0P6E First Quantum Minerals Ltd

First Quantum Minerals Reports Second Quarter 2023 Results
First Quantum Minerals Ltd. (“First Quantum” or “the Company”) (TSX: FM) today reports results for the three months ended June 30, 2023 (“Q2 2023” or the "second quarter") of net earnings attributable to shareholders of the Company of $93 million ($0.13 earnings per share) and adjusted earnings1 of $85 million ($0.12 adjusted earnings per share2).

“After a challenging start to the year, it is pleasing to see the improvements at our three largest operations. During the second quarter, Sentinel achieved its highest monthly production for the year in May and Cobre Panamá and Kansanshi achieved the same records in June. We remain well on track for a stronger performance in the second half of the year. Our brownfield projects achieved important milestones during the quarter with the Enterprise project producing first nickel concentrate and both Enterprise and the CP100 Expansion periodically demonstrating nameplate capacity,” commented Tristan Pascall, Chief Executive Officer. “While we expect the positive operational momentum to continue into the second half of the year, we are cognizant of the global economic slowdown. I believe that we are well-positioned to navigate through the near-term challenges with our focus on improving productivity and unit costs.”

Q2 2023 SUMMARY

In Q2 2023, First Quantum reported gross profit of $265 million, EBITDA1 of $568 million, net earnings attributable to shareholders of $0.13 per share, and adjusted earnings of $0.12 per share2. Relative to the first quarter of this year (“Q1 2023”), second quarter financial results benefitted from higher copper sales volumes and lower input costs, which was partially offset by lower realized copper and nickel prices.

Total copper production for the second quarter was 187,175 tonnes, a 35% increase from Q1 2023. The quarter-over-quarter increase in production was attributable to an improvement in grades at Cobre Panamá, Kansanshi and Sentinel and higher throughput at Cobre Panamá and Sentinel.

Copper C1 cash cost2 of $1.98 per lb for Q2 2023 was $0.26 per lb lower than Q1 2023. The improvement in copper C1 cash costs2 was related to improved production volumes and lower fuel and explosive costs.

Production at the three major copper operations is expected to be higher in the second half of the year. Guidance for copper, gold and nickel production remains unchanged, however full year production for each metal is expected to be towards the lower end of guidance to reflect year-to-date production. C1 cash cost2 and AISC2 for both copper and nickel remains unchanged. Unit cash costs2 are expected to decrease in the second half of the year with higher production and are expected to be towards the upper end of guidance for the full year.

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1 EBITDA and adjusted earnings are non-GAAP financial measures. 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, copper C1 cash cost (copper C1), and all-in sustaining costs (AISC) 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”.

Q2 2023 OPERATIONAL HIGHLIGHTS

Total copper production for Q2 2023 was 187,175 tonnes, up from the 138,753 tonnes reported in Q1 2023 as each of the Company's three largest operations reported improved grades during the period. Copper sales volumes in Q2 2023 totalled 177,362 tonnes, 9,813 tonnes lower than production.

