First Quantum Minerals Reports Fourth Quarter and Year-End 2023
Results
(In United States dollars, except where noted
otherwise)
TORONTO, Feb. 20, 2024 (GLOBE NEWSWIRE) -- First
Quantum Minerals Ltd. (“First Quantum” or “the Company”) (TSX: FM)
today reports results for the three months ended December 31, 2023
(“Q4 2023” or the "fourth quarter") of a net loss attributable to
shareholders of the Company of $1,447 million ($2.09 loss per
share) and an adjusted loss1 of $259 million ($0.37
adjusted loss per share2). For the year ended December
31, 2023, the Company reported a net loss attributable to
shareholders of the Company of $954 million ($1.38 basic loss per
share) and adjusted earnings1 of $261 million ($0.38
adjusted earnings per share2).
“2023 closed with the Company facing one of its
biggest challenges in recent history. However, I am confident in
the resilience of First Quantum and the determination of our teams
to work through these challenges. The Company continues to take a
proactive approach to managing its balance sheet and addressing its
liquidity in a fulsome and disciplined manner. As a continuation of
these efforts, it is pleasing to share that since the reporting
period, the Company has signed a $500 million copper prepay
arrangement at competitive terms with Jiangxi Copper. This
arrangement is a reminder of the strategic nature of copper as
supply challenges abound across the sector. Constructive
discussions with our lenders for an amendment and extension of our
loan facilities, which are an important component to our fulsome
solution, are well-advanced and there is a high degree of alignment
among all parties. We continue with sales processes for some of our
smaller assets and minority stake sales in our larger assets, with
strong interest from highly credible counterparties for both,”
commented Tristan Pascall, Chief Executive Officer of First
Quantum. "In Zambia, we continue to be confident in the investment
climate in the country and, as such, we remain committed to our
investment in the S3 Expansion, which is expected to generate
significant free cash flow once operational in the second half of
2025. At Cobre Panamá, the blockades around the mine have
dissipated, allowing for critical supply deliveries by port and by
road. We continue to work closely with local authorities in order
to ship the concentrate stockpile from the site, which is required
to fund critical environmental work. We remain focused on the
preservation, safe and responsible stewardship of Cobre Panamá.
Finally, I would like to thank everybody at First Quantum for their
continued perseverance and hard work in these challenging
times."
Q4 2023 SUMMARY
In Q4 2023, First Quantum reported gross profit
of $87 million, EBITDA1 of $273 million, a net loss
attributable to shareholders of $2.09 per share, and an adjusted
loss per share2 of $0.37. Relative to the third quarter
of 2023 (“Q3 2023”), fourth quarter financial results were
negatively impacted by the disruptions experienced at the Cobre
Panamá mine which led to the mine being placed in a phase of
Preservation and Safe Management ("P&SM"). In addition,
disruptions at the mine's port prevented the shipment of
concentrates since the beginning of November last year.
Total copper production for the fourth quarter
was 160,200 tonnes, a 28% decrease from Q3 2023. The
quarter-over-quarter decrease in production was attributable to
lower production at all three of the Company's main operations,
mainly Cobre Panamá. Copper C1 cash cost2 of $1.82 per
lb for Q4 2023 was $0.40 per lb higher than in Q3 2023 due to lower
production and higher electricity costs at the Zambian operations
following the signing of the new ZESCO agreement, mitigated by
lower maintenance costs.
Three-year guidance on production, copper C1
cash costs1, copper all-in sustaining costs
("AISC")1 and capital expenditures that were previously
disclosed on January 15, 2024 remain unchanged and exclude Cobre
Panamá. For 2024, copper production is forecast to be 370,000 to
420,000 tonnes while copper C1 cash costs1 are guided to
be $1.80 to $2.05 per lb. Capital cost guidance for 2024 is
expected to be between $1,250 million and $1,400 million.
____________________________________
1 EBITDA and adjusted earnings (loss) are
non-GAAP financial measures. These measures do not have a
standardized meaning prescribed by IFRS and might not be comparable
to similar financial measures disclosed by other issuers. See
“Regulatory Disclosures”.
2 Adjusted earnings (loss) per share and
copper C1 cash cost (copper C1) are non-GAAP ratios which do not
have a standardized meaning prescribed by IFRS and might not be
comparable to similar financial measures disclosed by other
issuers. See “Regulatory Disclosures”.
Q4 2023 OPERATIONAL HIGHLIGHTS
Total copper production for the fourth quarter
was 160,200 tonnes, a 28% decrease from Q3 2023. The
quarter-over-quarter decrease in production was impacted by the
ramp down in operations at Cobre Panamá to a phase of P&SM due
to illegal blockades around the mine site while lower production at
Kansanshi and Sentinel also contributed to the decline. Copper
sales volumes in Q4 2023 totaled 127,721 tonnes, approximately
32,479 tonnes lower than production, mainly due to port disruptions
at Cobre Panamá that prevented the shipment of copper
concentrates.
- Cobre Panamá
produced 62,616 tonnes of copper in Q4 2023, a decrease of 50,118
tonnes from the previous quarter as production was suspended at the
end of November 2023 due to illegal blockades at the Punta Rincón
port and at the roads to the site that prevented the delivery of
supplies that were necessary to operate the power plant. Prior to
the disruptions from the illegal blockades, Cobre Panamá operated
at an annualized throughput rate of 93 million tonnes for the month
of October. This, combined with higher grades and improving
recoveries, allowed the operation to achieve monthly record
production of 41,543 tonnes. Copper production for the full year
2023 was 330,863 tonnes, down from 350,438 tonnes in 2022. Copper
C1 cash cost1 of $1.45 per lb was $0.26 per lb higher
than the previous quarter due to lower copper production volumes
and lower gold by-product credits. 2024 production guidance for
Cobre Panamá has been suspended as the site currently remains in a
phase of P&SM. At the request of the Ministry of Commerce and
Industries ("MICI"), Cobre Panamá delivered a preliminary draft for
the first phase of P&SM on January 16, 2024. Previous illegal
blockages around the mine have dissipated, allowing for the
delivery by road and at port of necessary supplies to conduct the
P&SM program. The associated costs for the program are
estimated at $15 to $20 million per month and further reductions
could follow depending on environmental stewardship programs.
Approximately 121 thousand dry metric tonnes of copper concentrate
remains onsite following disruptions at the Punta Rincón port. The
sale of this concentrate will result in a net cash inflow of
approximately $225 million at current market prices.
- Kansanshi’s
copper production of 31,887 tonnes in Q4 2023 was 7,713 tonnes
lower than the previous quarter as a result of lower throughput,
grades and recoveries across all three circuits. Lower throughput
was primarily due to mining constraints in M17 resulting in slower
mining rates and the stockpiling of material from M15 and M17 due
to acid volume restrictions. Kansanshi's production for 2023 of
134,827 tonnes was within the revised guidance range of 130,000 to
140,000 tonnes. Copper C1 cash cost1 of $2.43 per lb was
$0.80 higher than Q3 2023 mainly due to lower copper production
volumes. Production guidance for 2024 is expected to be 130,000 to
150,000 tonnes of copper and 65,000 to 75,000 ounces of gold.
- Sentinel
reported copper production of 59,964 tonnes in Q4 2023, 3,841
tonnes lower than the previous quarter mainly due to lower
throughput as production continued to be impacted by the mining of
very hard rock from the lower levels in Stages 1 and 2 of the open
pit. Mining productivity, however, continued to improve during the
quarter with improved blast fragmentation and reduced congestion
with the commencement of the Stage 3 (Western Cut-back) mining.
Sentinel copper production for 2023 of 214,046 tonnes was lower
than the revised guidance range of 220,000 to 230,000 tonnes.
Copper C1 cash cost1 of $1.85 per lb was $0.20 per lb
higher than the preceding quarter, reflecting higher electricity
prices. Copper production guidance for 2024 is 220,000 to 250,000
tonnes. The major focus for 2024 at Sentinel will be on the
development of Stage 3 (Western Cut-back) in order to enable
improved mining productivities and increased availability of softer
material from higher elevations. The wet weather preparations and
improved storm water management processes have been implemented to
mitigate the risk of water accumulation as experienced in previous
raining seasons.
