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