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February 2012
TSX: FM LSE: FQM LuSE: FQMZ www.first-quantum.com
A Rapidly Growing Metals & Mining
Company
1
Some of the statements contained in the following material are forward looking statements and not statement of facts. Such statements are based on the current beliefs of management, as well as assumptions based on management information currently available. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from expected results. Readers must rely on their own evaluation of these uncertainties.
Note: all dollar amounts in US dollars unless otherwise indicated
Cautionary Note Concerning Forward-Looking Statements
2
First Quantum What Do Our Shareholders Own?
3
• A substantial copper producer with a pipeline of expansions and new projects
• An emerging nickel producer with growth opportunities
• A strong balance sheet
• Production in an industry with strong fundamentals
• Most importantly, the ability to add value through efficient delivery of growth at costs below industry norms
What We Have Delivered So Far
4
Total Annualised Shareholder Return (2)
January 2000 – December 2011 (%)
Copper Growth (1)
2000-2011 CAGR (%)
(1) Source: Brook Hunt. Inclusive of corporate acquisitions. (2) Source: CapIQ.
(4)%
(1)%
0%
1%
1%
3%
4%
7%
10%
12%
18%
20%
22%
23%
34%
Rio Tinto
Kazakhmys
KGHM
Codelco
Norilsk
BHPB
Anglo American
Antofagasta
Glencore
Freeport
Teck
Xstrata
First Quantum
Southern Copper
Barrick
0%
1%
2%
2%
2%
2%
3%
3%
4%
6%
6%
7%
12%
15%
21%
22%
24%
32%
ENRC
Kazakhmys
Anglo American
Vedanta
Xstrata
Rio Tinto
Lundin
Hudbay
Freeport
Eramet
Teck
BHP Billiton
Vale
Norilsk
Antofagasta
Southern Peru
Inmet
First Quantum
Long-Term Targets
5
0
200
400
600
800
1000
04 06 08 10 12F 14F 16F 18F
Base Projects
Copper Production
000’s tonnes
0
25
50
75
100
125
04 06 08 10 12F 14F 16F 18F
Base Projects Optional
Nickel Production
000’s tonnes
What We Are Looking to Deliver: Copper Growth Remains Best in Class
6
2016 Copper Producer Landscape
(Mt)
Copper Growth
2011 – 2016 CAGR (%)
1.0
0.3
29.2%
Teck
Antofagasta
Freeport
Anglo
Codelco
Norilsk
BHPB
KGHM
Vedanta
Barrick
Kazakhmys
Rio Tinto
Glencore
Xstrata
S Copper
Vale
FQM
Source: Brook Hunt. First Quantum estimates based on management projections.
6th Largest Global Copper Producer
by 2016
13th Largest Global Copper Producer
Currently
Tripling Copper Production
Capacity
Kansanshi Copper-Gold Mine • Located near Solwezi in the
North Western Province of Zambia
• First production in 2005
• Open pit mining
• Flexible ore treatment to allow for variation in ore type
– Sulphide circuit
– Oxide circuit
– Gold facility
• On-going program of resource development and exploration
• Workforce of ~1,515
8
Kansanshi Mining Volumes & Strip Ratio
9
Kansanshi Sulphuric Acid Supply
10
Kansanshi Improving Ore Availability
11
Kansanshi Multi-Phase Expansion
12
Expansion Project Capacity Completion
Estimate Cost Production Impact
($ millions)
Acid Plant 5 1000t/day 2012 18
Oxide 7.2 mtpa 2012 31 Copper: 10,000 - 15,000 tpa
Oxide 12 mtpa 2013 - 2014 200 Copper: 60,000 - 75,000 tpa
Smelter 1.2 mtpa 2014 635 Smelter Acid - 900,000 tpa @
$40-$50/tonne
Sulphide 14 - 16 mtpa 2015 400 Copper: 60,000 - 70,000 tpa
Kansanshi Copper Smelter Project Parameters
13
• Concentrate feed rate 1.2 Mtpa —67% Sentinel
—33% Kansanshi
—Average copper grade 26%
• Blister copper production 300,000 tpa
• Acid production 1.0 Mtpa
Kansanshi Copper Smelter Project Key Estimates
14
• Capital cost of US$635M
• Commissioning from mid 2014
• Operating cost US$69/t of concentrate
Economic Benefits of the Copper Smelter
15
Transport
Kansanshi 100% to Zambian Smelters
Sentinel 900,00 – 1,200,000 to export less 300,000 t Blister
