9th Nov 2005 07:00
First Quantum Minerals Ld08 November 2005 NEWS RELEASE 05-12 November 8, 2005 www.first-quantum.com FIRST QUANTUM REPORTS OPERATIONAL AND FINANCIAL RESULTS FOR THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2005 (All figures expressed in US dollars) First Quantum Minerals Ltd. (TSE Symbol "FM", LSE Symbol "FQM") is pleased toannounce its results for the three months and nine months ended September 30,2005. The complete Financial Statements and Management Discussion and Analysisare available for review at www.first-quantum.com and should be read inconjunction with this News Release. Highlights - Three Months Ended September 30, 2005 • Net earnings of $39.5 million or $0.64 (CDN $0.75) per share • Cash flows from operating activities, before working capital movements, of $81.1 million or $1.32 (CDN$1.55) per share • Copper production of 36,196 tonnes (79.8 million pounds) • Selling price before realization charges of $1.77 per pound of copper • Production of contained copper from Kansanshi increased by 27% to 23,065 tonnes (50.8 million pounds) in the third quarter and to 10,239 tonnes (22.6 million pounds) in October 2005 • The Guelb Moghrein project construction in Mauritania reached 71% completion • Interim dividend declared in August of CDN$0.02 per share Financial Results (see attached financial statements) Third quarter revenues were $143.0 million, which included copper revenues of$138.4 million ($88.8m Kansanshi and $49.6m Bwana/ Lonshi), gold revenues of$3.4 million, and acid revenues of $1.2 million. Copper revenues at Kansanshicomprised $57.5 million from copper cathodes and $31.3 million from copperconcentrates. Copper revenues increased from the second quarter due toimprovements in both the market price for copper and a 21% increase in copperproduction. The realized copper price was $1.58 per pound for the quarter a significantincrease from last year due to the increased market price for copper and theCompany's unhedged copper position. The realized copper price is calculated bydeducting treatment and refining charges (TC/RCs) and freight parity chargesfrom the selling price before realization charges. The copper selling price,before realization charges, for the quarter was $1.77 per pound, which washigher than the average LME cash price of $1.71 per pound, due to favourablecontract pricing adjustments. Certain copper sales agreements entered into by the Company call for "provisional pricing" based on the average applicable copper price for aspecified future monthly period. Included within copper revenue for the quarterwas 28,315 tonnes of copper that has been provisionally priced using aprovisional average LME copper price of $1.75 per pound. The average LME cashprice for the month of October was $1.84. Gold revenues represent a credit from the sale of copper concentrates. Eachtonne of concentrate generally contains between 3 and 5 grams of gold for whicha net credit is received by the Company after the deduction of the goldrealization charges. Cost of sales as a percentage of revenue decreased to 38% in the third quarterof 2005. Although unit costs have risen from 2004, the cost of sales hasdecreased as a percentage of revenue which is explained by rising copper pricesand the addition of copper concentrates to the sales mix in 2005. For the purposes of financial reporting, TC/RCs and freight parity charges arerecognized as a revenue deduction and are not included within the cost of sales.However, to facilitate cross-industry comparison these costs are included in thedetermination of cash and total unit costs. The cash inflow from operating activities, before working capital movements, was$81.1 million or $1.32 per share. The cash inflow from operating activities,after working capital movements, was $69.8 million or $1.13 per share. Includedwithin operating cash flow, after working capital movements, is the receipt of$9.5 million relating to deferred revenue as the Company was prepaid for aportion of its copper concentrate sales which is to be delivered in the fourthquarter. Net