9th Mar 2006 07:02
First Quantum Minerals Ld09 March 2006 NEWS RELEASE 06-05 March 9, 2006 www.first-quantum.com FIRST QUANTUM REPORTS OPERATIONAL AND FINANCIAL RESULTS FOR THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2005 (All figures expressed in US dollars) First Quantum Minerals Ltd. (the "Company") (TSE Symbol "FM", LSE Symbol "FQM")is pleased to announce its results for the three months and twelve months endedDecember 31, 2005. The complete financial statements and management discussionand analysis are available for review at www.first-quantum.com and should beread in conjunction with this News Release. Highlights - 2005 & the Fourth Quarter •Record net earnings of $152.8 million or $2.48 per share in 2005, an increase of 446% compared with 2004. •Record net earnings of $57.1 million or $0.93 per share in the fourth quarter, an increase of 514% compared to 2004. •Copper production in 2005 of 119,117 tonnes (263 million pounds), an increase of 187% compared with 2004. •Cash flow from operating activities of $101.0 million ($1.64 per share) in the fourth quarter and $236.1 million ($3.84 per share) for 2005. •Inaugural dividends of $4.0 million paid to Company shareholders in 2005. Final dividend for 2005 of CA$0.265 per share (26.5 Canadian cents) declared, payable to shareholders of record on April 19, 2006. •Commercial production at Kansanshi commenced in April 2005. Fourth quarter production was 29,558 tonnes (65.1 million pounds) an increase of 28% over third quarter production. •Detailed design of the Guelb Moghrein project in Mauritania is now complete and construction is progressing to completion. •The Frontier project Environmental Impact Assessment and Environmental Management Plans were formally approved and the Exploitation permit granted by the Government of the Democratic Republic of Congo ("DRC"). Project activity has commenced. Financial Results (see attached financial statements) 2005 Fourth Quarter Results Fourth quarter revenues were $176.9 million, which included copper revenues of$174.2 million ($119.5m Kansanshi and $54.7m Bwana/Lonshi) and gold revenues of$2.7 million. Copper revenues at Kansanshi comprised $87.6 million from coppercathodes and $31.9 million from copper concentrates. Copper revenues increasedfrom the third quarter due to improvements in both the market price for copperand a 17% increase in copper production. Copper production was 42,220 tonnes which included 29,558 tonnes from Kansanshi(18,324 tonnes cathode; 11,234 tonnes concentrate) and 12,662 tonnes from Bwana/Lonshi. The Company also produced 72,040 tonnes of acid, which represents a 102%increase over 2004 as a result of the start up of the Solwezi Acid Plant. The realized copper price was $1.97 per pound for the quarter. The significantincrease from 2004 is principally due to the increased market price for copper.The average LME cash copper price for the fourth quarter was $1.95 versus $1.40for the fourth quarter of 2004. The realized copper price is calculated bydeducting treatment and refining charges ("TC/RCs") and freight parity chargesfrom the selling price achieved before realization charges. The gross copperselling price, before realization charges, for the quarter was $2.09 per pound,which was higher than the average LME cash price of $1.95 per pound due tofavorable contract pricing terms. Gold revenues arise from the sale of gold contained in copper concentrates atKansanshi. Each tonne of concentrate generally contains between 3 and 10 gramsof gold for which a net credit is received by the Company after the deduction ofthe gold realization charges. For the fourth quarter, gold revenues totalled$2.7 million for 5,766 ounces of gold. Revenue from surplus acid sales has declined from previous years as a result ofthe increased internal acid consumption at Bwana/Lonshi and Kansanshi, neededfor the increased copper production. Cost of sales as a percentage of revenue decreased to 27% in the fourth 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. Group cash costs have increased from the fourth quarter of 2004 due to the startup of Kansanshi and increased costs at Bwana/Lonshi. Cash costs at Kansanshiwere $0.65 per pound and $0.84 per pound at Bwana/Lonshi compared with averagecash costs of $0.48 per pound for the fourth quarter of 2004. The cash inflow for the quarter from operating activities, before workingcapital movements, was $101.0 million or $1.64 per share. The cash inflow fromoperating activities, after working capital movements, was $115.5 million or$1.87 per share. The difference between the before and after non-cash workingcapital movements can be principally attributed to the increase in accountspayable. Net earnings for the quarter increased to $57.1 million or $0.93 per sharecompared with third quarter net earnings of $39.5 million or $0.64 per share. 