18th Mar 2005 16:15
First Quantum Minerals Ld18 March 2005 NEWS RELEASE 05-04 March 18, 2005 www.first-quantum.com FIRST QUANTUM MINERALS REPORTS OPERATIONAL AND FINANCIAL RESULTS FOR THREE MONTHS AND YEAR ENDED DECEMBER 31, 2004 (All figures expressed in US dollars) First Quantum Minerals Ltd. (TSE Symbol "FM", LSE Symbol "FQM") is pleased toannounce results for the three months and year ended December 31, 2004. Thecomplete financial statements are available for review at www.first-quantum.com. Summary Table 2004 2003 Fourth Twelve Fourth Twelve Quarter Months Quarter Months (Oct-Dec) (Jan-Dec) (Oct-Dec) (Jan-Dec)Financial Data (millions) Revenues $30.7 $113.5 $19.9 $60.4 Cash flow, (before operating working capital movements) $9.8 $46.3 $8.4 $18.1Cash flow, (after operating working capital movements) $2.9 $30.7 $8.2 $16.9Net earnings $9.3 $28.0 $1.4 $4.6 Weighted average shares outstanding ('000) 60,942 60,123 55,984 50,668 Per Share Data Cash flow, (before operating working capital movements) $0.16 $0.77 $0.15 $0.36Cash flow, (after operating working capital movements) $0.05 $0.51 $0.15 $0.33Net earnings $0.16 $0.47 $0.02 $0.09 Operating Data Finished Copper Production (tonnes) 10,942 41,546 9,558 29,513Sulphuric Acid Produced (tonnes) 35,671 140,200 33,035 132,951Sulphuric Acid Sold (tonnes) 9,664 66,460 15,689 75,228 Realized Copper Price (US$/lb) $1.20 $1.13 $0.84 $0.75Total Cost (C3) Copper (US$/lb) $0.59 $0.62 $0.66 $0.62Cash Cost (C1) Copper (US$/lb) $0.48 $0.46 $0.47 $0.44 Notable Events - Kansanshi commissioning underway, ZESCO power line energized - New copper discovery at Kashime in Zambia Financial Results (see attached financial statements) Fourth quarter revenues were $30.7 million (Q3: $31.2m; Q2: $26.3m; Q1: $25.3m;Q4'03: $19.9m) which principally comprised copper revenues of $29.2 million (Q3:$28.6m; Q2: $23.4m; Q1: $22.1m; Q4'03: $17.5m) and acid revenues of $1.5 million(Q3: $2.6m; Q2: $2.9m; Q1: $3.2m; Q4'03: $2.4m). Copper revenues were consistentwith the third quarter as a result of a 3% increase in the realized copper pricewhich was offset by slightly lower copper sales (2%). Acid revenues have fallenby approximately $1.1 million on the lower acid available for sale at BwanaMkubwa. The availability of acid for sale was reduced as the gangue acidconsumption ratio (tonnes of acid consumed per tonne of copper produced)increased to 2.3 (Q3: 1.7; Q2: 1.6; Q1: 1.4; Q4'03: 1.8) at Bwana Mkubwa. Gross profit for the fourth quarter of 2004 was $16.2 million (Q3: $17.1m; Q2:$13.2m; Q1: $13.2m; Q4'03: $7.0m) reflecting the increased copper revenues fromBwana Mkubwa. The cash flow from operating activities, after changes in workingcapital, was $2.9 million (Q3: $10.4m; Q2: $10.8m; Q1: $6.6m; Q4'03: $8.2m) or$0.05 per share (Q3: $0.17; Q2: $0.18; Q1: $0.11; Q4'03: $0.15). Cash flow fromoperations was adversely impacted by movements in working capital of $7.0million for the quarter. The cash flow from operating activities, before changesin non-cash working capital, was $9.8 million (Q3: $12.9m; Q2: $11.5m; Q1:$12.1m; Q4'03: $8.4m) or $0.16 per share (Q3: $0.21; Q2: $0.19; Q1: $0.21;Q4'03: $0.15). Net earnings for the fourth quarter were $9.3 million (Q3: $7.9m;Q2: $4.1m; Q1: $6.7m; Q4'03: $1.4m) or $0.16 per share (Q3: $0.13; Q2: $0.07;Q1: $0.11; Q4'03: $0.02). The realized copper price rose to $1.20 per pound (Q3: $1.16/lb; Q2: $1.11/lb;Q1: $1.03/lb; Q4'03: $0.84/lb). The average LME price for the fourth quarter was$1.31 per pound (Q3: $1.27/lb; Q2: $1.23/lb; Q1: $1.23/lb; Q4'03: $0.89/lb). Thedifference between the LME price and the realized price was due to realizationcharges and copper forward contracts entered into in 2003. During the threemonths ended, December 31, 2004, the company delivered into 3,000 tonnes ofcopper forward sales contracts at an average realized price of $0.88 per pound.As at January 