earnings for the quarter increased to $39.5 million or $0.64 per sharecompared with second quarter net earnings of $29.0 million or $0.47 per share. Year to date revenues were $267.7 million which comprised copper revenues of$259.9 million, gold revenues of $4.0 million and acid revenues of $3.8 million. Copper revenues at Kansanshi were $133.3 million, comprised of $86.7 millionfor copper cathode and $46.6 million for copper in concentrate. Kansanshirevenue figures only include revenues from the commencement of commercialproduction (April 19, 2005). Copper revenues at Bwana/Lonshi were $126.6million. Copper revenues increased due to improvements in both the market pricefor copper and an increase in copper production with the start of commercialproduction at Kansanshi and increased copper production from the Bwana/Lonshioperation. The realized copper price was $1.50 per pound for the nine months, a significantincrease from last year due to the rising market price for copper and theCompany's unhedged copper position. The copper selling price, beforerealization charges, for the nine months was $1.63 per pound which was higherthan the average LME cash price of $1.58 per pound, due to favourable contractpricing adjustments. Included within the year to date copper revenues were28,315 tonnes of copper that has been provisionally priced using a provisionalaverage LME copper price of $1.75 per pound. The average LME cash price for themonth of October was $1.84. Cost of sales increased by 167% to $105.0 million, which is consistent with the180% increase in copper production due to the commencement of commercialproduction at Kansanshi and the increased copper production from the Bwana/Lonshi operation. The cash flow from operating activities, before working capital movements, was$136.2 million or $2.22 per share. The cash inflow from operating activities,after working capital movements, was $87.4 million or $1.42 per share. Thesignificant turnaround in cash flow from operations is attributable to theimprovement in earnings resulting from increased copper production and thehigher copper prices. The difference between the cash flow before and afterworking capital movements can be attributed principally to the increase in bothaccounts receivable and inventory at Kansanshi. Net earnings for the nine months increased to $95.7 million or $1.56 per share,including the gain on sale from Anvil of $16.1 million or $0.26 per share. Kansanshi Mining and Processing During the quarter, 1,621,000 tonnes of ore and 6,064,000 tonnes of waste weremined. The increase in volumes mined from previous quarters has resulted fromimproved fleet availability (less trucks standing due to lack of tires), and thearrival of additional trucks during the quarter. The recent Zambian dieselshortage has not had a material impact on operations as contracted supplierswere able to continue steady deliveries. Notwithstanding, the Company islooking to build up diesel stocks to mitigate the potential for any futureshortages. For the third quarter, contained copper production increased 27% to23,065 tonnes. Kansanshi continues to ramp up production after commencingcommercial production in April 2005. Based on production levels achieved inOctober, Kansanshi is currently producing at an annualized rate of in excess of120,000 tonnes of contained copper. During the quarter, Kansanshi produced 14,395 tonnes of copper cathode at a cashcost of $0.52 per pound and a total cost of $0.73 per pound. Costs continue totrend lower as the volume of copper cathode increases. During the quarter,Kansanshi produced 8,670 tonnes of contained copper in the form of concentratesat a cash cost of $0.71 per pound and a total cost of $0.90 per pound. Theincrease in cash costs for concentrate were due to higher realization chargesresulting from a change in the sales mix between domestic and internationaloff-take, higher fuel costs and the replacement of the sulphide mill lifters andliners that was required during the quarter. The combined cash cost for bothconcentrate and cathode was $0.59 per pound with