2005 Annual Results Operating revenues for the year ended December 31, 2005 were a record $444.6million; 97.6% being derived from the Company's core activity, copper mining.Copper revenues year on year increased significantly with the commencement ofcommercial production at Kansanshi and the improved copper production andrealized copper price at the Bwana/Lonshi operation. Copper production was 119,117 tonnes which included 69,579 tonnes from Kansanshi(41,521 tonnes cathode; 28,058 tonnes concentrate) and 49,538 tonnes from Bwana/Lonshi. The Company also produced 260,796 tonnes of acid, which represents an86% increase over 2004 as a result of the start up of the Solwezi Acid Plant. Copper revenues at Kansanshi for 2005 were $252.7 million, which was composed of$170.9 million for copper cathode and $81.8 million for copper in concentrate.Kansanshi revenue figures only include revenues from the commencement ofcommercial production on April 19, 2005. Copper revenues at Bwana/Lonshi were$181.4 million. For the purposes of financial reporting, TC/RCs and freightparity charges are recognized as a revenue deduction and are not included withinthe cost of sales. The realized copper price was $1.66 per pound for the year, which was asignificant increase from last year due to the rising market price for copper.The gross copper selling price, before realization charges, for the year was$1.79 per pound, which was higher than the average London Metal Exchange ("LME")cash price of $1.67 per pound, due to favourable contract pricing terms. Thefavorable adjustments arise from sales contracts with a quotation period (finalpricing basis) in future months plus premiums that the Company receives for itscathodes over LME cash prices. During this period of continually increasingcopper prices this has been favorable for the Company. Certain copper sales agreements entered into by the Company call for"provisional pricing" based on the average applicable cash copper price for aspecified future month. Included within copper revenue as at December 31, 2005was 28,491 tonnes of copper that has been provisionally priced using aprovisional average LME copper price of $2.06 per pound. This equates toapproximately $129.5 million worth of total revenue included within the 2005results that may be subject to adjustment as a result of copper pricefluctuations between January 2006 and July 2006. The average LME cash price forJanuary 2006 was $2.15 per pound and the average copper price for February 2006was $2.26 per pound. Gold revenues represent a credit from the sale of copper concentrates atKansanshi. Each tonne of concentrate generally contains between 3 and 10 gramsof gold for which a net credit is received by the Company after the deduction ofthe gold realization charges. For the year, gold revenues totalled $6.7 millionfor 14,266 ounces of gold. Revenue from surplus acid sales fell from $10.2 million in 2004 to $3.8 millionin 2005. This decrease was principally due to an increase in internal acidconsumption at Bwana/Lonshi resulting from the increased copper production. Cost of sales for 2005 increased by 182% to $151.9 million, which is consistentwith the 187% increase in copper production due to the commencement ofcommercial production at Kansanshi and the increased copper production from theBwana/Lonshi operation. Group cash costs have increased year on year as a result of the introduction ofthe Kansanshi operation as well as increased costs at Bwana/Lonshi. Cash costsat Kansanshi were $0.63 per pound and $0.68 per pound at Bwana/Lonshi for 2005both higher than the group average of $0.46 in 2004. Kansanshi's unit costswere higher than expected due partially to the requirement to transportconcentrate further and use alternative smelters than those planned while a newsmelter is being completed at Mufulira (part of Mopani). The new smelter isexpected to be complete by mid 2006. At Bwana/Lonshi the increase in costs canbe attributed to the revised strip ratio and increased costs associated withmining. Reference should be made to the segmented discussion for furtherdiscussion of segmented cash costs. For 2005, the cash inflow from operating activities, before working capitalmovements, was $236.1 million or $3.84 per share. The cash flow from operatingactivities, after working capital movements, was $201.8 million or $3.28 pershare. The difference between the cash flow before and after working capitalmovements can be attributed principally to the increase in both accountsreceivable ($44.5 million) and inventory ($25.2 million). The large increase inboth is due to the normal payment terms surrounding concentrate and cathodesales at Kansanshi coupled with the provisional revenue adjustments at year end.The