Results Kansanshi 2013

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Laf1986

Messages: 4998

Inscription: Jeu 30 Juil 2009 19:54

Message Ven 21 Fév 2014 14:37

Results Kansanshi 2013

http://www.first-quantum.com/files/doc_ ... ements.pdf

Full year operating results
Overall copper production at Kansanshi increased by 4% compared to 2012. Higher throughput realized on the recent plant
expansions and higher mixed ore grade processed was partly offset by lower sulphide ore grade. Ongoing mine pit development
work continues to improve access to various ore types, specifically oxide, to coincide with the current plant expansions.

Sulphide ore production decreased by 2% in 2013 compared to 2012, primarily as a result of lower feed grade, partly offset by
higher throughput. Throughput was higher in 2013 as a result of circuit reconfiguration in 2012 which temporarily decreased the
sulphide circuit capacity. Kansanshi continues to process sulphide from the main pit which is a lower grade area.

Mixed ore production was in line with 2012 as lower throughput was offset by higher ore grade and recoveries. Throughput
exceeded the 6.5 Mtpa design capacity but was lower compared to 2012, when a temporary circuit reconfiguration increased the
capacity of the mixed circuit.

Copper production from the oxide circuit was 9% higher than 2012. Throughput increased reflecting ore characteristics with
incremental increases facilitated by the incorporation of components of the 14.5 Mtpa expansion. Grade and recoveries were in
line with 2012.

Gold production was 23% higher than 2012 as a result of gold circuit enhancements and the re-processing of stockpiled gold
plant tailings.

Cash costs were $0.11 per lb lower compared to 2012 as a result of lower mining and processing costs. These reductions were
mainly attributable to increased gold credit, lower acid costs, savings in solvent extraction and electrowinning combined with
record copper production.

Sales revenues decreased by 7% from 2012 reflecting lower realized copper and gold prices, and a build-up of concentrate
inventory. This decrease flowed into gross profit which was also negatively impacted by higher depreciation charges relating to
plant and mine pit expansions, partially offset by a reduction in cash costs during the year.
Q4 operating results
Overall copper production at Kansanshi was 3% higher compared to Q4 2012, due primarily to higher oxide and mixed ore grade
processed.
in United States dollars, tabular amounts in millions, except where noted
2013 Management’s Discussion and Analysis 7
Sulphide ore production decreased by 8% in Q4 2013 compared to Q4 2012, primarily as a result of lower feed grade, partly
offset by higher throughput.

Mixed ore production increased by 8% compared to Q4 2012 due to higher ore grade, offset partly by lower recoveries.

Copper production from the oxide circuit was 9% higher than Q4 2012 due to higher ore grade, partly offset by lower throughput,
reflecting ore characteristics.

Gold production was 4% lower than Q4 2012 as a result of significantly lower recoveries, offset partly by enhancements in the
gold circuit and the re-processing of stockpiled gold plant tailings.

Unit cash costs were $0.17 per lb lower compared to Q4 2012 as a result of lower mining and processing costs. These reductions
were mainly attributable to lower acid costs and an increase in copper production.

Sales revenues decreased by 11% from Q4 2012 reflecting lower realized copper and gold prices, 13% lower sales of copper
concentrate and a significant build-up of concentrate inventory due to particularly low local Zambian smelter off-take during the
quarter. This decrease flowed into gross profit which was also negatively impacted by higher depreciation charges relating to
plant and mine pit expansions, partially offset by a reduction in cash costs for the quarter.

Outlook
Production in 2014 is expected to be between 255,000 and 270,000 tonnes of copper, and 145,000 and 160,000 ounces of gold.

A strong start to the year is expected, despite the unfavourably wet weather, due to significant gains in mining flexibility and
stockpiles of ore made during 2013.

Acid Plant 5 has attained nameplate production rates after upgrades to the process water treatment system. Trials of technological
enhancements to the water treatment system using non-chemical means will be carried out, with a view to reducing operating cost
and to increase overall effectiveness of water treatment.

The recent commissioning of the leach, solvent extraction and CCD thickener systems of the oxide circuit 14.5 Mtpa expansion
project allows for increased treatment of oxide ore, providing an avenue to flex treatment plans in response to continuing
concentrate smelting constraints locally. Mining plans and schedules are being adapted and the process plant treatment regime is
likely to be changed to allow for increased oxide treatment. The goal of the revision is to facilitate a reduction in concentrate
stockpiled on site and increase production of copper in cathode. Acid constraints remain, however and, as such, full projected
oxide treatment rate is not expected until 2015 when sufficient acid becomes available from the new smelter.

Efforts to reduce concentrate stockpile levels this year will focus on grade improvements, mainly through additional flotation
cleaning capacity, maximized treatment of concentrate through our high pressure leach facility, and changes to the plant feed
composition to favour the production of cathode.

Work on improvements in process control on the oxide treatment route is being expanded, with the goal of improving recovery
and containing costs.

