First Quantum Minerals Reports Fourth Quarter And Year-End 2021
Results
First Quantum Minerals Ltd. (“First Quantum” or the “Company”)
(TSX: FM) today reported results for the three months and
year-ended December 31, 2021. For the three months ended December
31, 2021 (“Q4”), the Company reported net earnings attributable to
shareholders of the Company of $247 million ($0.36 per share),
adjusted earnings1 of $306 million ($0.44 per share2), and cash
flows from operating activities of $760 million ($1.10 per share2).
For the year-ended 2021, the Company reported net earnings
attributable to shareholders of the Company of $832 million ($1.21
per share), adjusted earnings1 of $826 million ($1.20 per share2),
and cash flows from operating activities of $2,885 million ($4.19
per share2).
“First Quantum’s operations continue to
demonstrate resilience in dealing with the challenges brought about
by the COVID-19 pandemic and new variants as they emerge. We are in
a period of solid cash flow generation for the Company and while
debt reduction remains a priority, we are pleased to cautiously
commence increased capital returns to our shareholders with our new
dividend framework. We have released our inaugural Climate Change
report which recognizes our obligation to mine responsibly and to
report on our actions to address climate change,” commented Philip
Pascall, Chairman and CEO. “I am grateful for the dedication and
commitment of the entire team at First Quantum and for the support
of Governments and communities in our host countries. It is with
these efforts and this support that First Quantum is placed in a
strong position for 2022 and beyond.”
FOURTH QUARTER SUMMARY
- Fourth quarter
financial results benefitted from higher sales volumes and a higher
realized copper price2 of $4.08 per lb as the Company’s hedge
profile continued to decline, partially offset by higher costs. The
Company’s exposure to the strong copper price environment is
expected to continue to improve with the declining profile of the
hedge book with no new additional copper hedges were entered into
during the fourth quarter. On the basis of continued strong
operational performance, the Company anticipates continued strong
future cash flow and expects to be in a position to continue its
debt reduction program, to advance growth programs, to support
Environmental, Social & Governance (“ESG”) initiatives and to
cautiously increase dividend payments in 2022.
- Q4 2021 copper
production totalled 201,823 tonnes, taking the full year production
to 816,435 tonnes, the highest annual copper production in First
Quantum’s history. Through advancement of its brownfield portfolio,
the Company sees a path to 1 million tonnes of copper
production.
- Copper C1 cash
costs2 averaged $1.39 per lb during the quarter. While operating
costs are facing inflationary pressures, Q4 2021 was also impacted
by higher electricity costs due to regular maintenance shutdown
works to Unit 1 of the power station at Cobre Panama. During the
quarter, however, there was a non-recurring reduction in provisions
at Kansanshi from the Zambian Electricity Supply Corporation
Limited (“ZESCO”) arbitration case that was settled in December
2021.
1 Adjusted earnings (loss) and EBITDA 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. Adjusted earnings (loss) and
EBITDA were previously named comparative earnings and comparative
EBITDA, respectively, and the composition remains the same. See
“Regulatory Disclosures” in this News Release for a reconciliation
of EBITDA and adjusted earnings (loss) to the IFRS measures. The
use of adjusted earnings (loss) and EBITDA represents the Company’s
adjusted earnings (loss) metrics.2 Adjusted earnings (loss) per
share, cash flows from operating activities per share, realized
metal prices, and copper C1 cash costs (C1) are non-GAAP ratios
which do not have a standardized meaning prescribed by IFRS and
might not be comparable to similar financial ratios disclosed by
other issuers.
- Cash flow from
operating activities was $760 million for Q4 2021 and cumulatively
$2,885 million for the full year 2021. Net debt1 decreased by $249
million during the quarter, bringing the balance down to $6,053
million as at December 31, 2021. The Company expects to achieve the
previously announced $2 billion debt reduction target in H1 2022
and has increased the short to medium term target by an additional
$1 billion. A new dividend policy was announced on January 17,
2022.
Q4 2021 OPERATIONAL
HIGHLIGHTS
As previously reported, fourth quarter total
copper production of 201,823 tonnes was down 4% from Q3 2021.
Production declined quarter-over-quarter as a result of expected
lower ore grades at Cobre Panama while production at Kansanshi and
Sentinel remained consistent with Q3 2021 levels. Copper C1 cash
costs2 averaged $1.39 per lb during the quarter, up 10% from the
previous quarter, as the company continued to experience cost
increases related to freight and fuel. For the full year 2021,
First Quantum achieved its highest ever annual copper production of
816,435 tonnes, a 5% increase from 2020, attributable to record
production at Cobre Panama and the resilience of the other
operations. Copper C1 cash costs2 averaged $1.30 per lb for the
year, the midpoint of the Company’s guidance range of $1.25 to
$1.35 per lb.
- Cobre Panama
produced 80,030 tonnes of copper in Q4 2021, a decrease of 8%
quarter-over-quarter principally due to expected lower ore grades
based on the mine plan. During the quarter, Unit 1 of the power
plant continued maintenance shutdown works, which were completed in
late January. Although replacement power for Unit 1 was sourced
from the grid, a 7-day unplanned shutdown of Unit 2 impacted total
tonnes milled during the quarter. However, Cobre Panama set a
record in monthly copper production in October. Copper C1 cash
cost2 for the quarter was $1.57 per lb, a 24% increase from Q3 2021
as electricity was drawn from the grid at spot rates during the
period of maintenance to the power station.
- Kansanshi copper
production in the fourth quarter of 2021 was 51,939 tonnes, a
slight improvement over Q3 levels on improved ore grades. Copper C1
cash costs2 were $0.79 per lb in Q4 2021, down 26% from the
previous quarter. Copper C1 cash costs during the quarter
benefitted from a reduction on operational provisions following the
conclusion of the arbitration case on electricity prices charged by
ZESCO in December 2021. This is a one-time benefit that is not
expected to recur in future quarters.
- Sentinel
delivered its best quarterly production of the year with 60,197
tonnes of copper produced on record quarterly throughput rates
equivalent to 60 million tonnes per annum (“Mtpa”). Sentinel copper
C1 cash cost2 in the fourth quarter of $1.51 per lb was up 10%
quarter-over-quarter, reflecting inflationary pressures such as
higher consumables, fuel and labour costs.
- Copper sales in
Q4 2021 totalled 213,087 tonnes, up from 194,278 tonnes in Q3 2021.
In the fourth quarter, there was a recovery in sales volumes at
Kansanshi and Sentinel as a number of planned shipments from the
third quarter were rolled into the fourth quarter. Logistical
challenges for Zambian sales are expected to continue throughout
the first quarter of 2022.
- Total gold
production for Q4 2021 was 74,945 ounces, a 4% decrease from the
previous quarter, mainly attributable to lower gold production at
Cobre Panama. Gold sales volumes of 79,403 ounces for the fourth
quarter remained fairly consistent with the prior quarters in the
year.