increase in inventory stems from the Company's $13.4 million investment instockpiles at Kansanshi. The increase in accounts receivable and inventory hasbeen partially offset by an increase in payables of $35.5 million. Net earnings for the year increased to $152.8 million or $2.48 per share,including a gain on the sale of the Company's interest in Anvil of $16.1 millionor $0.26 per share. Kansanshi 2005 Fourth Quarter Results During the quarter, 1,499,000 tonnes of ore and 5,240,000 tonnes of waste weremined. In the fourth quarter, the total material mined declined from the thirdquarter from a total of 7,685,000 tonnes to 6,739,000 tonnes. The 12% decreasecan be attributed to the onset of the Zambian wet season coupled with anincreased ore re-handling requirement, as Kansanshi differentiated between oretypes to maximize the mill throughput. The previously reported fuel and tireshortages had minimal impact during the quarter. For the fourth quarter,contained copper production increased 28% to 29,558 tonnes, which although asubstantial increase, fell just short of the revised target of 30,513 tonnes,principally due to a mill relining required in December, and disruptions inmilling for "tie-ins" during the upgrade construction. During the quarter, Kansanshi produced 18,324 tonnes of copper cathode at a cashcost of $0.52 per pound and a total cost of $0.63 per pound. Cathode costs weremarginally higher than the previous quarter due to one-off accruals of duty andimport charges. During the quarter, Kansanshi produced 11,234 tonnes ofcontained copper in the form of concentrates at a cash cost of $0.87 per poundand a total cost of $0.98 per pound. Concentrate costs were up on the previousquarter as a result of higher freight costs and a lower gold credit. Theincrease in the freight costs of approximately $0.10 per pound is a result ofselling a high component of concentrates to international smelters rather thandomestic smelters as the smelter at Mopani (Mufulira smelter) does not have anyspare capacity while its new smelter is being completed. The gold credit alsofell $0.08 quarter on quarter as a result of the lower ratio of concentratesales to copper concentrate production. In the determination of the goldproduction credit, the gold sales figure is used, consequently as the salesincrease so does the gold credit. The accrual of duties and import charges alsoimpacted the concentrate side but were offset by other processing efficiencies.The combined cash cost for both concentrate and cathode was $0.65 per pound witha total cash cost of $0.76 per pound. 2005 Annual Results In 2005, 7,288,000 tonnes of ore and 16,141,000 tonnes of waste were mined. Thetotal waste mined was below the original targets principally as a result of thetire shortage in the first half of the year, late delivery of mining equipmentand the additional rehandling requirements experienced in the fourth quarter.Notwithstanding, Kansanshi was still able to build stockpiles of 5.5 milliontonnes of high and low grade ore with a copper content of approximately 1.8%. The strip ratio for the year was 2.2:1. As this exceeded the expected life ofmine strip ratio, the Company deferred costs of $6.5 million associated withmining at Kansanshi. As at the end of the year, Kansanshi had deferred a totalof $7.8 million in mining costs. Copper production was 69,579 tonnes of which 41,521 tonnes were produced fromcopper cathode and 28,058 tonnes from concentrates. Excluded from the copperproduction figures for the year are 6,792 tonnes of copper in concentrate and1,941 tonnes of finished copper cathode that were produced prior to commercialproduction being achieved in April. The combined cash costs for both cathode and concentrate for 2005 was $0.63 perpound with a total cost of $0.79 per pound. The cash cost for cathode was $0.54per pound, which was comprised of ore costs of $0.08 per pound; processing costsof $0.42 per pound; and other costs of $0.04 per pound. Total costs were $0.70per pound. The cash costs for concentrate was $0.78 per pound, which wascomprised of ore costs of $0.08 per pound; processing costs including TC/RC andfreight credits of $0.77 per pound; and other costs of $0.05 per pound offset bya $0.12 per pound gold credit. The TC/RC costs were higher than expected due tothe requirement to transport the concentrate further than planned and highersmelting charges as Mufulira was unable to process the planned production whilethe new smelter is being completed. The total costs for concentrate were $0.94per pound. Bwana/Lonshi 2005 Fourth Quarter During the fourth quarter, approximately 209,000 tonnes of ore and approximately5,918,000 tonnes of waste were mined from Lonshi. The strip ratio for thequarter was 28:1. Total material mined increased 22% despite two of the