A Rapidly Growing Metals & Mining Company www.first-quantum.com February 2012 TSX: FM LSE: FQM LuSE: FQMZ 1
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 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
First Quantum What Do Our Shareholders Own? A substantial copper producer with a pipeline of expansions and new projects An emerging nickel producer with growth opportunities A strong balance sheet Production in an industry with strong fundamentals Most importantly, the ability to add value through efficient delivery of growth at costs below industry norms 3
What We Have Delivered So Far Copper Growth (1) 2000-2011 CAGR (%) Total Annualised Shareholder Return (2) January 2000 December 2011 (%) Barrick Southern Copper First Quantum Xstrata 23% 22% 20% 34% First Quantum Inmet Southern Peru Antofagasta Norilsk 15% 22% 21% 24% 32% Teck 18% Vale 12% Freeport Glencore Antofagasta 7% 10% 12% BHP Billiton Teck Eramet Freeport 7% 6% 6% 4% Anglo American 4% Hudbay 3% BHPB Norilsk Codelco 3% 1% 1% Lundin Rio Tinto Xstrata Vedanta 3% 2% 2% 2% KGHM 0% Anglo American 2% Kazakhmys Rio Tinto (4)% (1)% Kazakhmys ENRC 1% 0% (1) Source: Brook Hunt. Inclusive of corporate acquisitions. (2) Source: CapIQ. 4
Long-Term Targets 1000 Copper Production 000 s tonnes 125 Nickel Production 000 s tonnes 800 100 600 75 400 50 200 25 0 04 06 08 10 12F 14F 16F 18F 0 04 06 08 10 12F 14F 16F 18F Base Projects Base Projects Optional 5
What We Are Looking to Deliver: Copper Growth Remains Best in Class 2016 Copper Producer Landscape Copper Growth (Mt) 6 th Largest Global Copper Producer by 2016 13 th Largest Global Copper Producer Currently 2011 2016 CAGR (%) FQM Vale 29.2% S Copper Xstrata Glencore Rio Tinto 1.0 Kazakhmys Barrick Vedanta KGHM BHPB Norilsk 0.3 Codelco Anglo Freeport Antofagasta Teck Source: Brook Hunt. First Quantum estimates based on management projections. 6
Tripling Copper Production Capacity
Kansanshi Copper-Gold Mine 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 On-going program of resource development and exploration Workforce of ~1,515 8
Kansanshi Mining Volumes & Strip Ratio 9
Kansanshi Sulphuric Acid Supply 10
Kansanshi Improving Ore Availability 11
Kansanshi Multi-Phase Expansion Expansion Project Capacity Completion Estimate Cost Production Impact ($ millions) Acid Plant 5 1000t/day 2012 18 Oxide 7.2 mtpa 2012 31 Copper: 10,000-15,000 tpa Oxide 12 mtpa 2013-2014 200 Copper: 60,000-75,000 tpa Smelter 1.2 mtpa 2014 635 Smelter Acid - 900,000 tpa @ $40-$50/tonne Sulphide 14-16 mtpa 2015 400 Copper: 60,000-70,000 tpa 12
Kansanshi Copper Smelter Project Parameters Concentrate feed rate 1.2 Mtpa 67% Sentinel 33% Kansanshi Average copper grade 26% Blister copper production 300,000 tpa Acid production 1.0 Mtpa 13
Kansanshi Copper Smelter Project Key Estimates Capital cost of US$635M Commissioning from mid 2014 Operating cost US$69/t of concentrate 14
Economic Benefits of the Copper Smelter Transport Kansanshi 100% to Zambian Smelters Sentinel 900,00 1,200,000 to export less 300,000 t Blister Cost per annum @ $220/t: $130M to $ 200M Export Levy Current 10% of export value Sentinel Annual export 230,000 310,000 copper in concentrate Cost per annum Cu @ $ 7,000/t: $160M to $ 220M Acid Supply Current consumption 1,200 tpd @$ 200/t: $ 90Mpa Increase with AP5 + 900 tpd @$ 200/t: $ 150Mpa Annual Savings $ 340M to $ 510M 15
Guelb Moghrein Copper-Gold Mine 100% ownership Located 250 kilometres northeast of the nation s capital, Nouakchott As at December 31, 2011, the estimated minelife was approximately 10 years (including stockpiles) First production in 2006 Workforce of ~1,200 16
Guelb Moghrein Copper-Gold Mine 2011 production challenged with plant utilization issues but tonnage increases evident at year end Mining side performed positively 2012 focus on improved throughput and recoveries to increase copper production 17
Guelb Moghrein - Outlook 500 450 400 350 300 250 200 150 100 50 0 Average tonnes per operating hour 2007 2008 2009 2010 2011 Dec 2011 2012 Feed tonnage rising during operating hours with improved grinding and HPGR operation Additional mill and further modifications to existing circuits expected to achieve desired tonnage targets. Improvements to equipment utilization required Copper recovery over 90% Tonnage increased more consistently to meet design 18