- Ravensthorpe had
its lowest quarterly nickel production of the year at 3,385
contained tonnes. Fourth quarter production was impacted by the
delayed transition to the Shoemaker Levy orebody and unplanned
maintenance at the power plant main steam pipe. However,
commissioning of the Shoemaker Levy conveyor was completed later in
the quarter and the resulting material handling performance and
beneficiation upgrade was improved compared to the Hale Bopp ore,
in line with expectations. Skilled labour availability and high
sulphur prices remain a challenge.
1 Net debt is a supplementary financial measure 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”2 Cash cost of copper
production (C1) is a non-GAAP financial 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”
CONSOLIDATED OPERATING HIGHLIGHTS
|
QUARTERLY |
FULL YEAR |
|
Q4 2021 |
Q3 2021 |
Q4 2020 |
2021 |
2020 |
Cobre Panama |
80,030 |
87,242 |
65,520 |
331,000 |
205,548 |
Kansanshi |
51,939 |
50,987 |
52,630 |
202,159 |
221,487 |
Sentinel |
60,197 |
59,931 |
62,993 |
232,688 |
251,216 |
Other sites |
9,657 |
11,699 |
22,028 |
50,588 |
100,660 |
Copper production (tonnes)1 |
201,823 |
209,859 |
203,171 |
816,435 |
778,911 |
Copper sales (tonnes) |
213,087 |
194,278 |
217,041 |
821,889 |
764,471 |
Gold production (ounces) |
74,945 |
78,124 |
68,747 |
312,492 |
265,112 |
Gold sales (ounces)2 |
79,403 |
79,773 |
70,905 |
321,858 |
277,291 |
Nickel production (contained tonnes) |
3,385 |
4,248 |
5,603 |
16,818 |
12,695 |
Nickel sales (contained tonnes) |
3,756 |
4,055 |
5,343 |
17,078 |
12,120 |
CONSOLIDATED FINANCIAL HIGHLIGHTS
|
QUARTERLY |
FULL YEAR |
|
Q4 2021 |
Q3 2021 |
Q4 2020 |
|
2021 |
|
2020 |
Sales revenues3 |
|
2,061 |
|
1,747 |
|
1,562 |
|
7,212 |
|
5,070 |
Gross profit |
|
784 |
|
613 |
|
443 |
|
2,562 |
|
1,077 |
Net earnings (loss) attributable to shareholders of the
Company |
|
247 |
|
303 |
|
9 |
|
832 |
|
(180) |
Basic earnings (loss) per share |
$0.36 |
$0.44 |
$0.01 |
$1.21 |
($0.26) |
Diluted earnings (loss) per share |
$0.36 |
$0.44 |
$0.01 |
$1.20 |
($0.26) |
Cash flows from operating activities |
|
760 |
|
703 |
|
533 |
|
2,885 |
|
1,613 |
Net debt4 |
|
6,053 |
|
6,302 |
|
7,409 |
|
6,053 |
|
7,409 |
EBITDA4,5 |
|
1,085 |
|
886 |
|
725 |
|
3,684 |
|
2,152 |
Adjusted earnings (loss)4 |
|
306 |
|
197 |
|
53 |
|
826 |
|
(46) |
Adjusted earnings (loss) per share6 |
$0.44 |
$0.29 |
$0.08 |
$1.20 |
($0.07) |
Cash cost of copper production (C1) (per lb)7 |
$1.39 |
$1.26 |
$1.28 |
$1.30 |
$1.21 |
Total cost of copper production (C3) (per lb)7 |
$2.39 |
$2.22 |
$2.20 |
$2.23 |
$2.11 |
All-in sustaining cost (AISC) (per lb)7 |
$2.05 |
$1.87 |
$1.77 |
$1.88 |
$1.63 |
Realized copper price (per lb)7 |
$4.08 |
$3.68 |
$2.97 |
$3.64 |
$2.74 |
1 Production is presented on a contained basis,
and is presented prior to processing through the Kansanshi
smelter.2 Excludes refinery-backed gold credits purchased and
delivered under the precious metal streaming arrangement.3 Sales
revenues and cost of sales in the year ended 2020 have been reduced
by $129 million from previously reported values as refinery-backed
gold and silver credits on the Company’s precious metal stream
arrangement are now netted within sales revenues rather than
included in cost of sales.4 EBITDA and adjusted earnings (loss) are
non-GAAP financial measures and net debt is a supplementary
financial measure. These do not have a standardized meaning under
IFRS and might not be comparable to similar financial measures
disclosed by other issuers. Adjusted earnings 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”.5 Adjustments to EBITDA in 2021 relate principally to
foreign exchange revaluations (2020 - foreign exchange
revaluations).6 Adjusted earnings (loss) per share is a non-GAAP
financial ratio, which does not have a standardized meaning under
IFRS, and might not be comparable to similar financial measures
disclosed by other issuers. See “Regulatory Disclosures”.7 Realized
metal prices, all-in sustaining cost (AISC), cash cost of copper
production (C1), and total cost of copper production (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”.
FINANCIAL HIGHLIGHTS
Financial results for the fourth quarter
benefitted from higher sales volumes and a higher realized copper
price1 of $4.08 per lb as the Company’s hedge profile continued to
decline, partially offset by higher costs.
- Q4 2021 adjusted
earnings were $306 million ($0.44 adjusted earnings per share), a
significant improvement from Q3 2021 of $197 million ($0.29 per
share). Net earnings included a total impairment charge of $44
million against the Sese Integrated Power project, exploration
assets and housing assets.
- Gross profit of
$784 million and EBITDA of $1,085 million for the quarter were
higher (28% and 22%, respectively) than the preceding quarter.
- Cash flows from
operating activities was $760 million for Q4 2021 and cumulatively
$2,885 million for the full year 2021.
- Debt reduction:
Net debt3 decreased by $249 million during the quarter, bringing
the balance down to $6,053 million as at December 31, 2021. Net
debt3 decreased by $1,356 million during the year. At December 31,
2021, total debt was $7,912 million.
- Debt
restructure: On October 14, 2021, the Company signed a new $2.925
billion Term Loan and Revolving Credit Facility (the "Facility").
This new Facility replaces the existing $2.7 billion Term Loan and
Revolving Credit Facility due to mature December 2022. The new
$2.925 billion Facility comprises a $1.625 billion Term Loan
Facility and a $1.3 billion Revolving Credit Facility, maturing in
2025 and is syndicated to a group of long-standing relationship
banks of First Quantum. The Facility was used to fully prepay and
cancel amounts outstanding on the existing facility, to fully
prepay and cancel a bilateral bank facility for $175 million and
for general corporate purposes. Repayments on the term loan will
commence in December 2022. The Facility has a single Net debt3 to
EBITDA ratio covenant set at 3.5 times over the Facility term.
- Note redemption:
On December 7, 2021, the Company redeemed $600 million of the 2023
Notes at a redemption price of 101.813%. The portion of the
outstanding 2023 Notes to be redeemed was allocated on a lottery
drawing basis at the redemption plus accrued and unpaid
interest.