1, 2005, the company no longer has any forward copper salescontracts in place at Bwana. For 2004, revenues increased to $113.5 million (2003: $60.4m; 2002: $51.1m)which comprised copper revenues of $103.3 million (2003: $49.4m; 2002: $17.0m)and acid revenues of $10.2 million (2003: $11.0m; 2002: $12.8m). Revenues wereup 88% on the comparative period due to improved copper prices and a 40%increase in copper sales at Bwana Mkubwa. Acid revenues have remainedconsistent with the comparative periods as slightly higher acid prices and acidproduction has offset higher internal consumption due to the increase in copperproduction at Bwana Mkubwa. Gross profit for 2004 was $59.7 million (2003: $19.1m; 2002: $4.0m) reflectingthe increased copper revenues from Bwana Mkubwa. The cash flow from operatingactivities, after changes in working capital, was $30.7 million (2003: $16.9m;2002: ($4.1m)) or $0.51 per share (2003: $0.33; 2002: ($0.09)). Cash flow fromoperating activities was impacted by movements in operating working capital of$15.6 million for the year. The cash inflow from operating activities, beforechanges in working capital, was $46.3 million (2003: $18.1m; 2002: ($0.6m)) or$0.77 per share (2003: $0.36; 2002: ($0.01)). Net earnings for 2004 increased to$28.0 million (2003: $4.6m; 2002: ($3.8m)) or $0.47 per share (2003: $0.09;2002: ($0.09)). The realized copper price rose to $1.13 per pound (2003: $0.75/lb; 2002: $0.65/lb). The LME copper price remained strong for 2004 with LME copper inventoriesfalling and demand remaining strong from China. The average LME price for 2004was $1.23 per pound (2003: $0.81/lb; 2002: $0.71/lb). The difference between theLME price and the realized price was due to realization charges and hedgingcopper forward contracts entered into in 2003. During 2004, the companydelivered into 12,000 tonnes of copper forward sales contracts at an averagerealized price of $0.87 per pound. Bwana Mkubwa SX/EW Facility, Zambia (100%) During the fourth quarter 2004, copper production was 10,942 tonnes (Q3:11,330t; Q2: 9,585t; Q1: 9,689t, Q4'03: 9,558t). The small decrease from thethird quarter can be attributed to the failure of a rectiformer and anelectrical short that occurred during the period in the electrowinning plant atBwana Mkubwa. Cash costs (C1) were $0.48 per pound (Q3: $0.45/lb; Q2: $0.48/lb; Q1: $0.39/lb,Q4'03: $0.47/lb) and total costs (C3) were $0.59 per pound (Q3: $0.68/lb; Q2:$0.67/lb; Q1: $0.53/lb, Q4'03: $0.66/lb). The increase in C1 costs can beattributed to the higher gangue acid consumption which has impacted the cashcosts in two distinct ways. Firstly, the C1 costs are up $0.02 per pound due tothe higher acid consumption and secondly, the acid available for resale has beenreduced resulting in the acid credit falling by $0.03 per pound. The combined$0.05 per pound increase has been partially offset by an improvement inprocessing costs of $0.02 per pound on quarter three. Acid production decreased slightly to 35,671 tonnes (Q3: 35,920t; Q2: 34,265t;Q1: 34,344t, Q4'03: 33,035t) of which 9,664 tonnes (Q3: 16,884t; Q2: 19,149t;Q1: 20,763t, Q4'03:15,689t) of surplus acid production was sold. The decreasein surplus acid sold was as a result of the higher gangue acid consumption atBwana. For the year ended December 31, 2004, copper production increased to 41,546tonnes (2003: 29,513t; 2002: 11,878t). The 40% increase in production hasresulted from a steady state of production being reached as well as Bwana Mkubwarealizing the benefits of the new ore-delivery system and other processinginitiatives. In addition, the electrical current flow through the new tankhouse at Bwana Mkubwa has been increased which has enabled more copper to beplated. Cash costs (C1) for the year were $0.46 per pound (2003: $0.44/lb; 2002: $0.27/lb) and total costs (C3) were $0.62 per pound (2003: $0.62/lb; 2002: $0.52/lb).Cash