• Cobre Panamá produced 90,086 tonnes of copper in Q2 2023, an increase of 24,659 tonnes from the previous quarter as the current quarter saw improved grades and higher tonnes milled from the continued successful ramp-up of the CP 100 Expansion project. Copper C1 cash cost3 of $1.71 per lb was $0.06 per lb higher than the previous quarter due lower gold by-product credits. 2023 Production guidance for Cobre Panamá remains unchanged at 350,000 to 380,000 tonnes of copper and 140,000 to 160,000 ounces of gold. For the full year 2023, grades and recoveries are expected to be broadly consistent with 2022 regardless of the increased processing throughput, with some fluctuation from quarter to quarter. Ramp-up of the CP100 Expansion continues, with the expansion facilities periodically demonstrating nameplate capacity during the second quarter, and the expansion to 100 million tonnes per annum ("Mtpa") remains on schedule for the end of 2023. Significant progress has been made on the pre-strip work for the Colina pit and earthworks for the associated overland conveyor and in-pit crushing facility. The first crusher at Colina is expected to be commissioned in 2024. Construction of the molybdenum recovery circuit is progressing well with completion of construction and commencement of commissioning expected by the end of 2023 with first molybdenum concentrate production to commence in the first quarter of 2024.
• Kansanshi’s copper production of 34,657 tonnes in Q2 2023 was 5,974 tonnes higher than the previous quarter. Kansanshi production improved in the second quarter with mining cutbacks at elevated benches with historically higher grades, which will continue to be the focus for the remainder of the year. Copper C1 cash cost1 of $2.36 per lb was $0.52 lower than Q1 2023 mainly due to lower fuel costs and improved production volumes. Production in 2023 is expected to be at the lower end of the guidance range of 130,000 to 150,000 tonnes of copper and 95,000 to 105,000 ounces of gold. Mining fleet deployment changes over the past six months have enabled the operation to open up mining areas, placing less reliance on low-grade ore stockpiles. Additionally, mining will focus on cutbacks M15 and M17 at upper elevations in the main pit, where mineralization is predominantly disseminated in stratigraphy and with wider veins, and therefore higher grades. This will continue to be a focus for the remainder of the year, which will benefit production through the rest of 2023.
• Sentinel reported copper production of 54,045 tonnes in Q2 2023, 17,813 tonnes higher than the previous quarter as the operation saw steady improvement after the impact of record heavy rains experienced in the first quarter. Mining activities continued to be impacted by excess water in the pit until mid-May when dewatering activities reduced water levels in the pit, allowing operations to regain access to higher-grade ore. Copper C1 cash cost1 of $2.04 per lb was $0.66 per lb lower than the preceding quarter, reflecting lower fuel costs and higher production volumes. As a result of the challenges encountered at the start of the year, copper production for 2023 is expected to be toward the lower end of guidance of 260,000 to 280,000 tonnes. A drilling contractor will be deployed from July alongside the Company’s own drill rigs to increase stocks of broken material. The focus will remain on blast quality to improve fragmentation and mine-to-mill optimization. Production is expected to continue to improve in the second half of the year with improved milling rates in line with the comparable period in 2022 and with ground water now under control, providing full access to high-grade ore. Grade improvement is expected to continue for the rest of the year.
• At Enterprise, first production of nickel concentrate was achieved in the second quarter, with nameplate capacity of the process plant temporarily demonstrated during the second quarter, and first concentrate sale is expected in the third quarter of 2023. The ramp-up continues to commercial production and full plant throughput in 2024. Oxide material is impacting recoveries of the plant and the ore profile has been updated to reflect the classification of material. 2023 production for Enterprise is expected to be at the lower end of guidance of 5,000 – 10,000 contained tonnes of nickel.

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1 C1 cash costs (C1) is a non-GAAP ratio which does not have a standardized meaning prescribed by IFRS and might not be comparable to similar financial measures disclosed by other issuers. See “Regulatory Disclosures”.

COBRE PANAMÁ UPDATE

On March 8, 2023, the Company and the Government of Panamá (the "GOP") reached an agreement in respect of the terms and conditions for a Refreshed Concession Contract, which is subject to approval by law. The Refreshed Concession Contract provides for an initial 20-year term with a 20-year extension option and possible additional extensions for life of mine. The Refreshed Concession Contract has been signed by the GOP and the Company on June 26, 2023, having completed the public consultation process, and is currently under the ordinary course of business review by the National Comptroller prior to its countersignature. Once counter signed by the Comptroller, it is expected to be presented before the National Assembly of Panamá during the current legislative term that commenced on July 1, 2023.

Once the agreement is signed and passed into law as expected, payments to cover taxes and royalties up to the year-end 2022 of approximately $395 million are expected to be made within 30 days of the Refreshed Concession Contract being enacted into law. In addition, past due amounts payable for 2023 corporate tax instalments, withholding taxes and quarterly royalty payments will also be due 30 days after being enacted, without penalty or interest. It is intended that the charge relating to taxes and royalties up to the year-end 2022 be excluded from 2023 adjusted earnings. The expected taxes and royalties to the GOP relating to 2023 is $375 million.

BROWNFIELD PROJECTS

Construction work for the CP100 Expansion project was completed and commissioned in the first quarter. With the expansion facilities periodically demonstrating nameplate capacity in the second quarter, the ramp up to a throughput rate of 100 Mtpa remains on schedule for the end of 2023.

At the S3 Expansion, detailed design is progressing well. Long-lead mining fleet and long-lead process plant equipment have been ordered with deliveries expected to commence in the second half of 2023. Overall project procurement is approximately 33% committed as at the end of the quarter. The majority of the capital spend on the S3 Expansion is expected in late-2023 and 2024.

At Enterprise, nameplate capacity of the process plant was temporarily demonstrated during the second quarter. First production of nickel concentrate was achieved in the second quarter and first concentrate sale is expected in the third quarter of 2023. The ramp-up continues to commercial production and full plant throughput in 2024.