- As previously
announced, with the company on track to meet the previously
announced $2 billion debt reduction target during the first half of
2022, the target for debt reduction in the short to medium term has
increased by $1 billion.
- The Company has
declared a final dividend of $0.005 Canadian dollar (“CDN”) per
share, in respect of the financial year-ended December 31, 2021.
The final dividend together with the interim dividend of CDN$0.005
per share is a total of CDN$0.01 per share for the 2021 financial
year.
- A new dividend
policy was also adopted by the Company. The Company intends to pay,
on a semi-annual basis, a performance dividend (the “Performance
Dividend”) that represents, in the aggregate, 15% of available cash
flows generated after planned capital spending and distributions to
non-controlling interests. It is expected that a minimum annual
base dividend of CDN$0.10 per share consisting of semi-annual
dividends of CDN$0.05 per share will be part of the Performance
Dividend.
- Copper price
hedges: At December 31, 2021, all of the Company’s unmargined
copper forward sales contracts have matured, with no new hedges put
in place. At February 15, 2022, the Company had 40,000 tonnes of
unmargined zero cost copper collar sales contracts with maturities
to June 2022 at weighted average prices of $3.63 per lb to $4.68
per lb outstanding. Copper sales in the fourth quarter were 24%
hedged. Approximately 5% of expected copper sales for the next 12
months are hedged to unmargined zero cost collar sales
contracts.
1 Realized metal prices and adjusted earnings
(loss) 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”2 Adjusted earnings (loss) and EBITDA 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” in this News Release for a reconciliation of EBITDA
and adjusted earnings (loss) to the IFRS measures. The use of
adjusted earnings (loss) and EBITDA represents the Company’s
adjusted earnings (loss) metrics.3 Net debt is a supplementary
financial measure which does not have a standardized meaning
prescribed by IFRS and might not be comparable to similar financial
measures disclosed by other issuers.
2022 to 2024 GUIDANCE
UPDATE
Three-year guidance on production, C1 cash
costs1, AISC1 and capital expenditures that was previously
disclosed on January 17, 2022 remains unchanged. Copper and nickel
production are forecast to grow to 850,000 to 910,000 tonnes and
40,000 to 50,000 tonnes, respectively, by 2024. Capital cost
guidance has been guided to $1,250 million in 2022 and 2023 and
$1,375 million in 2024.
- Cobre Panama is
expected to produce 330,000 to 360,000 tonnes of copper and 135,000
to 150,000 ounces of gold in 2022. Mill throughput is expected to
ramp up over the course of 2022 to achieve between 85 and 90 Mtpa.
For 2022 as a whole, grades and recoveries are expected to be
consistent with 2021 levels but will fluctuate from quarter to
quarter. The three-year guidance period for Cobre Panama includes
the CP100 Expansion, which includes a new primary crushed ore
screening facility, process water upgrades and the addition of a
sixth ball mill. Completion of construction works and commencement
of commissioning is targeted for the first quarter of 2023 to allow
for a ramp up of production over the course of the year and achieve
a throughput rate of 100 Mtpa by the end of 2023. A Letter of
Intent was signed for incremental electrical supply for the CP100
Expansion, approximately 60-80MW, and is expected to be renewable
power, specifically hydroelectricity, sourced from the Panamanian
grid.
- At Kansanshi,
production in 2022 is expected to range from 190,000 to 210,000
tonnes of copper and 120,000 to 130,000 ounces of gold. Based on
the current mine plan at Kansanshi, while processed ore is expected
to be slightly higher in 2022 relative to 2021, grades are expected
to decline over the course of the year from Q4 2021 levels. For the
three-year guidance period, copper and gold production in 2024
includes some limited production associated to the S3 expansion,
with the development and timing still subject to Board
approval.
- At Sentinel,
copper production in 2022 is expected to be between 260,000 to
280,000 tonnes. Grade is expected to improve from 2021 levels
throughout 2022 as higher-grade ore is exposed in both the Stage 1
and Stage 2 pits. Construction of the fourth in-pit crusher was
completed in the December 2021 and commissioning was completed in
January 2022, which will enable the plant to achieve throughput of
62 Mtpa in 2022.
- 2022 copper
production guidance from Other sites is expected to be 30,000
tonnes.
- Nickel
production in 2022 from Ravensthorpe is expected to be 25,000 to
30,000 tonnes with major shutdowns and descales of autoclaves
scheduled in March and August of this year. Nickel production
for the three-year guidance period includes Enterprise, with first
production assumed during 2023. The development timeline for
Enterprise is expected to be approximately twelve months and still
subject to Board approval.
- C1 cash cost2
guidance over 2022 to 2024 period for both copper and nickel
remains unchanged and reflects recent inflationary and commodity
price pressures as well as movement in foreign exchange rates,
particularly in Zambia. AISC guidance also reflects higher
royalties in Zambia related to copper prices as well as an increase
in sustaining capital expenditure. At this stage, guidance assumes
no change in royalties in Panama. Copper C1 cash cost2 and AISC2
guidance for 2024 includes some limited contribution from the S3
expansion at Kansanshi. Nickel unit cost guidance does not include
Enterprise. By 2024, nickel C1 cash costs2 at Enterprise are
expected to range $4.25/lb to $5.25/lb.
- Guidance on 2022
to 2024 capital expenditures remains unchanged. Within the total
project capital expenditure guidance of $2,210 million over the
three-year period, approximately $1,000 million relates to
Kansanshi, $830 million to Cobre Panama, $60 million to Enterprise
and $15 million to Guelb Moghrein.
1 Cash cost of copper production (C1) and all-in sustaining cost
(AISC) are non-GAAP financial ratios which do not have a
standardized meaning prescribed by IFRS and might not be comparable
to similar financial ratios disclosed by other issuers.
PRODUCTION GUIDANCE
000’s |
2022 |
2023 |
2024 |
Copper (tonnes) |
810 – 880 |
840 – 910 |
850 – 910 |
Gold (ounces) |
285 – 310 |
275 – 300 |
295 – 320 |
Nickel (contained tonnes) |
25 – 30 |
30 – 40 |
40 – 50 |
PRODUCTION GUIDANCE BY OPERATION 1
Copper production guidance (000’s
tonnes) |
2022 |
2023 |
2024 |
Cobre Panama |
330 – 360 |
350 – 380 |
370 – 400 |
Kansanshi |
190 – 210 |
190 – 210 |
205 – 220 |
Sentinel |
260 – 280 |
270 – 290 |
255 – 270 |
Other sites |
30 |
30 |
20 |
Gold production guidance (000’s
ounces) |
|
|
|
Cobre Panama |
135 – 150 |
140 – 155 |
155 – 170 |
Kansanshi |
120 – 130 |
105 – 115 |
110 – 120 |
Other sites |
30 |
30 |
30 |
Nickel production guidance (000’s
contained tonnes) |
|
|
|
Ravensthorpe |
25 – 30 |
25 – 30 |
25 – 30 |
Enterprise |
- |
5 - 10 |
15 – 20 |
1 Production is stated on a 100% basis as the
Company consolidates all operations.