costs (C1) have risen from 2003 to 2004 principally due to the acid creditper pound of copper produced has fallen from $0.08 to $0.06 per pound. Acid production was 140,200 tonnes (2003: 132,951t; 2002: 140,263t), of which66,460 tonnes (2003: 75,228t; 2002: 88,198t) was surplus acid production thatwas sold to external customers. The increase in acid production was due toproblems experienced in 2003 that were resolved by the start of 2004. Themaintenance programs undertaken in 2003 were also more extensive in 2004. Although the acid production has actually increased, the acid available forresale has decreased due to the increased acid consumption through the BwanaMkubwa copper circuit. Acid consumption during 2004 was 73,298 tonnes (2003:57,573t; 2002: 51,392t), which has meant that less acid was available forresale. The increase of 27% in acid consumption has been driven by a 41%increase in copper production less the effects of a slightly improved acidconsumption rate per tonne of copper produced of 1.8 (2003: 2.0; 2002: 4.3). Lonshi Copper Mine, Democratic Republic of Congo (100%) During the fourth quarter 2004, approximately 261,000 tonnes (Q3: 257,000t; Q2:85,000t; Q1: 66,000t) of ore grading 6.4% (Q3: 4.7%; Q2: 5.2%; Q1: 5.4%) andapproximately 2,926,000 tonnes (Q3: 4,213,000t; Q2: 2,854,000t; Q1: 1,036,000t)of waste were mined from Lonshi. The strip ratio (ratio of waste to ore) forthe quarter was approximately 11:1. The total material mined was 3,187,000tonnes (Q3: 4,470,000t; Q2: 2,939,000t; Q1: 1,102,000t). The 29% reduction inmined material was due to constraints surrounding drilling capacity at Lonshi.During the quarter, the push-backs to the east of pit encountered dolomiticrocks which required drilling and blasting. Waste mining in the Southernpush-back has continued from the third quarter with the expectation that the orezone will be reached in the first quarter of 2005. The company has alsocontinued its efforts to improve the dewatering of the Lonshi pit, with morein-pit pumps and bigger boreholes being used. These initiatives will add to thecompany's ability to manage the water ingress and continue to mine efficientlyin the wet season. In 2004, approximately 669,000 tonnes (2003: 711,000t; 2002: 1,195,000t) of oregrading 5.5% (2003: 4.8%; 2002: 4.6%) and approximately 11,029,000 tonnes (2003:4,487,000t; 2002: 4,156,000t) of waste were mined in total. Due to theincreased copper production at Bwana Mkubwa and the need to re-establish astrategic stockpile, the size of the mining fleet at Lonshi has increasedsignificantly to cope with this increased demand. The strip ratio for the yearwas 16:1 (2003: 6:1; 2002: 3:1). As a result, the Company has deferred costs ofapproximately $3.4 million since December 31, 2003 associated with its miningprogram at Lonshi. In 2003, the company had provided for an additional $2.7million associated with the mining program at Lonshi. On April 1, 2004 as a result of the on-going exploration program at Lonshi, themine reserve was increased to 225,000 tonnes of acid soluble copper as at April1, 2004. In the light of this reserve increase, and the prevailing improvementin copper price, a new mine plan was generated. The new mine plan has alife-of-mine stripping ratio of 12:1 compared to the previous plan of 8:1. Kansanshi Copper-Gold Deposit, Zambia (80%) At Kansanshi, construction was completed. Waste stripping and ore stockpilingcommenced. The new 330Kv ZESCO power line was energized and commissioningbegan. Commissioning has been prioritized, with the staged introduction of waterand ore through the plant, commencing with the sulphide circuit, and followed bythe oxide circuit. During fourth quarter 2004, approximately 1,346,000 tonnes (Q3: 0t) of oregrading 2.4% and approximately 2,857,000 tonnes of waste (Q3: 1,175,000t) weremined. The strip ratio for the quarter was 2:1 which