a total cash cost of $0.80 perpound. The cash cost was slightly lower than the previous quarter principallydue to the increased volumes offset by the slightly higher concentrateproduction costs. For the nine months ended September 30, 2005, 5,791,000 tonnes of ore and10,901,000 tonnes of waste had been mined. The world tire shortages and dieselshortages in Zambia have not impacted processing at Kansanshi. The tireshortage has meant that some waste stripping that was scheduled for the start ofthe year has been rescheduled. To date, the diesel shortage has only had aminimal impact on mining activities. Copper production increased to 48,754tonnes, including 23,612 tonnes of copper in concentrate and 25,142 tonnes ofcopper cathode. Included within the copper production figures for the year to date are 6,792tonnes of copper in concentrate and 1,941 tonnes of finished copper cathode thatwere produced prior to commercial production. Bwana/Lonshi Mining and Processing Effective July 1, 2005, the Company adopted a new mine plan for Lonshi, theeffect of which was to increase the remaining life of mine strip ratio from 12:1to 26:1. The increase in the strip ratio is the result of the removal ofdolomitic oxide ore and greater amounts of sulphide ore than in the previousmine plan. Due to the accelerated mining plan and significantly increased copperproduction at Bwana being achieved it is anticipated that the current reserveswill be exhausted early in 2008. During the third quarter, approximately 300,000 tonnes of ore and approximately4,707,000 tonnes of waste were mined from Lonshi. The strip ratio for thequarter was 16:1. While minor mining production losses occurred (6 days in thequarter) due to the Zambian diesel shortage, a number of additional sources arenow being used to supply diesel. By increasing site stock levels of diesel, itis expected that there will be no material impact on production if there is acontinuation of the Zambian diesel shortage. During the third quarter, copper production increased to a record 13,131 tonnes. Cash costs were $0.74 per pound and total costs were $1.01 per pound ofcopper. With the introduction of the new mine plan at Lonshi and the resultingincrease in the strip ratio from 12:1 to 26:1, the cost of ore has increased byapproximately $0.14 per pound compared with the second quarter of 2005. The orecost has also increased as a result of the higher than budgeted fuel costsarising from the increase in world oil prices. Acid production increased to 64,263 tonnes, of which 32,400 tonnes were producedat Ndola and 31,863 tonnes at Solwezi. Of the total acid produced, 7,120 tonneswere sold externally and 26,323 tonnes were sold to Kansanshi. The cash costs of$0.74 per pound include a $0.06 per pound credit from the Solwezi acid plant. For the nine months ended September 30, 2005, approximately 771,000 tonnes ofore and approximately 11,328,000 tonnes of waste were mined from Lonshi. Thestrip ratio for the nine months was 15:1, which is less than the new mine lifestrip ratio established on July 1, 2005 of 26:1. The increased strip ratiocombined with, the higher actual mining costs in 2005 has meant that the orecosts have risen $0.11 per pound compared with the same period last year. Copper production increased to 36,876 tonnes. The 20% increase over the sameperiod in 2004 was principally as a result of being able to operate thetankhouses at record high current densities. Cash costs were $0.63 per pound and total costs were $0.86 per pound. Theincrease in cash costs from 2004, can be attributed to the increase in ore costs($0.11 per pound) coupled with an increased acid costs ($0.05 per pound) due tothe increased gangue acid consumption resulting from the increased levels ofdolomitic and sulphide ore. The increased internal consumption of acid has alsoreduced the acid credit available from the Ndola plants. These costs have beenslightly offset by the acid credit from the Solwezi acid plant of $0.06 perpound. Acid production was 188,756 tonnes of which 99,645 tonnes were produced at Ndolaand 89,111 tonnes