At the Las Cruces Underground Project, work continues to advance with the release of the NI 43-101 Technical Report on Reserves and Resources expected later in the year. The proposed underground project involves supplementing the existing copper facilities at Las Cruces with additional processing capacity for zinc, silver and lead. The Las Cruces Underground Project is awaiting Board approval, which is not expected before the end of 2023 and will take into consideration prevailing economic conditions and the Company's debt reduction objectives.

GREENFIELD PROJECTS

The primary Environmental and Social Impact Assessment (“ESIA”) for Taca Taca was submitted to the Secretariat of Mining of Salta Province in 2019 and supplementary information on tailings and waste management were filed to the authority during 2022. As a part of the revision process, in June 2023, the Company received a second set of observations to the ESIA and is currently working to provide the requested information. Approval of the ESIA is expected in 2023. The Phase III groundwater exploration campaign successfully concluded during the second quarter of 2023, with eighteen pumping wells constructed and tested, obtaining positive results. The initial water use permit applications were submitted during the second quarter of 2023 and the remaining will be submitted progressively in 2023.

At Haquira, negotiations for land access to support a drill program were resumed during the second quarter and agreements were reached with three local communities. The Company is working on upgrading camp facilities, preparing required logistics including local suppliers and workers, renewing and/or progressing applicable environmental permits, and formalizing access contracts, with the aim of starting an in-fill drilling campaign at Haquira East deposit during the second half of 2023. The Company hopes to resume land access discussions with the remaining communities to extend the drilling program into Haquira West and other targets in the area of the project.

FINANCIAL HIGHLIGHTS

• Gross profit for the second quarter of $265 million was 5% lower than Q1 2023 due to higher depreciation, while EBITDA4 of $568 million for the same period was 10% higher due to higher sales volumes, partially offset by lower realized metal prices.
• Cash flows from operating activities of $719 million ($1.04 per share5) for the quarter were $420 million higher than Q1 2023 due mainly to working capital movements related to trade and other receivables and trade and other payables.
• Net debt1 decreased by $130 million during the quarter, taking the net debt1 balance to $5,650 million as at June 30, 2023. As at June 30, 2023, total debt was $6,528 million (March 31, 2023, total debt was $6,878 million). The decrease in net debt1 and total debt1 was attributable to the favourable timing of working capital cash flows.
• On May 17, the Company announced an offering of $1.3 billion of Senior Notes due 2031. Proceeds from the offering was used towards the repayment of $970 million of the Company’s existing revolving credit facility and a $300 million redemption of the Company’s outstanding Senior Notes due 2025.
• On July 25, the Company announced an interim dividend of CDN$0.08 per share, in respect of the financial year ended December 31, 2023 (July 26, 2022: CDN$0.16 per share), to be paid on September 19, 2023 to shareholders of record on August 28, 2023.

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1 EBITDA is a 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 Cash flows from operating activities per share, copper C1 cash cost (copper C1), and copper all-in sustaining cost (copper AISC) 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”.

CONSOLIDATED OPERATING HIGHLIGHTS

	QUARTERLY
	Q2 2023		Q1 2023		Q2 2022
Copper production (tonnes)1		187,175		138,753		192,668
Cobre Panamá		90,086		65,427		90,778
Kansanshi		34,657		28,683		39,719
Sentinel		54,045		36,232		52,447
Other Sites		8,387		8,411		9,724
Copper sales (tonnes)		177,362		150,287		187,642
Cobre Panamá		86,964		70,028		90,568
Kansanshi2		30,732		31,538		35,966
Sentinel		51,135		40,313		50,912
Other Sites		8,531		8,408		10,196
Gold production (ounces)		52,561		47,874		74,959
Cobre Panamá		28,994		23,878		36,931
Kansanshi		16,346		15,960		27,937
Guelb Moghrein		6,686		7,585		9,060
Other sites		535		451		1,031
Gold sales (ounces)3		48,640		51,941		69,998
Cobre Panamá		26,881		28,853		35,251
Kansanshi		15,825		17,244		26,775
Guelb Moghrein		5,233		5,482		6,974
Other sites		701		362		998
Nickel production (contained tonnes)4		5,976		5,917		4,853
Nickel sales (contained tonnes)		5,906		5,846		2,892
Cash cost of copper production (C1) (per lb)5,6	$	1.98	$	2.24	$	1.74
Total cost of copper production (C3) (per lb)5,6,7	$	2.92	$	3.30	$	2.73
Copper all-in sustaining cost (AISC) (per lb)5,6,7	$	2.64	$	2.87	$	2.37

1 Production is presented on a contained basis, and is presented prior to processing through the Kansanshi smelter.2 Sales include third-party sales of concentrate, cathode and anode attributable to Kansanshi. Sales exclude the sale of copper anode produced from third-party concentrate purchased at Kansanshi. Sales of copper anode attributable to third party concentrate purchases were 8,821 tonnes for the three months ended June 30, 2023 (580 tonnes for the three months ended June 30, 2022). 3 Excludes refinery-backed gold credits purchased and delivered under the precious metal streaming arrangement (see “Precious Metal Stream Arrangement”).4 Nickel production includes 220 tonnes of pre-commercial production from Enterprise, which is not included in earnings or C1, C3 and AISC calculations.

