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Corporate Presentation - November 2013
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
โข Geographically diversified asset base
โข 7 high-quality, stable operations; current
total copper and nickel production
capacities of 445 ktpa and 45 ktpa,
respectively
โข 4 major projects with completion targeted
from mid-2014 to 2017
โข Total production capacities for copper and
nickel to rise to 1.3 Mtpa and 110 ktpa,
respectively by 2018
โข Proven track record of building projects
efficiently and delivering superior
shareholder returns
โข Low-cost producer: $1.37 - $1.45/lb
copper; $5.20 - $5.60/lb nickel
Pre-Acquisition First Quantum
Post-Acquisition First Quantum
Australia
10%
Australia
19%
Africa
36%
Europe
10%
Americas
45%
Africa
71%
1
Mtpa1
1.3
1 2018E
Copper production
Europe
9%
Mtpa1
3
4. Strong Q3 2013 Results
โข Copper production 36% higher to 114,488 tonnes
โข Nickel production up 26% to 12,485 tonnes
โข Gold production 29% higher to 65,368 ounces
โข Copper production cash costs lower by 19% to $1.16 per pound
โข Comparative net earnings of $143.6 million or $0.24 per share
โข
โข
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
Copper Production
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
Nickel Production
Gold Production
Copper Cash
Production Cost
4
6. High-Quality, Stable Operations
Kansanshi Cu-Au mine, Zambia
โข Located near Solwezi in the north
western Province of Zambia
โข First production in 2005
โข Open pit mining
โข Flexible ore treatment to allow for
variation in ore type :
โ sulphide circuit; oxide circuit; gold
facility
โข As at December 31, 2012, the
estimated mine life was ~17 years
โข Workforce = ~1,700
6
8. High-Quality, Stable Operations
Guelb Moghrein Cu-Au mine, Mauritania
โข 100% ownership
โข Located 250 kilometres northeast of
the nationโs capital, Nouakchott
โข As at December 31, 2012, the
estimated mine life was ~ 9 years
(including stockpiles) based on current
operations
โข First production in 2006
โข Workforce = ~1,470
8
9. High-Quality, Stable Operations
Guelb Moghrein Cu-Au mine, Mauritania
โข Stronger, more sustained performance
over the past 12 months
โข Focused on improving plant availability
โข IOCG type deposit - structure and mineralogy
has common features with other IOCG
deposits elsewhere in the world
โข Magnetite plant project:
โ In detailed design stage
โ Estimated capex of $50M
โ Expected annual production of 1M - 2M tonnes
of 69% Fe magnetite concentrate
โ Expected start up in mid 2014
โ Expected to extend mine life through retreatment of
tailings dam
9
10. High-Quality, Stable Operations
Ravensthorpe Ni mine, Australia
โข Acquired as a decommissioned plant
in 2010
โข First production within 20 months
of purchase
โข Estimated mine life of 32 years
โข Commercial production declared
Dec 28 2011
โข Workforce = ~405
โข Q3 โ13 performance
โ 9.917 tonnes of contained nickel
โ C1 cash cost of US$4.85/payable lb.
10
11. High-Quality, Stable Operations
Kevitsa Ni-Cu-PGE mine, Finland
โข Built, commissioned and started
commercial operations within 36
months of board approval
โข Estimated mine life of 29 years
โข Commercial production declared
August 2012
โข Workforce = ~290
โข Further potential
โ Process optimization
โ Approval to increase throughput to a
maximum of 10Mtpa from 5.5Mtpa
โ Public hearings & inspections held in
September; decision expected within 6
months
11
12. High-Quality, Stable Operations
Las Cruces Cu mine, Spain
โข Acquired in March 2013
โข Estimated mine life of 9 years;
potential for extension
โข Current average reserve grade of
5.4% copper
โข Workforce = 250 direct employees;
650 contractors
โข Annual production capacity โ 72,000
tonnes of copper cathode
โข Q3 โ13 cash cost of US$0.69/lb.
