TIDMFQM
RNS Number : 7483W
First Quantum Minerals Ld
28 April 2016
NEWS RELEASE
16-10
April 28, 2016
www.first-quantum.com
=======================
FIRST QUANTUM MINERALS REPORTS FIRST QUARTER 2016 RESULTS
(In United States dollars, except where noted otherwise)
First Quantum Minerals Ltd. ("First Quantum" or the "Company",
TSX Symbol "FM", LSE Symbol "FQM") today announced comparative
earnings(1) of $63 million ($0.09 per share) and cash flows from
continuing operating activities(2) of $254 million ($0.37 per
share(1) ) for the three months ended March 31, 2016.
FIRST QUARTER 2016 Highlights(2)
-- Achieved the highest quarterly copper production and sales
for our continuing operations of 119,287 tonnes and 131,267 tonnes,
respectively:
- Progressively higher production at Sentinel each quarter since
start-up in Q1 2015 combined with continued strong operations at
all the mines.
- Increased throughput at the Kansanshi smelter by 7% over Q4
2015 and achieved an average copper recovery of 98%.
-- C1, All-in sustaining ("AISC") and C3 cost per pound(3) for
both copper and nickel all substantially below Q1 2015:
- Copper Q1 2016: C1 cash cost = $1.03; AISC = $1.36; C3 total cost = $1.86
- Nickel Q1 2016: C1 cash cost = $4.48; AISC = $4.93; C3 total cost = $6.00
-- Realized average price for copper of $2.38 per pound exceeded
the average LME price of $2.11 primarily on account of the
Company's copper sales hedge program.
-- As previously disclosed on March 10, 2016, the Company and
Boliden entered into a share purchase agreement for the Kevitsa
mine for cash consideration of $712 million subject to requisite
competition approvals and other typical closing conditions. As of
today's date, all required competition authority approvals have now
been received and the transaction is expected to close on or before
June 1, 2016.
-- Advanced other strategic initiatives aimed at further
strengthening the balance sheet and improving the capital
structure. Among these initiatives is the process to put in place
up to $2.5 billion of project financing for Cobre Panama.
-- The Company has requested the cancellation of admission of
its shares to the standard segment of the UK Listing Authority's
Official List and of trading in its shares on the London Stock
Exchange's main market for listed securities. Pursuant to UK
Listing Rule 5.2.8, the cancellation notice period has now
commenced and cancellation is expected to take effect from 8:00 am
(BST) on May 31, 2016.
-- At quarter end, the Company was in full compliance with all
financial covenants with unrestricted cash and cash equivalents of
$269 million in addition to $1,800 million of committed undrawn
facilities.
-- The material uncertainty regarding the Company's ability to
meet the Net Debt to EBITDA ratio covenant under the debt financing
agreements, previously noted in the year-end 2015 financial
statements, has been removed as current forecasts do not indicate a
breach of the covenant over the next 12 months. This development
reflects the agreed sale of Kevitsa, the advanced stages in the
project financing and other strategic initiatives processes and
ongoing effectiveness of cost improvement and copper sales hedge
programs.
-- The development of Cobre Panama continues with priority given
to the power station and associated infrastructure and expenditures
being managed to suit market conditions.
-- Changes to the Zambian mining tax regime, including the
reduction of the royalty rate for open pit mines from 9% to a
sliding scale of between 4% to 6%, based on the copper LME price
and the repeal of the variable profits tax, have been presented to
the country's Parliament with the intention of having them passed
in the current sitting.
-- Updates to guidance for year 2016 are reductions for C1 and
AISC cost per pound for copper to reflect the sustainable cost
improvements achieved and an increase to the gold production
estimate.
(1) Net earnings (loss) attributable to shareholders of the
Company have been adjusted to exclude items which are not
reflective of underlying performance to arrive at comparative
earnings. Comparative earnings, comparative earnings per share and
cash flows per share are not measures recognized under
International Financial Reporting Standards ("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 March 31, 2016, for further
information.
(2) Operating performance measures exclude the Kevitsa mine.
(3) C1, AISC and C3 cost per pound are not recognized under
IFRS. Refer to the "Regulatory Disclosures" section in the MD&A
for the quarter ended
March 31, 2016, for further information.
ceo's COMMENTS
"It was a strong start to the year for every aspect of the
Company. The momentum generated in 2015 with the excellent
performance of the Kansanshi copper smelter and successful cost
savings and expenditure programs, continued into 2016. For four
successive quarters, our mines have delivered progressively higher
copper output and lower unit cost of production," noted Philip
Pascall, Chairman and CEO.
"On the corporate development front, the agreed sale of Kevitsa
is a major step towards our objective of further strengthening the
balance sheet. Other strategic initiatives are now well advanced
and we expect them to be finalized within the next twelve
months.