5 Copper all-in sustaining cost (copper AISC), copper C1 cash cost (copper C1), and total cost of copper (copper C3) 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”.6 Excludes the sale of copper anode produced from third-party concentrate purchased at Kansanshi. Sales of copper anode attributable to third party concentrate purchases were 8,821 tonnes for the three months ended June 30, 2023 (580 tonnes for the three months ended June 30, 2022).7 Copper C3 and AISC for the three months ended June 30, 2023 exclude $18 million royalty attributable to ZCCM-IH relating to the year ended December 31, 2022.

REALIZED METAL PRICES1        

	QUARTERLY
	Q2 2023			Q1 2023			Q2 2022
Average LME copper cash price (per lb)	$	3.84		$	4.05		$	4.31
Realized copper price (per lb)	$	3.75		$	3.95		$	4.19
Treatment/refining charges (“TC/RC”) (per lb)	$	(0.15	)	$	(0.14	)	$	(0.14	)
Freight charges (per lb)	$	(0.03	)	$	(0.02	)	$	(0.03	)
Net realized copper price1 (per lb)	$	3.57		$	3.79		$	4.02
Average LBMA cash price (per oz)	$	1,976		$	1,890		$	1,872
Net realized gold price1,2 (per oz)	$	1,797		$	1,766		$	1,736
Average LME nickel cash price	$	10.12		$	11.79		$	13.13
Net realized nickel price1	$	9.50		$	10.25		$	10.09

1	Realized metal prices are a non-GAAP ratio, do not have standardized meanings under IFRS and might not be comparable to similar financial measures disclosed by other issuers. See “Regulatory Disclosures” for further information.
2	Excludes gold revenues recognized under the precious metal stream arrangement.

CONSOLIDATED FINANCIAL HIGHLIGHTS

	QUARTERLY
	Q2 2023			Q1 2023			Q2 2022
Sales revenues		1,651			1,558			1,904
Gross profit		265			280			629
Net earnings attributable to shareholders of the Company		93			75			419
Basic earnings per share	$	0.13		$	0.11		$	0.61
Diluted earnings per share	$	0.13		$	0.11		$	0.60
Cash flows from operating activities		719			299			904
Net debt1		5,650			5,780			5,339
EBITDA2,3		568			518			906
Adjusted earnings2		85			76			337
Adjusted earnings per share4	$	0.12		$	0.11		$	0.49
Realized copper price (per lb)4	$	3.75		$	3.95		$	4.19
Net earnings attributable to shareholders of the Company		93			75			419
Adjustments attributable to shareholders of the Company:
Adjustment for expected phasing of Zambian value-added tax (“VAT”) receipts		(31	)		(23	)		106
Total adjustments to EBITDA2 excluding depreciation		15			22			(238	)
Tax and minority interest adjustments		8			2			50
Adjusted earnings2		85			76			337

1 Net debt is a supplementary financial measure which does not have a standardized meaning under IFRS, and might not be comparable to similar financial measures disclosed by other issuers. See “Regulatory Disclosures.2 EBITDA and adjusted earnings are non-GAAP financial measures, which do not have a standardized meaning under IFRS and might not be comparable to similar financial measures disclosed by other issuers. Adjusted earnings have been adjusted to exclude items from the corresponding IFRS measure, net earnings attributable to shareholders of the Company, which are not considered by management to be reflective of underlying performance. The Company has disclosed these measures to assist with the understanding of results and to provide further financial information about the results to investors and may not be comparable to similar financial measures disclosed by other issuers. The use of adjusted earnings and EBITDA represents the Company’s adjusted earnings metrics. See “Regulatory Disclosures”. 3 Adjustments to EBITDA in 2023 relate principally to royalties payable to ZCCM-IH for the year ended December 31, 2022, and foreign exchange revaluations (2022 - foreign exchange revaluations).4 Adjusted earnings per share, realized metal prices, copper all-in sustaining cost (copper AISC), copper C1 cash cost (copper C1), and total cost of copper (copper C3) 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”.