12
13. High-Quality, Stable Operations
รayeli Cu-Zn mine, Turkey
โข Acquired in March 2013
โข Estimated mine life of 6 years with
potential for an additional 3 years
โข Average grade of 3.1% copper and
3.6% zinc
โข Workforce = 493 employees
โข Q3 2013 C1 cash cost of US$0.98/lb.
copper
โข 2013 Estimates:
โ 23,000 โ 26,000 tonnes of copper
โ 30,000 โ 32,000 tonnes of zinc
13
14. High-Quality, Stable Operations
Pyhรคsalmi Cu-Zn mine, Finland
โข Acquired in March 2013
โข One of the most efficient underground
mines in the world
โข Estimated mine life of 6 years
โข Average grade of 1.1% copper and 1.9% zinc
โข Workforce = 261 employees
โข Q3 C1 cash cost of US$0.65/lb. copper
โข 2013 Estimates:
โ 9,000 โ 11,000 tonnes of copper
โ 16,000 โ 18,000 tonnes of zinc
โ 820,000 tonnes pyrite
14
15. Outlook for 2013
Production
Copper
Zinc
(000โs contained tonnes)
(000โs ounces)
(000โs tonnes)
397 - 416
260 - 267
37 - 41
15 - 16
23 - 26
53 - 55
9 - 11
44 - 47
35 โ 37
9 - 10
-
232 โ 250
155 โ 165
56 โ 61
11 - 12
4โ5
6-7
46 - 50
30 - 32
16 - 18
Copper
Nickel
Unit cash cost
Capital
expenditure
Gold
(000โs tonnes)
Group
Kansanshi
Guelb Moghrein
Ravensthorpe
Kevitsa
รayeli1
Las Cruces1
Pyhรคsalmi1
Group
Nickel
(US$/lb.)
(US$/lb.)
$1.37 - $1.45
$5.20 - $5.60
Excluding
Cobre Panama
$2.0 billion
The production guidance shown above for รayeli, Las Cruces and Pyhรคsalmi
represents guidance from acquisition date of March 22, 2013 until the end of the year.
1
15
17. Our Project Pipeline
Copper Smelter, Zambia
โข
Processing capacity of 1.2 Mtpa
โ71% Sentinel
โ100% Kansanshi
โAverage copper grade 26%
โข
Copper production 300,000 tpa; acid
production 1.0 Mtpa
โข
Estimates:
โ Capital cost of US$650M
โ Operating cost US$69/tonne of
concentrate
โ Commissioning from mid 2014
โข Estimated savings: US$340M - US$510M/year
17
18. Our Project Pipeline
Sentinel Cu project, Zambia
โข Located ~ 140 km northwest of
Solwezi, northern Zambia
โข M&I resource of 1,027 Mt at 0.51% Cu
grade, containing 5.2 Mt Cu
โข Estimates:
โ 2.2:1 LOM strip ratio
โ >15 years mine life
โ Annual production up to 300,000
tonnes
โ US$2.0 billion capex (incl. Enterprise
nickel project)
โข Includes 4 Mtpa nickel facility; flexibility
to augment copper capacity
18
19. Our Project Pipeline
Cobre Panama Cu project, Panama
โข Acquired March 2013
โข Large open pit copper project; Larger
project than the Panama Canal
โข Est. mine life of 40 years
โข Est. average annual production of
260,000 tonnes copper
โข Progress since acquisition:
โ
โ
โ
โ
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
โข Focused on community &
environmental aspects
โข Potential:
- 20 year mine life
โ 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
$3.75 - 4.00/lb
Short- and medium-term
corrections to demand
especially if deficit is
expected to be prolonged
$3.25 - 3.50/lb
Incentive price for
marginal greenfield
projects needed to meet
modest demand growth
Design
adjustments and
substitution
Slowing growth
driven by
macroeconomics
Mines depleting,
projects difficult to
build and fund
~$3.00/lb
Strategic buyers see value
versus all-in cash costs and
future greenfield needs
$2.80 - $3.00/lb
90th percentile total cash
+ susex cost (growing at
2.5% p.a. on a real basis)
$2.20/lb
90th percentile C1 cash
cost (growing at 2.5% p.a.
on a real basis)
Price floor on a year over year basis
Medium- to
long-term
price
range
Short-term
price
range
Strategic buyers and
traders, disruptions and
project issues
Real cost inflation, strained balance
sheets and need for miners to have
cash to replace reserves
Analyst LT
consensus
price
Price floor on a quarter over quarter basis
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
1.8
2018E Copper Production, Mt
1.5
0.5
0.5
0.4
0.4
0.3
First Quantum
2012
0.5
Norilsk
0.6
Antofagasta
0.8
Teck Resources
0.8
Kazakhmys
Southern
Copper
BHP Billiton
First Quantum
Codelco
Glencore
Xstrata
FreeportMcMoRan
0.9
Vale
1.2
KGHM
1.3
Anglo American
1.5
Rio Tinto
โข
โข
โข
โข
Source: BrookHunt
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