was greater than the lifeof mine mine strip ratio. This resulted in costs of approximately $0.4 millionbeing deferred for the quarter. The ore was comprised of 307,000 tonnes ofsulphide ore and 1,039,000 tonnes of oxide ore. Mining has been concentrated in the Main pit as this is the principal source ofthe sulphide ores. The phased start up at Kansanshi has meant that the focushas been on providing sulphide ores as the sulphide circuit was commissionedfirst. As expected with any commissioning, the mining program at Solwezi hasfaced a number of challenges including rain delays of up to 4 hours per daywhich have restricted access to the pit, and reduced truck availabilityresulting from problems associated with the supply of tyres, and spare parts, aswell as fuel system faults. Notwithstanding these challenges the company as atDecember 31, 2004 has still managed to stockpile 157,000 tonnes of sulphide oreand 1,039,000 tonnes of oxide ore for future processing. In the fourth quarter, Kansanshi crushed 94,270 dry tonnes of ore and milled59,316 dry tonnes of ore. This in combination with the commissioning at thesulphide circuit has meant that as at the end of December 2004, Kansanshi hadproduced 441 tonnes of copper concentrate. Frontier (formerly Lufua) Copper Deposit, Democratic Republic of Congo (100%) In May, First Quantum announced the results of an independent copper-cobaltresource estimate completed at its wholly owned Frontier Project located in HautKatanga Province, Democratic Republic of Congo. The 43-101 compliant resource,at a 0.5% cutoff, is 87.6 million tonnes grading 1.17% copper or one milliontonnes of contained copper. In addition, drilling has outlined a discrete, highgrade cobalt resource of 5.6 million tonnes grading 0.169% cobalt that occurswithin the larger copper resource. Frontier is located near the town of Sakania in the DRC, within 2 km of theZambian border, and the paved highway that parallels it, roughly equidistantbetween the city of Ndola (35 kilometres) to the southeast and the Mopani CopperMines smelter at Mufulira (30 kilometres) to the northwest. It is alsoapproximately 45 kilometres from First Quantum's Bwana Mkubwa SX/EW facility.The main railway from the Copperbelt in Zambia to Lubumbashi in the DRC passeswithin 5 kilometres of the property. Mineralization at Frontier is hosted predominantly within altered and veinedKatangan metapelites, interpreted to be contained within a shallow northwestplunging, north eastward dipping syncline, with the thickest mineralizationdeveloped on the west limb of this fold. Oxidation extends to variable depthsacross the deposit, and is strongly influenced by post mineral faulting. Thedeposit is open along strike to the northwest, and is open down dip to thenortheast. In-fill drilling to move the resource into the reserve category was completed.Metallurgical testing and preliminary feasibility work contuniue. Updatedresource/reserve statements, as well as a Project Engineering Report, areexpected to be published in the first half of 2005. Guelb Moghrein Copper-Gold Deposit, Mauritania (80%) During the second quarter of 2004, First Quantum announced the purchase an 80%interest in the Guelb Moghrein copper - gold project in Mauritania. As atNovember 1, 2004, all agreements applying to the acquisition had been finalized. The Guelb Moghrein copper-gold deposit is located 250 kilometres northeast ofthe nation's capital, Nouakchott, near the town of Akjoujt, and is accessible bypaved highway. It consists of an open pit mineable, copper/gold depositcontaining a measured and indicated resource of 23.7 million tonnes grading1.88% total copper and 1.41 gram per tonne gold, as estimated by Kilborn-SNCLavalin Europe Limited, for a previous owner. This resource was estimated in accordance with the Australasian Code forReporting of Identified Mineral Resources and Ore