- Enterprise
produced 2,751 tonnes of nickel during the fourth quarter, an
increase from 1,556 tonnes in Q3 2023 as the operation continues to
ramp up. Production guidance in 2024 for Enterprise is 10,000 to
20,000 contained tonnes of nickel. Commercial production and full
plant throughput is expected in 2024.
- At Ravensthorpe,
as previously announced, a decision was made subsequent to the
year-end to scale back mining operations and associated processing
activities as a result of continued low nickel prices. A new
operating plan has been developed under which Ravensthorpe aims to
maintain production from ore stockpiles and suspend mining from the
Shoemaker Levy ore body. The high-pressure acid leach circuit will
also be bypassed and ore will be exclusively processed through the
atmospheric leach circuits. Production from existing ore stockpiles
is expected for 18 months after which time, mining at Hale Bopp and
Halley’s ore bodies is expected to commence.
____________________________________
1 Copper C1 cash costs (C1), and copper all-in
sustaining costs (AISC) are non-GAAP ratio which does not have a
standardized meaning prescribed by IFRS and might not be comparable
to similar financial measures disclosed by other issuers. See
“Regulatory Disclosures”.
FINANCIAL HIGHLIGHTS
Compared to Q3 2023, fourth quarter financial
results were considerably weaker due to the suspension of
production at the Cobre Panamá mine at the end of November 2023
when the mine was placed in P&SM. Financial results were also
impacted by approximately 121 thousand dry metric tonnes of copper
concentrate that remains unsold from Cobre Panamá as a result of
the disruptions at the Punta Rincón port. An impairment charge of
$900 million was recognized which includes $854 million at
Ravensthorpe as a result of significant margin pressure due to weak
nickel prices, lower payabilities and high operating costs.
Impairment expenses also include $46 million in respect of
exploration assets.
The Company's total and net debt1
increased during the fourth quarter due to a one-time payment of
$567 million to the Government of Panama on November 16, 2023 in
respect to taxes and royalties for the period from December 2021 to
October 2023.
- Gross profit for
the fourth quarter of $87 million was 87% lower than in Q3 2023,
while EBITDA1 of $273 million for the same period was
72% lower.
- Cash flows used
by operating activities of $185 million ($0.27 per
share2) for the quarter were $779 million lower than Q3
2023.
- Net
debt1 increased by $783 million during the quarter,
taking the net debt1 balance to $6,420 million as at
December 31, 2023. As at December 31, 2023, total debt was $7,379
million (total debt was $6,892 million at September 30, 2023).
- An interim
dividend of CDN$0.08 per share, in respect of the financial year
ended December 31, 2023 was paid on September 19, 2023 to
shareholders of record on August 28, 2023. On January 15, 2024, the
Company announced that it has suspended its dividend as a result of
Cobre Panamá being in a phase of P&SM.
The current situation at Cobre Panamá has
impacted the EBITDA1 generating potential of the
Company, putting at risk the Company’s ability to meet the net
debt1 to EBITDA1 ratio covenant as defined in
its current senior banking facilities. Current forecasts for 2024,
before taking into account future balance sheet initiatives,
indicate the Company may breach the prevailing net debt1
to EBITDA1 ratio covenant during the coming twelve
months, and failure to address this would result in the existence
of a material uncertainty that may cast a significant doubt about
the Company’s ability to continue as a going concern. Accordingly,
disclosure of this material uncertainty has been made in the notes
to the consolidated financial statements.
Management has a strong expectation that the
balance sheet initiatives initiated earlier this year will be
realized in the near term. The disclosure of material uncertainty
does not include potential changes in the Company's covenants,
which are materially advanced in discussions with the Company's
banking partners nor the financing initiatives described in more
detail below, which would significantly reduce the risk of
breaching covenants if realized.
____________________________________
1 EBITDA is a non-GAAP financial measures and
net debt is a supplementary financial measure. These measures do
not have a standardized meaning prescribed by IFRS and might not be
comparable to similar financial measures disclosed by other
issuers. See “Regulatory Disclosures”
2 Cash flows from operating activities per
share, and copper C1 cash cost (copper C1) are non-GAAP ratios
which do not have a standardized meaning prescribed by IFRS and
might not be comparable to similar financial measures disclosed by
other issuers. See “Regulatory Disclosures”.
BALANCE SHEET INITIATIVES
With Cobre Panamá in a phase of P&SM, the
Company is employing a number of measures to prudently allow for
the planned capital spending elsewhere across First Quantum’s
business, most notably the S3 Expansion at Kansanshi, which will
further strengthen cash flows when it is commissioned in 2025. The
Company is advancing several initiatives in 2024 to give
optionality and flexibility:
- Copper
prepayment agreement ("Prepayment Agreement"): After the
reporting period, the Company signed a $500 million 3-year
Prepayment Agreement with Jiangxi Copper at competitive rates. The
agreement provides for the delivery of 50kt of copper anode per
annum from Kansanshi payable at market prices. The prepaid amount
will reduce in line with deliveries over the second and third years
of the Prepayment Agreement. Proceeds will be used towards general
corporate purposes and to increase liquidity.
- Dividend
suspension: On January 15, 2024, the Board suspended the
semi-annual dividend. The Board will review the Company’s financial
policy on an ongoing basis and adjust the dividend approach when
appropriate.
- Capital
expenditure reductions: Planned capital programs across
the Company were reduced or re-phased by approximately $400 million
in 2024 and $250 million in 2025. The Company remains committed to
delivering the S3 Expansion project at Kansanshi in 2025.
-
Operating costs and other reductions: Following a
detailed review of all operating and administrative costs, the
Company has identified savings which will offset recent
inflationary pressures. The cost savings initiatives include a
change in strategy at Ravensthorpe to temporarily remove higher
cost production.
- Working
capital: The Company is also targeting reductions in
working capital requirements and savings in the procurement of
materials, supplies and third party service costs where
possible.
- Assets
and stake sales: A sales process for the Las Cruces mine
in Spain is well-advanced with strong interest given the strategic
location and processing capabilities of the project. Following a
number of inbound expressions of interest, the Company is
evaluating the possibility of a minority investment by strategic
investors in the Company's Zambian business.
-
Financing activity: The Company continues to take
a proactive approach to managing its balance sheet and the
refinancing of its near-term debt maturities. An ongoing process
between the Company and its banking partners is materially
advanced, with a high degree of alignment regarding amendment and
extension. A conclusion on these amendments is expected in the near
term. The Company is also assessing a range of alternatives across
the capital markets to maintain a robust financial position and
preserve value for its shareholders.