CASH COST AND ALL-IN SUSTAINING COST
Total Copper |
2022 |
2023 |
2024 |
C1 cash cost (per lb)2 |
$1.30 – $1.50 |
$1.30 – $1.50 |
$1.25 – $1.45 |
AISC (per lb)2 |
$1.90 – $2.05 |
$1.90 – $2.05 |
$1.85 – $2.00 |
|
|
|
|
Ravensthorpe Nickel |
2022 |
2023 |
2024 |
C1 cash cost (per lb)2 |
$5.75 - $6.50 |
$5.75 - $6.50 |
$5.50 - $6.25 |
AISC (per lb) 2 |
$7.00 - $7.75 |
$7.00 - $7.75 |
$6.75 - $7.25 |
PURCHASE AND DEPOSITS ON PROPERTY, PLANT &
EQUIPMENT
|
2022 |
2023 |
2024 |
Deferred stripping3,4 |
250 |
250 |
275 |
Sustaining capital4 |
310 |
290 |
290 |
Project Capital4 |
690 |
710 |
810 |
Total purchase and deposits on property, plant and equipment |
1,250 |
1,250 |
1,375 |
2 Cash costs of copper and nickel production (C1), 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 Capitalized stripping represents
additions to what IFRS refers to as the ‘stripping activity
asset’.4 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”.
PANAMA LAW 9 UPDATE
In July 2021, the Government of Panama (“GOP”)
announced the appointment of a high-level commission of senior
government ministers and officials, chaired by the Minister of
Commerce, to discuss the Company’s concession contract. In
September 2021, the Supreme Court upheld its ruling in respect of
the clarification motions presented by the Company to the Court in
relation to its Law 9 decision announced in September 2018 and the
ruling was gazetted in the fourth quarter. We understand that the
upholding of the unconstitutionality ruling against Law 9 of 1997
does not have retroactive effects, pursuant to article 2573 of the
Code of Judicial Proceedings of Panama, therefore the approval of
the mining concession contract which occurred in 1997 with the
enactment of Law 9, remains unaltered, providing operation
continuity as per status quo. In September 2021, the Ministry of
Commerce publicly announced the culmination of the high-level
formal discussions on two topics being environmental and labour
matters.
During January 2022, the GOP tabled a new
proposal, namely that the GOP should receive $375 million in
benefits per year from Cobre Panama and that the existing revenue
royalty will be replaced by a gross profit royalty. The parties
continue to finalize the details behind these principles, including
the appropriate mechanics that would achieve this outcome, the
necessary protections to the business for downside copper price and
production scenarios and to ensure that the new contract and
legislation are both durable and sustainable.
Once an agreement is concluded and the full
contract is documented, it is expected that the newly drafted
legislation will be put to the National Assembly. The Company
welcomes the transparency of the robust ministerial commission
process and is hopeful that this matter can be concluded
shortly.
ZESCO RESOLUTION
In the fourth quarter of 2021, the Company
received a favourable resolution on the case that commenced in June
2018 between ZESCO and Kansanshi.
The arbitration hearing took place on August 22,
2018 and concluded in July 2021 with the Tribunal issuing its award
in November 2021. The Tribunal found in favour of Kansanshi on the
key issues including the appropriate tariff and the return to
Kansanshi of the funds held in the segregated account pursuant to
the Order. In December 2021, the Tribunal awarded Kansanshi its
costs of the arbitration and rejected ZESCO’s application for
interpretation of various parts of the Tribunal’s award.
Despite this dispute, the Company’s operations
generally maintain a constructive relationship with ZESCO,
particularly with regards to the management of technical and supply
issues. Operational and technical dialogue between the parties is
expected to continue in the normal course.
COVID-19
The ongoing challenges presented by COVID-19
have continued throughout the fourth quarter, with the Omicron
variant present on several sites. Fortunately, employees and
neighbouring communities are not experiencing as severe symptoms
from this wave as previous variants. The focus for this quarter has
been to maximize vaccination rates and plan booster vaccination
campaigns for 2022.
The Company continues to maintain strict health
and sanitary protocols to minimize transmission and support the
government health authorities. We continue to work with local
communities to develop support processes and encourage vaccination.
The Company has also redesigned ways of working, with staggered
rosters, remote working and bubble concepts on site to continue
operations while limiting the potential spread.
As cases are identified amongst the workforce,
they are contained and isolated according to the established
protocols and in coordination with local health authorities, with
limited impact to operations. The Company continues to employ
measures to ensure minimal spread, and the health and well-being of
our workforce continues to be a priority.
SUSTAINABILITY
On January 17, 2022, First Quantum published its
Inaugural Climate Change Report. First Quantum has set tangible
targets with an identified realistic path to reduce unit greenhouse
gas emissions by 50% by 2030. The achievement of these targets is
not expected to result in significant increases in capital
expenditures or operating costs from previous forecasts. Details of
the Company’s ESG reporting, including the Company’s primary ESG
report, the annual Environment, Safety and Social Data Report,
policies and related programs, including the Taskforce on
Climate-related Financial Disclosures aligned Climate Change
Report, policies and data can be found at:
https://www.first-quantum.com/English/sustainability/default.aspx
SOCIAL RESPONSIBILITY
The Company has published its Legacy Report
which provides a ten-year overview of the Company’s approach to
social responsibility. This report highlights the Company’s
environmental, community and economic development initiatives,
programs and achievements across the regions in which the
operations are located.
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, 2021 are available at www.first-quantum.com
and at www.sedar.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 16 at 9:00 am
(ET).
Conference call and webcast
details:Toll-free North America: 1-800-952-5114Toronto
Local and International: 1-416-406-0743Toll-free UK:
00-80042228835Passcode: 8095536#Webcast:
www.first-quantum.com
A replay of the webcast will be available on the
First Quantum website. The replay can also be accessed by dialing
1-800-408-3053 and using the passcode 9327693#.
