TORONTO, October 26, 2017 /PRNewswire/ --
(In United States dollars, except
where noted otherwise)
First Quantum Minerals Ltd. ("First Quantum" or the
"Company", TSX Symbol "FM") today announced a comparative
loss[1] of $28
million ($0.04 per
share[1]), net loss from continuing
operations attributable to shareholders of the
Company[1] of $52
million ($0.08 per share) and
cash flows from continuing operating activities of $267 million ($0.39
per share[1]) for the three months ended
September 30, 2017. The results
include a $157 million loss realized
under the copper sales hedge program for which no tax credit is
available.
THIRD QUARTER 2017
SUMMARY[2]
- Good Overall Operational Performance:
- Continued strong copper production[3
]with 145,376 tonnes:
- The Sentinel mine turned in its strongest performance to date
despite reduced power supply for about a five-week period:
- Its throughput increased to 11.4 million tonnes of ore, average
recovery improved to 89%, production reached 53,533 tonnes of
concentrate and unit cost lowered to $2.05 and $1.62 per
pound for all-in sustaining cost and cash cost, respectively.
- Maintained low unit copper production
cost[4]: All-in sustaining ("AISC") =
$1.75 per pound; Cash cost ("C1") =
$1.21 per pound; Total cost ("C3") =
$2.03 per pound.
- Set a new quarterly copper sales record of 148,894
tonnes: Reduced copper anode inventory to
approximately 36,000 tonnes from about 56,000 tonnes at the end of
the second quarter.
- A Robust Project Development Program:
- Cobre Panama development capital estimate revised;
project advanced to 63% completion:
- Our estimate now stands at $5.71
billion. This includes the cost of rectification of certain
components of the power station, additional spare equipment
purchases and several improvements derived from our experience at
both Sentinel and the Kansanshi smelter, which are expected to
benefit start-up, operations and future sustaining capital. We
continue to evaluate other enhancements including the installation
of an eighth mill - which would increase throughput further but
together with additional pre-stripping, would add to the current
estimate.
- Capital estimate for 2017 is now $1,250
million with our share being $750
million assuming the current 80% ownership.
- Commissioning activities for the first generating set of the
power station and shared facilities are progressing well.
- The entire project remains scheduled for phased commissioning
during 2018, with continued ramp-up over 2019.
- We are continuing environmental impact assessment studies
at our advanced-stage exploration projects, Haquira and
Taca Taca, with the aim of having
the necessary information available to support go-forward decisions
in 2019.
- Continuing To Further Strengthen The Balance Sheet And
Manage Operational And Price Risk:
- On October 19, 2017, we signed
an agreement to refinance our corporate facilities with a
new $2.2 billion Facility that has improvements to the
interest rate, financial covenants and amortization
schedule.
- We continue to advance the process to put in place project
financing for the Cobre Panama project towards completion and
drawdown expected in the first quarter of 2018.
- At October 26, 2017, our
copper sales hedge program consisted of unsettled and unmargined
sales hedges for 184,250 tonnes with maturities to September 2018 at an average price of
$2.51 per pound and zero cost collar
unmargined sales contracts for 120,500 tonnes at a spread of
$2.56 - $3.37 per pound with
maturities to December 2018.
- We remain in full compliance with all financial covenants
and ended the quarter with $508
million of committed undrawn facilities and $476 million in net unrestricted cash and net
cash equivalents.
- Corporate And Other Developments:
- Kansanshi and Sentinel are being provided unrestricted
power for the first time since July
2015:
- This follows an agreement on a tariff increase, to
approximately $0.09 per kilowatt
hour, provided we can import a portion of our total power
requirements from alternative suppliers.
- Increasing our ownership in Minera Panama, which holds
the concession to Cobre Panama, to 90%:
- We expect to close this agreement and the associated additional
precious metals stream agreement in the fourth quarter.
- Ravensthorpe Placed On Care And Maintenance Effective
October 2017:
- No impairment of the operation has been recognized based on the
higher longer term consensus nickel price.
- We are reviewing market conditions regularly for the potential
restart of operations while continuing with the permitting process
for the Shoemaker Levy deposit.