Cost per annum @ $220/t: $130M to $ 200M
Export Levy
Current 10% of export value
Sentinel Annual export
230,000 – 310,000 copper in concentrate
Cost per annum Cu @ $ 7,000/t: $160M to $ 220M
Acid Supply
Current consumption 1,200 tpd @$ 200/t: $ 90Mpa
Increase with AP5 + 900 tpd @$ 200/t: $ 150Mpa
Annual Savings $ 340M to $ 510M
Guelb Moghrein Copper-Gold Mine
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• 100% ownership
• Located 250 kilometres northeast of the nation’s capital, Nouakchott
• As at December 31, 2011, the estimated minelife was approximately 10 years (including stockpiles)
• First production in 2006
• Workforce of ~1,200
Guelb Moghrein Copper-Gold Mine
17
• 2011 production challenged with plant utilization issues but tonnage increases evident at year end
• Mining side performed positively
• 2012 focus on improved throughput and recoveries to increase copper production
Guelb Moghrein - Outlook
18
0
50
100
150
200
250
300
350
400
450
500
2007 2008 2009 2010 2011 Dec 2011 2012
Average tonnes per operating hour
• Feed tonnage rising during operating hours with improved grinding and HPGR operation
• Additional mill and further modifications to existing circuits expected to achieve desired tonnage targets.
• Improvements to equipment utilization required
• Copper recovery over 90%
• Tonnage increased more consistently to meet design
Ravensthorpe Nickel Operation 20 Months from Purchase to Production
19
• Purchased in February 2010 for US$340M
• Design phase
– February – December 2010
• Modifications
– July 2010 – September 2011
• Commissioning
– June – December 2011
• First product
– 4 October 2011
• First exports
– 25 November 2011
Ravensthorpe Making it Work
20
• Front-end materials handling
• Dewatering
• Buffer storage capacity
• Refurbish existing plant
• Tailings Storage Facility
Ravensthorpe Operational Achievements
21
• Crushing:
– SAP and LIM achieved design of 2000 tph
• Beneficiation:
– SAP – 550 tph vs design of 455 tph
– LIM – 1200 tph vs design of 1177 tph
• Atmospheric Leach:
– 180 tph vs design of 135 tph
• PAL Trains:
– 150 tph vs design of 150 tph
• MHP Loadout:
– 120 tpd Ni vs design of 137 tpd
• Acid Plant: – 4200 tpd vs design of 4400 tpd
Ravensthorpe Going Forward
22
Target operations:
39 ktpa for the first five years; 28 ktpa over the life of mine; C1 cost of ~$7.00 per lb (1)
• Expected mine life >30 years
• Three ore bodies: Halleys, Hale-Bopp, Shoemaker-Levy
• 480 staff
(1)At current sulphur prices
Kevitsa Nickel-Copper-PGE Project
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• 100% owned; Acquired in 2008
• Large undeveloped sulphide nickel deposit suitable for open cast mining
• 240M tonnes @ 0.30% Ni (0.28 NiSulphide) and 0.41% Cu
• Initial ore feed of 5.5 mt/yr with intention to expand by ~50% in 2013
• On-going drill program continues to deliver encouraging results
Kevitsa Nickel-Copper-PGE Project
24
• First product expected in May, sales in July, 2012
• Target operations: 10 ktpa nickel @ ~$6.70 / lb 20 ktpa copper @ ~$1.10 / lb
• Workforce primarily from Lapland; FQM technical staff in key areas
• Preliminary mining, process and engineering staff established on-site and assisting with initial startups
• Negotiations underway with various offtake customers
Sentinel Copper Project
25
• Located ~ 140 km northwest of Solwezi, Northern Zambia
• Resource update being finalized
• EIA and land use agreement obtained
• Estimates: – Production to start at 150 ktpa
copper concentrate initially, rising up to 300 ktpa
– Strip ratio 2:1 – Mine life over 20 years – C1 costs between $1.10 - $1.20/lb
Sentinel Copper Project
26
Project Total Cost
Nominal 20Mtpa Plant
Nominal 40Mtpa Plant
Mining 299 495