Ravensthorpe Nickel Operation 20 Months from Purchase to Production Purchased in February 2010 for US$340M Design phase February December 2010 Modifications July 2010 September 2011 Commissioning June December 2011 First product 4 October 2011 First exports 25 November 2011 19
Ravensthorpe Making it Work Front-end materials handling Dewatering Buffer storage capacity Refurbish existing plant Tailings Storage Facility 20
Ravensthorpe Operational Achievements Crushing: SAP and LIM achieved design of 2000 tph Beneficiation: SAP 550 tph vs design of 455 tph LIM 1200 tph vs design of 1177 tph Atmospheric Leach: 180 tph vs design of 135 tph PAL Trains: 150 tph vs design of 150 tph MHP Loadout: 120 tpd Ni vs design of 137 tpd Acid Plant: 4200 tpd vs design of 4400 tpd 21
Ravensthorpe Going Forward Target operations: 39 ktpa for the first five years; 28 ktpa over the life of mine; C1 cost of ~$7.00 per lb (1) Expected mine life >30 years Three ore bodies: Halleys, Hale-Bopp, Shoemaker-Levy 480 staff (1)At current sulphur prices 22
Kevitsa Nickel-Copper-PGE Project 100% owned; Acquired in 2008 Large undeveloped sulphide nickel deposit suitable for open cast mining 240M tonnes @ 0.30% Ni (0.28 NiSulphide) and 0.41% Cu Initial ore feed of 5.5 mt/yr with intention to expand by ~50% in 2013 On-going drill program continues to deliver encouraging results 23
Kevitsa Nickel-Copper-PGE Project First product expected in May, sales in July, 2012 Target operations: 10 ktpa nickel @ ~$6.70 / lb 20 ktpa copper @ ~$1.10 / lb Workforce primarily from Lapland; FQM technical staff in key areas Preliminary mining, process and engineering staff established on-site and assisting with initial startups Negotiations underway with various offtake customers 24
Sentinel Copper Project Located ~ 140 km northwest of Solwezi, Northern Zambia Resource update being finalized EIA and land use agreement obtained Estimates: Production to start at 150 ktpa copper concentrate initially, rising up to 300 ktpa Strip ratio 2:1 Mine life over 20 years C1 costs between $1.10 - $1.20/lb 25
Sentinel Copper Project Project Total Cost Nominal 20Mtpa Plant Mining 299 495 Treatment Plant 393 645 Infrastructure 217 335 Indirects 169 250 Nominal 40Mtpa Plant Total 1,078 1,725 26
Sentinel Copper Project Project Status Committed deliveries for mills, gearless mill drives, crushers and mining fleet Flowsheets completed Concept layouts and detailed estimates complete Equipment list complete 300-man construction camp complete 27
Sentinel Copper Project Project Status Power scope defined and commercial discussions are continuing Mine planning commenced Internal reviews undertaken Site access complete Pending Board approval 28
Enterprise Nickel Project Located 12 km northwest of Sentinel High grade sulphide nickel open pit potential Potential to produce 40-70 ktpa of Ni vaesite nickeloan pyrite 29
Enterprise Nickel Project Current focus continue to define resource, design the mine and confirm process route Campaign treatment at the Sentinel facilities significantly reduces capital utilization of re-grind mills and cleaner circuits Open pit mining potential one-off pre-strip utilizing Sentinel mining fleet 30
Haquira Copper Project Acquired in December 2010 Large scale copper project located in southern Peru M&I resource of 3.7 Mt of copper equivalent and an inferred resource of 2.4 Mt of copper equivalent Currently focused on: Community relations and land access Expanding infill and condemnation drill program and environmental matters 31
Long-term Copper Dynamics 15
Copper Price Estimates Over Time 4.50 Copper Price (US$ / lb Cu) 2009 4.00 3.50 2010 2011 3.00 2.50 2.00 1.50 1.00 0.50 2000 Actual 2008 2011 2007 Long Term 2010 LT 2009 LT 2008 LT 2004 2006 2007 LT 2002 2003 2005 2006 LT 2001 2004 LT 2001 LT 2002 LT 2003 LT 2005z LT 2000 LT 0.00 Long Term Price Estimate 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Broker Research 33
Surpluses Overestimated & Deficits Underestimated Brook Hunt Supply / Demand Forecast vs. Actual Supply / Demand Surplus (Deficit) (ktpa) 1,500 Copper Demand (ktpa) 19,000 1,137 1,000 960 648 737 18,000 500 236 424 295 0 0 78 17,000 (77) (134) (135) (500) (293) (422) (334) 16,000 (1,000) (1,080) (1,500) 2003 2004 2005 2006 2007 2008 2009 2010 3-Year Prior Estimate Actual Copper Demand 15,000 Source: Brook Hunt and USGS 34
Copper Grades Have Declined Significantly Grades of Global Copper Mined % Cu 1.60 1.40 Lack of sizeable, high quality production coming on-stream 1.20 1.00 Initial production of Grasberg and Escondida 0.80 0.60 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Source: Brook Hunt. Broker Research 35