Power supply stability is expected to remain a challenge throughout the year, though some long-awaited ZESCO infrastructure
projects, which will assist in this regard, are expected to come on line during the first half of the year.
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cvarvois

Messages: 1459

Inscription: Mar 1 Sep 2009 16:09

Localisation: French Guiana

Message Ven 4 Avr 2014 22:39

Re: Results Kansanshi 2013

Admission of 114,526,277 New Common Shares to listing on the Official List and to trading on the London Stock Exchange - Prospectus du 27/03/2014

Deux extraits :

"The Company holds an 80 per cent interest in the Kansanshi mine; the remaining 20 per cent is held by ZCCM, controlled by the GRZ. The Company’s relationship with ZCCM is governed by a shareholders’ agreement pursuant to which the GRZ is entitled to certain privileges, such as the right to appoint a "government director".
The Company currently has operations in Zambia and Mauritania, with 52 per cent of its pro forma revenue being generated from Zambia and 9 per cent from Mauritania in the twelve months ended 31 December 2013. These countries have a history of political instability, significant and unpredictable changes in government policies and laws, illegal mining activities, lack of law enforcement and labor unrest.

The Company’s ability to maintain or increase its annual production of copper, nickel and gold will be dependent, in significant part, on its ability to bring new mines into production and to expand existing mines.

The Company’s mining operations and exploration activities are subject to extensive laws and regulations, which include laws and regulations governing, among other things: exploration; development; production; exports; taxes; labour standards; mining royalties; price controls; waste disposal; protection and remediation of the environment; reclamation; historic and cultural resource preservation; mine safety and occupational health; handling; storage and transportation of hazardous substances; and other matters.

The Company’s business operations are subject to risks and hazards inherent in the mining industry that may result in damage to its property, delays in its business and possible legal liability.

The Company’s reported mineral reserves and resources are only estimates. No assurance can be given that the estimated mineral reserves and resources will be recovered or that they will be recovered at the rates estimated.

Title to the Company’s properties may be challenged or impugned, and title insurance is generally not available.

In the countries in which the Company operates, there are a limited number of smelters within range of its operations, which means that it may be unable to manage the increased costs of freight and export duties associated with transporting or exporting ore to smelters.

The profitability of the Company’s current operations is directly related and sensitive to the market price of copper and, to a lesser extent, that of nickel, gold and zinc. Copper, nickel, gold and zinc prices fluctuate widely and are affected by numerous factors beyond the Company’s control, including global supply and demand, expectations with respect to the rate of inflation, the exchange rates of the U.S. dollar to other currencies and interest rates".


Et


"RISKS RELATING TO THE GROUP'S BUSINESS AND INDUSTRY

The Company derives a significant portion of its revenue from one asset

For the twelve months ended 31 December 2013, the Company derived 52 per cent of its pro forma revenue from Kansanshi. Kansanshi is located in Zambia, which has a history of political instability, significant and unpredictable changes in government policies and laws, illegal mining activities, lack of law enforcement and labor unrest. The Company’s operations at Kansanshi are vulnerable to disruption due to government intervention, political, social and labor unrest, and other hazards more generally associated with the mining industry and open pit mining. In addition, its ownership interest at Kansanshi is subject to third party risk arising from the Zambian authorities and the Company’s partner on the project, ZCCM. It therefore faces risks related to its ability to extract profits from Kansanshi. The Company’s results of operations have depended, and are expected to continue to depend significantly, on production at Kansanshi. Any suspension of operations or production for any reason, or third party intervention in the Company’s corporate actions at Kansanshi, could have a material adverse effect on its business, prospects, financial condition and results of operations.

The Company holds its principal asset in Zambia jointly with the GRZ, whose interests may conflict with those of the Company

The Company holds an 80 per cent interest in the Kansanshi mine; the remaining 20 per cent is held by ZCCM, controlled by the GRZ. The Company’s relationship with ZCCM is governed by a shareholders’ agreement pursuant to which the GRZ is entitled to certain privileges, such as the right to appoint a "government director" to the board of the operating company, which carries out its operations at the site, as well as weighted voting rights in respect of certain corporate actions. In particular, ZCCM has a veto right in respect of changes to the Company’s dividend policy, which could affect the ability to pay dividends from the operating company to the Company. The shareholders’ agreement also imposes certain restrictions on the Company’s ability to transfer its shares in the operating company or a controlling interest in its assets at Kansanshi unless the party to whom the Company’s assets are transferred assumes certain undertakings pursuant to the shareholders’ agreement. In the event that the Company becomes unable to pay its debts or commence liquidation or administration proceedings, ZCCM is entitled to a right of first refusal in relation to the Company’s 80 per cent interest in the Kansanshi mine. The shareholders’ agreement also contains "free-carried" interest provisions which entitle ZCCM to maintain a 5 per cent equity interest and "repayable carried" interest provisions for the benefit of ZCCM set at the 15 per cent level. These provisions would entitle ZCCM to maintain the same percentage of equity interest in the event of capital increases. Restrictions such as those in the shareholders’ agreement may interfere with the ability of the Company’s subsidiaries to make distributions to it, which could adversely affect the company's ability to use its cash to fund further development and exploration projects and/or make payments in respect of its indebtedness".

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