at Solwezi. Of the total acid produced, 32,382 tonnes weresold externally and 49,576 tonnes were consumed at Kansanshi. Annual acidproduction capacity at Ndola and Solwezi is 146,000 tonne per site. Guelb Moghrein Copper-Gold Deposit, Marutainia Guelb is located 250 kilometres northeast of the nation's capital, Nouakchott,near the town of Akjoujt, in Mauritania. It consists of an open pit mineablecopper/gold deposit. In January 2005, the detailed design and engineeringcontract was awarded with site establishment commencing in March 2005.Commissioning will start during the first quarter of 2006 with commercialproduction expected in the second quarter of 2006. Production will be initiallytargeted at approximately 30,000 tonnes of copper in concentrate and 70,000ounces of gold per year. As at September 30, 2005, the Company had capitalized acquisition anddevelopment costs totalling $32.1 million (2004: $10.3m). Of the capitalizedamount, $7.6 million relates to the discounted value of the deferred acquisitionpayments. Detailed design is now complete and overall the project is approximately 71%complete. The recent military coup in Mauritania has had no impact on theconstruction program and the new government has pledged to honour all existingagreements. Site civil works are largely complete and structural steel iscurrently being erected. During the quarter the Environmental and Social ImpactAssessment report was submitted to the Ministry of Mines and Industry inNouakchott and is expected to be approved shortly, which will result in theissuance of the mining license. Frontier Copper Deposit, Democratic Republic of Congo In May 2004, First Quantum announced the results of an independent copper-cobaltresource estimate completed at Frontier Project located in Haut KatangaProvince, DRC. As at September 30, 2005, the company had spent $6.8 million(2004: $3.7m) on this project. The current scoping study envisages an averageannual production of 80,000 tonnes of contained copper. The Company expects torelease this study in the fourth quarter. Kashime Copper Prospect, Zambia At the end of September, assay results from the initial 40 hole programme hadbeen received and an additional 3 diamond drill holes had been completed toprovide ore grade oxide material for metallurgical test-work. Drilling to datehas located both oxide and sulphide copper mineralization over a strike lengthof 3500m. Oxide mineralization occurs as black copper minerals and malachitewithin residual dolomite overlying the Grand Conglomerate in a stratigraphicposition equivalent to the Lonshi ore body. Significant oxide mineralization isconfined to a shallow-dipping (10-150 South) zone with approximate dimensions of2500 x 400m and open to the west. Thickness of the oxide zone ranges from 6m to45m and overburden varies from as little as 2m to 73m. Highlights from thediamond drill programme include oxide intersections (0.5 %TCu cut-off) of 16.5mgrading 6.81% TCu, 30.00m grading 3.06%TCu and 18.00m grading 3.23%TCu. An oxideresource estimate is expected to be available during the fourth quarter 2005. Significant sulphide intersections include 65.00m grading 1.11%TCu and 93.00mgrading 0.90%TCu. The Company has plans for infill drilling to improvedefinition of the oxide resource and additional exploration of the sulphidepotential of the Kashime area. During the nine months ended September 2005, the Company expensed $3.1 million(2004: $1.0m; 2003: $0.2m) on other exploration targets that were predominantlylocated within the DRC and Zambia. Of this amount, $0.7 million was related tothe Kashime Copper Prospect. As at September 30, 2005, no costs associated withthis exploration property have been deferred. Investments -Carlisa The Company holds an 18.8% interest in Carlisa Investment Corporation (Carlisa),which holds a 90% interest in Mopani Copper Mines Plc (Mopani). The carryingvalue of this investment as at June 30, 2004 is $9.5 million. There has been nomovement in this investment since 2002. For the first nine months of 2005, Mopani produced approximately 97,000 tonnesof