(In United States dollars, except where noted otherwise)
First Quantum Minerals Ltd. ("First Quantum" or the "Company"),
(TSX:FM)(LSE:FQM) today announced comparative net earnings(1) of $133.6 million
or $0.23 per share for the three months ended June 30, 2014 inclusive of $19.5
million or $0.04 per share of unfavorable, recurring acquisition-related
adjustments.
SECOND QUARTER 2014 HIGHLIGHTS(2)
-- Higher production in main metals:
-- Copper up 4% to 107,808 tonnes
-- Nickel up 12% to 12,223 tonnes
-- Significantly increased copper sales:
-- Revenues up 11% to $685.1 million despite lower market price
-- Overall sales volume up 20% to 114,449 tonnes
-- Kansanshi sales volume up 26% over Q2 2013 and Q1 2014
-- 14% higher nickel revenues to $147.7 million despite 11% lower sales
volume
-- Low cash cost of production maintained:
-- Copper up 8% to $1.45 per pound
-- Nickel down 24% to $4.16 per pound
-- Growth projects supported by strong cash flow from operations and
enhanced financing:
-- $388.6 million of cash flow generated by operations(3)
-- $769.4 million cash balance including restricted cash at June 30,
2014
-- Further enhanced financial flexibility with issuance of $850.0
million of senior notes
-- $618.6 million invested in the expansion of the production base
-- Sentinel advanced to 94% overall completion
-- Phase 1 copper smelter advanced to 78% overall completion; initial
commissioning started in July
-- Enterprise nickel advanced
-- Proposed acquisition of Lumina Copper Corporation expected to close
on or before August 30, 2014
(1) Earnings attributable to shareholders of the Company have been adjusted to
remove the effect of unusual items to arrive at comparative earnings.
Comparative earnings and comparative earnings 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.
(2) Results are compared to the second quarter 2013, unless noted otherwise.
(3) Cash flow from operations before changes in working capital and tax paid.
CEO'S COMMENTS
"Continued solid operations and the benefits of our cost control drive underlie
the results for the quarter. The operational flexibility that has been built
into Kansanshi was particularly evident as good headway was made on reducing
concentrate inventory by utilizing as much of its recently-expanded oxide
circuit as economically feasible. Both our nickel operations had good quarters
with Kevitsa turning in one of its best performances since startup," noted
Philip Pascall, First Quantum's CEO and Chairman.
"The second half of 2014 is an important one for First Quantum. Both the Phase 1
copper smelter and Trident project are tracking well for staged commissioning
during this period towards commercial operations in 2015. These are significant
components in the Company's growth and when in operation, they are expected to
employ an additional 2,400 people, add up to 300,000 tonnes of new copper
production capacity and enhance the overall unit operating cost.
"Our balance sheet remains strong. With the addition of extra financing
flexibility during the quarter, funding for our growth projects is well provided
for and we were able to take the opportunity to supplement our growth pipeline
with our proposed acquisition of Lumina Copper Corporation. This underscores our
belief in the fundamentals of copper and is another step in our long-stated
objective of geographical diversification through the acquisition of world
class, early-stage copper assets. The Taca Taca project is at the stage where we
can apply our resources and development expertise to realize its full potential
and further add to our copper production profile," Mr. Pascall concluded.
FINANCIAL HIGHLIGHTS
------------------------------------------------
Three months ended June Six months
30 ended June 30
------------------------------------------------
(U.S. dollars millions,
except where noted
otherwise) 2014 2013 2014 2013(1)
----------------------------------------------------------------------------
Sales revenues 945.1 869.3 1,835.6 1,770.5
Gross profit 292.6 201.1 574.2 511.3
EBITDA(2) 381.5 284.2 745.1 594.6
Net earnings attributable to
shareholders of the
Company(3) 133.6 71.9 260.4 184.3
Earnings per share $0.23 $0.12 $0.44 $0.35
Diluted earnings per share $0.23 $0.12 $0.44 $0.34
----------------------------------------------------------------------------
Comparative earnings(3) 133.6 103.6 260.4 257.4
Comparative earnings per
share(3) $0.23 $0.18 $0.44 $0.48
Cash flow from operations,
before changes in working
capital and tax paid 388.6 281.6 758.7 606.3
----------------------------------------------------------------------------
(1) Financial results for the six months ended June 30, 2013 include the results
of the Las Cruces mine (100%), the Cayeli mine (100%), and the Pyhasalmi mine
(100%) (together "the acquired operations") from March 22, 2013, the date of
acquisition.
(2) Earnings before interest, tax, depreciation and amortization ("EBITDA") are
not recognized under IFRS. Refer to the "Regulatory Disclosures" section in the
Management's Discussion and Analysis ("MD&A") for the three and six months ended
June 30, 2014, for further information.
(3) Net earnings attributable to shareholders of the Company have been adjusted
to remove the effect of unusual items to arrive at comparative earnings.