2023 GUIDANCE

Production at the three major copper operations is expected to be higher in the second half of the year following a challenging start to the year. Guidance for copper, gold and nickel production remains unchanged, however, full year production for each metal is expected to be towards the lower end of guidance to reflect year-to-date production.

C1 cash cost1 and AISC1 for both copper and nickel remains unchanged, however, full year costs are expected to be towards the upper end of guidance. Unit cash costs1 are expected to decrease in the second half of the year with higher production.

Any non-profit based top-up tax to meet the minimum contribution at Cobre Panamá is expected to be recognized within operating profit and AISC1. The AISC1 range remains unchanged and is able to accommodate the expected impact of between $0.00 per lb to $0.05 per lb.

Guidance for total capital expenditure remains unchanged at $1,600 million. Guidance excludes any capitalized pre-commercial production costs. Capital expenditure for the three and six months ended June 30, 2023 was $321 million and $586 million, respectively. Expenditure on the S3 Expansion project to date is approximately $76 million, with $35 million spent this year.

Interest expense on debt for the full year 2023 is expected to be approximately $510 million and excludes interest accrued on related party loans to Cobre Panamá and Ravensthorpe, a finance cost accreted on the precious metal streaming arrangement, capitalized interest expense and accretion on asset retirement obligation (“ARO”). Cash outflow on interest paid is expected to be approximately $505 million for the full year 2023.

The full year 2023 depreciation expense is expected to be between $1,250 million to $1,275 million.

At current consensus pricing, the adjusted effective tax rate for the Company for the full year 2023 is expected to be between 35% and 40%. It is anticipated that the effective tax rate for the Group in the second half of the year will be higher than this rate as the income tax expense is adjusted to the full year rate under the Refreshed Concession Contract when the agreement is passed into law, rather than the Law 9 basis used in the current quarter.

PRODUCTION GUIDANCE

000’s	2023
Copper (tonnes)	770 – 840
Gold (ounces)	265 – 295
Nickel (contained tonnes)	28 – 38

PRODUCTION GUIDANCE BY OPERATION2

Copper production guidance (000’s tonnes)	2023
Cobre Panamá	350 – 380
Kansanshi	130 – 150
Sentinel	260 – 280
Other sites	30
Gold production guidance (000’s ounces)
Cobre Panamá	140 – 160
Kansanshi	95 – 105
Other sites	30
Nickel production guidance (000’s contained tonnes)
Ravensthorpe	23 – 28
Enterprise	5 – 10

1 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”2 Production is stated on a 100% basis as the Company consolidates all operations.

CASH COST AND ALL-IN SUSTAINING COST1

Copper	2023
C11 (per lb)	$1.65 – $1.85
AISC1 (per lb)	$2.25 – $2.45
Ravensthorpe Nickel	2023
C11 (per lb)	$7.00 – $8.50
AISC1 (per lb)	$9.00 – $10.50

1 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”

ENVIRONMENT, SOCIAL AND GOVERNANCE (“ESG”)

The Company published its primary sustainability report, the 2022 ESG Report, as well as the 2022 Tax Transparency and Contributions to Governments Report, in May 2023. The latest reports can be found in the ESG Analyst Centre on the Company’s website: https://www.first-quantum.com/English/sustainability/esg-analyst-centre/default.aspx. These include the TCFD-aligned Climate Change Reports, ESG Reports, Tax Transparency and Contributions to Government Reports, as well as the Company’s sustainability policies. Following the publication of the 2022 ESG Report, the Company hosted its inaugural virtual ESG Day in June 2023. A replay of the webcast can be found on the Presentations and Events page of the Company’s website: https://first-quantum.com/English/investors/presentations-and-events/default.aspx.

COMPLETE FINANCIAL STATEMENTS AND MANAGEMENT’S DISCUSSION AND ANALYSIS

The complete Consolidated Financial Statements and Management’s Discussion and Analysis for the three and six months ended June 30, 2023 are available at www.first-quantum.com and at www.sedar.com and should be read in conjunction with this news release.

CONFERENCE CALL DETAILS

The Company will host a conference call and webcast to discuss the results on Wednesday, July 26, 2023 at 9:00 am (ET).

Conference call and webcast details:Toll-free North America: 1-800-319-4610Toll-free International: +1-604-638-5340Webcast: Direct link or on our website

A replay of the webcast will be available on the First Quantum website.

