First Quantum Minerals Reports Fourth Quarter 2017 Results

First Quantum Minerals Reports Fourth Quarter 2017 Results

PR Newswire

TORONTO, February 12, 2018

TORONTO, February 12, 2018 /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 $36 million ($0.05 per share[1]), a net loss from continuing operations attributable to shareholders of the Company[1] of $115 million ($0.17 per share) and cash flows from continuing operating activities of $203 million ($0.30 per share[1]) for the three months ended December 31, 2017. The results include a $188 million loss realized under the copper sales hedge program for which no tax credit is available and $79 million for impairments and other comparative adjustments.

Results for the full year 2017 are a comparative loss[1] of $111 million ($0.16 per share[1]), a net loss from continuing operations attributable to shareholders of the Company[1] of $316 million ($0.46 per share) and cash flows from continuing operating activities of $914 million ($1.33 per share[1]). The results include a loss realized under the sales hedge program of $568 million for which no tax credit is available, and impairments and other costs and comparative adjustments of $205 million.

FOURTH QUARTER 2017 SUMMARY[2]


   
    1 Net earnings (loss) attributable to shareholders of the Company has been adjusted to
      exclude items which are not reflective of underlying performance to arrive at
      comparative earnings (loss). 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 year ended December 31,
      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 of 2016 was presented to exclude
      Kevitsa. On October 1, 2017, Ravensthorpe was placed on care and maintenance.
   3  Production is presented on a copper contained basis, and is presented prior to
      processing through the Kansanshi smelter.
   4  AISC, C1 and C3 costs per pound are not recognized under IFRS. Refer to the
      "Regulatory Disclosures" section in the MD&A for the year ended December 31, 2017
      for further information.

CEO'S COMMENTS 

"2017 was another successful year for First Quantum. Our achievements were realized through the continued dedication and efforts of our entire workforce and partners," noted Philip Pascall, Chairman and CEO.

"We made significant progress on our copper growth objective. Sentinel's ramp-up over the year accounted for a good part of that progress as did the continued strong performances at the Kansanshi complex and Las Cruces.  While our smaller operations are managing the challenges of being in the latter part of their lives, they do make good contributions both in production and providing unique training and experience for our valuable workforce. 2017 marked the sixth consecutive year that we have increased our copper production. This is an achievement we are proud of especially in light of the tough conditions faced by our industry over the past few years.

"2018 is an important year for us with the start of the critical phased commissioning of our largest project to date - Cobre Panama. We believe the project will enter operations at a time when the fundamentals for copper will be at their strongest. This has informed our decision to bring forward an expansion and increase our ownership interest.

"Through this period of significant growth for our Company, we are also committed to deleveraging the balance sheet and providing some return to our shareholders who have been supportive of our vision and strategy," Mr. Pascall concluded.

OPERATING HIGHLIGHTS 


   

                                               Three months ended        Year ended
                                                   December 31           December 31
    (U.S. dollars where applicable)                 2017        2016      2017      2016

    COPPER
             - Production (tonnes)               154,319     146,101   573,963   539,458
             - Sales (tonnes)                    151,905     136,265   580,130   535,613
             - Cost of production:
                            o AISC (per lb)        $1.76       $1.71     $1.65     $1.46
                            o C1 (per lb)          $1.30       $1.22     $1.23     $1.06
                            o C3 (per lb)          $2.16       $1.91     $2.05     $1.83
             - Realized price (per lb)             $2.50       $2.18     $2.33     $2.26

    NICKEL
               Production (contained
             - tonnes)                                 -       6,206    17,837    23,624
             - Sales (contained tonnes)              865       6,073    18,683    25,882
             - Cost of production:
                            o AISC (per lb)      ($0.51)       $5.03     $5.29     $5.29
                            o C1 (per lb)        ($0.61)       $4.46     $4.45     $4.66
                            o C3 (per lb)        ($0.51)       $6.16     $6.17     $6.34
               Realized price (per payable
             - lb)                                 $5.37       $4.50     $4.67     $4.25

    GOLD
             - Production (ounces)                51,904      54,234   199,736   214,012
             - Sales (ounces)                     50,723      45,620   201,376   232,783

FINANCIAL HIGHLIGHTS




   