Reserves, July 1998, and henceis believed to have been done to the industry standards then pertaining. Theresource, which First Quantum considers relevant, has not been verified by aQualified Person for First Quantum as required by National Instrument 43-101.First Quantum is not treating the resource as a National Instrument 43-101defined resource and therefore it should not be relied upon. First Quantumintends to establish a new resource under National Instrument 43-101 guidelinesin due course. First Quantum intends to develop Guelb Moghrein with production expected by thefourth quarter of 2005. Production will be initially targeted at approximately30,000 tonnes of copper and 50,000 ounces of gold per year in the form of acopper-gold concentrate which will be trucked to the port of Nouakchott andexported to International smelters. Kashime Copper Prospect, Zambia (100%) In December, First Quantum announced the results of a reverse circulation drillprogram completed at the Kashime prospect (Kashime). Kashime is locatedapproximately 40 kilometres north of the town of Mkushi, which has paved highwayaccess to the Copperbelt, as well as limited services. Kashime is approximately140 kilometres by paved and dirt road from First Quantum's Bwana Mkubwa SX/EWfacility, near Ndola. Mineralization at Kashime occurs as disseminated to semi massive bornite andchalcopyrite, oxidized in part, and is hosted by an altered, schistose,carbonaceous sandstone unit overlain by a barren hanging wall dolomitic marble.The mineralized unit dips southwards at 10 - 20 degrees, and depth of oxidationis controlled by proximity to faulting. The drill program tested the mostanomalous 1000 metre long section of a 2000 metre long, +300 parts per millioncopper soil anomaly. Highlights from the 13 hole drill program included 56metres grading 2.08% copper; 55 metres grading 1.20% copper and 101 metresgrading 0.92% copper. Follow up drilling to further test the prospect isunderway. 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). Mopani is aprivately held company registered in Zambia. The carrying value of thisinvestment as at September 30, 2004 is $9.5 million (Dec 2003: $9.5m; Dec 2002:$9.5m). There were no movements in this investment during the first nine monthsof 2004. As the majority owner of Mopani is a private company, only limited publicinformation is available for dissemination. Notwithstanding, in a recentarticle, Mopani Chief Executive Officer Tim Henderson told Reuters copperproduction for 2004 was expected to increase 23 percent to 165,000 tonnes, 5,000tonnes higher than the initial budget, from 134,000 tonnes last year. Inaddition Mr. Henderson said an expansion program at Mopani will boost finishedcopper output to 190,000 tonnes in 2005. Henderson said the Mufulira smelter,which currently has a handling capacity of 420,000 tonnes of copper concentrateper year, would eventually be expanded to handle 850,000 tonnes of copperconcentrate. Outlook The Bwana Mkubwa SX/EW processing facility is expected to produce between 40,000to 45,000 tonnes of copper cathode in 2005. C1 (cash) costs are expected torange between $0.50 and $0.55 per pound of finished copper as high gangue acidconsuming ores are treated in 2005. During the first two months of 2005(February being a short month), Bwana Mkubwa produced approximately 7,712 tonnesof copper cathode. All production from Bwana Mkubwa is unhedged. At Kansanshi in Zambia, commissioning of the new mine is well underway. Thesulphide circuit is operating at design throughputs with average copperrecoveries of approximately 88%. The first concentrate shipment left the mine onFebruary 8, 2005. Commissioning of the oxide circuit is underway with build-upof in circuit inventory. First copper cathode is expected to be produced inMarch 2005. Commercial production is expected to begin in April of 2005. The original GRD