The New Leader in Global Copper

Transcription

1 The New Leader in Global Copper November 2013 TSX: FM; LSE: FQM

2 Cautionary Note Regarding Forward-Looking Statement 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 available. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from expected results. Readers must rely on their own evaluation of these uncertainties. Note: all dollar amounts in US dollars unless otherwise indicated 2

3 First Quantum Minerals - The New Leader in Global Copper Geographically diversified asset base 7 high-quality, stable operations; current total copper and nickel production capacities of 445 ktpa and 45 ktpa, respectively Low-cost producer: $ $1.45/lb copper; $ $5.60/lb nickel 4 major projects with completion targeted from mid-2014 to 2017 Total production capacities for copper and nickel to rise to 1.3 Mtpa and 110 ktpa, respectively by 2018 Proven track record of building projects efficiently and delivering superior shareholder returns Pre-Acquisition First Quantum Australia 19% Europe 10% Post-Acquisition First Quantum Australia 10% Africa 36% 1 Mtpa1 Africa 71% E Copper production Americas 45% 1.3 Mtpa 1 Europe 9% 3

4 Strong Q Results Copper production 36% higher to 114,488 tonnes Nickel production up 26% to 12,485 tonnes Gold production 29% higher to 65,368 ounces Copper production cash costs lower by 19% to $1.16 per pound Comparative net earnings of $143.6 million or $0.24 per share inclusive of $21.9 million or $0.04 per share of unfavorable, recurring acquisition-related adjustments Unfavorable impact of $112.9 million due to lower metal prices Q3 '12 Q4 '12 Q1 '13 Q2'13 Q3'13 Q3 '12 Q4 '12 Q1 '13 Q2'13 Q3'13 Q3 '12 Q4 '12 Q1 '13 Q2'13 Q3'13 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Copper Production Nickel Production Gold Production Copper Cash Production Cost 4

5 High-Quality, Stable Operations 5

6 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 As at December 31, 2012, the estimated mine life was ~17 years Workforce = ~1,700 6

7 High-Quality, Stable Operations Kansanshi Cu-Au mine, Zambia Higher year-over-year production reflecting capacity expansion Q3 13 performance 71,037 tonnes of copper; 43,904 ounces of gold C1 cash cost of US$1.25/lb. Multi-phase capacity expansion project underway Expansion Project Capacity Completion Estimate Cost (US$M) Production Impact Oxide 7.2 mtpa Complete 31 Copper: 10,000-15,000 tpa Oxide 14.5 mtpa Copper: 60,000-75,000 tpa Smelter 1.2 mtpa Smelter Acid 1.0 Mtpa % increase in overall production capacity % increase in oxide production capacity % increase in sulphide production capacity Sulphide 25 mtpa Copper: 60,000-70,000 tpa 7

8 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 mine life was ~ 9 years (including stockpiles) based on current operations First production in 2006 Workforce = ~1,470 8

9 High-Quality, Stable Operations Guelb Moghrein Cu-Au mine, Mauritania Stronger, more sustained performance over the past 12 months Focused on improving plant availability IOCG type deposit - structure and mineralogy has common features with other IOCG deposits elsewhere in the world Magnetite plant project: In detailed design stage Estimated capex of $50M Expected annual production of 1M - 2M tonnes of 69% Fe magnetite concentrate Expected start up in mid 2014 Expected to extend mine life through retreatment of tailings dam 9

10 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 Workforce = ~405 Q3 13 performance tonnes of contained nickel C1 cash cost of US$4.85/payable lb. 10

11 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 Approval to increase throughput to a maximum of 10Mtpa from 5.5Mtpa Public hearings & inspections held in September; decision expected within 6 months 11

12 High-Quality, Stable Operations Las Cruces Cu mine, Spain Acquired in March 2013 Estimated mine life of 9 years; potential for extension Current average reserve grade of 5.4% copper Workforce = 250 direct employees; 650 contractors Annual production capacity 72,000 tonnes of copper cathode Q3 13 cash cost of US$0.69/lb. 12

13 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 Q C1 cash cost of US$0.98/lb. copper 2013 Estimates: 23,000 26,000 tonnes of copper 30,000 32,000 tonnes of zinc 13

14 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 Q3 C1 cash cost of US$0.65/lb. copper 2013 Estimates: 9,000 11,000 tonnes of copper 16,000 18,000 tonnes of zinc 820,000 tonnes pyrite 14

15 Outlook for 2013 Production Copper (000 s tonnes) Nickel (000 s contained tonnes) Gold (000 s ounces) Zinc (000 s tonnes) Group Kansanshi Guelb Moghrein Ravensthorpe Kevitsa Çayeli Las Cruces Pyhäsalmi Unit cash cost Copper (US$/lb.) Nickel (US$/lb.) Group $ $1.45 $ $5.60 Capital expenditure Excluding Cobre Panama $2.0 billion 1 The production guidance shown above for Çayeli, Las Cruces and Pyhäsalmi represents guidance from acquisition date of March 22, 2013 until the end of the year. 15

16 Our Development Project Pipeline 16

17 Our Project Pipeline Copper Smelter, Zambia Processing capacity of 1.2 Mtpa 71% Sentinel 100% Kansanshi Average copper grade 26% Copper production 300,000 tpa; acid production 1.0 Mtpa Estimates: Capital cost of US$650M Operating cost US$69/tonne of concentrate Commissioning from mid 2014 Estimated savings: US$340M - US$510M/year 17

18 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 Annual production up to 300,000 tonnes US$2.0 billion capex (incl. Enterprise nickel project) Includes 4 Mtpa nickel facility; flexibility to augment copper capacity 18

19 Our Project Pipeline Cobre Panama Cu project, Panama Acquired March 2013 Large open pit copper project; Larger project than the Panama Canal Est. mine life of 40 years Est. average annual production of 260,000 tonnes copper Progress since acquisition: Several contracts modified or cancelled Access to site improved Components for power plant arriving on site Biodiversity, environmental and social programs continuing 19

20 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 20

21 One of the Few Mining Companies Investing in Building Capacity

22 Forces at work in copper market suggest medium- to long-term prices driven by greenfield incentive pricing as market tightens $ /lb Short- and medium-term corrections to demand especially if deficit is expected to be prolonged $ /lb Incentive price for marginal greenfield projects needed to meet modest demand growth ~$3.00/lb Strategic buyers see value versus all-in cash costs and future greenfield needs $ $3.00/lb 90th percentile total cash + susex cost (growing at 2.5% p.a. on a real basis) $2.20/lb 90 th percentile C1 cash cost (growing at 2.5% p.a. on a real basis) Slowing growth driven by macroeconomics Price floor on a year over year basis Price floor on a quarter over quarter basis Design adjustments and substitution Strategic buyers and traders, disruptions and project issues Real cost inflation, strained balance sheets and need for miners to have cash to replace reserves Mines depleting, projects difficult to build and fund Medium- to long-term price range Short-term price range Analyst LT consensus price 22

23 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 E Copper Production, Mt Freeport- McMoRan Glencore Xstrata Codelco First Quantum BHP Billiton Southern Copper Rio Tinto Anglo American KGHM Kazakhmys Teck Resources Vale Antofagasta Norilsk First Quantum 2012 Source: BrookHunt 23

24 The New Leader in Global Copper November 2013