finished copper and 1,300 tonnes of cobalt. As the majority owner of Mopaniis a private company registered in Zambia, only limited public information isavailable. Investments -Anvil On February 28, 2005, the Company disposed of all of its 4,029,617 common sharesin Anvil at a net price of CDN$6.75 per share. In the first quarter of 2005,the Company recognized a gain of approximately $16.1 million on this sale. TheCompany continues to hold 296,631 warrants in Anvil at an exercise price ofCDN$1.13. Outlook Production at Kansanshi has continued to improve month over month sincecommercial production began in mid-April. In October, Kansanshi produced 10,239tonnes of copper (6,530 tonnes of cathode copper and 3,709 tonnes of copper inconcentrate) and production volumes are expected to continue at these levels forthe remainder of 2005. Harder ore than predicted from the original testwork hasreduced throughput volumes in the sulphide circuit and consequently there hasbeen a slower ramp up in copper concentrate production. In the near term, theore hardness issue is being managed via the blending of soft and hard ores, anda long term solution has been implemented through the modification of the millsto allow for pebble discharge and the addition of pebble crushing which will becompleted at the same time as the upgrade referred to below. As a result of theslower ramp in concentrate production, Kansanshi is now expected to produce88,000 tonnes of copper in 2005 of which 7,000 tonnes preceded commercialproduction. The completion of a $29 million capital upgrade program this year will expandthe sulphide circuit to eight million tonnes per year of treatment capacitywhich will result in an average of 145,000 tonnes of finished copper productionper year during 2006-2009. An additional expansion of the sulphide circuit isalso under consideration for 2009 to increase the sulphide treatment capacity to12 million tonnes of sulphide ore to maintain annual copper production of145,000 tonnes as oxide ore is depleted and sulphide ore grades begin to fall. The Company has also been investigating alternative processing routes for aportion of the increased copper concentrate production. To this end, theCompany has purchased a second-hand pressure oxidation facility. The pressureoxidation facility has been dismantled and is in Zambia enroute to Kansanshi.Once on site, the pressure oxidation facility and ancillary equipment will berebuilt and commissioned for use at an estimated total cost of $37 million.Commissioning of this plant is expected to commence by early in the thirdquarter of 2006 despite a recent set back when one of the two high pressureautoclave vessels required was damaged while being transported to site.Fortunately the second-hand facility purchased incorporated three autoclaves sotransport of the third vessel, which was being stored at Richards Bay in SouthAfrica, has now commenced while assessment of the damaged autoclave isundertaken. The other autoclave is now on site. As part of the new pressure leach facility the Company will also be expandingthe SX/ EW capacity by an additional 35,000 tonnes of copper cathode productionat an estimated cost of $35 million. The company expects that when fullyoperational these initiatives will provide significant strategic and economicbenefits including the generation of much of the acid required for oxideleaching and a substantial improvement in copper recovery in mixed oresresulting from the leach circuit operating at elevated temperatures. A fullreport of the operation and impact of this process route is being prepared byindependent consultants, Bateman Engineering Pty Ltd. The Bwana/Lonshi operation is currently on track to produce between 45,000 to50,000 tonnes of copper cathode in 2005 with 36,876 tonnes of copper cathodealready produced during the first nine months of 2005. A revised mine plan forLonshi was required due to the higher than originally planned production rate atBwana has resulted in an increased strip ratio of 26:1 which will result inhigher ore costs for the remaining life of