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) 688-6577E-Mail: info@fqml.com
REGULATORY DISCLOSURES
EBITDA1, ADJUSTED EARNINGS1 AND ADJUSTED
EARNINGS PER SHARE2
EBITDA1, adjusted earnings1 and adjusted
earnings per share2 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 2021 |
Q3 2021 |
Q4 2020 |
2021 |
|
2020 |
Operating profit |
722 |
|
775 |
|
357 |
2,598 |
|
695 |
Depreciation |
314 |
|
288 |
|
326 |
1,174 |
|
1,217 |
Other adjustments: |
|
|
|
|
|
Foreign exchange (gain) loss |
(13) |
|
(180) |
|
32 |
(159) |
|
225 |
Impairment expense |
44 |
|
- |
|
- |
44 |
|
- |
Other expense |
12 |
|
4 |
|
8 |
20 |
|
15 |
Revisions in estimates of restoration provisions at closed
sites |
6 |
|
(1) |
|
2 |
7 |
|
- |
Total adjustments excluding depreciation |
49 |
|
(177) |
|
42 |
(88) |
|
240 |
EBITDA1 |
1,085 |
|
886 |
|
725 |
3,684 |
|
2,152 |
|
Q4 2021 |
Q3 2021 |
Q4 2020 |
|
2021 |
|
|
2020 |
Net earnings (loss) attributable to shareholders of the
Company |
|
247 |
|
|
303 |
|
|
9 |
|
832 |
|
|
(180) |
Adjustments attributable to shareholders of the Company: |
|
|
|
|
|
Adjustment for expected phasing of Zambian VAT |
|
(2) |
|
|
4 |
|
|
(5) |
|
16 |
|
|
(80) |
Loss on redemption of debt |
|
21 |
|
|
- |
|
|
(3) |
|
21 |
|
|
5 |
Other |
|
- |
|
|
- |
|
|
11 |
|
- |
|
|
5 |
Total adjustments to EBITDA1 excluding depreciation |
|
49 |
|
|
(177) |
|
|
42 |
|
(88) |
|
|
240 |
Tax and minority interest adjustments |
|
(9) |
|
|
67 |
|
|
(1) |
|
45 |
|
|
(36) |
Adjusted earnings (loss)1 |
|
306 |
|
|
197 |
|
|
53 |
|
826 |
|
|
(46) |
Earnings (loss) per share as reported |
$0.36 |
|
$0.44 |
|
$0.01 |
$1.21 |
|
($0.26) |
Adjusted earnings (loss) per share2 |
$0.44 |
|
$0.29 |
|
$0.08 |
$1.20 |
|
($0.07) |
REALIZED METAL PRICES2
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 SHARE2
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 DEBT3
Net debt comprises unrestricted cash and cash
equivalents, bank overdrafts and total debt.
1Adjusted earnings (loss) and EBITDA 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. The use of adjusted earnings (loss) and EBITDA
represents the Company’s adjusted earnings (loss) metrics.2
Adjusted earnings (loss) per share, operating cash flows per share
and realized metal prices 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 issuers3 Net debt
is a supplementary financial measure which does not have a
standardized meaning prescribed by IFRS and might not be comparable
to similar financial measures disclosed by other issuers.
|
Q4 2021 |
Q3 2021 |
Q4 2020 |
Q4 2019 |
Cash and cash equivalents |
1,859 |
1,918 |
950 |
1,138 |
Bank overdraft |
- |
- |
36 |
615 |
Current debt |
313 |
746 |
871 |
838 |
Non current debt |
7,599 |
7,474 |
7,452 |
7,360 |
Net debt1 |
6,053 |
6,302 |
7,409 |
7,675 |
CASH COST2, ALL-IN SUSTAINING COST2, TOTAL
COST2
The consolidated cash cost (C1)2, all-in
sustaining cost (AISC) 2 and total cost (C3) 2 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 cost2, AISC2 and C32, 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.
AISC2 is defined as cash cost (C1) 2 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.
C32 total cost is defined as AISC2 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.
1Net debt is a supplementary financial measure which does not
have a standardized meaning prescribed by IFRS and might not be
comparable to similar financial measures disclosed by other
issuers.2 All-in sustaining cost (AISC), cash cost of copper
production (C1), and total cost of copper production (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”.
For the three months ended December 31, 2021 |
Cobre Panama |
Kansanshi |
Sentinel |
Guelb Moghrein |
Las Cruces |
Çayeli |
Pyhäsalmi |
Copper |
Corporate & other |
Ravensthorpe |
Total |
Cost of
sales1,i |
|
(485) |
|
|
(295) |
|
|
(294) |
|
|
(50) |
|
|
(26) |
|
|
(10) |
|
|
(8) |
|
|
(1,168) |
|
(15) |
|
|
(94) |
|
(1,277) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
154 |
|
|
71 |
|
|
70 |
|
|
6 |
|
|
- |
|
|
3 |
|
|
- |
|
|
304 |
|
2 |
|
|
8 |
|
314 |
|
By-product credits |
|
48 |
|
|
63 |
|
|
- |
|
|
17 |
|
|
- |
|
|
4 |
|
|
4 |
|
|
136 |
|
- |
|
|
6 |
|
142 |
|
Royalties |
|
16 |
|
|
57 |
|
|
61 |
|
|
1 |
|
|
- |
|
|
1 |
|
|
- |
|
|
136 |
|
- |
|
|
4 |
|
140 |
|
Treatment and refining charges |
|
(30) |
|
|
(7) |
|
|
(15) |
|
|
(2) |
|
|
- |
|
|
(1) |
|
|
- |
|
|
(55) |
|
- |
|
|
- |
|
(55) |
|
Freight costs |
|
(1) |
|
|
- |
|
|
(11) |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(12) |
|
- |
|
|
- |
|
(12) |
|
Finished goods |
|
12 |
|
|
19 |
|
|
(11) |
|
|
9 |
|
|
1 |
|
|
(5) |
|
|
- |
|
|
25 |
|
- |
|
|
8 |
|
33 |
|
Other |
|
20 |
|
|
9 |
|
|
8 |
|
|
(2) |
|
|
- |
|
|
2 |
|
|
- |
|
|
37 |
|
13 |
|
|
- |
|
50 |
|
Cash cost (C1)2 |
|
(266) |
|
|
(83) |
|
|
(192) |
|
|
(21) |
|
|
(25) |
|
|
(6) |
|
|
(4) |
|
|
(597) |
|
- |
|
|
(68) |
|
(665) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation (excluding depreciation in finished goods) |
|
(146) |
|
|
(60) |
|
|
(75) |
|
|
(4) |
|
|
- |
|
|
(6) |
|
|
- |
|
|
(291) |
|
- |
|
|
(8) |
|
(299) |
|
Royalties |
|
(16) |
|
|
(57) |
|
|
(61) |
|
|
(1) |
|
|
- |
|
|
(1) |
|
|
- |
|
|
(136) |
|
- |
|
|
(4) |
|
(140) |
|
Other |
|
(4) |
|
|
(3) |
|
|
(2) |
|
|
1 |
|
|
- |
|
|
- |
|
|
- |
|
|
(8) |
|
- |
|
|
(1) |
|
(9) |
|
Total cost (C3)2 |
|
(432) |
|
|
(203) |
|
|
(330) |
|
|
(25) |
|
|
(25) |
|
|
(13) |
|
|
(4) |
|
|
(1,032) |
|
- |
|
|
(81) |
|
(1,113) |
|
Cash cost (C1)2 |
|
(266) |
|
|
(83) |
|
|
(192) |
|
|
(21) |
|
|
(25) |
|
|
(6) |
|
|
(4) |
|
|
(597) |
|
- |
|
|
(68) |
|
(665) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
(12) |
|
|
(4) |
|
|
(8) |
|
|
- |
|
|
(1) |
|
|
- |
|
|
- |
|
|
(25) |
|
- |
|
|
(3) |
|
(28) |
|
Sustaining capital expenditure and deferred stripping3 |
|
(34) |
|
|
(47) |
|
|
(43) |
|
|
- |
|
|
- |
|
|
(1) |
|
|
- |
|
|
(125) |
|
- |
|
|
4 |
|
(121) |
|
Royalties |
|
(16) |
|
|
(57) |
|
|
(61) |
|
|
(1) |
|
|
- |
|
|
(1) |
|
|
- |
|
|
(136) |
|
- |
|
|
(4) |
|
(140) |
|
Lease payments |
|
(2) |
|
|
- |
|
|
- |
|
|
- |
|
|
(1) |
|
|
- |
|
|
- |
|
|
(3) |
|
- |
|
|
- |
|
(3) |
|
AISC3 |
|
(330) |
|
|
(191) |
|
|
(304) |
|
|
(22) |
|
|
(27) |
|
|
(8) |
|
|
(4) |
|
|
(886) |
|
- |
|
|
(71) |
|
(957) |
|
AISC (per lb)2 |
$1.94 |
|
$1.67 |
|
$2.39 |
|
$4.57 |
|
$4.32 |
|
$0.62 |
|
$2.93 |
|
$2.05 |
|
|
$11.15 |
|
|
Cash cost – (C1)2 (per lb) |
$1.57 |
|
$0.79 |
|
$1.51 |
|
$4.11 |
|
$4.01 |
|
($0.44) |
|
$2.81 |
|
$1.39 |
|
|
$10.93 |
|
|
Total cost – (C3) 2 (per lb) |
$2.55 |
|
$1.78 |
|
$2.59 |
|
$4.01 |
|
$4.10 |
|
$1.19 |
|
$2.81 |
|
$2.39 |
|
|
$12.87 |
|
|
1 Total cost of sales per the Consolidated Statement of Earnings
(Loss) in the Company’s annual audited consolidated financial
statements.2 Cash costs of copper and nickel production (C1), 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 is a
non-GAAP financial measures which does not have a standardized
meaning prescribed by IFRS and might not be comparable to similar
financial measuresdisclosed by other issuers. See “Regulatory
Disclosures”.
