First Quantum achieves annual copper production of 708,000 tonnes

TORONTO – First Quantum Minerals announces preliminary production for the three months (“Q4”) and year ended December 31, 2023, guidance for production, capital expenditures and costs for the years 2024 to 2026 and an update on balance sheet initiatives.

“With the suspension of production at Cobre Panama, we are taking decisive action to conserve capital, lower costs and strengthen our financial position. This will enable the continued development of the Kansanshi S3 Expansion, which will further strengthen our cash flows when commissioned next year. In parallel, we are advancing several initiatives to give us optionality and flexibility in respect to our balance sheet,” commented Tristan Pascall, Chief Executive Officer of First Quantum. “We remain committed to Zambia with the improved investment climate. The strong progress of the S3 Expansion project is a reflection of this. It is also pleasing that recent discussions in Panama have been constructive regarding the responsible environmental stewardship of the mine.”

Highlights

• Q4 and 2023 Production: First Quantum achieved annual copper production of 708 thousand tonnes (“kt”), a 9% reduction from 2022. After the successful completion of the CP100 Expansion project, Cobre Panama delivered annual copper production of 331kt before halting operations in November and placing the mine into a phase of Preservation and Safe Management (“P&SM”). Zambian production of 349kt was 10% lower than 2022 due to a combination of lower throughput at both sites and lower grades at Kansanshi. Copper production in Q4 2023 was 160kt, 22% lower than Q4 2022 and 28% lower than Q3 2023 mainly attributable to the ramp down of operations at Cobre Panama in November.
• Three-Year Guidance: When referring to future and prior year production figures, guidance is presented excluding Cobre Panama. 2024 Copper production guidance is between 370 – 420kt and is expected to increase to between 400 – 460kt in 2025 and 2026 as the S3 Expansion at Kansanshi comes online. Total C1 and AISC unit cost ranges are in line with prior year guidance when excluding Cobre Panama. Improvements in operating costs such as fuel, maintenance, contractors and labour mitigate the impact of lower by-product credits from Kansanshi and lower production at Sentinel. Guidance for gold production has been revised at Kansanshi, in line with an improved understanding of the sources of sulphide copper-gold mineralization at depth. Nickel production guidance for Ravensthorpe has been reduced in response to weak nickel market conditions.
• Balance sheet initiatives: The Company has suspended its dividend as a result of Cobre Panama being in a phase of P&SM. Additionally, planned capital programs have been reduced or re-phased by approximately $400 million in 2024 and $250 million in 2025. This reflects a halt in capital spend at Cobre Panama and proactive initiatives to offset capital inflation in the Zambian business. The Company has commenced discussions with its banking partners to address and extend its bank loan facilities. The Company is further evaluating a range of options to maintain a robust financial position and preserve value for its shareholders, including exploring the sale of smaller mines and interests in its larger mining assets.

2023 Preliminary Production

First Quantum achieved annual copper production of 708kt in 2023, which was 68kt lower than in 2022. Copper production in Q4 2023 was 160kt, 46kt below Q4 2022 and 62kt below Q3 2023. Copper production for the full year and Q4 2023 was impacted by the ramp down of operations at Cobre Panama in November with the operation placed in a phase of P&SM. Production guidance for Cobre Panama was duly suspended.

Copper production at Cobre Panama of 331kt for the full year was 19kt lower than 2022. Cobre Panama achieved record copper production of 310kt to the end of October before ramping down operations in November and entering a phase of P&SM. Copper production in Q4 2023 of 63kt was a 27kt decrease from Q4 2022 and 50kt lower than Q3 2023. Approximately 121 thousand dry metric tonnes of copper concentrate remains unsold following disruptions at the Punta Rincon port.

Kansanshi copper production of 135kt for the full year was 11kt lower than 2022 due to lower feed grades and lower throughput on the sulphide circuit, particularly from the highly competent ore from lower elevations of M11 in the main pit. The variability of grades in ore stockpiles also impacted grades. Copper production in Q4 2023 was 32kt, a 3kt reduction from Q4 2022 and 8kt lower than Q3 2023. Kansanshi production for 2023 was within the revised guidance range of 130 – 140kt.

Sentinel copper production of 214kt for the full year was 28kt lower than 2022. Production in Q1 was impacted by excessive rainfall that resulted in the accumulation of water in the high-grade area of the Stage 1 pit, which was subsequently cleared by mid-May 2023. Mining volumes and mill throughput improved in H2 2023 but were lower than anticipated due to the mining of very hard rock in the lower levels of the pit. Q4 2023 copper production of 60kt was 13kt below Q4 2022 and 4kt lower than Q3 2023. Sentinel production for 2023 of 214kt was lower than the revised guidance range of 220 – 230kt. Other sites achieved consolidated copper production of 28kt for the full year, a 10kt reduction from 2022 reflecting declining production from short life mines. Copper production at the Cobre Las Cruces mine in Spain ceased in Q2 2023. All permits are now in place for the underground development project at Cobre Las Cruces.