threemonths in the fourth quarter experiencing much heavier than average rainfall.The increase in material mined was principally due to the arrival of theremaining mining fleet acquired to address the requirements of the July 1st,2005 revision to the strip ratio from 12:1 to 26:1. As with Kansanshi, both thefuel and tire situations improved during the quarter with no significantdowntime experienced as a result of either of these two items. During the fourth quarter, copper production was 12,662 tonnes, 4% below therecord production achieved in the previous quarter. Cash costs were $0.84 perpound and total costs were $1.16 per pound of copper. Cash costs at Bwana/Lonshiincreased $0.10 over quarter three due to a $0.06 increase in ore costs, a $0.04increase in processing costs, and a $0.03 increase in administrative costsoffset by an improved acid credit of $0.02 per pound as a result of theincreased sales from the Solwezi Acid Plant located at Kansanshi. The increasein ore costs can be attributed to the higher stripping ratio, higher fuel costsand higher transportation costs. The increase in processing costs can beattributed to the increased cost of oil based consumables. Acid production increased to 72,040 tonnes, of which 34,988 tonnes were producedat Ndola and 37,052 tonnes at Solwezi. Of the total acid produced, 219 tonneswere sold externally, 35,754 tonnes consumed at Kansanshi with the balanceconsumed at Bwana/Lonshi. 2005 Annual Results In 2005, approximately 981,000 tonnes of ore and approximately 17,246,000 tonnesof waste were mined from Lonshi. The strip ratio for the year was 18:1, which isless than the new mine life strip ratio established on July 1, 2005 of 26:1. Asa result, $1.7 million has been expensed or provided for during 2005. TheCompany recognized a deferred stripping liability of $1.0 million as at December31, 2005. The increased strip ratio combined with, the higher actual mining andtransport costs in 2005, has meant that the ore costs have risen $0.15 per poundcompared with the same period last year. Copper production increased to 49,538 tonnes in 2005. The 19% increase over thesame period in 2004 was principally as a result of being able to operate thetankhouses at record high current densities. Cash costs for 2005 were $0.68 per pound and total costs were $0.93 per pound.The increase in cash costs from 2004, can be attributed to the increase in orecosts ($0.15 per pound) due to the increase in the life of mine strip ratio thatoccurred on July 1, 2005 and the increased cost of tires and fuel. This coupledwith increased acid costs ($0.04 per pound) due to the increased gangue acidconsumption resulting from the higher levels of dolomitic ore. The increasedinternal consumption of acid has also reduced the acid credit available from theNdola plants. These costs have been slightly offset by the acid credit from theSolwezi acid plant of $0.06 per pound. Cash costs at Bwana/Lonshi for the year were composed of ore costs $0.36 perpound and processing and other costs of $0.38 per pound. These costs were offsetby a $0.06 credit for acid sales. Acid production in 2005 was 260,796 tonnes, of which 134,633 tonnes wereproduced at Ndola and 126,163 tonnes at Solwezi. Of the total acid produced,32,601 tonnes were sold externally and 85,330 tonnes were consumed at Kansanshi.Annual acid production capacity at Ndola and Solwezi is 146,000 tonnes per site. Guelb Moghrein Copper-Gold Deposit, Mauritania 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.Logistical and supply difficulties in Mauritania have delayed the commissioningfrom the first quarter of 2006 until the second quarter of 2006, with commercialproduction now expected in the third quarter of 2006. Production will beinitially targeted at approximately 30,000 tonnes of copper in concentrate and70,000 ounces of gold per year. As at December 31, 2005, the Company had capitalized acquisition and developmentcosts totalling $66.0 million (2004: $10.3m). Detailed design is now complete. In 2005, a non-violent military coup inMauritania has had no impact on the construction program and the new governmenthas pledged to honour all existing agreements. Site civil works and structuralsteel erection are complete and final equipment installation is now inprogress. During the fourth quarter, the Environmental and Social ImpactAssessment ("ESIA") report was reviewed by the Ministry of Mines and Industry inNouakchott and was found to contain no fatal flaws. A provisional mining licensewas issued in late-December, with final approval of the ESIA and a final mininglicense to be granted once a reclamation plan is submitted and bonding put inplace. Frontier Copper Deposit, DRC In May 2004, the Company announced the results of an independent copper-cobaltresource estimate completed