Emerging Markets Substantial Growth Ahead GDP per Capita US$ 35,000 30,000 USA 25,000 UK 20,000 15,000 10,000 5,000 Brazil China Russia 0 1835 1855 1875 1895 1915 1935 1955 1975 1995 Source: Maddison 36
Projected Impact on the Copper Market Key Points Should China, India and Brazil all grow in line with population forecasts and reach copper use per capita equivalent to, say, the EU-27 country group by 2020, the increased annual copper demand would be approximately 10 Mtpa, equivalent to: ca. 60% of current annual global copper demand Nine new Escondidas being brought on line Intensity of Refined Copper Consumption (1) kg Cu per capita 25 20 15 10 5 0 Aggregate Copper Use per Capita: 3.0 kg per capita 0.55 1.80 Source: International Copper Study Group 5.50 Multiple of India, Brazil, China Average Intensity of Use (x) 2.1x 6.30 India Brazil China EU 27 Japan Germany Korea Taiwan 2.3x 7.00 4.5x 13.7 6.1x 18.50 7.1x 21.50 Illustrative Scenarios Assuming Increased Intensity of Cu Consumption for China, India and Brazil New Annual Cu demand No. of New Escondidas (2) No. of New First Quantum s (3) If China, India and Brazil reach the copper intensity of EU27 countries by 2020, this equates to... If China, India and Brazil reach the copper intensity of Japan by 2020, this equates to... If China, India and Brazil reach the copper intensity of Germany by 2020, this equates to... (1) Defined as copper consumed by semis fabricators or first users of refined copper (ingot makers, master alloy plants, wire rod plants, brass mills, alloy wire mills, foundries and foil mills) (2) Based on Escondida 2010 production of 1.09 Mt (3) Based on FM 2010 production of 323 kt 37
Projects Less Sensitive to Copper Prices Top 25 Copper Projects Capex Intensity (US$ / t) Minimum Required Copper Price to Generate 15% IRR (US$ / tonne Cu) Source: Brook Hunt, equity research estimates. Cumulative Production (paid kt Cu) Cobre Panama (Inmet) Caracoles (Antofagasta) Caserones (JX Nippon) Sierra Gorda (Quadra FNX) El Moro (GoldCorp) Telegrapho (Antofagasta) Tampakan (Xstrata) Toromocho (Chinalco) Oyu Tolgoi (Ivanhoe) Las Bambas (Xstrata) Salobo (Vale) Los Bronces (Anglo Amer.) Cerro Verde (Freeport) Ministro Mina Hales (Codelco) Quebrada Blanca (Teck) Canariaco (Candente) Quellaveco (Anglo Amer.) Haquira (FQM) Rio Blanco (Zijin) Antamina (BHP) Antapaccay (Xstrata) Galeno (Minmetals) Sentinel (FQM) Buenavista DC (South. Cop) Konkola Deep (Vedanta) $ 21,622 $ 20,421 $ 20,045 $ 19,895 $ 18,551 $ 18,472 $ 18,400 $ 17,325 $ 16,602 $ 15,759 $ 15,514 $ 15,474 $ 15,470 $ 15,435 $ 15,000 $ 14,672 $ 14,667 $ 14,290 $ 13,611 $ 11,550 $ 10,794 $ 10,696 $ 9,079 $ 8,061 $ 6,130 38
Agreement to Dispose of DRC Assets Agreement with ENRC to dispose of all residual claims and assets Total consideration of $1.25B consisting of: $750M payable on closing $500M three-year promissory note with a 3% interest coupon Condition of closing FQM, ENRC and DRC government will settle all disputes relating to the companies beings sold, their assets and operations in the DRC, and FQM. ENRC and DRC government will be releasing one another in respect of all claims and judgments related to the foregoing or to any other matter arising in the DRC on or before the date of closing Transaction closing expected on or before February 29, 2012 39
A Rapidly Growing Mining & Metals Company Unique core technical strength behind the strong track record of value creation Existing operations provide a solid platform to support growth Strong financial position and cash flow ~$5 billion investment in growth over 2012 2016 to significantly increase copper and nickel production Growth program expected to position First Quantum as the world s 6 th largest copper producer and a top ten nickel producer 40
A Rapidly Growing Metals & Mining Company www.first-quantum.com February 2012 TSX: FM LSE: FQM LuSE: FQMZ 1
Corporate Profile Stock exchange listings & symbols (S&P/TSX 60 Index) Shares issued and outstanding Fully diluted 52-week share price range Recent share price February 17, 2012 Market capitalization $ millions Average daily trading volume - shares Dividend paid in regards to year 2010 per share Geographic breakdown of institutional shareholders TSX: FM LSE: FQM LuSE: FQMZ 476.3 million 476.3 million C$29.60 C$12.60 C$22.24 C$11.4 billion 1.6 million C$0.80 US=36%; UK=26%; Canada=23%; other=15% 42