the mine. Full year cash costs arenow expected to be between $0.65 per pound and $0.70 per pound. The Company iscurrently assessing the alternative and most beneficial uses for the Bwanaprocessing plant after the Lonshi ore has been exhausted. In October, the Bwana/Lonshi operation produced 4,247 tonnes of copper cathode. At Guelb, the detailed design is now complete and construction 71% complete.Commissioning will start in the first quarter of 2006 and commercial productionwill be achieved in the second quarter. The company remains unable to releasean engineering report as the current resource statement is not compliant withNational Instrument 43-101. At Frontier, the scoping study is complete and will be published during thefourth quarter of 2005. Subject to a positive production decision and Board ofDirectors approval pre-stripping and construction of civil works will begin inApril 2006. At the Kashime prospect initial diamond drilling has been completedwith an initial reserve estimate expected once the final assay results areavailable On Behalf of the Board of Directors 12g3-2b-82-4461of First Quantum Minerals Ltd. Listed in Standard and Poor's"G. Clive Newall" Sedar Profile #00006237G. Clive Newall For further information visit our web site at www.first-quantum.com United Kingdom contact: Clive Newall, President1st Floor, Mill House Mill Bay Lane Horsham West Sussex RH12 1TQ United Kingdom Tel: +44 140 327 3484 Fax: +44 140 327 3494 E-Mail: [email protected]. or Carina Corbett, 4C Communications Ltd, Tel: + 44 20 7907 4761 North American contact: Geoff Chater or Bill Iversen Suite 800 - 543 Granville Street, Vancouver, British Columbia, Canada V6C 1X8 Tel: (604) 688-6577 Fax: (604) 688-3818 Toll Free: 1 (888) 688-6577 E-Mail: [email protected] Table 8: Summary of Quarterly Results (unaudited) 2005 2005 2005 2004 2004 2004 2004 2003Statement of Operations and Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4Deficit(millions, except whereindicated)Total Revenues 143.0 86.5 $38.2 $30.7 $31.2 $26.3 $25.3 $19.9Cost of Sales 53.8 35.0 16.2 14.5 14.1 13.1 12.1 13.0Net Earnings (Loss) 39.5 29.0 27.2 9.3 7.9 4.1 6.7 1.4Basic Earnings per share $0.64 $0.47 $0.44 $0.16 $0.13 $0.07 $0.11 $0.02Diluted Earnings per share $0.63 $0.46 $0.43 $0.15 $0.13 $0.07 $0.11 $0.02 Realized copper price $1.58 $1.42 $1.44 $1.20 $1.16 $1.11 $1.03 $0.84Cash Costs (C1) (per lb) (1) $0.64 $0.60 $0.58 $0.48 $0.45 $0.48 $0.39 $0.47Total Costs (C3) (per lb) (1) $0.87 $0.80 $0.75 $0.59 $0.68 $0.67 $0.53 $0.66 Total Copper Sold (tonnes)(2) 39,864 26,535 12,000 10,872 1,674 19,299 9,700 9,537Total Copper Produced (tonnes) 36,196 29,909 19,525 10,942 11,330 9,585 9,689 9,558 Financial Position (millions)Working Capital $32.2 $47.1 $61.4 $33.9 $51.8 $28.0 $40.2 $13.5Total Assets $641.5 $561.9 $523.1 $473.1 $385.0 $276.4 $241.8 $162.1Weighted Average # Shares 61,583 61,499 61,267 60,942 60,668 59,434 58,568 55,984(000's) Kansanshi ProductionStatisticsMining:Waste Mine (000's) 6,064 3,185 1,651 2,857 1,175 - - -Ore Mined (000's) 1,621 2,051 2,120 1,346 - - - -Ore Grade % 2.0 2.0 1.7 2.4 - - - -Processing:Ore Processed (000's) 1,461 1,129 688 - - - - -Contained Copper (tonnes) 27,510 21,145 11,541 - - - - -Recovery % 84 86 65 - - - - -Copper Produced (tonnes) 23,065 18,192 7,497 - - - - -Combined Cash Costs:Cash Costs (per lb) (1) $0.59 $0.63 - - - - - -Total Costs (per lb) (1) $0.80 $0.80 - - - - - -Cathode Cash Costs:Cash Costs (per lb) (1) $0.52 $0.61 - - - - - -Total Costs (per lb) (1) $0.73 $0.80 - - - - - -Concentrate Cash Costs $0.71 $0.65 - - - - -Total Concentrate Cash Costs $0.90 $0.81 - - - - - -Revenue (000's)Copper Cathodes 57,531 29,165 - - - - - -Copper Concentrates 31,253 15,309 - - - - - -Total Revenues 88,784 44,474 - - - - - - Bwana/Lonshi ProductionStatisticsMining:Waste Mined (000's) 4,707 4,025 2,596 2,926 4,213 2,854 1,036 885Ore Mined (000's) 300 319 152 261 257 85 66 439Ore Grade % 3.9 5.5 5.3 6.4 4.7 5.2 5.4 5.5Processing:Ore Processed (000's) 363 328 264 256 278 237 209 197Contained Copper (tonnes) 15,003 13,354 13,804 12,824 