Fourth Quarter And Year-End 2021 Results TORONTO, Feb. 15, 2022 (GLOBE NEWSWIRE) -- First Quantum Minerals Ltd. (“First Quantum” or the “Company”) (TSX: FM) today reported results for the three months and year-ended December 31, 2021. For the three months ended December 31, 2021 (“Q4”), the Company reported net earnings attributable to shareholders of the Company of $247 million ($0.36 per share), adjusted earnings1 of $306 million ($0.44 per share2), and cash flows from operating activities of $760 million ($1.10 per share2). For the year-ended 2021, the Company reported net earnings attributable to shareholders of the Company of $832 million ($1.21 per share), adjusted earnings1 of $826 million ($1.20 per share2), and cash flows from operating activities of $2,885 million ($4.19 per share2).
“First Quantum’s operations continue to demonstrate resilience in dealing with the challenges brought about by the COVID-19 pandemic and new variants as they emerge. We are in a period of solid cash flow generation for the Company and while debt reduction remains a priority, we are pleased to cautiously commence increased capital returns to our shareholders with our new dividend framework. We have released our inaugural Climate Change report which recognizes our obligation to mine responsibly and to report on our actions to address climate change,” commented Philip Pascall, Chairman and CEO. “I am grateful for the dedication and commitment of the entire team at First Quantum and for the support of Governments and communities in our host countries. It is with these efforts and this support that First Quantum is placed in a strong position for 2022 and beyond.”
FOURTH QUARTER SUMMARY
- Fourth quarter financial results benefitted from higher sales volumes and a higher realized copper price2 of $4.08 per lb as the Company’s hedge profile continued to decline, partially offset by higher costs. The Company’s exposure to the strong copper price environment is expected to continue to improve with the declining profile of the hedge book with no new additional copper hedges were entered into during the fourth quarter. On the basis of continued strong operational performance, the Company anticipates continued strong future cash flow and expects to be in a position to continue its debt reduction program, to advance growth programs, to support Environmental, Social & Governance (“ESG”) initiatives and to cautiously increase dividend payments in 2022.
- Q4 2021 copper production totalled 201,823 tonnes, taking the full year production to 816,435 tonnes, the highest annual copper production in First Quantum’s history. Through advancement of its brownfield portfolio, the Company sees a path to 1 million tonnes of copper production.
- Copper C1 cash costs2 averaged $1.39 per lb during the quarter. While operating costs are facing inflationary pressures, Q4 2021 was also impacted by higher electricity costs due to regular maintenance shutdown works to Unit 1 of the power station at Cobre Panama. During the quarter, however, there was a non-recurring reduction in provisions at Kansanshi from the Zambian Electricity Supply Corporation Limited (“ZESCO”) arbitration case that was settled in December 2021.
1 Adjusted earnings (loss) and EBITDA 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. Adjusted earnings (loss) and EBITDA were previously named comparative earnings and comparative EBITDA, respectively, and the composition remains the same. See “Regulatory Disclosures” in this News Release for a reconciliation of EBITDA and adjusted earnings (loss) to the IFRS measures. The use of adjusted earnings (loss) and EBITDA represents the Company’s adjusted earnings (loss) metrics.
2 Adjusted earnings (loss) per share, cash flows from operating activities per share, realized metal prices, and copper C1 cash costs (C1) are non-GAAP ratios which do not have a standardized meaning prescribed by IFRS and might not be comparable to similar financial ratios disclosed by other issuers.
- Cash flow from operating activities was $760 million for Q4 2021 and cumulatively $2,885 million for the full year 2021. Net debt1 decreased by $249 million during the quarter, bringing the balance down to $6,053 million as at December 31, 2021. The Company expects to achieve the previously announced $2 billion debt reduction target in H1 2022 and has increased the short to medium term target by an additional $1 billion. A new dividend policy was announced on January 17, 2022.
Q4 2021 OPERATIONAL HIGHLIGHTS
As previously reported, fourth quarter total copper production of 201,823 tonnes was down 4% from Q3 2021. Production declined quarter-over-quarter as a result of expected lower ore grades at Cobre Panama while production at Kansanshi and Sentinel remained consistent with Q3 2021 levels. Copper C1 cash costs2 averaged $1.39 per lb during the quarter, up 10% from the previous quarter, as the company continued to experience cost increases related to freight and fuel. For the full year 2021, First Quantum achieved its highest ever annual copper production of 816,435 tonnes, a 5% increase from 2020, attributable to record production at Cobre Panama and the resilience of the other operations. Copper C1 cash costs2 averaged $1.30 per lb for the year, the midpoint of the Company’s guidance range of $1.25 to $1.35 per lb.
- Cobre Panama produced 80,030 tonnes of copper in Q4 2021, a decrease of 8% quarter-over-quarter principally due to expected lower ore grades based on the mine plan. During the quarter, Unit 1 of the power plant continued maintenance shutdown works, which were completed in late January. Although replacement power for Unit 1 was sourced from the grid, a 7-day unplanned shutdown of Unit 2 impacted total tonnes milled during the quarter. However, Cobre Panama set a record in monthly copper production in October. Copper C1 cash cost2 for the quarter was $1.57 per lb, a 24% increase from Q3 2021 as electricity was drawn from the grid at spot rates during the period of maintenance to the power station.
- Kansanshi copper production in the fourth quarter of 2021 was 51,939 tonnes, a slight improvement over Q3 levels on improved ore grades. Copper C1 cash costs2 were $0.79 per lb in Q4 2021, down 26% from the previous quarter. Copper C1 cash costs during the quarter benefitted from a reduction on operational provisions following the conclusion of the arbitration case on electricity prices charged by ZESCO in December 2021. This is a one-time benefit that is not expected to recur in future quarters.
- Sentinel delivered its best quarterly production of the year with 60,197 tonnes of copper produced on record quarterly throughput rates equivalent to 60 million tonnes per annum (“Mtpa”). Sentinel copper C1 cash cost2 in the fourth quarter of $1.51 per lb was up 10% quarter-over-quarter, reflecting inflationary pressures such as higher consumables, fuel and labour costs.
- Copper sales in Q4 2021 totalled 213,087 tonnes, up from 194,278 tonnes in Q3 2021. In the fourth quarter, there was a recovery in sales volumes at Kansanshi and Sentinel as a number of planned shipments from the third quarter were rolled into the fourth quarter. Logistical challenges for Zambian sales are expected to continue throughout the first quarter of 2022.
- Total gold production for Q4 2021 was 74,945 ounces, a 4% decrease from the previous quarter, mainly attributable to lower gold production at Cobre Panama. Gold sales volumes of 79,403 ounces for the fourth quarter remained fairly consistent with the prior quarters in the year.
- Ravensthorpe had its lowest quarterly nickel production of the year at 3,385 contained tonnes. Fourth quarter production was impacted by the delayed transition to the Shoemaker Levy orebody and unplanned maintenance at the power plant main steam pipe. However, commissioning of the Shoemaker Levy conveyor was completed later in the quarter and the resulting material handling performance and beneficiation upgrade was improved compared to the Hale Bopp ore, in line with expectations. Skilled labour availability and high sulphur prices remain a challenge.
https://www.globenewswire.com/news-release/2022/02/15/2385685/0/en/First-Quantum-Minerals-Reports-Fourth-Quarter-And-Year-End-2021-Results.html