at Frontier Project located in Haut KatangaProvince, DRC. As at December 31, 2005, the Company had spent $9.9 million (2004: $3.7m) onthis project. The current scoping study envisages an average annual productionof 80,000 tonnes of contained copper. In January 2006, the FrontierEnvironmental Impact Assessment and Environmental Management Plan were formallyapproved by the Congolese Ministry of Mines and the Exploitation Permit wasgranted in February 2006. Kashime Copper Prospect, Zambia A preliminary inferred oxide resource has been completed by independentconsultants, Digital Mining Services, and in February 2006, a program ofcombined reverse circulation and diamond drilling was initiated to improvedefinition. In March 2006, a programme of induced polarization will be carriedout over the eastern and central portion of the target where significant coppersulphides have been intersected at depth in some holes. During the year ended December 2005, the Company expensed $7.5 million (2004:$3.1m; 2003: $0.6m) on other exploration targets that were predominantly locatedwithin the DRC and Zambia. Of this amount, $2.6 million was related to theKashime Copper Prospect. As at December 31, 2005, no costs associated with thisexploration 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. The carrying value of thisinvestment as at December 31, 2005 is $9.5 million. There has been no movementin this investment since 2002. For 2005, Mopani produced approximately 132,000tonnes of finished copper and 1,800 tonnes of cobalt. In a recent, Reutersdispatch, Tim Henderson, Mopani's CEO forecasted "copper production to rise to200,000 tonnes in 2006." The increase in forecasted copper production can beattributed to capital upgrades at the mine including the construction of a newsmelter at Mufulira, which will increase its handling capacity from 420,000tonnes to 650,000 tonnes of copper concentrate per year. The smelter isexpected to be completed and operating during the middle of 2006. As at December31, 2005, Mopani had total assets over $700.0 million. As the majority owner ofMopani is a private company not registered in Zambia, only limited publicinformation is available. Outlook For the full year of 2006, the Company expects to produce about 200,000 tonnesof copper (a 68% increase over 2005 copper production) which includes 140,000 to145,000 tonnes from Kansanshi, 45,000 to 50,000 tonnes from Bwana/Lonshi and15,000 tonnes from Guelb Moghrein. In addition, the Company expects to produce75,000 ounces of gold which includes 40,000 ounces from Kansanshi and 35,000ounces from Guelb Moghrein. Group cash costs are expected to be in the range of$0.72 to $0.77. During the period January to February, 2006, Kansanshi produced 19,226 tonnes ofcopper which included 10,338 tonnes of copper cathode and 8,888 tonnes of copperin concentrate. During February 2006, the recently completed four million tonnesulphide circuit expansion began commissioning. Name plate treatment capacity atKansanshi now stands at eight million tonnes of sulphide ore per year, whileoxide treatment capacity remains four million tonnes per year. Upon achievingdesign throughputs Kansanshi is expected to produce an average of 12,300 tonnesof copper per month which includes 6,000 tonnes of copper cathode and 6,300tonnes of copper in concentrate. Cash costs for 2006 are forecast in the rangeof $0.71 to $0.77 per pound of copper. At Kansanshi the Company is investing in a High Pressure Leach (HPL) facility totreat a portion of the increased copper concentrate production. The maincomponents of HPL project are two autoclaves, an oxygen plant and an additional35,000 tonne per annum solvent extraction and electrowinning (SX/EW) facility.The main equipment for the autoclave and oxygen plants has been successfullyrelocated from Turquoise Ridge in Nevada, USA and all of the equipment is noweither on site or undergoing refurbishment in South Africa. Two autoclavevessels have been installed on their foundations at Kansanshi. Detailed designwork for the HPL project has been completed, and construction is well underway.Site civil works for the project are essentially complete, with only a smallamount of civil work outstanding for the oxygen plant. The majority of materialshave been ordered and are currently arriving on site. The structural, plate workand mechanical installation associated with the new SX/EW plant are wellprogressed, and are also underway for the autoclave and oxygen plant areas.Piping and electrical installation for the project is expected to begin March2006. Construction of the HPL project is expected to be completed such thatpre-commissioning and commissioning will begin in the third quarter of 2006. Oneof the three high pressure autoclave vessels was damaged during transportation.An