For further information, visit our website at www.first-quantum.com or contact:

Bonita To, Director, Investor Relations(416) 361-6400 Toll-free: 1 (888) 688-6577E-Mail: info@fqml.com

REGULATORY DISCLOSURES

Non-GAAP and Other Financial Measures

EBITDA, ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE

EBITDA, adjusted earnings and adjusted earnings per share exclude certain impacts which the Company believes are not reflective of the Company’s underlying performance for the reporting period. These include impairment and related charges, foreign exchange revaluation gains and losses, gains and losses on disposal of assets and liabilities, one-time costs related to acquisitions, dispositions, restructuring and other transactions, revisions in estimates of restoration provisions at closed sites, debt extinguishment and modification gains and losses, the tax effect on unrealized movements in the fair value of derivatives designated as hedged instruments, and adjustments for expected phasing of Zambian VAT receipts.

	QUARTERLY
	Q2 2023		Q1 2023	Q2 2022
Operating profit	252		225	856
Depreciation	301		271	288
Other adjustments:
Foreign exchange loss (gain)	(15	)	16	(239	)
Royalty payable to ZCCM-IH1	18		–	–
Other expense	3		6	2
Revisions in estimates of restoration provisions at closed sites	9		–	(1	)
Total adjustments excluding depreciation	15		22	(238	)
EBITDA	568		518	906

1 The three months ended June 30, 2023, include royalty attributable due to ZCCM-IH of $18 million relating to the year ended December 31, 2022.

	QUARTERLY
	Q2 2023			Q1 2023			Q2 2022
Net earnings attributable to shareholders of the Company		93			75			419
Adjustments attributable to shareholders of the Company:
Adjustment for expected phasing of Zambian VAT		(31	)		(23	)		106
Total adjustments to EBITDA excluding depreciation		15			22			(238	)
Tax and minority interest adjustments		8			2			50
Adjusted earnings		85			76			337
Basic earnings per share as reported	$	0.13		$	0.11		$	0.61
Adjusted earnings per share	$	0.12		$	0.11		$	0.49

REALIZED METAL PRICES

Realized metal prices are used by the Company to enable management to better evaluate sales revenues in each reporting period. Realized metal prices are calculated as gross metal sales revenues divided by the volume of metal sold in lbs. Net realized metal price is inclusive of the treatment and refining charges (TC/RC) and freight charges per lb.

OPERATING CASHFLOW PER SHARE

In calculating the operating cash flow per share, the operating cash flow calculated for IFRS purposes is divided by the basic weighted average common shares outstanding for the respective period.

NET DEBT

Net debt is comprised of bank overdrafts and total debt less unrestricted cash and cash equivalents.

CASH COST, ALL-IN SUSTAINING COST, TOTAL COST

The consolidated cash cost (C1), all-in sustaining cost (AISC) and total cost (C3) presented by the Company are measures that are prepared on a basis consistent with the industry standard definitions by the World Gold Council and Brook Hunt cost guidelines but are not measures recognized under IFRS. In calculating the C1 cash cost, AISC and C3, total cost for each segment, the costs are measured on the same basis as the segmented financial information that is contained in the financial statements.

C1 cash cost includes all mining and processing costs less any profits from by-products such as gold, silver, zinc, pyrite, cobalt, sulphuric acid, or iron magnetite and is used by management to evaluate operating performance. TC/RC and freight deductions on metal sales, which are typically recognized as a component of sales revenues, are added to C1 cash cost to arrive at an approximate cost of finished metal.

AISC is defined as cash cost (C1) plus general and administrative expenses, sustaining capital expenditure, deferred stripping, royalties and lease payments and is used by management to evaluate performance inclusive of sustaining expenditure required to maintain current production levels.

C3 total cost is defined as AISC less sustaining capital expenditure, deferred stripping and general and administrative expenses net of insurance, plus depreciation and exploration. This metric is used by management to evaluate the operating performance inclusive of costs not classified as sustaining in nature such as exploration and depreciation.