                                            Three months ended            Year ended
                                                December 31               December 31
    (U.S. dollars millions, except
    where noted otherwise)                       2017           2016       2017       2016

    Sales revenues                                885            689      3,310      2,673
    Gross profit                                  117             52        335        339

    Net earnings (loss) from
    continuing operations attributable
    to
    shareholders of the Company                 (115)             12      (316)        222
    Net loss from discontinued
    operations                                      -              -          -      (267)
    Net earnings (loss) per share from
    continuing operations
    attributable to shareholders of
    the Company                               ($0.17)          $0.02    ($0.46)      $0.32

    Net earnings (loss) per share[5]          ($0.17)          $0.02    ($0.46)    ($0.07)
    Basic and diluted earnings (loss)
    per share[5]                              ($0.17)          $0.02    ($0.46)    ($0.07)

    Comparative EBITDA                            318            218      1,154        964
    Comparative earnings (loss)                  (36)             27      (111)        165
    Comparative earnings (loss) per
    share                                     ($0.05)          $0.04    ($0.16)      $0.24

    Cash flows from continuing
    operating activities                          203             93        914        914


   
    5 2016 figures include discontinued operations.

THREE-YEAR GUIDANCE 


Capital Expenditures  [6] 

    (U.S. dollars millions)                2018 2019 2020

    Total Cobre Panama [7]                1,180  382    -
    Third-party contribution [8]          (354) (89)    -
    First Quantum's share [9]               826  293    -
    Capitalized stripping                   200  200  200
    Sustaining capital and other projects   360  400  400
    Total net capital expenditures        1,386  893  600


   
    6 Excludes capitalization of any net pre-commercial production costs, revenue and
       interest.
    7 Reflects the revised total capital expenditure estimate of $6.3 billion.
      Third-party contributions are from the pro-rata funding under a $1 billion precious
    8 metals stream agreement and KORES' 10% indirect interest in the project.
    9 Based on the current 90% ownership.


Production   

    (000's)                                   2018 2019      2020

    Copper - excluding Cobre Panama (tonnes)   590  595       610
    Nickel (contained tonnes)                    -    -         -
    Gold - excluding Cobre Panama (ounces)     200  200       195
    Zinc (tonnes)                               20   17         5

    Cobre Panama [10] - copper (tonnes)          - 150+ 270 - 300

 


   
    10 Assumes the following:
       a) Start of commissioning in fourth quarter 2018.
       b) Continued ramp-up in 2019 with copper production estimated at a
          minimum of 150,000 tonnes.
       c) Further ramp-up in 2020 with copper production between 270,000 and
          300,000 tonnes.


Copper AISC and C1 Cost  [11]


    (Per pound)          2018          2019          2020

    AISC        $1.65 - $1.85 $1.65 - $1.80 $1.65 - $1.80
    C1          $1.20 - $1.40 $1.20 - $1.40 $1.20 - $1.40

 


   
    11 Does not include estimates for Cobre Panama which are projected at $1.20 per pound
       C1 and $1.50 per pound AISC, net of a by-product credit of $0.25 per pound at
       steady-state.

CONFERENCE CALL & WEBCAST 

Conference call and webcast details are as follows:


   
    Date:     February 12, 2018
    Time:     9:00 am (EST); 2:00 pm (GMT); 6:00 am (PST)

    Webcast:  http://www.first-quantum.com

    Dial in:  North America: (toll free) (877)291-4570
              North America and international: 1(647)-788-4919
              United Kingdom: (toll free) 0-800-051-7107

    Replay:   Available from noon (EST) on February 12, until 11:59 pm (EST) on February
              19, 2018

              North America: (toll free) (800)585-8367
              North America and international: 1(416)621-4642

    Passcode: 4089109

COMPLETE FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS  

The complete audited consolidated financial statements and Management's Discussion and Analysis for the year ended December 31, 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 

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, other required 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, the United States and Australia, adverse weather conditions in Zambia, Finland, Spain, Turkey, Mauritania and Panama, labour disruptions, potential social and environmental challenges, 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.

Visit our website at http://www.first-quantum.com

North American contact:
Sharon Loung,
Director, Investor Relations,
Tel: +1-(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

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