For the twelve months ended December 31, 2021 |
Cobre Panama |
Kansanshi |
Sentinel |
Guelb Moghrein |
Las Cruces |
Çayeli |
Pyhäsalmi |
Copper |
Corporate & other |
Ravensthorpe |
Total |
Cost of
sales1ii |
|
(1,711) |
|
|
(1,045) |
|
|
(1,116) |
|
|
(208) |
|
|
(98) |
|
|
(57) |
|
|
(31) |
|
|
(4,266) |
|
(35) |
|
|
(349) |
|
(4,650) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
579 |
|
|
220 |
|
|
270 |
|
|
36 |
|
|
13 |
|
|
18 |
|
|
1 |
|
|
1,137 |
|
3 |
|
|
34 |
|
1,174 |
|
By-product credits |
|
208 |
|
|
220 |
|
|
- |
|
|
114 |
|
|
- |
|
|
14 |
|
|
21 |
|
|
577 |
|
- |
|
|
22 |
|
599 |
|
Royalties |
|
61 |
|
|
192 |
|
|
203 |
|
|
9 |
|
|
2 |
|
|
8 |
|
|
- |
|
|
475 |
|
- |
|
|
13 |
|
488 |
|
Treatment and refining charges |
|
(112) |
|
|
(26) |
|
|
(56) |
|
|
(10) |
|
|
- |
|
|
(5) |
|
|
(2) |
|
|
(211) |
|
- |
|
|
- |
|
(211) |
|
Freight costs |
|
(5) |
|
|
- |
|
|
(41) |
|
|
- |
|
|
- |
|
|
(5) |
|
|
- |
|
|
(51) |
|
- |
|
|
- |
|
(51) |
|
Finished goods |
|
27 |
|
|
(24) |
|
|
10 |
|
|
12 |
|
|
3 |
|
|
(7) |
|
|
- |
|
|
21 |
|
- |
|
|
10 |
|
31 |
|
Other |
|
41 |
|
|
13 |
|
|
16 |
|
|
2 |
|
|
- |
|
|
2 |
|
|
1 |
|
|
75 |
|
32 |
|
|
5 |
|
112 |
|
Cash cost (C1)2 |
|
(912) |
|
|
(450) |
|
|
(714) |
|
|
(45) |
|
|
(80) |
|
|
(32) |
|
|
(10) |
|
|
(2,243) |
|
- |
|
|
(265) |
|
(2,508) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation (excluding depreciation in finished goods) |
|
(564) |
|
|
(224) |
|
|
(270) |
|
|
(29) |
|
|
(10) |
|
|
(21) |
|
|
(1) |
|
|
(1,119) |
|
- |
|
|
(34) |
|
(1,153) |
|
Royalties |
|
(61) |
|
|
(192) |
|
|
(203) |
|
|
(9) |
|
|
(2) |
|
|
(8) |
|
|
- |
|
|
(475) |
|
- |
|
|
(13) |
|
(488) |
|
Other |
|
(16) |
|
|
(9) |
|
|
(8) |
|
|
- |
|
|
(1) |
|
|
- |
|
|
- |
|
|
(34) |
|
- |
|
|
(5) |
|
(39) |
|
Total cost (C3)2 |
|
(1,553) |
|
|
(875) |
|
|
(1,195) |
|
|
(83) |
|
|
(93) |
|
|
(61) |
|
|
(11) |
|
|
(3,871) |
|
- |
|
|
(317) |
|
(4,188) |
|
Cash cost (C1)2 |
|
(912) |
|
|
(450) |
|
|
(714) |
|
|
(45) |
|
|
(80) |
|
|
(32) |
|
|
(10) |
|
|
(2,243) |
|
|
|
(265) |
|
(2,508) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
(43) |
|
|
(21) |
|
|
(33) |
|
|
(2) |
|
|
(4) |
|
|
(1) |
|
|
- |
|
|
(104) |
|
- |
|
|
(13) |
|
(117) |
|
Sustaining capital expenditure and deferred stripping3 |
|
(106) |
|
|
(182) |
|
|
(149) |
|
|
(1) |
|
|
- |
|
|
(5) |
|
|
- |
|
|
(443) |
|
- |
|
|
(14) |
|
(457) |
|
Royalties |
|
(61) |
|
|
(192) |
|
|
(203) |
|
|
(9) |
|
|
(2) |
|
|
(8) |
|
|
- |
|
|
(475) |
|
- |
|
|
(13) |
|
(488) |
|
Lease payments |
|
(5) |
|
|
- |
|
|
- |
|
|
- |
|
|
(2) |
|
|
(1) |
|
|
- |
|
|
(8) |
|
- |
|
|
(1) |
|
(9) |
|
AISC2 |
|
(1,127) |
|
|
(845) |
|
|
(1,099) |
|
|
(57) |
|
|
(88) |
|
|
(47) |
|
|
(10) |
|
|
(3,273) |
|
- |
|
|
(306) |
|
(3,579) |
|
AISC (per lb) 2 |
$1.61 |
|
$1.96 |
|
$2.21 |
|
$1.66 |
|
$2.91 |
|
$1.56 |
|
$1.61 |
|
$1.88 |
|
- |
|
$9.87 |
|
|
Cash cost – (C1) (per lb) 2 |
$1.31 |
|
$1.04 |
|
$1.44 |
|
$1.38 |
|
$2.67 |
|
$0.99 |
|
$1.54 |
|
$1.30 |
|
- |
|
$8.59 |
|
|
Total cost – (C3) (per lb) 2 |
$2.22 |
|
$2.03 |
|
$2.40 |
|
$2.31 |
|
$3.10 |
|
$2.01 |
|
$1.71 |
|
$2.23 |
|
- |
|
$10.24 |
|
|
1 Total cost of sales per the Consolidated Statement of Earnings
(Loss) in the Company’s annual audited consolidated financial
statements. Refinery-backed credits presented net within revenues.2
Cash costs of copper and nickel production (C1), 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 is a non-GAAP
financial measures 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”.