For the three months ended June 30, 2023	Cobre Panamá			Kansanshi			Sentinel			Guelb Moghrein			Las Cruces			Çayeli			Pyhäsalmi		Copper			Corporate & other		Ravensthorpe			Total
Cost of sales1		(469	)		(374	)		(334	)		(41	)		(23	)		(19	)	(5	)		(1,265	)	(1	)		(120	)	(1,386	)
Adjustments:
Depreciation		149			56			74			2			–			4		1			286		–			15		301
By-product credits		32			30			–			26			–			3		5			96		–			3		99
Royalties		13			55			26			1			1			2		–			98		–			5		103
Treatment and refining charges		(45	)		(5	)		(11	)		(2	)		–			(3	)	–			(66	)	–			–		(66	)
Freight costs		–			–			(6	)		–			–			(2	)	–			(8	)	–			–		(8	)
Finished goods		(5	)		(8	)		13			(5	)		(1	)		3		(1	)		(4	)	–			5		1
Other4		2			69			5			(1	)		3			1		–			79		1			3		83
Cash cost (C1)2,4		(323	)		(177	)		(233	)		(20	)		(20	)		(11	)	–			(784	)	–			(89	)	(873	)
Adjustments:
Depreciation (excluding depreciation in finished goods)		(148	)		(55	)		(70	)		(3	)		–			(4	)	(1	)		(281	)	(1	)		(14	)	(296	)
Royalties5		(13	)		(37	)		(26	)		(1	)		(1	)		(2	)	–			(80	)	–			(5	)	(85	)
Other		(6	)		(2	)		(3	)		1			–			–		–			(10	)	–			(1	)	(11	)
Total cost (C3)2,4		(490	)		(271	)		(332	)		(23	)		(21	)		(17	)	(1	)		(1,155	)	(1	)		(109	)	(1,265	)
Cash cost (C1)2,4		(323	)		(177	)		(233	)		(20	)		(20	)		(11	)	–			(784	)	–			(89	)	(873	)
Adjustments:
General and administrative expenses		(12	)		(7	)		(10	)		(1	)		–			–		–			(30	)	–			(3	)	(33	)
Sustaining capital expenditure and deferred stripping3		(61	)		(45	)		(40	)		(1	)		–			(1	)	–			(148	)	–			(7	)	(155	)
Royalties5		(13	)		(37	)		(26	)		(1	)		(1	)		(2	)	–			(80	)	–			(5	)	(85	)
Lease payments		(1	)		–			–			–			(1	)		–		–			(2	)	–			(1	)	(3	)
AISC2,4		(410	)		(266	)		(309	)		(23	)		(22	)		(14	)	–			(1,044	)	–			(105	)	(1,149	)
AISC (per lb)2,4	$	2.16		$	3.60		$	2.71		$	2.92		$	5.49		$	2.16		–		$	2.64		–		$	11.17
Cash cost – (C1) (per lb)2,4	$	1.71		$	2.36		$	2.04		$	2.30		$	5.13		$	1.72		–		$	1.98		–		$	9.58
Total cost – (C3) (per lb)2,4	$	2.59		$	3.68		$	2.91		$	2.83		$	5.23		$	2.59		–		$	2.92		–		$	11.76

1 Total cost of sales per the Consolidated Statement of Earnings in the Company’s unaudited condensed interim consolidated financial statements.2 C1 cash cost (C1), total costs (C3), and all-in sustaining costs (AISC) 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”.3 Sustaining capital and deferred stripping are non-GAAP financial measures 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”.4 Excludes purchases of copper concentrate from third parties treated through the Kansanshi Smelter.5 Royalties in C3 and AISC costs exclude the 2022 impact of $18 million attributable to the 3.1% sale of a gross royalty interest in Kansanshi Mining Plc to ZCCM-IH.

For the three months ended June 30, 2022	Cobre Panamá			Kansanshi			Sentinel			Guelb Moghrein			Las Cruces			Çayeli			Pyhäsalmi			Copper			Corporate & other		Ravensthorpe			Total
Cost of sales1		(478	)		(274	)		(293	)		(48	)		(30	)		(13	)		(7	)		(1,143	)	(36	)		(96	)	(1,275	)
Adjustments:
Depreciation		155			48			66			3			–			4			1			277		1			10		288
By-product credits		49			55			–			31			–			1			7			143		–			5		148
Royalties		16			38			47			2			1			3			–			107		–			3		110
Treatment and refining charges		(34	)		(6	)		(12	)		(2	)		–			(1	)		–			(55	)	–			–		(55	)
Freight costs		–			1			(10	)		–			–			(2	)		–			(11	)	–			–		(11	)
Finished goods		(3	)		(32	)		(15	)		1			3			(3	)		(2	)		(51	)	–			(25	)	(76	)
Other		3			13			7			(1	)		5			(1	)		(1	)		25		35			4		64
Cash cost (C1)2		(292	)		(157	)		(210	)		(14	)		(21	)		(12	)		(2	)		(708	)	–			(99	)	(807	)
Adjustments:
Depreciation (excluding depreciation in finished goods)		(156	)		(56	)		(68	)		(3	)		–			(4	)		(1	)		(288	)	–			(12	)	(300	)
Royalties		(16	)		(38	)		(47	)		(2	)		(1	)		(3	)		–			(107	)	–			(3	)	(110	)
Other		(3	)		(4	)		(2	)		(1	)		1			–			–			(9	)	–			(1	)	(10	)
Total cost (C3)2		(467	)		(255	)		(327	)		(20	)		(21	)		(19	)		(3	)		(1,112	)	–			(115	)	(1,227	)
Cash cost (C1)2		(292	)		(157	)		(210	)		(14	)		(21	)		(12	)		(2	)		(708	)	–			(99	)	(807	)
Adjustments:																														–
General and administrative expenses		(11	)		(6	)		(8	)		–			–			(1	)		–			(26	)	–			(3	)	(29	)
Sustaining capital expenditure and deferred stripping3		(38	)		(41	)		(42	)		(1	)		–			–			–			(122	)	–			(7	)	(129	)
Royalties		(16	)		(38	)		(47	)		(2	)		(1	)		(3	)		–			(107	)	–			(3	)	(110	)
Lease payments		(1	)		–			–			–			–			–			–			(1	)	–			–		(1	)
AISC2		(358	)		(242	)		(307	)		(17	)		(22	)		(16	)		(2	)		(964	)	–			(112	)	(1,076	)
AISC (per lb)2	$	1.88		$	2.85		$	2.76		$	2.49		$	3.78		$	2.46		$	0.74		$	2.37		–		$	11.78
Cash cost – (C1) (per lb)2	$	1.54		$	1.83		$	1.88		$	2.02		$	3.53		$	1.86		$	0.81		$	1.74		–		$	10.08
Total cost – (C3) (per lb)2	$	2.46		$	3.00		$	2.94		$	2.81		$	3.61		$	2.96		$	1.25		$	2.73		–		$	12.05

