MANAGEMENT'S DISCUSSION AND ANALYSIS

S E C O N D Q U A R T E R E N D E D J U N E 3 0 , 2 0 2 2

(In United States dollars, tabular amounts in millions, except where noted)

(in United States dollars, tabular amounts in millions, except where noted)

INDEX

SECOND QUARTER HIGHLIGHTS

2

ENVIRONMENT, SOCIAL AND GOVERNANCE

5

COVID-19

6

LOGISTICS AND SHIPPING

6

COST INFLATION

6

DEVELOPMENT PROJECTS

6

EXPLORATION

8

OTHER DEVELOPMENTS

8

GUIDANCE

9

SUMMARY OPERATIONAL RESULTS

13

OPERATIONS REVIEW

18

SUMMARY FINANCIAL RESULTS

29

LIQUIDITY AND CAPITAL RESOURCES

37

ZAMBIAN VAT

42

JOINT VENTURE

43

PRECIOUS METAL STREAM ARRANGEMENT

43

MATERIAL LEGAL PROCEEDINGS

45

REGULATORY DISCLOSURES

46

SUMMARY QUARTERLY INFORMATION

55

APPENDICES

56

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

60

First Quantum Minerals Ltd. | Q2 2022 MANAGEMENT'S DISCUSSION AND ANALYSIS 1

(in United States dollars, tabular amounts in millions, except where noted)

First Quantum Minerals Ltd. ("First Quantum" or "the Company") is engaged in the production of copper, nickel, gold and silver, and related activities including exploration and development. The Company has operating mines located in Zambia, Panama, Finland, Turkey, Spain, Australia and Mauritania, and a development project in Zambia. The Company is progressing the Taca Taca copper-gold-molybdenum project in Argentina and is exploring the Haquira copper deposit in Peru.

The Company's shares are publicly listed for trading on the Toronto Stock Exchange.

This Management's Discussion and Analysis ("MD&A") should be read in conjunction with the unaudited consolidated financial statements of First Quantum for the three and six months ended June 30, 2022. The Company's results have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to interim reporting, IAS 34 Interim Financial Reporting, and are presented in United States dollars, tabular amounts in millions, except where noted.

For further information on First Quantum, reference should be made to its public filings (including its most recently filed Annual Information Form) which are available on SEDAR at www.sedar.com. Information is also available on the Company's website at www.first-quantum.com.This MD&A contains forward-looking information that is subject to risk factors, see "Cautionary statement on forward-lookinginformation" for further discussion. Information on risks associated with investing in the Company's securities and technical and scientific information under National Instrument 43-101 - Standards for Disclosure for Mineral Projects ("NI 43-101") concerning the Company's material properties, including information about mineral resources and mineral reserves, are contained in its most recently filed Annual Information Form. This MD&A was prepared as of July 26, 2022.

SECOND QUARTER HIGHLIGHTS

Cobre Panama achieved quarterly records in throughput and copper production.The Company reported significant increases in net earnings1 attributable to shareholders and adjusted earnings2 together with a notable reduction in net debt2, achieving its debt reduction target.Gross profit and EBITDA2 remained robust and were at a similar level to the same quarter in 2021.

Financial results for the second quarter include net earnings1 attributable to shareholders of the Company of $419 million ($0.61 net earnings per share) and adjusted earnings2 of $337 million ($0.49 adjusted earnings per share3), showing significant improvements over the comparable quarter in 2021 which had net earnings attributable to shareholders of the Company of $140 million ($0.20 net earnings per share) and adjusted earnings2 of $173 million ($0.25 adjusted earnings per share3). Results benefitted from higher realized metal prices3 following the reduced hedge profile and a lower effective tax rate, together with lower finance costs.

Debt reduction: Net debt2 decreased by $476 million during the quarter, bringing the net debt2 balance down to $5,339 million as at June 30, 2022, a reduction of $2,319 million from $7,658 million at June 30, 2020. As at June 30, 2022, total debt was $7,164 million (March 31, 2022, total debt was $7,763 million). The Company has achieved its debt reduction target of $2 billion, from the peak in the second quarter of 2020, and continues to target a further $1 billion reduction in the medium term.

