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2021-10-26

First Quantum Minerals Reports Third Quarter 2021 Results

(In United States dollars, except where noted otherwise)

TORONTO, Oct. 26, 2021 (GLOBE NEWSWIRE) -- First Quantum Minerals Ltd. (“FQM” or the “Company”) (TSX: FM) today reported results for the three and nine months ended September 30, 2021. The Company reported, for the three months ended September 30, 2021 (“Q3”), comparative earnings1 of $197 million ($0.29 per share1), net earnings attributable to shareholders of the Company1 of $303 million ($0.44 per share1) and cash flows from operating activities of $703 million ($1.02 per share1).

“In the third quarter, we delivered continued strong operational performance at all three of our large assets. This performance, combined with the closing of the Ravensthorpe stake sale in the quarter and our declining hedge book, means we are well on our way towards achieving our debt reduction target of at least $2 billion on an accelerated timetable in early 2022. Following the recent elections and subsequent smooth transfer of power in Zambia, we are pleased to be engaging constructively with the new Government as we look to establish the parameters for long-term investments into our growth projects in the country. Law 9 discussions with the Government of Panama continue to be transparent and constructive towards a mutually beneficial agreement. We were pleased to conclude the environmental and labour aspects of the discussions in the quarter,” commented Philip Pascall, Chairman and CEO. “The global pandemic from COVID-19 continues to present its challenges and I am grateful to our entire workforce for the commitment and tenacity that they demonstrated through these uncertain times. We remain committed to operating in a responsible and sustainable manner for the health and safety of our employees and providing support for our local communities during these challenging times.”

THIRD QUARTER SUMMARY

First Quantum’s financial performance continues at strong levels, driven by higher metal prices and strong operational performance resulting in a significant year-over-year increase in comparative EBITDA4,5 and net earnings, as well as notable further reduction in net debt3.

On a quarter-over-quarter basis, reported comparative EBITDA of $886 million in Q3 came in slightly below the $902 million reported in Q2 2021. Total copper production for the third quarter was 209,859 tonnes, up from 199,689 tonnes in Q2 2021. However, copper sales for the period were 194,278 tonnes, reflecting a challenging shipping environment. Partially offsetting the timing of sales was a higher realized copper price of $3.68 per lb in Q3 compared to $3.55 in Q2 2021, as the Company’s copper hedges continue to roll off.

Net debt decreased by $449 million during the quarter, with a total reduction of $1,107 million during the nine months year-to-date, bringing the balance down to $6,302 million as of September 30, 2021. With the current strength in the copper price and ongoing strong operational performance, a significant further reduction is expected in the last quarter of this year.

  • Operational Highlights
    • Third quarter total copper production of 209,859 tonnes was up 5% from Q2 2021. Production improved quarter-over-quarter as a result of record production at Cobre Panama and continued strong performance at Sentinel while Kansanshi production remained steady during the quarter. Total copper production guidance for the year has been narrowed by 15,000 tonnes to a range of 800,000 and 835,000 tonnes.
    • Total copper C1 cost was $1.26 per lb during the period while AISC of $1.87 per lb continues to be impacted by higher Zambia royalties due to higher copper prices. Some marginal impact from logistics, shipping, fuel and consumable costs, and labour has been felt on operating costs. C1 cost guidance for the year has been narrowed by $0.05 to $1.25 and $1.35 per lb. However, copper AISC guidance of $1.80 to $1.95 per lb remains unchanged.
    • During the third quarter, anode shipments in Zambia were impacted a global shortage of container shipping capacity as well as port congestion at the Durban, Walvis Bay and Dar Es Salaam ports. Consequently, a number of planned shipments were rolled into the fourth quarter. These logistical challenges for Zambian sales and on increased finished goods inventories are expected to continue into the fourth quarter.
    • Cobre Panama delivered a record 87,242 tonnes of copper production in Q3, an increase of 7% over Q2 2021 levels as the operation achieved further quarterly milestones in tonnes milled. Gold production also hit record levels of 36,649 ounces during the quarter. Throughput is expected to improve in the fourth quarter while grades are expected to be lower than the first nine months of 2021. Third quarter C1 cash costs at Cobre Panama increased slightly from Q2 2021 to $1.27 per lb, reflecting higher freight and fuel costs. A collar structure for the operation’s coal requirements has been in place since May 2020 that will prevent exposure to further increases in the coal price until December 2023.
    • Sentinel delivered its best quarter of the year, producing 59,931 tonnes of copper, a 10% increase from the preceding quarter. Copper C1 and AISC costs improved from the previous quarter to $1.37 and $2.16 per lb, respectively, on higher production volumes. A record milling rate was achieved in August and improved ore grades were processed in September. Grade is expected to continue to improve in the fourth quarter and throughout 2022 as higher grade ore is exposed in both the Stage 1 and Stage 2 pits. The fourth in-pit crusher at Sentinel is scheduled for commissioning in December 2021, which will enable the plant to increase throughput to 62 Mtpa in 2022.
    • Ravensthorpe achieved third quarter contained nickel production of 4,248 tonnes, C1 cash cost of $9.58 per pound and AISC of $11.66 per pound. The operation continued to be impacted by challenges in labour availability due to COVID-19 related travel restrictions in Western Australia. However, commissioning of Shoemaker Levy was largely completed towards the end of the third quarter which enabled the introduction of first saprolite ore into the plant in September. Completion of construction and commissioning works at the Shoemaker Levy Project and the delivery of limonite ore is the main priority for the fourth quarter of 2021. 2021 nickel production has been revised lower and costs, which are also being impacted by higher sulfur prices, have been revised higher from prior guidance.
    • Total gold production for the quarter was 78,124 ounces, a 4% decrease from Q2 2021. While gold production remained steady at Cobre Panama and Kansanshi, Guelb Mogrein experienced lower production levels. Total gold production guidance for 2021 has increased by 10,000 ounces to a range of 290,000 and 310,000 ounces on stronger performance at Cobre Panama.
 

Three months endedNine months ended
September 30September 30
(U.S. dollars where applicable) 2021 2020 2021 2020
COPPER
    
  
- Production (tonnes) 2 209,859 211,396 614,612 575,740...
Författare GlobeNewswire