[1] Net earnings (loss) attributable to
shareholders of the Company and Earnings before interest, tax,
depreciation, amortization and impairment ("EBITDA") have been
adjusted to exclude items which are not reflective of underlying
performance to arrive at comparative earnings (loss) and
comparative EBITDA. EBITDA, comparative earnings (loss),
comparative earnings (loss) per share, comparative EBITDA and cash
flows per share are not measures recognized under IFRS and do not
have a standardized meaning prescribed by IFRS. The Company
has disclosed these measures to assist with the understanding of
results and to provide further financial information about the
results to investors. Refer to the "Regulatory Disclosures" section
in the MD&A for the quarter ended September 30, 2017 for further
information.
[2] On June 1,
2016 the sale of the Kevitsa mine was completed. In
accordance with the requirements of IFRS 5 - Non-current assets
Held for Sale and Discontinued Operations, the financial and
operating information presented for 2016 exclude the Kevitsa
mine.
[3 ]Production is presented on a copper
contained basis, and is presented prior to processing through the
Kansanshi smelter.
[4] AISC, C1 and C3 cost per pound are not
recognized under IFRS. Refer to the "Regulatory Disclosures"
section in the MD&A for the quarter ended September 30, 2017 for further
information.
CEO's COMMENTS
"This was a very constructive quarter for First Quantum as we
made significant progress towards several of our key objectives,"
noted Philip Pascall, Chairman and
CEO.
"On our copper growth objective, it is pleasing to see
Sentinel's performance as the steps taken earlier this year gain
traction. The mine has already made a meaningful impact on our
production and sales volumes, and we have set yet another quarterly
benchmark. With unrestricted power now being provided to both our
operations in Zambia, Sentinel is
well positioned to be one of the pillars in the Company's
production.
"Like many in our industry, strengthening the financial position
has been a key objective. Our recent refinancing, together with
other initiatives successfully executed over the past two years,
has accomplished a lot in that regard. Our copper sales hedge
program was important to protect financial covenants in the
turbulent price environment of the past few years. However, with
our much improved financial position and the more positive
sentiment for base metals, it is now appropriate to employ other
financial instruments to protect against the downside risk while
enabling our shareholders to benefit more from the better market
conditions.
"First Quantum's growth in copper is set to continue in the
near-term with the construction of our tier-one Cobre Panama
project which is expected to start phased commissioning within 12
months. Our imminent acquisition of an additional 10% interest in
the project reinforces our confidence not only in this project, but
also in the strong fundamentals for copper. We are very pleased
that this opportunity became available when it did and that we have
been able to reach agreement with LS-Nikko Copper on terms that
match the timetable for the development and commissioning of Cobre
Panama," Mr. Pascall concluded.
OPERATING HIGHLIGHTS[4]
Three months ended Nine months ended
September 30 September 30
(U.S. dollars where applicable) 2017 2016 2017 2016
COPPER
- Production (tonnes) 145,376 142,721 419,644 393,357
- Sales (tonnes) 148,894 136,051 428,225 399,348
- Cost of production:
o AISC (per lb) $1.75 $1.36 $1.62 $1.35
o C1 (per lb) $1.21 $0.97 $1.20 $0.99
o C3 (per lb) $2.03 $1.74 $2.01 $1.80
- Realized price (per lb) $2.37 $2.23 $2.28 $2.27
NICKEL
- Production (contained tonnes) 6,325 5,330 17,837 17,418
- Sales (contained tonnes) 7,099 5,454 17,818 19,809
- Cost of production:
o AISC (per lb) $4.67 $5.90 $5.32 $5.39
o C1 (per lb) $4.16 $5.01 $4.46 $4.72
o C3 (per lb) $5.77 $6.71 $6.12 $6.40
- Realized price (per payable lb) $4.77 $4.68 $4.63 $4.17
GOLD
- Production (ounces) 47,213 52,957 147,832 159,778
- Sales (ounces) 51,729 54,124 150,653 187,163
FINANCIAL HIGHLIGHTS
Three months ended Nine months ended
September 30 September 30
(U.S. dollars millions, except
where noted otherwise) 2017 2016 2017 2016
Sales revenues 877 605 2,425 1,984
Gross profit 83 80 218 287
Net earnings (loss) from continuing
operations
attributable to shareholders of the Company (52) 36 (201) 210
Net loss from discontinued operations - - - (267)
Net earnings (loss) per share from continuing
operations attributable to shareholders
of the Company ($0.08) $0.05 ($0.29) $0.31
Net earnings (loss) per share[5] ($0.08) $0.05 ($0.29) ($0.08)
Basic and diluted earnings (loss)
per share[5] ($0.08) $0.05 ($0.29) ($0.08)
Comparative EBITDA 304 220 836 746
Comparative earnings (loss) (28) 37 (75) 138
Comparative earnings (loss) per share ($0.04) $0.05 ($0.11) $0.20
Cash flows from continuing
operating activities 267 263 711 821
[5]2016 figures include discontinued operations.