CONSOLIDATED FINANCIAL HIGHLIGHTS
|
QUARTERLY |
FULL YEAR |
|
Q4 2023
|
|
Q3 2023
|
|
Q4 2022
|
|
|
2023 |
|
|
2022 |
|
Sales revenues |
|
1,218 |
|
|
2,029 |
|
|
1,832 |
|
|
6,456 |
|
|
7,626 |
|
Gross profit |
|
87 |
|
|
660 |
|
|
361 |
|
|
1,292 |
|
|
2,200 |
|
Net earnings (loss) attributable to shareholders of the
Company |
|
(1,447 |
) |
|
325 |
|
|
117 |
|
|
(954 |
) |
|
1,034 |
|
Basic earnings (loss) per share |
($2.09 |
) |
$0.47 |
|
$0.17 |
|
($1.38 |
) |
$1.50 |
|
Diluted earnings (loss) per share |
($2.09 |
) |
$0.47 |
|
$0.17 |
|
($1.38 |
) |
$1.49 |
|
Cash flows from (used by) operating activities3 |
|
(185 |
) |
|
594 |
|
|
237 |
|
|
1,427 |
|
|
2,332 |
|
Net debt1 |
|
6,420 |
|
|
5,637 |
|
|
5,692 |
|
|
6,420 |
|
|
5,692 |
|
EBITDA1,2 |
|
273 |
|
|
969 |
|
|
647 |
|
|
2,328 |
|
|
3,316 |
|
Adjusted earnings (loss)1 |
|
(259 |
) |
|
359 |
|
|
151 |
|
|
261 |
|
|
1,064 |
|
Adjusted earnings (loss) per share3 |
($0.37 |
) |
$0.52 |
|
$0.22 |
|
$0.38 |
|
$1.54 |
|
Realized copper price (per lb)3 |
$3.62 |
|
$3.70 |
|
$3.56 |
|
$3.76 |
|
$3.90 |
|
Net earnings (loss) attributable to shareholders of the
Company |
|
(1,447 |
) |
|
325 |
|
|
117 |
|
|
(954 |
) |
|
1,034 |
|
Adjustments attributable to shareholders of the Company: |
|
|
|
|
|
Adjustment for expected phasing of Zambian value-added tax (“VAT”)
receipts |
|
20 |
|
|
(15 |
) |
|
56 |
|
|
(49 |
) |
|
190 |
|
Ravensthorpe deferred tax charge |
|
160 |
|
|
– |
|
|
– |
|
|
160 |
|
|
– |
|
Total adjustments to EBITDA1 excluding
depreciation2 |
|
1,031 |
|
|
61 |
|
|
6 |
|
|
1,129 |
|
|
(155 |
) |
Tax adjustments |
|
273 |
|
|
(12 |
) |
|
(22 |
) |
|
271 |
|
|
(7 |
) |
Minority interest adjustments |
|
(296 |
) |
|
– |
|
|
(6 |
) |
|
(296 |
) |
|
2 |
|
Adjusted earnings (loss)1 |
|
(259 |
) |
|
359 |
|
|
151 |
|
|
261 |
|
|
1,064 |
|
1 EBITDA and adjusted earnings (loss) are
non-GAAP financial measures, and net debt is a supplementary
financial measure. These measures do not have a standardized
meaning under IFRS and might not be comparable to similar financial
measures disclosed by other issuers. Adjusted earnings (loss) have
been adjusted to exclude items from the corresponding IFRS measure,
net earnings (loss) attributable to shareholders of the Company,
which are not considered by management to be reflective of
underlying performance. The Company has disclosed these measures to
assist with the understanding of results and to provide further
financial information about the results to investors and may not be
comparable to similar financial measures disclosed by other
issuers. The use of adjusted earnings (loss) and EBITDA represents
the Company’s adjusted earnings (loss) metrics. See “Regulatory
Disclosures”.
2 Adjustments to EBITDA in 2023 relate
principally to an impairment expense of $854 million relating to
Ravensthorpe and $46 million to exploration assets, royalty expense
of $22 million related to 2022 pursuant to Law 406 and royalties
payable to ZCCM-IH for the year ended December 31, 2022, foreign
exchange revaluations and a restructuring expense of $49 million
(2022 - foreign exchange revaluations and non-recurring costs
relating to previously sold assets).
3 Adjusted earnings (loss) per share, realized
metal prices, and cash flows from operating activities per share
are non-GAAP ratios, which do not have a standardized meaning
prescribed by IFRS and might not be comparable to similar financial
measures disclosed by other issuers. See “Regulatory
Disclosures”.
4 Excludes the sale of copper anode produced
from third-party concentrate purchased at Kansanshi. Sales of
copper anode attributable to third-party concentrate purchases were
10,965 tonnes and 40,134 tonnes for the fourth quarter and full
year ended December 31, 2023, respectively, (8,651 and 13,379
tonnes for the fourth quarter and full year ended December 31,
2022). |
|
CONSOLIDATED OPERATING
HIGHLIGHTS
|
QUARTERLY |
FULL YEAR |
|
Q4 2023
|
|
Q3 2023
|
|
Q4 2022
|
|
|
2023 |
|
|
2022 |
|
Copper production (tonnes)1 |
|
160,200 |
|
|
221,550 |
|
|
206,007 |
|
|
707,678 |
|
|
775,859 |
|
Cobre Panamá |
|
62,616 |
|
|
112,734 |
|
|
89,652 |
|
|
330,863 |
|
|
350,438 |
|
Kansanshi |
|
31,887 |
|
|
39,600 |
|
|
34,802 |
|
|
134,827 |
|
|
146,282 |
|
Sentinel |
|
59,964 |
|
|
63,805 |
|
|
73,409 |
|
|
214,046 |
|
|
242,451 |
|
Other Sites |
|
5,733 |
|
|
5,411 |
|
|
8,144 |
|
|
27,942 |
|
|
36,688 |
|
Copper sales (tonnes)2 |
|
127,721 |
|
|
218,946 |
|
|
198,912 |
|
|
674,316 |
|
|
782,236 |
|
Cobre Panamá |
|
35,809 |
|
|
113,616 |
|
|
85,330 |
|
|
306,417 |
|
|
343,448 |
|
Kansanshi2 |
|
31,295 |
|
|
41,820 |
|
|
32,496 |
|
|
135,385 |
|
|
159,007 |
|
Sentinel |
|
55,112 |
|
|
58,600 |
|
|
71,642 |
|
|
205,160 |
|
|
241,162 |
|
Other Sites |
|
5,505 |
|
|
4,910 |
|
|
9,444 |
|
|
27,354 |
|
|
38,619 |
|
Gold production (ounces) |
|
53,325 |
|
|
73,125 |
|
|
70,493 |
|
|
226,885 |
|
|
283,226 |
|
Cobre Panamá |
|
30,986 |
|
|
45,996 |
|
|
38,302 |
|
|
129,854 |
|
|
139,751 |
|
Kansanshi |
|
16,718 |
|
|
19,946 |
|
|
24,479 |
|
|
68,970 |
|
|
109,617 |
|
Guelb Moghrein |
|
5,327 |
|
|
6,765 |
|
|
7,434 |
|
|
26,363 |
|
|
30,845 |
|
Other sites |
|
294 |
|
|
418 |
|
|
278 |
|
|
1,698 |
|
|
3,013 |
|
Gold sales (ounces)3 |
|
45,365 |
|
|
77,106 |
|
|
59,568 |
|
|
223,052 |
|
|
270,775 |
|
Cobre Panamá |
|
19,861 |
|
|
45,959 |
|
|
34,208 |
|
|
121,554 |
|
|
134,660 |
|
Kansanshi |
|
19,396 |
|
|
23,704 |
|
|
16,156 |
|
|
76,169 |
|
|
101,015 |
|
Guelb Moghrein |
|
5,539 |
|
|
7,292 |
|
|
8,601 |
|
|
23,546 |
|
|
30,852 |
|
Other sites |
|
569 |
|
|
151 |
|
|
603 |
|
|
1,783 |
|
|
4,248 |
|
Nickel production (contained tonnes)4 |
|
7,313 |
|
|
7,046 |
|
|
5,705 |
|
|
26,252 |
|
|
21,529 |
|
Nickel sales (contained tonnes)5 |
|
5,719 |
|
|
5,749 |
|
|
6,840 |
|
|
23,220 |
|
|
20,074 |
|
Cash cost of copper production (C1) (per lb)6,7,8 |
$1.82 |
|
$1.42 |
|
$1.86 |
|
$1.82 |
|
$1.76 |
|
Total cost of copper production (C3) (per lb)6,7,8 |
$2.77 |
|
$2.29 |
|
$2.79 |
|
$2.76 |
|
$2.73 |
|
Copper all-in sustaining cost (AISC) (per lb)6,7,8 |
$2.52 |
|
$2.02 |
|
$2.42 |
|
$2.46 |
|
$2.35 |
|
1 Production is presented on a contained basis, and
is presented prior to processing through the Kansanshi
smelter.
2 Sales exclude the sale of copper anode
produced from third-party concentrate purchased at Kansanshi. Sales
of copper anode attributable to third-party concentrate purchases
were 10,965 tonnes and 40,134 tonnes for the fourth quarter and
full year ended December 31, 2023, respectively, (8,651 tonnes and
13,379 tonnes for the fourth quarter and full year ended December
31, 2022).
3 Excludes refinery-backed gold credits purchased
and delivered under the precious metal streaming arrangement (see
“Precious Metal Stream Arrangement”).
4 Nickel production includes 2,751 tonnes and 4,527
tonnes of pre-commercial production from Enterprise for the fourth
quarter and full year ended December 31, 2023, which is not
included in earnings (loss) or C1, C3 and AISC calculations. (nil
tonnes for the year ended December 31, 2022).
