(In United States dollars, except where noted otherwise)
VANCOUVER, British Columbia,
April 29, 2019 /PRNewswire/ --
First Quantum Minerals Ltd. ("First Quantum" or "the
Company") (TSX: FM) today reported comparative
earnings1 of $95 million
($0.14 per share1), net
earnings1 attributable to shareholders of the Company of
$53 million ($0.08 per share) and cash flows from operating
activities of $159 million
($0.23 per share1) for the
three months ended March 31, 2019
("Q1").
SUMMARY:
- Stable Operational Results; Delivering on
Expectation
-
- 136,969 tonnes of copper2 produced including 25
tonnes of pre-commercial production at Cobre Panama.
-
- Sentinel delivered another strong quarter with copper
production of 57,716 tonnes, a 15% increase from Q1 2018, a record
for Q1.
- Kansanshi production was impacted by the planned processing of
lower grade oxide ore and lower throughput.
- Q1 unit cost of copper production3: All-in
sustaining cost ("AISC") = $1.77 per
pound; Cash cost ("C1") = $1.34 per
pound; Total cost ("C3") = $2.21 per
pound.
Generated Strong Earnings and Cash Flow
- Generated net earnings attributable to shareholders of the
Company1 of $53 million
and comparative earnings1 of $95
million or $0.14 per
share.
- $159 million of cash flows from
operating activities ($0.23 per
share3) during the quarter.
- Ended the quarter with $850
million in net unrestricted cash and cash equivalents,
$520 million of committed undrawn
facilities and was in full compliance with all financial
covenants.
Improved Liquidity; Extended Debt Maturities
- Secured a new $2.7 billion Term
Loan and Revolving Credit Facility replacing the existing
$1.5 billion Revolving Credit
Facility. The new Facility comprises a $1.5 billion Term Loan Facility and a
$1.2 billion Revolving Credit
Facility, maturing on December 31,
2022. The financing includes revised financial covenants,
extends debt maturities, and improves financial flexibility through
added liquidity.
- On March 27, 2019, $821 million of the senior notes due February 2021 were redeemed at a price of 101.75
plus accrued interest.
Significant Milestones Achieved at Cobre Panama; Ramp-up on
Schedule
- First ore was introduced to the mill and 25 tonnes of copper
concentrate was produced during the quarter. The project remains on
schedule to deliver between 140,000 – 175,000 tonnes in 2019 with
approximately 80% of total production expected in the second half
of the year and is expected to be running at an annualized rate of
72 million tonnes per year by year end.
- Power station construction and commissioning is now
complete.
- Ore commissioning of the first process plant train was
completed.
- Construction and lining of the Semi-Autogenous Grinding ("SAG")
mills 1 and 2 and ball mills 1, 2 and 3.
Other
- On January 23, 2019, the Company
announced a land slippage at Las Cruces, and the immediate
suspension of production. On February 1,
2019 the Company announced the production resumed at the
processing plant with the processing of lower grade stockpiled ore
which is expected to continue while the necessary regulatory
approvals are obtained to begin the mining of Phase 6, an area
unaffected by the incident. Las Cruces is expected to produce
45,000 tonnes of copper in 2019 and 2020.
- Further to the changes to the mining tax regime that were
enacted January 1, 2019, the Minister
of Finance of Zambia also
announced the abolition of value-added-tax ("VAT") and the proposed
introduction of a non-refundable sales tax at rates of 9% and 16%
for local goods and services, and imported goods and services,
respectively. The Government of the Republic of Zambia has confirmed that they plan for the
sales tax to be effective July 1,
2019, but this is subject to the required laws being passed
and implemented.
CEO'S COMMENTS
"It has been gratifying to see the successful start-up of our
Cobre Panama project. As ramp-up progresses, Cobre Panama
will allow us to deliver on our stated objectives of increased
geographic diversification and increased copper production. We are
now realizing the benefits of good design and quality assurance in
construction. It is especially rewarding to see our plans for
environmental management functioning as intended, and the
meaningful partnerships we have built with local communities are
already playing an integral role in the operation of Cobre Panama,"
commented Philip Pascall, Chairman
and CEO.
"Our first quarter financial results reflect solid operational
performance despite the rainy season in Zambia and lower production from Las Cruces
resulting from the land slippage early in the year. We expect
operational results to improve through 2019 as the ramp-up at Cobre
Panama accelerates. In the coming years, we will be able to deliver
on our commitment to deleveraging our balance sheet. The
refinancing announced earlier in the year was a step towards
improving liquidity and pushing out maturities. We will
continue this effort throughout the year with further progress
expected in 2020 as Cobre Panama starts to meaningfully contribute
to cash flow. We will also consolidate work done on our
project pipeline to enable future growth." Mr. Pascall
concluded.