Treatment Plant
393 645
Infrastructure 217 335
Indirects 169 250
Total 1,078 1,725
Sentinel Copper Project Project Status
27
• Committed deliveries for mills, gearless mill drives, crushers and mining fleet
• Flowsheets completed
• Concept layouts and detailed estimates complete
• Equipment list complete
• 300-man construction camp complete
Sentinel Copper Project Project Status
28
• Power scope defined and commercial discussions are continuing
• Mine planning commenced
• Internal reviews undertaken
• Site access complete
• Pending Board approval
Enterprise Nickel Project
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• Located 12 km northwest of Sentinel
• High grade sulphide nickel – open pit potential
• Potential to produce 40 - 70 ktpa of Ni
vaesite
nickeloan
pyrite
Enterprise Nickel Project
30
• Current focus – continue to define resource, design the mine and confirm process route
• Campaign treatment at the Sentinel facilities significantly reduces capital – utilization of re-grind mills and cleaner circuits
• Open pit mining – potential one-off pre-strip utilizing Sentinel mining fleet
Haquira Copper Project
31
• Acquired in December 2010
• Large scale copper project located in southern Peru
M&I resource of 3.7 Mt of copper equivalent and an inferred resource of 2.4 Mt of copper equivalent
• Currently focused on:
Community relations and land access
Expanding infill and condemnation drill program and environmental matters
Long-term Copper
Dynamics
15
Copper Price Estimates Over Time
33
Copper Price (US$ / lb Cu)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Broker Research
2011
2010
2009
2008
2007
2006
2005
2004
2003 2002
2001
Actual
2000
Long Term Price Estimate
2011 Long Term
2010 LT 2009 LT
2008 LT 2007 LT
2006 LT
2005z LT 2004 LT
2003 LT 2002 LT 2001 LT 2000 LT
Surpluses Overestimated & Deficits Underestimated
34
Brook Hunt Supply / Demand – Forecast vs. Actual
(77)
0
(422)
236
1,137
424
648737
(293)
(1,080)
(334)
(134)
78
295
960
(135)
15,000
16,000
17,000
18,000
19,000
(1,500)
(1,000)
(500)
0
500
1,000
1,500
2003 2004 2005 2006 2007 2008 2009 2010
3-Year Prior Estimate Actual Copper Demand
Supply / Demand Surplus (Deficit) (ktpa)Copper Demand (ktpa)
Source: Brook Hunt and USGS
Grades of Global Copper Mined % Cu
Copper Grades Have Declined Significantly
35 Source: Brook Hunt. Broker Research
0.60
0.80
1.00
1.20
1.40
1.60
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Initial production of Grasberg and Escondida
Lack of sizeable, high quality production coming on-stream…
Emerging Markets – Substantial Growth Ahead
36
Source: Maddison
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1835 1855 1875 1895 1915 1935 1955 1975 1995
USA
UK
China Brazil
Russia
GDP per Capita US$
Projected Impact on the Copper Market
37
Illustrative Scenarios Assuming Increased Intensity of Cu Consumption for China, India and Brazil
Key Points
Should China, India and Brazil all grow in line with population forecasts and reach copper use per capita equivalent to, say, the EU-27 country group by 2020, the increased annual copper demand would be approximately 10 Mtpa, equivalent to:
– ca. 60% of current annual global copper demand
– Nine new Escondidas being brought on line
If China, India and Brazil reach the copper
intensity of EU27 countries by 2020, this equates
to...
(1) Defined as copper consumed by semis fabricators or “first users” of refined copper (ingot makers, master alloy plants, wire rod plants, brass mills, alloy wire mills, foundries and foil mills)
(2) Based on Escondida 2010 production of 1.09 Mt (3) Based on FM 2010 production of 323 kt
If China, India and Brazil reach the copper
intensity of Japan by 2020, this equates to...