assessment of the damage is currently being undertaken but it will not slowthe commissioning or hinder performance. The total capital cost is budgeted at$87 million including an upgrade to the Zesco power supply and increased workingcapital. The Bwana/Lonshi operation is forecast to produce in excess of 45,000 tonnes ofcopper cathode in 2006. During the very wet period January to February 2006,Bwana/Lonshi produced 7,311 tonnes of copper cathode. Cash costs for 2006 areforecast in the range of $0.76 to $0.83 per pound of copper. The Company iscurrently assessing the alternative and most beneficial uses for the Bwanaprocessing plant after the Lonshi ore has been exhausted. In 2006, the Companyalso anticipates that it will process external ore purchased from third parties,to exploit the full production capacity at Bwana. This occurs for example duringperiods of heavy rain, and increases the ore costs. It should be noted that the forecast cash costs are provided under currentaccounting practice. With the implementation of the proposed accounting changeto deferred stripping, actual results may differ from these forecasts. At Guelb, the detailed design was completed at the end of January. Logisticaland supply difficulties in Mauritania have delayed the commissioning until thesecond quarter of 2006 and commercial production is expected to begin in thethird quarter. The Company remains unable to release an engineering report asthe Company is not treating the current resource statement as compliant withNational Instrument 43-101. At Frontier, the scoping study is complete and will be published shortly.Subject to a positive production decision, and board of directors approval,pre-stripping and construction of civil works will begin after the rains end inApril 2006. At the Kashime prospect diamond drilling continues with an initialresource estimate expected once the assay results are available for the currentprogram of drilling. 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 or contact Geoff Chater or Bill Iversen 8th Floor, 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] The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Certain information contained in the Management's Discussion and Analysisconstitutes "forward-looking statements" within the meaning of the PrivateSecurities Litigation Reform Act of 1995 and forward-looking information underapplicable Canadian securities legislation. Such forward-looking statements orinformation, including but not limited to those with respect to the prices ofgold, copper, cobalt and sulphuric acid, estimated future production, estimatedcosts of future production, the Company's hedging policy and permitting timelines, involve known and unknown risks, uncertainties, and other factors whichmay cause the actual results, performance or achievements of the Company to bematerially different from any future results, performance or achievementsexpressed or implied by such forward-looking statements or information. Suchfactors include, among others, the actual prices of copper, gold, cobalt andsulphuric acid, the factual results of current exploration, development andmining activities, changes in project parameters as plans continue to beevaluated, as well as those factors disclosed in the Company's documents filedfrom time to time with the Alberta, British Columbia, and Ontario SecuritiesCommissions, the Autorite des marches financiers in Quebec, the United StatesSecurities and Exchange Commission and the Alternative Investment Marketoperated by the London Stock Exchange. The preceding discussion and analysis and financial review should be read inconjunction with management's discussion of critical accounting policies, riskfactors and comments regarding forward looking statements contained in theaudited consolidated financial statements for the period ended December 31,2005. The following discussion and analysis of the Company's results ofoperations should also be read in conjunction with the audited consolidatedfinancial statements and related notes. Summary of Quarterly Results (unaudited) 2004 2005Statement of Operations and Deficit Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4(millions, except where indicated)Total revenues $25.3 $26.3 $31.2 $30.7 $38.2 $86.5 $143.0 $176.9Cost of sales 12.1 13.1 14.1 14.5 16.2 35.0 53.8 46.9Depletion and amortization 2.3 3.0 2.6 3.0 3.9 6.9 12.5 13.2Exploration 0.4 0.6 1.1 1.0 1.0 1.1 1.5 3.8General and administrative 1.1 1.5 1.4 2.2 2.1 2.2 2.5 2.9Interest 0.6 0.9 0.8 0.7 0.8 3.4 5.8 9.3Other expenses (0.1) 0.6 (0.3) (0.9) (0.6) (1.7) 5.9 13.5Income taxes 2.6 2.6 3.7 2.0 3.7 7.2 14.8 19.9Minority interests - - - - - 3.3 6.8 10.2Equity earnings 0.4 0.2 0.1 1.0 - - - -Net earnings 6.7 4.1 7.9 9.3 27.2 29.0 39.5 57.1Basic earnings per share $0.11 $0.07 $0.13 $0.16 $0.44 $0.47 $0.64 $0.93Diluted earnings per share $0.11 $0.07 $0.13 $0.15 $0.43 $0.46 $0.63 $0.90 Realized copper price $1.03 $1.11 $1.16 $1.20 $1.44 $1.42 $1.58 $1.97Total copper sold (tonnes)(2) 9,700 19,299 1,674 10,872 12,000 26,535 39,864 40,203Total copper produced (tonnes) (4) 9,689 9,585 11,330 10,942 12,028 28,673 36,196 42,220Total gold sold (ounces) - - - - - 1,370 7,130 5,766Cash Costs (C1) (per lb) (1) $0.39 $0.48 $0.45 $0.48 $0.58 $0.60 $0.64 $0.71Total Costs (C3) (per lb) (1) $0.53 $0.67 $0.68 $0.59 $0.75 $0.80 $0.87 $0.89 Financial Position (millions)Working capital $40.2 $28.0 $51.8 $33.9 $61.4 $47.1 $32.2 $76.2Total assets $241.8 $276.4 $385.0 $473.1 $523.1 $561.9 $641.5 $746.5Weighted average # shares (000's) 58,568 59,434 60,668 60,942 61,267 61,499 61,583 61,639 Cash Flows from (millions)Operating activitiesBefore working capital movements $12.1 $11.5 $12.9 $9.8 $19.7 $43.0 $81.1 $101.0After working capital movements 6.6 10.8 10.4 2.9 22.9 2.3 69.8 115.5Financing activities 57.4 16.5 76.6 49.0 24.8 (22.8) (5.1) (1.6)Investing activities (36.2) (47.7) (69.7) (52.5) (19.0) (2.3) (57.8) (94.4)Cash Flows from Operating activities per share(3)Before working capital movements 0.21 0.19 0.21 0.16 0.32 0.70 1.32 1.64After working capital movements 0.11 0.18 0.17 0.05 0.37 0.04 1.13 1.87 Kansanshi Production StatisticsMining:Waste mined (000's tonnes) - - 1,175 2,857 1,651 3,185 6,064 5,240Ore mined (000's tonnes) - - - 1,346 2,119 2,050 1,621 1,499Ore grade % - - - 2.4 1.7 2.0 2.0 1.9Processing:Ore processed (000's tonnes) (3) - - - - - 1,129 1,461 1,619Contained copper (tonnes) (3) - - - - - 19,917 27,510 30,934Recovery % (3) - - - - - 86 84 96Copper produced (tonnes) (3) - - - - - 16,956 23,065 29,558Combined Cash Costs:Cash Costs (per lb) (1) - - - - - $0.63 $0.59 $0.65Total Costs (per lb) (1) - - - - - $0.80 $0.80 $0.76Cathode Cash Costs:Cash Costs (per lb) (1) - - - - - $0.61 $0.52 $0.52Total Costs (per lb) (1) - - - - - $0.80 $0.73 $0.63Concentrate Cash Costs:Cash Costs (per lb) (1) - - - - - $0.65 $0.71 $0.87Total Costs (per lb) (1) - - - - - $0.81 $0.90 $0.98Revenue (000's)Copper cathodes - - - - - 29,165 54,116 87,624Copper concentrates - - - - - 15,309 34,668 31,850Total revenues - - - - - 44,474 88,784 119,474 Copper cathode sold (tonnes) - - - - - 8,919 14,227 18,505Copper concentrate sold (tonnes) - - - - - 6,024 12,243 9,260 Summary of Quarterly Results (unaudited) (continued) 2004 2005Bwana/Lonshi Production Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4StatisticsMining:Waste mined (000's 1,036 2,854 4,213 2,926 2,596 4,025 4,707 5,918tonnes)Ore mined (000's tonnes) 66 85 257 261 152 319 300 209Ore grade % 5.4 5.2 4.7 6.4 5.3 5.5 3.9 6.1Processing:Ore processed (000's 209 237 278 256 264 328 363 397tonnes)Contained copper 10,904 10,813 12,908 12,824 13,804 13,354 15,003 14,262(tonnes)Grade % 5.2 4.6 4.6 5.0 5.2 4.1 4.1 3.6Recovery % 89 89 88 85 87 88 88 89Copper produced (tonnes) 9,689 9,585 11,330 10,942 12,028 11,717 13,131 12,662Acid produced (tonnes) 34,344 34,265 35,920 35,671 55,275 69,218 64,263 72,040Surplus acid (tonnes) 20,763 19,149 16,884 9,664 49 14,939 7,120 219Cash Costs (per lb) (1) $0.39 $0.48 $0.45 $0.48 $0.58 $0.57 $0.74 $0.84Total Costs (per lb) (1) $0.53 $0.67 $0.68 $0.59 $0.75 $0.79 $1.01 $1.16Revenues ($000's)Copper cathodes 22,082 23,398 28,624 29,249 38,172 38,899 49,602 54,694Copper cathodes sold 9,693 9,553 11,233 11,060 12,000 11,592 13,394 12,438(tonnes)(1) For the definition of cash and total costs, reference should be made to section7. (2) Copper sold does not include tonnes sold prior to pre-commercial production. (3) Copper produced does not include tonnes produced prior to pre-commercialproduction. Consolidated Balance Sheets As at December 31, 2005 and 2004 (expressed in thousands of US dollars) 2005 2004 $ $AssetsCurrent assetsCash and cash equivalents (note 19) 82,910 50,356Restricted cash (note 10) 20,162 1,931Accounts receivable and prepaid expenses 70,444 21,927Inventory (note 5) 60,854 31,674 234,370 105,888Investments (note 6) 9,522 15,340Property, plant and equipment (note 7) 471,294 319,222Other assets (note 8) 31,325 32,611 746,511 473,061LiabilitiesCurrent liabilitiesAccounts payable and accrued liabilities 63,492 33,474Current taxes payable 16,055 3,248Other current liabilities (note 9) 78,632 35,287 158,179 72,009Long-term debt (note 10) 176,767 191,661Other liabilities (note 11) 34,340 37,048Future income tax liability (note 13) 43,330 12,313 412,616 313,031Minority interest 22,454 2,190 435,070 315,221Shareholders' EquityEquity accounts (note 14) 166,592 161,776Retained earnings (deficit) 144,849 (3,936) 311,441 157,840 746,511 473,061Commitments and contingencies (note 21) The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit the Company's website at www.first-quantum.com. Consolidated Statements of Earnings and Deficit For the years ended December 31, 2005 and 2004 (expressed in thousands of US dollars) 2005 2004 $ $Revenues Copper 434,100 103,352 Gold 6,715 - Acid 3,799 10,171 444,614 113,523Cost of sales 151,904 53,770Depletion and amortization 36,545 10,873Operating profit 256,165 48,880Other expenses Exploration 7,493 3,063 General and administrative 9,724 6,171 Interest on long-term debt 19,385 3,040 Other expenses (income) (note 16) 16,996 (725) Gain on disposal of investment (16,127) - 37,471 11,549Earnings before income taxes, minority interests and 218,694 37,331equity earningsIncome taxes (note 13) 45,612 11,006Minority interest 20,264 -Equity earnings - 1,685Net earnings for the year 152,818 28,010Deficit - beginning of year (3,936) (31,946)Dividends (4,033) -Retained earnings (deficit) - end of year 144,849 (3,936) Earnings per common share Basic $2.48 $0.47 Diluted $2.43 $0.46Weighted average shares outstanding (000's) 61,498 60,123 The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit the Company's website at www.first-quantum.com. Consolidated Statements of Cash Flows For years ended December 31, 2005 and 2004 (expressed in thousands of US dollars) 2005 2004 $ $Cash flows from operating activitiesNet earnings for the year 152,818 28,010Items not affecting cashDepletion and amortization 36,545 10,873Minority interest 20,264 -Provision for deferred stripping 1,690 -Unrealized foreign exchange gain (7,744) (1,180)Future income tax expense 26,632 7,724Stock-based compensation expense 2,656 1,227Unrealized derivative instruments loss 14,890 -Other 4,503 (391)Gain on disposal of investment (16,127) - 236,127 46,263Change in non-cash operating working capitalIncrease in accounts receivable and prepaid expenses (44,518) (9,455)Increase in inventory (25,218) (14,514)Increase in accounts payable and accrued liabilities 35,451 8,397 201,842 30,691Cash flows from financing activitiesRestricted cash (18,231) (1,931)Proceeds from long-term debt 68,023 179,455Repayments of long-term debt (39,819) (17,401)Issuance of common shares and warrants 2,159 46,983Dividends paid (4,033) -Deferred premium obligation and finance fees (12,763) (7,635) (4,664) 199,471Cash flows from investing activitiesProperty, plant and equipment (180,195) (193,245)Investments - (1,023)Prepaid power payments - (6,988)Deferred exploration and stripping costs (6,545) (4,849)Proceeds from sale of investments 21,944 - (164,796) (206,105)Effect of exchange rate changes on cash 172 707Increase in cash and cash equivalents 32,554 24,764Cash and cash equivalents - Beginning of year 50,356 25,592Cash and cash equivalents - End of year 82,910 50,356 The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit the Company's website at www.first-quantum.com. Segmented Information For years ended December 31, 2005 and 2004 (expressed in thousands of US dollars) For the year ended December 31, 2005, segmented information is presented asfollows: 2005 KCO BLO GMP CDA Inter-segment Total $ $ $ $ $ $Revenues 259,448 198,777 - 11,986 (25,597) 444,614Cost of sales 67,467 84,437 - - - 151,904Depletion and 14,987 21,443 - 115 - 36,545amortizationOperating profit 176,994 92,897 - 11,871 (25,597) 256,165(loss)Interest on 16,140 2,865 - 380 - 19,385long-term debtGain on disposal of - - - (16,127) - (16,127)investmentOther 19,159 6,468 - 8,586 - 34,213Segmented profit 141,695 83,564 - 19,032 (25,597) 218,694before undernoteditemsIncome taxes 31,497 18,842 - (4,727) - 45,612Minority interest 20,264 - - - - 20,264Segmented profit 89,934 64,722 - 23,759 (25,597) 152,818Property, plant and 323,194 71,488 65,991 10,621 471,294equipmentTotal assets 488,342 117,064 66,600 74,505 746,511Capital expenditures 93,099 35,073 55,719 6,165 190,056 For the year ended December 31, 2004, segmented information is presented asfollows: 2004 KCO BLO GMP CDA Inter-segment Total $ $ $ $ $ $Revenues - 113,523 - 5,806 (5,806) 113,523Cost of sales - 53,770 - - - 53,770Depletion and - 9,552 - 1,321 - 10,873amortizationSegmented operating - 50,201 - 4,485 (5,806) 48,880profitInterest on - 2,803 - 237 - 3,040long-term debtOther - 1,745 - 6,764 - 8,509Segmented profit - 45,653 - (2,516) (5,806) 37,331before undernoteditemsIncome taxes - 11,006 - - - 11,006Equity earnings - - - 1,685 - 1,685Segment profit - 34,647 - (831) (5,806) 28,010Property, plant and 245,937 58,284 10,275 4,726 319,222equipmentTotal assets 304,284 107,739 10,475 50,563 473,061Capital expenditures 204,923 19,038 10,275 3,689 237,925 Bwana / Lonshi Operation ("BLO"), Kansanshi Copper / Gold Operation ("KCO"),Guelb Moghrein Project ("GMP"), Corporate Development and Administration andOther ("CDA") This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
FQM.L