Total copper production for the second quarter was 193 thousand tonnes ("kt"), a 4% decrease from the comparative quarter, and is mainly attributable to lower grades at Kansanshi and Sentinel as well as reductions at shorter life operations. This was mitigated by Cobre Panama achieving record copper production in the quarter.

Cobre Panama delivered record copper production of 91kt for the quarter and achieved a record mill throughput of 21.2 million tonnes, attributable to increased plant stability and continuous improvement projects.

Kansanshi's copper production of 40kt for the quarter was 11kt lower than the same quarter of 2021. Production was impacted by a reduction in grades with narrow-veined regions as well as high water levels.

  1. Net earnings in the second quarter of 2022 includes foreign exchange gains of $239 million. Foreign exchange movements include realized and unrealized gains and losses, and also include the impact of an agreement reached in respect of the outstanding value-added tax receivable sum and an approach for repayment based on offsets against future corporate income taxes and mineral royalties in Zambia.
  2. EBITDA and adjusted earnings are non-GAAP financial measures and net debt is a supplementary financial measure. These measures do not have a standardized meaning prescribed by IFRS and might not be comparable to similar financial measures disclosed by other issuers. Adjusted earnings and EBITDA were previously named comparative earnings and comparative EBITDA, respectively, and the composition remains the same. See "Regulatory Disclosures".
  3. Adjusted earnings 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 issuers. See "Regulatory Disclosures".

First Quantum Minerals Ltd. | Q2 2022 MANAGEMENT'S DISCUSSION AND ANALYSIS 2

(in United States dollars, tabular amounts in millions, except where noted)

Sentinel's copper production of 52kt for the quarter was 2kt lower than the same quarter of 2021 as grades were impacted by a delay in stripping due to bench turnover rate and wet underfoot ground conditions, which delayed access to higher grade ore. Grades at Sentinel are expected to return to planned levels during the second half of the year.

Total copper sales volumes of 188kt were 5kt lower than the current quarter production due to continued shipping challenges and inland logistics.

Ravensthorpe's nickel production of 5kt contained tonnes was comparable to the same quarter in 2021.

Total gold production for the quarter was 75koz, a 6koz decrease from the same quarter of 2021due to lower production at the Kansanshi and Guelb Moghrein operations.

Gross profit of $629 million and EBITDA1 of $906 million for the second quarter were comparable to the same quarter in 2021, attributable to higher realized metal prices2 following the reduced hedge profile offsetting lower sales volumes and the inflationary impact on costs.

Cost inflation: Various inputs and operational costs continued to increase further during the second quarter and impacted C1 cash costs2. These include costs for fuel, explosives, sulphur, freight, reagents and steel. Global inflationary pressures have been impacted by the ongoing COVID-19 pandemic, as well as supply chain disruptions. Energy costs were further impacted by the wide-reaching sanctions imposed upon Russia due to the conflict in Ukraine.

Copper C1 cash cost2 of $1.74 per lb for the second quarter of 2022 was $0.45 per lb higher than the comparable quarter in 2021, attributable to inflationary pressures and lower production. Copper AISC2 of $2.37 per lb for the quarter reflecting the higher copper C1 cash cost2.

Cash flows from operating activities of $904 million ($1.31 per share2) for the quarter were $225 million higher than the same quarter of 2021 with a favourable movement in receivables working capital balance at the end of the quarter.

Note redemption: During the second quarter, the Company redeemed at par an aggregate of $1,000 million principal amount of the senior unsecured notes due 2023. $500 million was redeemed on each of April 5, 2022, and June 7, 2022. No senior unsecured notes due in 2023 remain outstanding post the redemptions.

Increasing cash returns to shareholders: The Board has commenced a cautious increase in shareholder dividends. The Board has adopted the Dividend policy, pursuant to which the Company intends to pay, on a semi-annual basis, a 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. Dividend payments remain at the discretion of the Board.