5 Nickel sales (contained tonnes) includes 1,554
tonnes and 1,651 tonnes of pre-commercial sales from Enterprise for
the fourth quarter and full year ended December 31, 2023,
respectively.
6 Copper all-in sustaining cost (copper AISC),
copper C1 cash cost (copper C1), and total cost of copper (copper
C3) are non-GAAP ratios, which do not have a standardized meaning
prescribed by IFRS and might not be comparable to similar financial
measures disclosed by other issuers. See “Regulatory
Disclosures”.
7 Excludes the sale of copper anode produced from
third-party concentrate purchased at Kansanshi. Sales of copper
anode attributable to third-party concentrate purchases were 10,965
tonnes and 40,134 tonnes for the fourth quarter and full year ended
December 31, 2023, respectively, (8,651 and 13,379 tonnes for the
fourth quarter and full year ended December 31, 2022)
8 Copper C3 and AISC for the year ended December
31, 2023 exclude $18 million royalty attributable to ZCCM-IH
relating to the year ended December 31, 2022. Copper C3 and AISC
for the year ended December 31, 2023 exclude the 2022 impact of $28
million royalty pursuant to Law 406 in Panama. |
|
REALIZED METAL
PRICES1
|
QUARTERLY |
FULL YEAR |
|
Q4 2023
|
|
Q3 2023
|
|
Q4 2022
|
|
|
2023 |
|
|
2022 |
|
Average LME copper cash price (per lb) |
$3.70 |
|
$3.79 |
|
$3.63 |
|
$3.85 |
|
$3.99 |
|
Realized copper price1 (per lb) |
$3.62 |
|
$3.70 |
|
$3.56 |
|
$3.76 |
|
$3.90 |
|
Treatment/refining charges (“TC/RC”) (per lb) |
($0.13 |
) |
($0.15 |
) |
($0.12 |
) |
($0.15 |
) |
($0.13 |
) |
Freight charges (per lb) |
($0.05 |
) |
($0.02 |
) |
($0.04 |
) |
($0.03 |
) |
($0.03 |
) |
Net realized copper price1 (per lb) |
$3.44 |
|
$3.53 |
|
$3.40 |
|
$3.58 |
|
$3.74 |
|
Average LBMA cash price (per oz) |
$1,974 |
|
$1,929 |
|
$1,728 |
|
$1,941 |
|
$1,800 |
|
Net realized gold price1,2 (per oz) |
$1,835 |
|
$1,764 |
|
$1,574 |
|
$1,786 |
|
$1,665 |
|
Average LME nickel cash price (per lb) |
$7.82 |
|
$9.23 |
|
$11.47 |
|
$9.74 |
|
$11.61 |
|
Net realized nickel price1 (per lb) |
$7.53 |
|
$8.96 |
|
$13.67 |
|
$9.07 |
|
$11.93 |
|
1 Realized metal prices are a non-GAAP ratio,
do not have standardized meanings under IFRS and might not be
comparable to similar financial measures disclosed by other
issuers. See “Regulatory Disclosures” for further
information.
2 Excludes gold revenues recognized under the
precious metal stream arrangement. |
|
2024 GUIDANCE
Guidance is based on a number of assumptions and
estimates as of December 31, 2023, including among other things,
assumptions about metal prices and anticipated costs and
expenditures. Guidance involves estimates of known and unknown
risks, uncertainties and other factors, which may cause the actual
results to be materially different.
Production, cash cost and capital expenditure
guidance for 2024 to 2026 remain unchanged from the News Release
"First Quantum Minerals Announces 2023 Preliminary Production,
2024-2026 Guidance and Balance Sheet Initiatives" dated January 15,
2024 and is presented excluding Cobre Panamá as the mine remains in
a phase of P&SM with production halted. The associated funding
of P&SM is expected to range from $15 to $20 million per month
and further reductions could follow depending on environmental
stewardship programs.
2024 Copper production guidance is between
370,000 to 420,000 tonnes and is expected to increase to between
400,000 to 460,000 tonnes in 2025 and 2026 as the S3 Expansion at
Kansanshi comes online. For 2024, copper C1 cash costs1
are guided to be $1.80 to $2.05 per lb. Total copper C1 cash
costs1 and copper AISC1 unit cost ranges are
in line with prior year guidance when excluding Cobre Panamá.
Improvements in operating costs such as fuel, maintenance,
contractors and labour mitigated the impact of lower by-product
credits from Kansanshi and lower production at Sentinel.
Capital expenditure continues to experience
inflationary cost increases driven by higher shipping rates, steel
prices, power costs, labour rates and general inflation. Guidance
reflects these cost increases as well as additional scope increases
and the timing of expenditures, including approximately $235
million of expenditure carried over from 2023. However, strategic
measures have been implemented to offset the impact of these
inflationary increases and deferred expenditure through optimizing
and prioritizing capital expenditure.
Total capital expenditure for the S3 Expansion
project remains unchanged at $1.25 billion, with approximately $215
million spent to date. The S3 Expansion includes the development
and construction of the S3 process plant circuit and mining fleet
acquisitions. Across the three-year guidance period, capital
expenditure for the S3 Expansion project is expected to be
approximately $780 million with the majority of the spend planned
over 2024 and 2025. Pre-strip activities for the South East Dome
pit are expected to continue through 2025, of which $220 million is
included in the S3 project capital within the guidance period.
First production from S3 continues to be expected in H2 2025.
Interest expense on debt for the full year 2024
is expected to be approximately $610 - $630 million and excludes
interest accrued on related party loans to Cobre Panamá and
Ravensthorpe, a finance cost accreted on the precious metal
streaming arrangement, capitalized interest expense and accretion
on asset retirement obligation.
Cash outflow on interest paid is expected to be
approximately $555 - $575 million for the full year 2024. This
figure excludes interest paid on related party loans to Cobre
Panamá and Ravensthorpe and capitalized interest paid.
Capitalized interest is expected to be
approximately $55 million for the full year 2024.
The effective tax rate for 2024 excluding Cobre
Panamá and interest expense is expected to be approximately
30%.
The full year 2024 depreciation expense
excluding Cobre Panamá is expected to be between $630 to $660
million. Whilst under P&SM, depreciation at Cobre Panamá is
expected to be $90 million to $120 million on an annualized
basis.
____________________________________
1 Realized metal price, C1 cash cost (C1), and
All-in sustaining cost (AISC) are non-GAAP ratio which does not
have a standardized meaning prescribed by IFRS and might not be
comparable to similar financial measures disclosed by other
issuers. See “Regulatory Disclosures”.