Comparative earnings and comparative earnings 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.
OPERATING HIGHLIGHTS
------------------------------------------------
Three months ended June Six months
30 ended June 30
------------------------------------------------
(U.S. dollars where
applicable) 2014 2013 2014 2013(1)
----------------------------------------------------------------------------
Copper production (tonnes) 107,808 103,694 220,926 183,002
Copper sales (tonnes) 114,449 95,491 217,235 184,600
Cash cost of copper
production (C1)(2) (per lb) $1.45 $1.34 $1.41 $1.43
Realized copper price (per
lb) $2.97 $3.10 $3.03 $3.29
Nickel production (contained
tonnes) 12,223 10,875 24,061 21,947
Nickel sales (contained
tonnes) 10,651 11,927 24,748 22,975
Cash cost of nickel
production (C1)(2) (per lb) $4.16 $5.45 $4.30 $5.38
Realized nickel price (per
payable lb) $8.45 $6.82 $7.38 $7.29
Gold production (ounces) 60,723 63,567 120,887 119,511
Gold sales (ounces) 60,135 59,381 113,261 118,172
----------------------------------------------------------------------------
(1) Operating results for the six months ended June 30, 2013 include those of
the Las Cruces mine (100%), the Cayeli mine (100%) and the Pyhasalmi mine (100%)
from March 22, 2013, the date of acquisition.
(2) Cash costs (C1) is not recognized under IFRS. Refer to the "Regulatory
Disclosures" section in the MD&A for the three and six months ended June 30,
2014, for further information.
UPDATED FULL YEAR 2014 GUIDANCE
-- Total production
-- copper between 418,000 and 444,000 tonnes
-- nickel between 45,000 and 48,000 tonnes
-- gold between 221,000 and 242,000 ounces
-- zinc between 55,000 and 60,000 tonnes
-- palladium between 22,000 and 24,000 ounces
-- platinum between 26,000 and 29,000 ounces
-- Cash cost of production
-- copper between $1.32 and $1.48 per pound
-- nickel between $4.40 and $4.90 per pound
-- Capital expenditures of between $2.2 billion and $2.4 billion, excluding
capitalization of any pre-commercial production costs and capitalized
interest
CONFERENCE CALL & WEBCAST
The Company will host a conference call and webcast to discuss the results on
Thursday, July 31, 2014.
Conference call and webcast details are as follows:
Date: July 31, 2014
Time: 9:00 am (EDT); 2:00 pm (BST); 6:00 am (PDT)
Webcast: http://www.first-quantum.com/
Dial in: North America: 800 709 0218 (toll free)
International and North America: 1 647 722 6851
United Kingdom: 0800 496 0830 (toll free) or 44 207 855 8971
Replay: Canada and international: 1 416 626 4100
OR
Toll free North America: 800 558 5253
Passcode: 21724489
The conference call replay will be available from 11:00 am (EDT) July 31, 2014
until 11:59 pm (EDT) on August 7, 2014.
COMPLETE FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS
The complete unaudited condensed interim consolidated financial statements, and
MD&A for the three and six months ended June 30, 2014 are available at
www.first-quantum.com and should be read in conjunction with this news release.
BASIS OF PRESENTATION
This news release and the Company's financial statements have been prepared in
accordance with IFRS and are presented in United States dollars, except where
noted. Changes in accounting policies have been applied consistently to
comparative periods unless otherwise noted.
On Behalf of the Board of Directors of First Quantum Minerals Ltd.
G. Clive Newall, President
12g3-2b-82-4461
Listed in Standard and Poor's
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. These
forward-looking statements are principally included in the Development
activities section and are also disclosed in other sections of the document. The
forward looking statements include estimates, forecasts and statements as to the
Company's expectations of production and sales volumes, expected timing of
completion of project development at Kansanshi, Sentinel, Enterprise and Cobre
Panama, 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 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. Although management believes that the assumptions made and the
expectations represented by such statements or information are reasonable, there
can be no assurance that a forward-looking statement or information herein will
prove to be accurate. 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, costs for inputs such as oil, power and sulphur,
political stability in Zambia, Peru, Mauritania, Finland, Spain, Turkey, Panama
and Australia, adverse weather conditions in Zambia, Finland, Spain, Turkey and
Mauritania, labour disruptions, mechanical failures, water supply, procurement
and delivery of parts and supplies to the operations, 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 undertake 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
First Quantum Minerals Ltd. - North American contact:
Sharon Loung
Director, Investor Relations
(647) 346-3934 / Toll Free: 1 (888) 688-6577
(604) 688-3818 (FAX)
sharon.loung@fqml.com
First Quantum Minerals Ltd. - United Kingdom contact:
Clive Newall
President
+44 140 327 3484
+44 140 327 3494 (FAX)
clive.newall@fqml.com
www.first-quantum.com
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