12,908 10,813 10,904 10,790Grade % 4.14 4.1 5.2 5.0 4.6 4.6 5.2 5.5Recovery % 88 88 87 85 88 89 89 89Copper Produced (tonnes) 13,131 11,717 12,028 10,942 11,330 9,585 9,689 9,558Acid Produced (tonnes) 64,263 69,218 55,275 35,671 35,920 34,265 34,344 33,035Surplus Acid (tonnes) 7,120 14,939 49 9,664 16,884 19,149 20,763 15,689Cash Costs (per lb) (1) $0.74 $0.57 $0.58 $0.48 $0.45 $0.48 $0.39 $0.47Total Costs (per lb) (1) $1.01 $0.79 $0.75 $0.59 $0.68 $0.67 $0.53 $0.66Revenues ($000's)Copper Cathodes 49,602 38,899 38,172 - - - - - (1) For the definition of cash and total costs, reference should be made to section 8. (2) Copper sold does notinclude tonnes sold prior to commercial production Consolidated Balance SheetsAs at September 30, 2005 and December 31, 2004(expressed in thousands of US dollars)(unaudited) 2005 2004 $ $AssetsCurrent assetsCash and cash equivalents 63,623 50,356Restricted cash (note 9) 3,469 1,931Accounts receivable and prepaid expenses 67,217 21,927Inventory (note 5) 53,580 31,674 187,889 105,888Investments (note 6) 9,522 15,340Property, plant and equipment (note 7) 417,816 319,222Other assets and deferred charges (note 8) 26,290 32,611 641,517 473,061LiabilitiesCurrent liabilitiesAccounts payable and accrued liabilities 59,960 33,884Current taxes payable 10,978 3,248Current portion of long-term debt (note 9) 59,255 22,865Current portion of other liabilities (note 10) 25,456 12,012 155,649 72,009Long-term debt (note 9) 159,572 191,661Future income tax liability 24,961 12,313Other liabilities (note 10) 35,990 37,048 376,172 313,031Minority interests 12,276 2,190 388,448 315,221Shareholders' EquityEquity accounts (note 11) 165,340 161,776Retained earnings (deficit) 87,729 (3,936) 253,069 157,840 641,517 473,061Commitments (note 14) The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit our website at www.first-quantum.com Consolidated Statements of Earnings and DeficitFor three and nine months ended September 30, 2005 and 2004(expressed in thousands of US dollars)(unaudited) Three months ended Nine months ended September 30, September 30, September 30, September 30, 2005 2004 2005 2004 $ $ $ $Revenues Copper 138,386 28,624 259,931 74,104 Gold 3,438 - 4,023 - Acid 1,198 2,576 3,765 8,673 143,022 31,200 267,719 82,777Cost of sales 53,792 14,076 105,028 39,245Depletion and amortization 12,519 2,639 23,364 8,017Operating profit 76,711 14,485 139,327 35,515 Other expenses Exploration 1,497 1,116 3,649 2,082 Foreign exchange (gain) loss 990 (499) (4,058) 1,033 General and administrative 2,498 1,359 6,777 3,984 Interest and financing fees on long-term 5,821 846 10,054 2,359 debt Other expenses (income) 4,878 187 7,541 (849) Gain on disposal of investment - - (16,127) - 15,684 3,009 7,836 8,609Earnings before income taxes, minority interests 61,027 11,476 131,491 26,906and equity earningsIncome taxes 14,784 3,718 25,708 8,973Minority interests 6,770 - 10,085 -Equity earnings - 114 - 719Net earnings for the period 39,473 7,872 95,698 18,652Retained earnings (deficit) - Beginning of 49,289 (21,166) (3,936) (31,946)periodDividends 1,033 - 4,033 -Retained earnings (deficit) - End of period 87,729 (13,294) 87,729 (13,294) Earnings per common share Basic $0.64 $0.13 $1.56 $0.31 Diluted $0.63 $0.13 $1.52 $0.31Weighted average shares outstanding (000's) 61,583 60,668 61,451 59,861 The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit our website at www.first-quantum.com Consolidated Statements of Cash FlowsFor three and nine months ended September 30, 2005 and 2004(expressed in thousands of US dollars)(unaudited) Three months ended Nine months ended September 30, September 30, September 30, September 30, 2005 2004 2005 2004 $ $ $ $Cash flows from operating activitiesNet earnings for the period 39,473 7,872 95,698 18,652Items not affecting cash Depletion and amortization 12,519 2,639 23,364 8,017 Minority interest 6,771 - 10,086 - Provision for deferred stripping 5,901 - 2,772 - Unrealized foreign exchange (gain) loss (475) (1,131) (5,334) (140) Future income tax expense 9,681 3,705 12,648 8,957 Stock-based