PRODUCTION GUIDANCE
000’s |
2024 |
|
2025 |
|
2026 |
|
Copper (tonnes) |
370 – 420 |
|
400 – 460 |
|
400 – 460 |
|
Gold (ounces) |
95 – 115 |
|
120 – 140 |
|
140 – 165 |
|
Nickel (contained tonnes) |
22 – 37 |
|
26 – 41 |
|
36 – 51 |
|
|
|
|
|
|
|
|
PRODUCTION GUIDANCE BY OPERATION1
Copper production guidance (000’s tonnes) |
2024 |
|
2025 |
|
2026 |
|
Kansanshi |
130 – 150 |
|
170 – 200 |
|
180 – 210 |
|
Trident - Sentinel |
220 – 250 |
|
210 – 240 |
|
210 – 240 |
|
Other sites |
20 |
|
20 |
|
10 |
|
Gold production guidance (000’s ounces) |
|
|
|
|
|
|
Kansanshi |
65 – 75 |
|
85 – 95 |
|
90 – 105 |
|
Guelb Moghrein |
28 – 38 |
|
34 – 44 |
|
49 – 59 |
|
Other sites |
2 |
|
1 |
|
1 |
|
Nickel production guidance (000’s contained
tonnes) |
|
|
|
|
|
|
Ravensthorpe |
12 – 17 |
|
11 – 16 |
|
11 – 16 |
|
Trident - Enterprise |
10 – 20 |
|
15 – 25 |
|
25 – 35 |
|
1 Production is stated on a 100% basis as the
Company consolidates all operations. |
|
CASH COST1 AND ALL-IN SUSTAINING
COST1
Total Copper |
2024 |
2025 |
2026 |
C1 (per lb)1 |
$1.80 – $2.05 |
$1.80 – $2.05 |
$1.80 – $2.05 |
AISC (per lb)1 |
$2.70 – $3.00 |
$2.85 – $3.15 |
$2.80 – $3.10 |
Total Nickel |
2024 |
|
2025 |
|
2026 |
|
C1 (per lb)1 |
$7.00 – $8.50 |
|
$5.50 – $7.00 |
|
$5.00 – $6.25 |
|
AISC (per lb)1 |
$8.40 – $10.40 |
|
$7.70 – $9.70 |
|
$6.50 – $7.80 |
|
1 C1 cash cost (C1), and all-in sustaining cost
(AISC) are non-GAAP ratios, and do not have a standardized meaning
prescribed by IFRS and might not be comparable to similar financial
measures disclosed by other issuers. See “Regulatory
Disclosures”. |
|
PURCHASE AND DEPOSITS ON PROPERTY, PLANT &
EQUIPMENT
|
2024 |
|
2025 |
|
2026 |
|
Capitalized stripping1 |
180 – 230 |
|
180 – 230 |
|
280 – 310 |
|
Sustaining capital1 |
260 – 290 |
|
450 – 480 |
|
280 – 320 |
|
Project capital1 |
810 – 880 |
|
570 – 590 |
|
290 – 320 |
|
Total capital expenditure |
1,250 – 1,400 |
|
1,200 – 1,300 |
|
850 – 950 |
|
1 Capitalized stripping, sustaining capital and
project capital are non-GAAP financial measures which do not have a
standardized meaning prescribed by IFRS and might not be comparable
to similar financial measures disclosed by other issuers. See
“Regulatory Disclosures”. |
|
COBRE PANAMÁ UPDATE
Cobre Panamá remains in a phase of P&SM with
production halted. Approximately 1,400 workers remain on site to
run the P&SM program. Further reductions to a headcount below
1,000 workers may follow depending on environmental stewardship
programs. Previous illegal blockages around the mine have
dissipated, allowing for the delivery by road and at port of
necessary supplies to conduct the P&SM program.
On June 26, 2023, the Company and the GOP signed
the Refreshed Concession Contract and it was subsequently
countersigned by the National Comptroller of Panama. The Refreshed
Concession Contract was presented before the Commerce Committee of
the National Assembly of Panama, that recommended the amendment of
certain terms of the contract.
On October 17, 2023, the Refreshed Concession
Contract, with amended terms, was resubmitted to and approved by
the Commerce Committee of the National Assembly of Panama. On
October 20, 2023, the National Assembly in Panama passed Bill 1100
for the approval of the Refreshed Concession Contract for the Cobre
Panamá mine. On the same day, the President of Panama sanctioned
Bill 1100 into Law 406 that was subsequently published in the
Official Gazette.
On November 16, 2023, in accordance with its
contractual obligations to the Republic of Panama under Law 406,
the Company made tax and royalty payments of $567 million in
respect of the period from December 2021 to October 2023.
On November 28, 2023, the Supreme Court of
Justice of Panama declared Law 406 unconstitutional and stating the
effect of the ruling is that the Refreshed Concession Contract no
longer exists. The Supreme Court did not order the closure of the
Cobre Panamá mine. The ruling of the Supreme Court was subsequently
published in the Official Gazette on December 2, 2023.
On December 19, 2023, the Minister for Panama’s
MICI announced plans for Cobre Panamá following the ruling of the
Supreme Court. The validity of Panama’s mineral resource code which
was established more than 50 years ago was reiterated by the
Minister given the absence of retroactivity of the Supreme Court
ruling. As part of these plans, a temporary phase of environmental
Preservation and Safe Management would be established until June
2024, during which intervening period independent audits, review
and planning activities would be undertaken. It was stated that
Panama would be the first country in the world to implement a
sudden mine closure of this magnitude, and therefore the planning
is estimated by the GOP to take up to two years, and 10 years or
more to implement. The Minister also announced plans to consider
the economic impacts of the halt to operations of Cobre Panamá at
both a national and local level. The Company is of the view,
supported by the advice of legal counsel, that it has acquired
rights with respect to the operation of the Cobre Panamá project,
as well as rights under international law.
In January 2024, the Company and MICI had
discussions related to a formalized P&SM program and the
associated costs for Cobre Panamá. Additionally, the Company hosted
a large delegation from MICI and the Ministry of the Environment,
as well as other government departments and a broad range of civil
society organizations to demonstrate the measures that are being
undertaken as part of the P&SM program. At the request of MICI,
Cobre Panamá delivered a preliminary draft for the first phase of
P&SM on January 16, 2024.
Presidential and national legislative elections
will take place in May 2024, with a new president, GOP cabinet and
National Assembly assuming office in July 2024.
The Company has commenced international
arbitration processes including notification under the Free Trade
Agreement (“FTA”) between Canada and Panama, and under the
International Court of Arbitration relating to concession
agreement. The FTA provides for, among other things, arbitration
before the International Centre for Settlement of Investment
Disputes, which is seated in Washington, D.C.
BROWNFIELD PROJECTS
At the S3 Expansion, the majority of the capital
spend is expected to occur in 2024. Detailed design is largely
complete. Earthworks and civil works continue to progress and the
project remains on track to come online during the second half of
2025. The first 11 ultra-class trucks and first shovel are
commissioned and are in service on site.
Earthworks and civil works continued to progress and project
procurement was approximately 70% committed at the end of the
quarter. Deliveries of major long lead equipment such as mills,
primary crusher and thickeners commenced in the third quarter of
2023 and will continue through to the second quarter of 2024.
Construction continues across all disciplines and excavation of the
primary crusher position commenced during the quarter.
At Enterprise, all major mining and plant
infrastructure has been completed. However, additional equipment is
being mobilized for higher mining volumes and the cleaner circuit
expansion, to include columns and Jameson cell flotation
technology, is progressing towards commissioning in early 2024. The
focus remains on stripping of waste and the final ramp-up of the
process plant to full production capacity, which was challenged by
the metallurgical characteristics of the shallow ore. Oxide
material has been impacting recoveries, but the ore profile has
been updated to reflect the classification of material and provide
a good understanding of the impact of this material on plant
performance and recoveries. Recovery and concentrate quality are
continuously improving as supply of the fresher sulphide ore
increases, consistent with expectations from the geo-metallurgical
understanding of the deposit. Commercial production and full plant
throughput is expected in 2024.
On February 20, 2024, the Company filed an
updated NI 43-101 Technical Report on Mineral Resources and
Reserves for the Las Cruces Underground Project. The purpose of the
Technical Report is to update the 2022 Mineral Resources estimate,
declare a Mineral Reserves estimate and to provide commentary on
the project development strategy. Polymetallic Primary Sulphides
(Underground) Measured and Indicated Mineral Resources have
increased from 36.2 million tonnes from the January 2022 Technical
Report to 41.4 million tonnes with the copper equivalent grade
decreasing from 2.51% to 2.29%. There is an additional 5.0 million
tonnes of Polymetallic Primary Sulphides tabled as stockpiles and
0.9 million tonnes of Secondary Sulphide (Underground Measured and
Indicated Mineral Resources).
OTHER DEVELOPMENTS
Zambian mines secure 100% renewable power
with new Power Supply Agreement (“PSA”)
On November 27, 2023, a 10-year PSA was signed
between the Company and ZESCO, the Zambian state energy provider.
As part of the agreement, ZESCO is committed to supplying 100%
certified renewable power, principally hydroelectricity, to Trident
and Kansanshi.
This agreement marks an important step in the
Company’s greenhouse gas emissions reduction plan and underlines
the Company’s commitment to sustainability, and lowering the carbon
intensity of responsibly mined copper production.
Zambian Power Supply
The Kariba Lake level closed the fourth quarter
of 2023 at 477.23 meters (“m”), compared to 475.60m recorded at the
same time last year. The rainy season in Zambia generally starts in
November and continues through April, with the heaviest rainfall
normally experienced in the months of January, February and March.