OPERATING
HIGHLIGHTS
|
|
|
Three months
ended
March
31
|
(U.S. dollars
where applicable)
|
2019
|
2018
|
COPPER
|
|
|
- Production2
(tonnes)
|
136,969
|
145,358
|
- Sales4 (tonnes)
|
130,262
|
138,021
|
|
|
|
- Cost of
production3:
|
|
|
o AISC (per
lb)
|
$1.77
|
$1.72
|
o C1 (per
lb)
|
$1.34
|
$1.27
|
o C3 (per
lb)
|
$2.21
|
$2.16
|
- Realized
price (per lb)
|
$2.79
|
$2.74
|
|
|
|
GOLD
|
|
|
- Production
(ounces)
|
49,357
|
45,929
|
- Sales
(ounces)
|
46,790
|
48,815
|
FINANCIAL
HIGHLIGHTS
|
|
|
Three months
ended
March
31
|
(U.S. dollars
millions, except where noted otherwise)
|
2019
|
2018
|
|
|
|
Sales
revenues
|
857
|
885
|
Gross
profit
|
185
|
181
|
|
|
|
Net earnings (loss)
attributable to shareholders of the Company1
|
53
|
47
|
Basic and diluted
earnings (loss) per share
|
$0.08
|
$0.07
|
|
|
|
Comparative
EBITDA1
|
368
|
363
|
Comparative earnings
(loss)1
|
95
|
49
|
Comparative earnings
(loss) per share1
|
$0.14
|
$0.07
|
|
|
|
Cash flow from
operating activities
|
159
|
796
|
Cash flow from
operating activities per share1
|
$0.23
|
$1.16
|
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 quarter
ended March 31, 2019 for further information.
|
2
Production is presented on a copper contained basis, and is
presented prior to processing through the Kansanshi smelter.
Production includes 25 tonnes of pre-commercial production from
Cobre Panama, which is not including in earnings or C1, C3 or AISC
calculations.
|
3AISC, C1
and C3 costs per pound are not recognized under IFRS. Refer to the
"Regulatory Disclosures" section in the MD&A for the quarter
ended March 31, 2019 for further information. C1, C3 and AISC costs
exclude third-party concentrate purchased at Kansanshi.
|
4Copper
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 1,182 tonnes
for the three months March 31, 2019.
|
CONFERENCE CALL
& WEBCAST
|
Conference call and
webcast details are as follows:
|
|
Date:
|
April 30,
2019
|
Time:
|
9:00 am (EDT); 2:00
pm (BST); 6:00 am (PDT)
|
Webcast:
|
www.first-quantum.com
|
|
|
Dial in:
|
North America (toll
free): (877) 291-4570
|
|
North America and
international: (647) 788-4919
|
|
United Kingdom (toll
free): 0-800-051-7107
|
|
|
Replay:
|
Available from noon
(EDT) on April 30, 2019 until 11:59 pm (EST) on May 21,
2019.
|
|
North America (toll
free): (800) 585-8367
|
|
North America and
international: (416) 621-4642
|
Passcode:
|
4757109
|
COMPLETE FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND
ANALYSIS
The complete consolidated financial statements and Management's
Discussion and Analysis for the quarter ended March 31, 2019 are available at
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 (including at Cobre Las
Cruces as a result of the land slippage in January 2019), 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, silver, nickel, zinc, pyrite, cobalt, iron 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, iron and sulphuric acid, anticipated
costs and expenditures and the ability to achieve the Company's
goals. Forward-looking statements and information by their nature
are based on assumptions and involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements, or industry results, to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements or
information. These factors include, but are not limited to, future
production volumes and costs, the temporary or permanent closure of
uneconomic operations, costs for inputs such as oil, power and
sulphur, political stability in Zambia, Peru,
Mauritania, Finland, Spain, Turkey, Panama, Argentina and Australia, adverse weather conditions in
Zambia, Finland, Spain, Turkey, 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 www.first-quantum.com; North American
contact: Lisa Doddridge, Director,
Investor Relations, Tel: (416) 361-3752, Toll free:
1 (888) 688-6577, E-Mail: lisa.doddridge@fqml.com;
United Kingdom contact:
Clive Newall, President, Tel:
+44 7802 721663, E-Mail: clive.newall@fqml.com