"Company-wide, we remain vigilant on cost savings and cash
outlays and to opportunities to maximize profitability and cash
flow. The delisting of our common shares from the London Stock
Exchange is a natural consequence. After 15 years of being on the
exchange, the trading volume has remained very low and as such, the
significant associated cost and administration required to maintain
the listing cannot be justified. Existing and potential
shareholders are not expected to be affected by this change as the
overwhelming majority of transactions in the shares is being
conducted on the Toronto Stock Exchange and alternative trading
systems in Canada and the United States."
OPERATING HIGHLIGHTS - CONTINUING OPERATIONS(1)
Three months
ended March
31
---------------------
(U.S. dollars where applicable) 2016 2015
-------------------------------------------------- ---------- ---------
COPPER
* Production (tonnes) (2,3) 119,287 91,910
(-) Sales (tonnes)(2) 131,267 91,082
* Cash cost of production (C1) (per lb)(4) $1.03 $1.41
* All-in sustaining cost (AISC) (per lb)(4) $1.36 $2.22
* Total cost of production (C3) (per lb)(4) $1.86 $2.39
* Realized price (per lb) $2.38 $2.58
NICKEL
* Production (contained tonnes) 7,106 4,238
* Sales (contained tonnes) 8,940 3,732
* Cash cost of production (C1) (per lb)(4) $4.48 $4.66
* All-in sustaining cost (AISC) (per lb)(4) $4.93 $5.56
* Total cost of production (C3) (per lb)(4) $6.00 $6.28
* Realized price (per payable lb) $3.88 $6.53
GOLD
* Production (ounces) 56,191 49,780
* Sales (ounces) 63,141 47,269
-------------------------------------------------- ---------- ---------
1 Operating metrics exclude the Kevitsa mine.
(2) Copper production includes production at Sentinel of 20,902
tonnes for the three months ended March 31, 2016. Copper sales
includes sales at Sentinel of 18,796 tonnes for the three months
ended March 31, 2016. Production and sales at Sentinel are
pre-commercial and therefore excluded from earnings.
(3) Production is presented on a copper concentrate basis (mine
production only), and does not include output from the Kansanshi
smelter.
(4) C1 cash cost, AISC and C3 total cost are not recognized
under IFRS. Refer to the "Regulatory Disclosures" section in the
MD&A for the quarter ended March 31, 2016, for further
information.
FINANCIAL HIGHLIGHTS(1)
Three months
ended March
31
------------------
(U.S. dollars millions, except where noted otherwise) 2016 2015
------------------------------------------------------- -------- --------
Sales revenues 720 602
Gross profit 105 23
Net earnings (loss) from continuing operations
attributable to shareholders of the Company 49 (78)
Net earnings (loss) from continuing operations 48 (90)
Net loss from discontinued operation (Kevitsa) (266) (4)
Basic and diluted loss per share ($0.32) ($0.14)
Comparative earnings (loss)(2) 63 (12)
Comparative earnings (loss) per share(2) $0.09 ($0.02)
Comparative EBITDA(2) 269 106
Cash flows from continuing operating activities 254 134
------------------------------------------------------- -------- --------
(MORE TO FOLLOW) Dow Jones Newswires
April 29, 2016 02:00 ET (06:00 GMT)
(1) Financial metrics, other than Net loss from discontinued
operation, exclude the Kevitsa mine.
(2) Net earnings (loss) attributable to shareholders of the
Company and EBITDA have been adjusted to exclude items which are
not reflective of underlying performance to arrive at comparative
earnings and comparative EBITDA. Comparative earnings, comparative
earnings per share and comparative EBITDA 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
"Regulatory Disclosures" section in the MD&A for the quarter
ended March 31, 2016, for a reconciliation of comparative EBITDA
and comparative earnings.
CONFERENCE CALL & WEBCAST
The Company will host a conference call and webcast to discuss
the results on Friday April 29, 2016.
Date: April 29, 2016
Time: 9:00 am (EDT); 2:00 pm (BST); 6:00 am (PDT)
Webcast: 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
Replay: North America and international: 1 416 621 4642
North America: (toll free) 1 800 585 8367
Passcode: 88320654
The conference call replay will be available from noon (EDT)
until 11:59 pm (EDT) on May 6, 2016.
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 March
31, 2016 are available at www.first-quantum.com and should be read
in conjunction with this news release.
On Behalf of the Board of Directors 12g3-2b-82-4461
of First Quantum Minerals Ltd. Listed in Standard and Poor's
G. Clive Newall
President
For further information visit our website at
www.first-quantum.com
North American contact: Sharon Loung, Director, Investor
Relations
Tel: (647) 346-3934 Fax: (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
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, commissioning and
reaching commercial production at Sentinel and expected timing of
completion of project development at Enterprise and Cobre Panama
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, cobalt, nickel, zinc,
pyrite, PGE, 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, PGE, 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 and Mauritania, 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRFEAELPASNKEAF
(END) Dow Jones Newswires
April 29, 2016 02:00 ET (06:00 GMT)
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