However, the lower than normal rains experienced in the current
rainy season have resulted in a reduction in water allocation for
ZESCO’s electricity generation. ZESCO is currently implementing
mitigation measures to address the lower water allocation. No
extended power restrictions are expected for the Zambian mining
operations beyond normal fluctuations on the national grid.
Pioneering full battery dump truck trials
for green mining
Hitachi Construction Machinery Co.,Ltd.
(“Hitachi”) completed the construction of the full battery dump
truck and shipped it to the Kansanshi mine in January 2024. The
technological feasibility trials are expected to start in
mid-2024.
The development and trials of the full battery
dump truck, in partnership with Hitachi, will leverage First
Quantum’s industry-leading trolley assist expertise. This will be
key to the next phase of the Company’s climate change strategy as
it seeks to reduce greenhouse gas emissions associated with mining
operations.
COMPLETE FINANCIAL STATEMENTS AND
MANAGEMENT’S DISCUSSION AND ANALYSIS
The complete Consolidated Financial Statements
and Management’s Discussion and Analysis for the three months and
year-ended December 31, 2023 are available at www.first-quantum.com
and at www.sedarplus.com and should be read in conjunction with
this news release.
CONFERENCE CALL DETAILS
The Company will host a conference call and
webcast to discuss the results on Wednesday, February 21, 2024 at
9:00 am (EST).
Conference call and webcast
details:
Toll-free North America: 1-800-319-4610
Toll-free International: +1-604-638-5340
Webcast: Direct link or on our website
A replay of the webcast will be available on the
First Quantum website.
For further information, visit our website at
www.first-quantum.com or contact:
Bonita To, Director, Investor Relations
(416) 361-6400 Toll-free: 1 (888) 688-6577
E-Mail: info@fqml.com
REGULATORY DISCLOSURES
Non-GAAP and Other Financial
Measures
EBITDA, ADJUSTED EARNINGS (LOSS) AND ADJUSTED
EARNINGS (LOSS) PER SHARE
EBITDA, adjusted earnings (loss) and adjusted
earnings (loss) per share exclude certain impacts which the Company
believes are not reflective of the Company’s underlying performance
for the reporting period. These include impairment and related
charges, foreign exchange revaluation gains and losses, gains and
losses on disposal of assets and liabilities, one-time costs
related to acquisitions, dispositions, restructuring and other
transactions, revisions in estimates of restoration provisions at
closed sites, debt extinguishment and modification gains and
losses, the tax effect on unrealized movements in the fair value of
derivatives designated as hedged instruments, and adjustments for
expected phasing of Zambian VAT receipts.
|
QUARTERLY |
FULL YEAR |
|
Q4 2023 |
|
Q3 2023 |
|
Q4 2022 |
|
2023 |
|
2022 |
|
Operating profit (loss) |
(984 |
) |
585 |
|
314 |
|
78 |
|
2,241 |
|
Depreciation |
226 |
|
323 |
|
327 |
|
1,121 |
|
1,230 |
|
Other adjustments: |
|
|
|
|
|
|
Foreign exchange loss (gain) |
43 |
|
23 |
|
25 |
|
67 |
|
(184 |
) |
Impairment expense4 |
900 |
|
– |
|
– |
|
900 |
|
– |
|
Share of results of joint venture |
35 |
|
– |
|
– |
|
35 |
|
– |
|
Royalty payable1,2 |
28 |
|
– |
|
– |
|
46 |
|
– |
|
Restructuring expense3 |
18 |
|
31 |
|
– |
|
49 |
|
– |
|
Other expense (income)5 |
11 |
|
8 |
|
(5 |
) |
28 |
|
46 |
|
Revisions in estimates of restoration provisions at closed
sites |
(4 |
) |
(1 |
) |
(14 |
) |
4 |
|
(17 |
) |
Total adjustments excluding depreciation |
1,031 |
|
61 |
|
6 |
|
1,129 |
|
(155 |
) |
EBITDA |
273 |
|
969 |
|
647 |
|
2,328 |
|
3,316 |
|
1 The year ended December 31, 2023, include royalty
attributable due to ZCCM-IH of $18 million relating to the year
ended December 31, 2022.
2 The quarter and year ended December 31, 2023,
pursuant to Law 406, include payments of $28 million income taxes,
withholding and mining taxes related to 2022 which has been
recognized in royalty expense.
3 The three months and year ended December 31, 2023
include $18 million from the severance package at Cobre Panamá and
for the year ended December 31, 2023, following a corporate
reorganization within the Kansanshi segment include a restructuring
expense of $31 million.
4 An impairment charge against property, plant and
equipment of $854 million has been recognized at Ravensthorpe
following an impairment test for the year ended December 31, 2023,
along with $46 million in respect of exploration assets.
5 Other expenses includes a charge of $40 million
for non-recurring costs in connection with previously sold assets
for the year ended December 31, 2022. |
|
QUARTERLY |
FULL YEAR |
|
Q4 2023
|
|
Q3 2023
|
|
Q4 2022
|
|
|
2023 |
|
|
2022 |
|
Net earnings (loss) attributable to shareholders of the
Company |
|
(1,447 |
) |
|
325 |
|
|
117 |
|
|
(954 |
) |
|
1,034 |
|
Adjustments attributable to shareholders of the Company: |
|
|
|
|
|
Adjustment for expected phasing of Zambian VAT |
|
20 |
|
|
(15 |
) |
|
56 |
|
|
(49 |
) |
|
190 |
|
Total adjustments to EBITDA excluding depreciation |
|
1,031 |
|
|
61 |
|
|
6 |
|
|
1,129 |
|
|
(155 |
) |
Ravensthorpe deferred tax charge1 |
|
160 |
|
|
– |
|
|
– |
|
|
160 |
|
|
— |
|
Tax adjustments |
|
273 |
|
|
(12 |
) |
|
(22 |
) |
|
271 |
|
|
(7 |
) |
Minority interest adjustments |
|
(296 |
) |
|
– |
|
|
(6 |
) |
|
(296 |
) |
|
2 |
|
Adjusted earnings (loss) |
|
(259 |
) |
|
359 |
|
|
151 |
|
|
261 |
|
|
1,064 |
|
Basic earnings (loss) per share as reported |
($2.09 |
) |
$0.47 |
|
$0.17 |
|
($1.38 |
) |
$1.50 |
|
Adjusted earnings (loss) per share |
($0.37 |
) |
$0.52 |
|
$0.22 |
|
$0.38 |
|
$1.54 |
|
1 In the current year to December 31, 2023 the
Company derecognized $160 million of deferred tax assets in
Ravensthorpe. |
|
REALIZED METAL PRICES
Realized metal prices are used by the Company to
enable management to better evaluate sales revenues in each
reporting period. Realized metal prices are calculated as gross
metal sales revenues divided by the volume of metal sold in lbs.
Net realized metal price is inclusive of the treatment and refining
charges (TC/RC) and freight charges per lb.
OPERATING CASHFLOW PER SHARE
In calculating the operating cash flow per
share, the operating cash flow calculated for IFRS purposes is
divided by the basic weighted average common shares outstanding for
the respective period.
NET DEBT
Net debt is comprised of bank overdrafts and
total debt less unrestricted cash and cash equivalents.
CASH COST, ALL-IN SUSTAINING COST, TOTAL COST
The consolidated cash cost (C1), all-in
sustaining cost (AISC) and total cost (C3) presented by the Company
are measures that are prepared on a basis consistent with the
industry standard definitions by the World Gold Council and Brook
Hunt cost guidelines but are not measures recognized under IFRS. In
calculating the C1 cash cost, AISC and C3, total cost for each
segment, the costs are measured on the same basis as the segmented
financial information that is contained in the financial
statements.
C1 cash cost includes all mining and processing
costs less any profits from by-products such as gold, silver, zinc,
pyrite, cobalt, sulphuric acid, or iron magnetite and is used by
management to evaluate operating performance. TC/RC and freight
deductions on metal sales, which are typically recognized as a
component of sales revenues, are added to C1 cash cost to arrive at
an approximate cost of finished metal.
AISC is defined as cash cost (C1) plus general
and administrative expenses, sustaining capital expenditure,
deferred stripping, royalties and lease payments and is used by
management to evaluate performance inclusive of sustaining
expenditure required to maintain current production levels.