If China, India and Brazil reach the copper
intensity of Germany by 2020, this equates to...
No. of New
Escondidas (2) New Annual
Cu demand
No. of New
First
Quantum’s (3)
Intensity of Refined Copper Consumption (1) kg Cu per capita
Aggregate Copper Use per Capita: 3.0 kg per capita
Multiple of India, Brazil, China Average Intensity of Use (x)
2.1x 2.3x
6.1x
7.1x
Source: International Copper Study Group
4.5x
0.551.80
5.506.30 7.00
13.7
18.50
21.50
0
5
10
15
20
25
India Brazil China EU 27 Japan Germany Korea Taiwan
Projects Less Sensitive to Copper Prices
38
Top 25 Copper Projects
$ 6,130
$ 8,061
$ 9,079
$ 10,696
$ 10,794
$ 11,550
$ 13,611
$ 14,290
$ 14,667
$ 14,672
$ 15,000
$ 15,435
$ 15,470
$ 15,474
$ 15,514
$ 15,759
$ 16,602
$ 17,325
$ 18,400
$ 18,472
$ 18,551
$ 19,895
$ 20,045
$ 20,421
$ 21,622
Konkola Deep (Vedanta)
Buenavista DC (South. Cop)
Sentinel (FQM)
Galeno (Minmetals)
Antapaccay (Xstrata)
Antamina (BHP)
Rio Blanco (Zijin)
Haquira (FQM)
Quellaveco (Anglo Amer.)
Canariaco (Candente)
Quebrada Blanca (Teck)
Ministro Mina Hales (Codelco)
Cerro Verde (Freeport)
Los Bronces (Anglo Amer.)
Salobo (Vale)
Las Bambas (Xstrata)
Oyu Tolgoi (Ivanhoe)
Toromocho (Chinalco)
Tampakan (Xstrata)
Telegrapho (Antofagasta)
El Moro (GoldCorp)
Sierra Gorda (Quadra FNX)
Caserones (JX Nippon)
Caracoles (Antofagasta)
Cobre Panama (Inmet)
Cumulative Production (paid kt Cu)
Minimum Required Copper Price to Generate 15% IRR (US$ / tonne Cu)
Capex Intensity (US$ / t)
Source: Brook Hunt, equity research estimates.
Agreement to Dispose of DRC Assets
• Agreement with ENRC to dispose of all residual claims and assets
• Total consideration of $1.25B – consisting of: – $750M payable on closing – $500M three-year promissory note with a 3% interest coupon
• Condition of closing – FQM, ENRC and DRC government will settle all disputes relating to the companies
beings sold, their assets and operations in the DRC, and – FQM. ENRC and DRC government will be releasing one another in respect of all
claims and judgments related to the foregoing or to any other matter arising in the DRC on or before the date of closing
• Transaction closing expected on or before February 29, 2012
39
A Rapidly Growing Mining & Metals Company
• Unique core technical strength behind the strong track record of value creation
• Existing operations provide a solid platform to support growth
• Strong financial position and cash flow
• ~$5 billion investment in growth over 2012 – 2016 to significantly increase copper and nickel production
• Growth program expected to position First Quantum as the world’s 6th largest copper producer and a top ten nickel producer
40
February 2012
TSX: FM LSE: FQM LuSE: FQMZ www.first-quantum.com
A Rapidly Growing
Metals & Mining
Company
1
Corporate Profile
Average daily trading volume - shares
Market capitalization – $ millions
Recent share price – February 17, 2012
Dividend paid in regards to year 2010 – per share
52-week share price range
Geographic breakdown of institutional shareholders
Fully diluted
Shares issued and outstanding
Stock exchange listings & symbols – (S&P/TSX 60 Index)
1.6 million
C$11.4 billion
C$22.24
C$0.80
C$29.60 – C$12.60
US=36%; UK=26%; Canada=23%; other=15%
476.3 million
476.3 million
TSX: FM LSE: FQM LuSE: FQMZ
42
