Diversified Mining Company Technical strength at the core of growth strategy Diversifying and expanding asset base Expected to be one of the world’s leading nickel producers by 2013 Continuing copper production growth profile established in 1998 Existing operations provide
Slide 38: First Quantum Minerals
TSX: FM LSE: FQM www.first-quantum.com January 2010
Slide 39: Corporate Profile
Corporate Profile Stock exchange listings & symbols – (S&P/TSX 60 Index) TSX: FM LSE: FQM Shares issued and outstanding 78.6 million Fully diluted 88.2 million 52-week share price range C$97.19-C$20.22 Recent share price – January 11, 2010 C$94.75 Market capitalization – $ millions C$7.4 billion Ave
Slide 40: Financial Summary
Financial Summary Three months ended September 30, 2009 Total revenues $557.9M Cost of sales $231.4M Net earnings, net of hedging losses of $28M after tax $123.8M Basic earnings per share $1.59 Cash flow before working capital movements $163.9M Financing activities $(52.2)M Investing activities $(86
Slide 41: Financial Summary
Financial Summary Nine months ended September 30, 2009 Total revenues $1,246.6M Cost of sales $563.6M Net earnings, net of hedging losses of $98M after tax $236.2M Basic earnings per share $3.17 Cash flow before working capital movements $407.3M Financing activities $594.5M Investing activities $(25
Slide 42: Operating Summary
Operating Summary Three months ended September 30, 2009 Copper produced – (tonnes) 93,486 Copper sold – (tonnes) 105,154 Gold sold – (ozs) 48,454 Copper in concentrate inventory – (tonnes) 25,704 Cash cost – (per lb) $0.98 Total cost – (per lb) $1.27 Realized copper price – (per lb) $2.26 Realized g
Slide 43: Operating Summary
Operating Summary Nine months ended September 30, 2009 Copper produced – (tonnes) 275,412 Copper sold – (tonnes) 268,410 Gold sold – (ozs) 128,336 Copper in concentrate inventory – (tonnes) 25,704 Cash cost – (per lb) $0.95 Total cost – (per lb) $1.20 Realized copper price – (per lb) $1.93 Realized
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