C3 total cost is defined as AISC less sustaining
capital expenditure, deferred stripping and general and
administrative expenses net of insurance, plus depreciation and
exploration. This metric is used by management to evaluate the
operating performance inclusive of costs not classified as
sustaining in nature such as exploration and depreciation.
For the three months ended December 31, 2023 |
Cobre Panamá |
Kansanshi |
Sentinel |
Guelb Moghrein |
Las Cruces |
Çayeli |
Pyhäsalmi |
Copper |
Corporate & other |
Ravensthorpe |
Enterprise |
Total |
Cost of sales1 |
|
(255 |
) |
|
(365 |
) |
|
(307 |
) |
|
(41 |
) |
(6 |
) |
|
(20 |
) |
(4 |
) |
|
(998 |
) |
(6 |
) |
|
(108 |
) |
(19 |
) |
(1,131 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
80 |
|
|
53 |
|
|
75 |
|
|
3 |
|
– |
|
|
4 |
|
1 |
|
|
216 |
|
(4 |
) |
|
14 |
|
– |
|
226 |
|
By-product credits |
|
22 |
|
|
37 |
|
|
– |
|
|
24 |
|
– |
|
|
4 |
|
3 |
|
|
90 |
|
– |
|
|
2 |
|
– |
|
92 |
|
Royalties |
|
25 |
|
|
27 |
|
|
29 |
|
|
1 |
|
– |
|
|
1 |
|
– |
|
|
83 |
|
– |
|
|
2 |
|
– |
|
85 |
|
Treatment and refining charges |
|
(18 |
) |
|
(5 |
) |
|
(15 |
) |
|
(2 |
) |
– |
|
|
(2 |
) |
– |
|
|
(42 |
) |
– |
|
|
– |
|
– |
|
(42 |
) |
Freight costs |
|
– |
|
|
– |
|
|
(11 |
) |
|
– |
|
– |
|
|
(1 |
) |
– |
|
|
(12 |
) |
– |
|
|
– |
|
– |
|
(12 |
) |
Finished goods |
|
(75 |
) |
|
(1 |
) |
|
(6 |
) |
|
(3 |
) |
(1 |
) |
|
4 |
|
(1 |
) |
|
(83 |
) |
– |
|
|
3 |
|
19 |
|
(61 |
) |
Other4 |
|
39 |
|
|
87 |
|
|
2 |
|
|
– |
|
7 |
|
|
– |
|
– |
|
|
135 |
|
10 |
|
|
1 |
|
– |
|
146 |
|
Cash cost (C1)2,4 |
|
(182 |
) |
|
(167 |
) |
|
(233 |
) |
|
(18 |
) |
– |
|
|
(10 |
) |
(1 |
) |
|
(611 |
) |
– |
|
|
(86 |
) |
– |
|
(697 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation (excluding depreciation in finished goods) |
|
(108 |
) |
|
(52 |
) |
|
(76 |
) |
|
(3 |
) |
– |
|
|
(4 |
) |
(1 |
) |
|
(244 |
) |
4 |
|
|
(13 |
) |
– |
|
(253 |
) |
Royalties5 |
|
3 |
|
|
(27 |
) |
|
(29 |
) |
|
(1 |
) |
– |
|
|
(1 |
) |
– |
|
|
(55 |
) |
– |
|
|
(2 |
) |
– |
|
(57 |
) |
Other |
|
(1 |
) |
|
(7 |
) |
|
(5 |
) |
|
(1 |
) |
– |
|
|
– |
|
– |
|
|
(14 |
) |
– |
|
|
– |
|
– |
|
(14 |
) |
Total cost
(C3)2,4,5 |
|
(288 |
) |
|
(253 |
) |
|
(343 |
) |
|
(23 |
) |
– |
|
|
(15 |
) |
(2 |
) |
|
(924 |
) |
4 |
|
|
(101 |
) |
– |
|
(1,021 |
) |
Cash cost (C1)2,4 |
|
(182 |
) |
|
(167 |
) |
|
(233 |
) |
|
(18 |
) |
– |
|
|
(10 |
) |
(1 |
) |
|
(611 |
) |
– |
|
|
(86 |
) |
– |
|
(697 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
(10 |
) |
|
(9 |
) |
|
(12 |
) |
|
(1 |
) |
– |
|
|
(1 |
) |
– |
|
|
(33 |
) |
– |
|
|
(4 |
) |
– |
|
(37 |
) |
Sustaining capital expenditure and deferred
stripping3 |
|
(30 |
) |
|
(60 |
) |
|
(42 |
) |
|
(1 |
) |
– |
|
|
(2 |
) |
– |
|
|
(135 |
) |
– |
|
|
(24 |
) |
– |
|
(159 |
) |
Royalties5 |
|
3 |
|
|
(27 |
) |
|
(29 |
) |
|
(1 |
) |
– |
|
|
(1 |
) |
– |
|
|
(55 |
) |
– |
|
|
(2 |
) |
– |
|
(57 |
) |
Lease payments |
|
– |
|
|
– |
|
|
(1 |
) |
|
– |
|
– |
|
|
(1 |
) |
– |
|
|
(2 |
) |
– |
|
|
– |
|
– |
|
(2 |
) |
AISC2,4,5 |
|
(219 |
) |
|
(263 |
) |
|
(317 |
) |
|
(21 |
) |
– |
|
|
(15 |
) |
(1 |
) |
|
(836 |
) |
– |
|
|
(116 |
) |
– |
|
(952 |
) |
AISC (per lb)2,4,5 |
$1.71 |
|
$3.83 |
|
$2.51 |
|
$2.73 |
|
– |
|
$2.90 |
|
– |
|
$2.52 |
|
– |
|
$16.08 |
|
– |
|
|
Cash cost – (C1)
(per lb)2,4 |
$1.45 |
|
$2.43 |
|
$1.85 |
|
$2.24 |
|
– |
|
$2.31 |
|
– |
|
$1.82 |
|
– |
|
$11.78 |
|
– |
|
|
Total cost – (C3)
(per lb)2,4,5 |
$2.22 |
|
$3.69 |
|
$2.72 |
|
$3.07 |
|
– |
|
$3.02 |
|
– |
|
$2.77 |
|
– |
|
$14.18 |
|
– |
|
|
1 Total cost of sales per the Consolidated
Statement of Earnings (loss) in the Company’s annual audited
consolidated financial statements.
2 C1 cash cost (C1), total costs (C3), and all-in
sustaining costs (AISC) are non-GAAP ratios which do not have a
standardized meaning prescribed by IFRS and might not be comparable
to similar financial measures disclosed by other issuers. See
“Regulatory Disclosures”.
3 Sustaining capital expenditure and deferred
stripping are non-GAAP financial measures which do not have a
standardized meaning prescribed by IFRS and might not be comparable
to similar financial measures disclosed by other issuers. See
“Regulatory Disclosures”.
4 Excludes purchases of copper concentrate from
third parties treated through the Kansanshi Smelter.