CONFERENCE CALL & WEBCAST
Conference call and webcast details are as follows:
Date: October 27, 2017
Time: 9:00 am (Eastern); 2:00 pm (British); 6:00 am (Pacific)
Webcast: http://www.first-quantum.com
Dial in: North America: (toll free) 1 877 291 4570
North America and international: 1 647 788 4919
United Kingdom: (toll free) 0 800 051 7107
Available from noon (Eastern) on October 27 until 11:59 pm (Eastern) on
Replay: November 10, 2017
North America: (toll free) 1 800 585 8367
North America and international: 1 416 621 4642
Passcode: 1057757
COMPLETE FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND
ANALYSIS
The complete unaudited consolidated financial statements and
Management's Discussion and Analysis for the quarter ended
September 30, 2017 are available
at http://www.first-quantum.com and should be read in
conjunction with this news release.
On Behalf of the Board of Directors of First Quantum Minerals
Ltd.
G. Clive Newall
President
For further information visit our website
at http://www.first-quantum.com
CAUTIONARY STATEMENT ON FORWARD-LOOKING
INFORMATION
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. The forward-looking statements include
estimates, forecasts and statements as to the Company's
expectations of production and sales volumes, and expected timing
of completion of project development at Cobre Panama and Enterprise
and are subject to the impact of ore grades on future production,
the potential of production disruptions, capital expenditure and
mine production costs, the outcome of mine permitting, the outcome
of legal proceedings which involve the Company, information with
respect to the future price of copper, gold, nickel, zinc, pyrite,
cobalt and sulphuric acid, estimated mineral reserves and mineral
resources, First Quantum's exploration and development program,
estimated future expenses, exploration and development capital
requirements, the Company's hedging policy, and goals and
strategies. Often, but not always, forward-looking statements or
information can be identified by the use of words such as "plans",
"expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate" or "believes" or variations of such words and
phrases or statements that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved.
With respect to forward-looking statements and information
contained herein, the Company has made numerous assumptions
including among other things, assumptions about continuing
production at all operating facilities, the price of copper, gold,
nickel, zinc, pyrite, cobalt and sulphuric acid, anticipated costs
and expenditures and the ability to achieve the Company's goals.
Forward-looking statements and information by their nature are
based on assumptions and involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements, or industry results, to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements or
information. These factors include, but are not limited to, future
production volumes and costs, the temporary or permanent closure of
uneconomic operations, costs for inputs such as oil, power
and sulphur, political stability in Zambia, Peru,
Mauritania, Finland, Spain, Turkey, Panama, Argentina and Australia, adverse weather conditions in
Zambia, Finland, Spain, Turkey, Mauritania and Panama, labour disruptions, power supply,
mechanical failures, water supply, procurement and delivery of
parts and supplies to the operations, and the production of
off-spec material.
See the Company's Annual Information Form for additional
information on risks, uncertainties and other factors relating to
the forward-looking statements and information. Although the
Company has attempted to identify factors that would cause actual
actions, events or results to differ materially from those
disclosed in the forward-looking statements or information, there
may be other factors that cause actual results, performances,
achievements or events not to be anticipated, estimated or
intended. Also, many of these factors are beyond First Quantum's
control. Accordingly, readers should not place undue reliance on
forward-looking statements or information. The Company undertakes
no obligation to reissue or update forward-looking statements or
information as a result of new information or events after the date
hereof except as may be required by law. All forward-looking
statements and information made herein are qualified by this
cautionary statement.
North American contact: Sharon
Loung, Director, Investor Relations, Tel: +1-647-346-3934,
Fax: +1-604-688-3818, Toll Free: +1-888-688-6577, E-Mail:
sharon.loung@fqml.com; United
Kingdom contact: Clive
Newall, President, Tel: +44-140-327-3484, Fax:
+44-140-327-3494, E-Mail: clive.newall@fqml.com