Dividends: On July 26, 2022, the Company declared an interim dividend of CDN$0.16 per share, in respect of the financial year

ended December 31, 2022 (July 27, 2021: CDN$0.005 per share), to be paid on September 20, 2022 to shareholders of record on August 29, 2022.

Development Projects: In May 2022, the Board approved the S3 Expansion at the Kansanshi mine and the Enterprise nickel project, and work on both projects started immediately. This follows the efforts of the New Dawn administration to enhance the investment climate for mining. The development timeline and capital commitments of both projects remains consistent with the three-year guidance provided by the Company on January 17, 2022. Furthermore, the Company reached an agreement with the Government Republic of Zambia ("GRZ") for repayment of the outstanding VAT claims based on offsets against future corporate income tax and mineral royalty tax payments, which commenced July 1, 2022.

  1. EBITDA is a non-GAAP 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. EBITDA was previously named comparative EBITDA and the composition remains the same. See "Regulatory Disclosures".
  2. Cash flows from operating activities per share, realized metal prices, C1 cash cost (C1), and all-in sustaining cost (AISC) are non-GAAP ratios, and 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".

First Quantum Minerals Ltd. | Q2 2022 MANAGEMENT'S DISCUSSION AND ANALYSIS 3

(in United States dollars, tabular amounts in millions, except where noted)

CONSOLIDATED OPERATING HIGHLIGHTS

Three months ended

Six months ended

June 30

June 30

2022

2021

2022

2021

Copper production (tonnes)1

192,668

199,689

374,878

404,753

Copper sales (tonnes)8

187,642

203,790

384,344

414,524

Gold production (ounces)

74,959

81,375

145,316

159,423

Gold sales (ounces)2

69,998

85,291

146,193

162,682

Nickel production (contained tonnes)

4,853

4,543

9,975

9,185

Nickel sales (contained tonnes)

2,892

6,910

7,242

9,267

CONSOLIDATED FINANCIAL HIGHLIGHTS

Three months ended

Six months ended

June 30

June 30

2022

2021

2022

2021

Sales revenues3

1,904

1,782

4,067

3,404

Gross profit

629

625

1,537

1,165

Net earnings attributable to shareholders of the Company

419

140

804

282

Basic earnings per share

$0.61

$0.20

$1.16

$0.41

Diluted earnings per share

$0.60

$0.20

$1.16

$0.41

Cash flows from operating activities

904

679

1,570

1,422

Net debt6

5,339

6,751

5,339

6,751

EBITDA4,5

906

902

2,086

1,713

Adjusted earnings4

337

173

817

323

Adjusted earnings per share7

$0.49

$0.25

$1.18

$0.47

Cash cost of copper production (C1) (per lb)7,8

$1.74

$1.29

$1.67

$1.26

Total cost of copper production (C3) (per lb)7,8

$2.73

$2.21

$2.69

$2.15

Copper all-in sustaining cost (AISC) (per lb)7,8

$2.37

$1.91

$2.32

$1.81

Realized copper price (per lb)7

$4.19

$3.55

$4.32

$3.39

Net earnings attributable to shareholders

419

140

804

282

of the Company

Adjustments attributable to shareholders of the

Company:

Adjustment for expected phasing of Zambian value-

106

22

128

14

added tax ("VAT") receipts

Total adjustments to EBITDA4 excluding depreciation5

(238)

28

(135)

40

Tax and minority interest adjustments

50

(17)

20

(13)

Adjusted earnings4

337

173

817

323

  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 (see "Precious Metal Stream Arrangement").
  3. Delivery of non-financial items (refinery-backed gold and silver credits) into the Company's precious metal stream arrangement have been netted within sales revenues rather than included in cost of sales. The periods ended June 30, 2021 have been revised to reflect this change. Sales revenues and cost of sales for the three and six months ended June 30, 2021 have been reduced by $65 and $121 million, respectively, compared to the previously reported values for the periods ended June 30, 2021
    (see "Precious Metal Stream Arrangement").

First Quantum Minerals Ltd. | Q2 2022 MANAGEMENT'S DISCUSSION AND ANALYSIS 4

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First Quantum Minerals Ltd. published this content on 26 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 July 2022 20:19:46 UTC.