5 Royalties in C3 and AISC costs for the quarter
and year ended December 31, 2023 exclude the 2022 impact of $28
million attributable to payments pursuant of Law 406 in
Panama. |
For the three months ended December 31, 2022 |
Cobre Panamá |
Kansanshi |
Sentinel |
Guelb Moghrein |
Las Cruces |
Çayeli |
Pyhäsalmi |
Copper |
Corporate & other |
Ravensthorpe |
Enterprise |
Total |
Cost of sales1 |
|
(485 |
) |
|
(373 |
) |
|
(366 |
) |
|
(53 |
) |
|
(24 |
) |
|
(15 |
) |
|
(11 |
) |
|
(1,327 |
) |
(4 |
) |
|
(140 |
) |
– |
(1,471 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
151 |
|
|
60 |
|
|
91 |
|
|
4 |
|
|
– |
|
|
4 |
|
|
1 |
|
|
311 |
|
(1 |
) |
|
17 |
|
– |
327 |
|
By-product credits |
|
47 |
|
|
31 |
|
|
1 |
|
|
30 |
|
|
– |
|
|
1 |
|
|
4 |
|
|
114 |
|
– |
|
|
8 |
|
– |
122 |
|
Royalties |
|
12 |
|
|
21 |
|
|
45 |
|
|
2 |
|
|
– |
|
|
1 |
|
|
– |
|
|
81 |
|
– |
|
|
7 |
|
– |
88 |
|
Treatment and refining charges |
|
(33 |
) |
|
(6 |
) |
|
(17 |
) |
|
(1 |
) |
|
– |
|
|
(2 |
) |
|
(1 |
) |
|
(60 |
) |
– |
|
|
– |
|
– |
(60 |
) |
Freight costs |
|
– |
|
|
– |
|
|
(16 |
) |
|
– |
|
|
– |
|
|
(1 |
) |
|
– |
|
|
(17 |
) |
– |
|
|
– |
|
– |
(17 |
) |
Finished goods |
|
(13 |
) |
|
(15 |
) |
|
17 |
|
|
(1 |
) |
|
1 |
|
|
(1 |
) |
|
4 |
|
|
(8 |
) |
– |
|
|
16 |
|
– |
8 |
|
Other |
|
10 |
|
|
71 |
|
|
4 |
|
|
1 |
|
|
4 |
|
|
– |
|
|
1 |
|
|
91 |
|
5 |
|
|
1 |
|
– |
97 |
|
Cash cost (C1)2,4 |
|
(311 |
) |
|
(211 |
) |
|
(241 |
) |
|
(18 |
) |
|
(19 |
) |
|
(13 |
) |
|
(2 |
) |
|
(815 |
) |
– |
|
|
(91 |
) |
– |
(906 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation (excluding depreciation in finished goods) |
|
(156 |
) |
|
(61 |
) |
|
(89 |
) |
|
(4 |
) |
|
– |
|
|
(3 |
) |
|
(1 |
) |
|
(314 |
) |
– |
|
|
(16 |
) |
– |
(330 |
) |
Royalties |
|
(12 |
) |
|
(21 |
) |
|
(45 |
) |
|
(2 |
) |
|
– |
|
|
(1 |
) |
|
– |
|
|
(81 |
) |
– |
|
|
(7 |
) |
– |
(88 |
) |
Other |
|
(4 |
) |
|
(3 |
) |
|
(3 |
) |
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
(10 |
) |
– |
|
|
(2 |
) |
– |
(12 |
) |
Total cost
(C3)2,4 |
|
(483 |
) |
|
(296 |
) |
|
(378 |
) |
|
(24 |
) |
|
(19 |
) |
|
(17 |
) |
|
(3 |
) |
|
(1,220 |
) |
– |
|
|
(116 |
) |
– |
(1,336 |
) |
Cash cost (C1)2,4 |
|
(311 |
) |
|
(211 |
) |
|
(241 |
) |
|
(18 |
) |
|
(19 |
) |
|
(13 |
) |
|
(2 |
) |
|
(815 |
) |
– |
|
|
(91 |
) |
– |
(906 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
(14 |
) |
|
(9 |
) |
|
(11 |
) |
|
– |
|
|
(2 |
) |
|
– |
|
|
– |
|
|
(36 |
) |
– |
|
|
(4 |
) |
– |
(40 |
) |
Sustaining capital expenditure and deferred
stripping3 |
|
(46 |
) |
|
(24 |
) |
|
(52 |
) |
|
(3 |
) |
|
– |
|
|
(2 |
) |
|
– |
|
|
(127 |
) |
– |
|
|
(7 |
) |
– |
(134 |
) |
Royalties |
|
(12 |
) |
|
(21 |
) |
|
(45 |
) |
|
(2 |
) |
|
– |
|
|
(1 |
) |
|
– |
|
|
(81 |
) |
– |
|
|
(7 |
) |
– |
(88 |
) |
Lease payments |
|
– |
|
|
– |
|
|
(1 |
) |
|
– |
|
|
(1 |
) |
|
– |
|
|
– |
|
|
(2 |
) |
– |
|
|
– |
|
– |
(2 |
) |
AISC2,4 |
|
(383 |
) |
|
(265 |
) |
|
(350 |
) |
|
(23 |
) |
|
(22 |
) |
|
(16 |
) |
|
(2 |
) |
|
(1,061 |
) |
– |
|
|
(109 |
) |
– |
(1,170 |
) |
AISC (per lb)2,4 |
$2.01 |
|
$3.55 |
|
$2.25 |
|
$3.19 |
|
$4.33 |
|
$3.01 |
|
$0.00 |
|
$2.42 |
|
– |
|
$11.10 |
|
– |
|
Cash cost – (C1)
(per lb)2,4 |
$1.63 |
|
$2.81 |
|
$1.55 |
|
$2.57 |
|
$4.02 |
|
$2.46 |
|
$0.00 |
|
$1.86 |
|
– |
|
$9.32 |
|
– |
|
Total cost – (C3)
(per lb)2,4 |
$2.54 |
|
$3.96 |
|
$2.42 |
|
$3.35 |
|
$4.09 |
|
$3.31 |
|
$0.00 |
|
$2.79 |
|
– |
|
$11.70 |
|
– |
|
1 Total cost of sales per the Consolidated
Statement of Earnings (loss) in the Company’s annual audited
consolidated financial statements.
2 C1 cash cost (C1), total costs (C3) and all-in
sustaining costs (AISC) are non-GAAP ratios which do not have a
standardized meaning prescribed by IFRS and might not be comparable
to similar financial measures disclosed by other issuers. See
“Regulatory Disclosures”.
3 Sustaining capital expenditure and deferred
stripping are non-GAAP financial measures which do not have a
standardized meaning prescribed by IFRS and might not be comparable
to similar financial measures disclosed by other issuers. See
“Regulatory Disclosures”.
4 Excludes purchases of copper concentrate from
third parties treated through the Kansanshi Smelter. |
|
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; the status
of Cobre Panamá and the P&SM program, including the potential
impact of the status of Cobre Panamá on the Company’s leverage and
liquidity; the Company’s agreement with the Government of Panama
regarding the long term future of Cobre Panamá and approval of the
same by the National Assembly of Panama; expected timing of
completion of project development at Enterprise and the impact of
ore grades on future production, potential production, operational,
labour or marketing disruptions, including as a result of the
COVID-19 global pandemic, capital expenditure and mine production
costs, the outcome of mine permitting, other required permitting,
the outcome of legal and arbitration proceedings which involve the
Company, the impact of any changes to tax legislation, information
with respect to the future price of copper, gold, nickel, silver,
iron, cobalt, pyrite, zinc 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; plans, targets and commitments regarding
climate change-related physical and transition risks and
opportunities (including intended actions to address such risks and
opportunities), greenhouse gas emissions, energy efficiency and
carbon intensity; use of renewable energy sources, future reporting
regarding climate change and environmental matters, design,
development and operation of the Company’s projects including the
S3 Expansion and scale-back at Ravensthorpe; the Company’s
expectations regarding increased debt management initiatives and
the impact of such initiatives on liquidity and leverage; the
Company’s expectations regarding it’s ability to meet debt
covenants in its senior banking facilities and to renegotiate and
extend such facilities; the Company’s expectations regarding
financing activity and the use of proceeds from the Prepayment
Agreement; the Company’s project pipeline and development and
growth plans; and the timing of the presidential and national
legislative elections in Panama and engagement with the
administration thereafter. Often, but not always, forward-looking
statements or information can be identified by the use of words
such as “aims”, “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, silver, iron, cobalt, pyrite, zinc and
sulphuric acid, anticipated costs and expenditures, the success of
Company’s actions and plans to reduce greenhouse gas emissions and
carbon intensity of its operations, 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 Panama, Zambia,
Peru, Mauritania, Finland, Spain, Turkey, Argentina and Australia,
adverse weather conditions in Panama, Zambia, Finland, Spain,
Turkey, Mauritania, and Australia, labour disruptions, potential
social and environmental challenges (including the impact of
climate change), power supply, mechanical failures, water supply,
procurement and delivery of parts and supplies to the operations,
the production of off-spec material and events generally impacting
global economic, political and social stability and legislative and
regulatory reform. For mineral resource and mineral reserve figures
appearing or referred to herein, varying cut-off grades have been
used depending on the mine, method of extraction and type of ore
contained in the orebody.
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 as 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 made and information contained herein are qualified by
this cautionary statement.
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