For the three months ended December 31, 2020 |
Cobre Panama |
Kansanshi |
Sentinel |
Guelb Moghrein |
Las Cruces |
Çayeli |
Pyhäsalmi |
Copper |
Corporate & other |
Ravensthorpe |
Total |
Cost of
sales1,4iii |
|
(308) |
|
|
(255) |
|
|
(332) |
|
|
(46) |
|
|
(81) |
|
|
(12) |
|
|
(9) |
|
|
(1,043) |
|
(8) |
|
|
(68) |
|
(1,119) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
107 |
|
|
60 |
|
|
90 |
|
|
9 |
|
|
48 |
|
|
3 |
|
|
1 |
|
|
318 |
|
- |
|
|
8 |
|
326 |
|
By-product credits |
|
39 |
|
|
54 |
|
|
- |
|
|
37 |
|
|
- |
|
|
3 |
|
|
5 |
|
|
138 |
|
- |
|
|
4 |
|
142 |
|
Royalties |
|
9 |
|
|
30 |
|
|
45 |
|
|
4 |
|
|
1 |
|
|
1 |
|
|
- |
|
|
90 |
|
- |
|
|
3 |
|
93 |
|
Treatment and refining charges |
|
(24) |
|
|
(6) |
|
|
(17) |
|
|
(3) |
|
|
- |
|
|
(1) |
|
|
(1) |
|
|
(52) |
|
- |
|
|
- |
|
(52) |
|
Freight costs |
|
(1) |
|
|
- |
|
|
(18) |
|
|
- |
|
|
- |
|
|
(1) |
|
|
- |
|
|
(20) |
|
- |
|
|
- |
|
(20) |
|
Finished goods |
|
(12) |
|
|
(1) |
|
|
26 |
|
|
- |
|
|
(1) |
|
|
(2) |
|
|
- |
|
|
10 |
|
- |
|
|
(2) |
|
8 |
|
Other |
|
3 |
|
|
4 |
|
|
1 |
|
|
(3) |
|
|
(2) |
|
|
1 |
|
|
1 |
|
|
5 |
|
8 |
|
|
1 |
|
14 |
|
Cash cost (C1)2 |
|
(187) |
|
|
(114) |
|
|
(205) |
|
|
(2) |
|
|
(35) |
|
|
(8) |
|
|
(3) |
|
|
(554) |
|
- |
|
|
(54) |
|
(608) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation (excluding depreciation in finished goods) |
|
(110) |
|
|
(57) |
|
|
(75) |
|
|
(11) |
|
|
(49) |
|
|
(3) |
|
|
(1) |
|
|
(306) |
|
- |
|
|
(9) |
|
(315) |
|
Royalties |
|
(9) |
|
|
(30) |
|
|
(45) |
|
|
(4) |
|
|
(1) |
|
|
(1) |
|
|
- |
|
|
(90) |
|
- |
|
|
(3) |
|
(93) |
|
Other |
|
(3) |
|
|
(3) |
|
|
(2) |
|
|
1 |
|
|
1 |
|
|
1 |
|
|
(1) |
|
|
(6) |
|
- |
|
|
(1) |
|
(7) |
|
Total cost (C3) 2 |
|
(309) |
|
|
(204) |
|
|
(327) |
|
|
(16) |
|
|
(84) |
|
|
(11) |
|
|
(5) |
|
|
(956) |
|
- |
|
|
(67) |
|
(1,023) |
|
Cash cost (C1) 2 |
|
(187) |
|
|
(114) |
|
|
(205) |
|
|
(2) |
|
|
(35) |
|
|
(8) |
|
|
(3) |
|
|
(554) |
|
- |
|
|
(54) |
|
(608) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
(8) |
|
|
(5) |
|
|
(10) |
|
|
1 |
|
|
(3) |
|
|
- |
|
|
- |
|
|
(25) |
|
- |
|
|
(3) |
|
(28) |
|
Sustaining capital expenditure and deferred stripping3 |
|
(35) |
|
|
(29) |
|
|
(34) |
|
|
(1) |
|
|
- |
|
|
(1) |
|
|
- |
|
|
(100) |
|
- |
|
|
- |
|
(100) |
|
Royalties |
|
(9) |
|
|
(30) |
|
|
(45) |
|
|
(4) |
|
|
(1) |
|
|
(1) |
|
|
- |
|
|
(90) |
|
- |
|
|
(3) |
|
(93) |
|
Lease payments |
|
(1) |
|
|
- |
|
|
(1) |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(2) |
|
- |
|
|
(1) |
|
(3) |
|
Other |
|
- |
|
|
(1) |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(1) |
|
- |
|
|
(1) |
|
(2) |
|
AISC2 |
|
(240) |
|
|
(179) |
|
|
(295) |
|
|
(6) |
|
|
(39) |
|
|
(10) |
|
|
(3) |
|
|
(772) |
|
- |
|
|
(62) |
|
(834) |
|
AISC (per lb) 2 |
$1.72 |
|
$1.59 |
|
$2.04 |
|
$0.36 |
|
$1.70 |
|
$1.37 |
|
$2.21 |
|
$1.77 |
|
- |
|
$6.09 |
|
|
Cash cost – (C1) (per lb) 2 |
$1.34 |
|
$1.01 |
|
$1.44 |
|
$0.09 |
|
$1.56 |
|
$0.96 |
|
$2.06 |
|
$1.28 |
|
- |
|
$5.39 |
|
|
Total cost – (C3) (per lb) 2 |
$2.22 |
|
$1.81 |
|
$2.28 |
|
$1.07 |
|
$3.76 |
|
$1.52 |
|
$2.93 |
|
$2.20 |
|
- |
|
$6.78 |
|
|
1 Total cost of sales per the Consolidated Statement of Earnings
(Loss) in the Company’s annual audited consolidated financial
statements. Refinery-backed credits presented net within revenues.2
Cash costs of copper and nickel production (C1), 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 is a non-GAAP
financial measures which does not have a standardized meaning
prescribed by IFRS and might not be comparable to similar financial
ratios disclosed by other issuers. See “Regulatory Disclosures”.4
Refinery-backed credits presented net within revenues
For the twelve months ended December 31, 2020 |
Cobre Panama |
Kansanshi |
Sentinel |
Guelb Moghrein |
Las Cruces |
Çayeli |
Pyhäsalmi |
Copper |
Corporate & other |
Ravensthorpe |
Total |
Cost of
sales1,5iv |
|
(1,052) |
|
|
(1,075) |
|
|
(990) |
|
|
(197) |
|
|
(345) |
|
|
(58) |
|
|
(38) |
|
|
(3,755) |
|
(14) |
|
|
(224) |
|
(3,993) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
400 |
|
|
247 |
|
|
261 |
|
|
40 |
|
|
215 |
|
|
22 |
|
|
5 |
|
|
1,190 |
|
3 |
|
|
24 |
|
1,217 |
|
By-product credits |
|
124 |
|
|
229 |
|
|
- |
|
|
139 |
|
|
- |
|
|
10 |
|
|
20 |
|
|
522 |
|
- |
|
|
8 |