compensation expense 672 216 2,041 683 Unrealized derivative instruments (gain) loss 4,935 (500) 8,561 230 Other 1,658 138 2,505 136 Gain on disposal of investment - - (16,127) 81,135 12,939 136,214 36,535Change in non-cash operating working capital Decrease (increase) in accounts receivable and (25,998) (3,258) (43,932) (6,091) prepaid expenses (Increase) decrease in inventory (2,617) (1,275) (21,497) (438) Increase (decrease) in accounts payable and accrued 17,314 2,039 16,623 (2,069) liabilities 69,834 10,445 87,408 27,937Cash flows from financing activitiesRestricted cash 827 (2,379) (1,538) (6,246)Proceeds from long-term debt 11,500 90,172 43,023 131,544Repayments of long-term debt (15,260) (9,067) (30,694) (14,093)Issuance of common shares and warrants 235 402 1,523 43,959Dividends paid (1,033) - (4,033) -Deferred premium obligation and finance fees (1,390) (2,569) (11,372) (4,778) (5,121) 76,559 (3,091) 150,386Cash flows from investing activitiesProperty, plant and equipment and investments (52,168) (66,484) (92,155) (146,918)Deferred exploration and stripping costs (5,665) (3,264) (1,281) (6,733)Proceeds from sale of investment - - 21,944 - (57,833) (69,748) (71,492) (153,651) Effect of exchange rate changes on cash 279 999 442 (575)Increase (decrease) in cash and cash equivalents 6,880 17,256 12,825 24,672Cash and cash equivalents - beginning of period 56,464 31,434 50,356 25,592Cash and cash equivalents - end of period 63,623 49,689 63,623 49,689 Segmented InformationFor three months ended September 30, 2005 and 2004(expressed in thousands of US dollars)(unaudited) For the three months ended September 30, 2005, segmented information is presented as follows: BLO KCO GMP CDA Inter-segment Total $ $ $ $ $ $Revenues 55,028 92,227 - 2,901 (7,134) 143,022Segment profit (loss) 16,002 24,300 - (829) - 39,473 Property, plant and equipment 26,905 14,627 19,873 33 61,438additionsTotal assets 199,653 409,616 42,622 237,772 889,663Inter-company balances included (66,923) - - (181,223) (248,146)in total assetsTotal consolidated assets 132,730 409,616 42,622 56,549 641,517 For the three months ended September 30, 2004, segmented information is presented as follows: BLO KCO GMP CDA Inter-segment Total $ $ $ $ $ $Revenues 31,200 - - 911 (911) 31,200Segment profit (loss) 9,456 - - (1,584) - 7,872 Property, Plant and equipment 509 77,116 - 166 - 77,791additionsTotal assets 154,010 214,270 9,522 197,244 - 575,046Inter-company balances included (48,807) - - (141,196) - (190,003)in total assetsTotal consolidated assets 105,203 214,270 9,522 56,048 - 385,043 Bwana / Lonshi Operation (BLO), Kansanshi Copper / Gold Operation (KCO), GuelbMoghrein Project (GMP), Corporate Development and Administration and Other (CDA) Segmented InformationFor nine months ended September 30, 2005 and 2004(expressed in thousands of US dollars)(unaudited) For the nine months ended September 30, 2005, segmented information is presented as follows: BLO KCO GMP CDA Inter-segment Total $ $ $ $ $ $Revenues 138,314 137,280 - 6,782 (14,657) 267,719Segment profit (loss) 44,661 41,011 - 10,026 - 95,698 Property, plant and equipment 44,358 49,879 31,620 - - 125,857additionsTotal assets 199,653 409,616 42,622 237,772 - 889,663 Inter-company balances includedin total assets (66,923) - - (181,223) - (248,146) Total consolidated assets 132,730 409,616 42,622 56,549 - 641,517 For the nine months ended September 30, 2004, segmented information is presented as follows: BLO KCO GMP CDA Inter-segment Total $ $ $ $ $ $Revenues 82,777 - - 2,920 (2,920) 82,777Segment profit (loss) 23,952 - - (5,300) - 18,652 Property, plant and equipment 12,455 155,152 - 72 - 167,679additionsTotal assets 154,010 214,270 9,522 197,244 - 575,046 Inter-company balances includedin total assets (48,807) - - (141,196) - (190,003) Total consolidated assets 105,203 214,270 9,522 56,048 - 385,043 Bwana / Lonshi Operation (BLO), Kansanshi Copper / Gold Operation (KCO), GuelbMoghrein Project (GMP), Corporate Development and Administration and Other (CDA) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
FQM.L