1 Total cost of sales per the Consolidated Statement of Earnings in the Company’s unaudited condensed interim consolidated financial statements.2 C1 cash cost (C1), total costs (C3) and all-in sustaining costs (AISC) 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”.3 Sustaining capital and deferred stripping are non-GAAP financial measures 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”.

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. The forward-looking statements include estimates, forecasts and statements as to the Company’s expectations of production and sales volumes, the Company’s agreement with the Government of Panamá regarding the long term future of Cobre Panamá and approval of the same by the National Assembly of Panamá, expected timing of completion of project development at Enterprise and post-completion construction activity at Cobre Panamá and are subject to the impact of ore grades on future production, the potential of production disruptions, potential production, operational, labour or marketing disruptions as a result of the COVID-19 global pandemic, capital expenditure and mine production costs, the outcome of mine permitting, other required permitting, the outcome of legal proceedings which involve the Company, information with respect to the future price of copper, gold, nickel, silver, iron, cobalt, pyrite, zinc and sulphuric acid, estimated mineral reserves and mineral resources, First Quantum’s exploration and development program, estimated future expenses, exploration and development capital requirements, the Company’s hedging policy, and goals and strategies; plans, targets and commitments regarding climate change-related physical and transition risks and opportunities (including intended actions to address such risks and opportunities), greenhouse gas emissions, energy efficiency and carbon intensity, use of renewable energy sources, design, development and operation of the Company’s projects and future reporting regarding climate change and environmental matters; the Company’s expectations regarding increased demand for copper; the Company’s project pipeline and development and growth plans. Often, but not always, forward-looking statements or information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.

With respect to forward-looking statements and information contained herein, the Company has made numerous assumptions including among other things, assumptions about continuing production at all operating facilities, the price of copper, gold, nickel, silver, iron, cobalt, pyrite, zinc and sulphuric acid, anticipated costs and expenditures, the success of Company’s actions and plans to reduce greenhouse gas emissions and carbon intensity of its operations, and the ability to achieve the Company’s goals. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to, future production volumes and costs, the temporary or permanent closure of uneconomic operations, costs for inputs such as oil, power and sulphur, political stability in Panamá, Zambia, Peru, Mauritania, Finland, Spain, Turkey, Argentina and Australia, adverse weather conditions in Panamá, Zambia, Finland, Spain, Turkey, Mauritania, and Australia, labour disruptions, potential social and environmental challenges (including the impact of climate change), power supply, mechanical failures, water supply, procurement and delivery of parts and supplies to the operations, the production of off-spec material and events generally impacting global economic, political and social stability. For mineral resource and mineral reserve figures appearing or referred to herein, varying cut-off grades have been used depending on the mine, method of extraction and type of ore contained in the orebody.

See the Company’s Annual Information Form for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information. Although the Company has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actual results, performances, achievements or events not as anticipated, estimated or intended. Also, many of these factors are beyond First Quantum’s control. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements made and information contained herein are qualified by this cautionary statement.