|
530 |
|
Royalties |
|
24 |
|
|
111 |
|
|
112 |
|
|
9 |
|
|
5 |
|
|
2 |
|
|
- |
|
|
263 |
|
- |
|
|
7 |
|
270 |
|
Treatment and refining charges |
|
(79) |
|
|
(34) |
|
|
(48) |
|
|
(13) |
|
|
- |
|
|
(5) |
|
|
(3) |
|
|
(182) |
|
- |
|
|
- |
|
(182) |
|
Freight costs |
|
(4) |
|
|
(11) |
|
|
(40) |
|
|
- |
|
|
(1) |
|
|
(4) |
|
|
- |
|
|
(60) |
|
- |
|
|
- |
|
(60) |
|
Finished goods |
|
- |
|
|
13 |
|
|
(18) |
|
|
1 |
|
|
- |
|
|
(3) |
|
|
1 |
|
|
(6) |
|
- |
|
|
(2) |
|
(8) |
|
Other |
|
18 |
|
|
6 |
|
|
(11) |
|
|
1 |
|
|
1 |
|
|
1 |
|
|
1 |
|
|
17 |
|
11 |
|
|
582 |
|
86 |
|
Cash cost (C1)3 |
|
(569) |
|
|
(514) |
|
|
(734) |
|
|
(20) |
|
|
(125) |
|
|
(35) |
|
|
(14) |
|
|
(2,011) |
|
- |
|
|
(129) |
|
(2,140) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation (excluding depreciation in finished goods) |
|
(400) |
|
|
(246) |
|
|
(270) |
|
|
(40) |
|
|
(215) |
|
|
(23) |
|
|
(5) |
|
|
(1,199) |
|
- |
|
|
(25) |
|
(1,224) |
|
Royalties |
|
(24) |
|
|
(111) |
|
|
(112) |
|
|
(9) |
|
|
(5) |
|
|
(2) |
|
|
- |
|
|
(263) |
|
- |
|
|
(7) |
|
(270) |
|
Other |
|
(10) |
|
|
(11) |
|
|
(6) |
|
|
(1) |
|
|
- |
|
|
1 |
|
|
- |
|
|
(27) |
|
- |
|
|
(2) |
|
(29) |
|
Total cost (C3) 3 |
|
(1,003) |
|
|
(882) |
|
|
(1,122) |
|
|
(70) |
|
|
(345) |
|
|
(59) |
|
|
(19) |
|
|
(3,500) |
|
- |
|
|
(163) |
|
(3,663) |
|
Cash cost (C1) 3 |
|
(569) |
|
|
(514) |
|
|
(734) |
|
|
(20) |
|
|
(125) |
|
|
(35) |
|
|
(14) |
|
|
(2,011) |
|
- |
|
|
(129) |
|
(2,140) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
(26) |
|
|
(24) |
|
|
(34) |
|
|
(1) |
|
|
(7) |
|
|
(1) |
|
|
- |
|
|
(93) |
|
- |
|
|
(6) |
|
(99) |
|
Sustaining capital expenditure and deferred stripping4 |
|
(74) |
|
|
(105) |
|
|
(126) |
|
|
(10) |
|
|
- |
|
|
(4) |
|
|
- |
|
|
(319) |
|
- |
|
|
(3) |
|
(322) |
|
Royalties |
|
(24) |
|
|
(111) |
|
|
(112) |
|
|
(9) |
|
|
(5) |
|
|
(2) |
|
|
- |
|
|
(263) |
|
- |
|
|
(7) |
|
(270) |
|
Lease payments |
|
(3) |
|
|
(3) |
|
|
(2) |
|
|
- |
|
|
(1) |
|
|
- |
|
|
- |
|
|
(9) |
|
- |
|
|
(1) |
|
(10) |
|
Other |
|
- |
|
|
(2) |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(2) |
|
- |
|
|
(1) |
|
(3) |
|
AISC4 |
|
(696) |
|
|
(759) |
|
|
(1,008) |
|
|
(40) |
|
|
(138) |
|
|
(42) |
|
|
(14) |
|
|
(2,697) |
|
- |
|
|
(147) |
|
(2,844) |
|
AISC (per lb)3 |
$1.60 |
|
$1.60 |
|
$1.92 |
|
$0.70 |
|
$1.15 |
|
$1.53 |
|
$1.55 |
|
$1.63 |
|
|
$6.46 |
|
|
Cash cost – (C1) (per lb)3 |
$1.31 |
|
$1.09 |
|
$1.40 |
|
$0.38 |
|
$1.05 |
|
$1.24 |
|
$1.48 |
|
$1.21 |
|
|
$5.72 |
|
|
Total cost – (C3) (per lb)3 |
$2.30 |
|
$1.86 |
|
$2.14 |
|
$1.20 |
|
$2.88 |
|
$2.14 |
|
$2.03 |
|
$2.11 |
|
|
$7.19 |
|
|
1 Total cost of sales per the Consolidated Statement of Earnings
(Loss) in the Company’s annual audited consolidated financial
statements. Refinery-backed credits presented net within revenues.2
Includes restart costs at Ravensthorpe 3 Cash costs of copper and
nickel production (C1), 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”.4
Sustaining capital is a non-GAAP financial measures which does not
have a standardized meaning prescribed by IFRS and might not be
comparable to similar financial ratios disclosed by other issuers.
See “Regulatory Disclosures”.5 Refinery-backed credits presented
net within revenues
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 Enterprise
and post-completion construction activity at Cobre Panama and are
subject to the impact of ore grades on future production, the
potential of production disruptions, potential production,
operational, labour or marketing disruptions 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 proceedings which involve the Company,
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, design, development and operation of the Company’s
projects and future reporting regarding climate change and
environmental matters; the Company’s expectations regarding
increased demand for copper; the Company’s project pipeline and
development and growth plans. 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, 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. 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.
First Quantum Minerals (LSE:0P6E)
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First Quantum Minerals (LSE:0P6E)
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