First Quantum Minerals Ltd. (“First Quantum” or “the Company”) (TSX: FM) today reports results for the three months ended March 31, 2022 (“Q1 2022”) of net earnings attributable to shareholders of the Company of $385 million ($0.56 earnings per share) and adjusted earnings of $480 million ($0.70 adjusted earnings per share).
“Despite the operational and inflationary challenges presented in the first quarter, First Quantum was able to deliver another quarter of strong earnings and demonstrate continued financial improvement. Cash flow generation continues to be strong in the current commodity price environment and we remain committed to improving our balance sheet with net debt(1) reduction of over $200 million during the period and the early redemption of $500 million of senior notes subsequent to the quarter,” commented Philip Pascall, Chairman and CEO. “While the restrictions from the global pandemic have largely eased, recent geopolitical events have brought about new challenges and I thank the entire First Quantum team for their tireless efforts.”
FIRST QUARTER SUMMARY
In Q1 2022, First Quantum reported improvements in gross profit (16%), EBITDA1
(9%), net earnings attributable to shareholders (56%), and adjusted earnings(1) (57%) relative to the fourth quarter of last year (“Q4 2021”). On a quarter-overquarter basis, despite lower copper and gold sales volumes and the inflationary pressures on costs, the first quarter benefitted from higher realized metal prices2 as the Company’s copper hedge positions continued to decline.
Total copper production for the first quarter was 182,210 tonnes, a 10% decrease from Q4 2021. Different factors at each of the main operating mines contributed, to varying degrees, to a reduction in grade from Q4 2021 levels. Grades are expected to return to planned levels at Cobre Panama and Sentinel over the coming months, while Kansanshi’s grades are expected to be lower than 2021. Total copper production guidance for 2022 has been lowered to a range of 790,000 to 855,000 tonnes from 810,000 to 880,000 tonnes to reflect the lower production experienced in the first quarter. Guidance for gold and nickelproduction remains unchanged.
Copper C1 cash cost2 of $1.61 per lb for Q1 2022 was $0.22 per lb higher than the preceding quarter as global pressures on fuel, explosives and freight prices have been seen across all of the Company’s operations. The guidance range for copper C1 cash cost2 has been increased to $1.45 and $1.60 per lb, and copper all-in sustaining cost (AISC)2 guidance has increased to $2.15 and $2.30 per lb. The conflict in Ukraine and the associated wide-reaching sanctions imposed upon Russia has led to higher energy and commodity prices. These increases have further contributed to the global inflationary environment since the Company provided three-year guidance in January 2022. For the Company, various inputs and operational costs have increased and may increase further; these include costs for fuel, explosives, sulphur, freight, reagents and steel. Such inflationary pressures have currently added approximately $0.10 per lb to monthly copper C1 cash costs2 and approximately
$0.50 per lb to monthly nickel C1 cash costs2.
1 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. See “Regulatory Disclosures”.
2 Adjusted earnings 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”.