Minproc Definitive Feasibility Study (DFS) for Kansanshienvisioned the treatment of 4 million tonnes of oxide ore and 2 million tonnesof sulphide ore to produce an average of 100,000 tonnes of finished copperproduction per year. Capital additions carried out to the sulphide millingcircuit during initial construction at Kansanshi will double design capacitythroughput of sulphide ore to 4 million tonnes per year. This will result incopper concentrate production substantially outperforming the DFS forecasts in2005 when an aggregate production of 91,000 tonnes is planned at C1 (cash) costsof $0.45 per pound of copper. In addition, a $29 million capital program committed in 2005 will expand thesulphide circuit again to eight million tonnes of treatment capacity which willresult in an average of 145,000 tonnes of finished copper production per yearduring the period of 2006-2009. Finally, an additional expansion of the sulphide circuit is under considerationto increase the sulphide treatment capacity to 12 million tonnes of sulphide oreto maintain annual finished copper production of 145,000 tonnes as oxide ore isdepleted and sulphide ore grades begin to fall. With the growing concentrate production from the Kansanshi mine and thepotential future concentrate production from the Company's Frontier deposit,there will be a need for additional smelter capacity in the Copperbelt over thenext several years. This additional smelter capacity may result from thefurther expansion of the Mopani Mufulira smelter or from the refurbishment ofthe Vedanta Nkana smelter. In an effort to reduce its reliance upon Copperbeltsmelter capacity, First Quantum has investigated alternative processing routesfor a portion of its future copper concentrates. To this end, the Company haspurchased a complete "second-hand" pressure oxidation facility from PlacerDome's Turquoise Ridge operations in Nevada, USA. The pressure oxidationfacility is currently being dismantled and over the next several months will betransported to the Kansanshi mine site in Zambia. Once on site, the pressureoxidation facility and ancillary equipment will be reconstructed andcommissioned for use. Additional information will be published as the projectprogresses. At the Frontier project in the DRC, in-fill drilling to expand the resource andmove the resource into the reserve category was completed in 2004. Updatedresource/reserve statements, as well as a Project Engineering Report, areexpected to be published in the second quarter of 2005. At Guelb Moghrein, in Mauritania, MDM Processing, an Australian engineeringcompany, has completed a Project Engineering Report (PER). The results of thePER will be published in the second quarter of 2005. The contracts for theplant engineering and construction have been awarded. Construction activitiesare underway. Guelb Moghrein is expected to be financed through a combinationof cash on hand, project debt and end user/supplier finance. An explorationdrill program of approximately 5,000 metres is underway on selected highpriorities targets within the 10,000 square kilometer Guelb Moghrein explorationtenement. At the newly discovered Kashime prospect exploration drilling recommenced inFebruary, 2005. A substantial exploration program continues in the Zambia and the DRC Pedicleregion where First Quantum controls approximately 30,000 square kilometers ofprospective geology. A program of more than 10,000 metres of reversecirculation and diamond core drilling is planned for 2005. The drill programwill focus on a number of attractive targets with similar geochemical andgeophysics signatures to those demonstrated by Lonshi, Frontier and Kashime.Some of these new targets have had limited preliminary drilling in 2004 leadingto the more extensive drill programs in 2005. In February 2005, First Quantum's, wholly owned subsidiary company,International Quantum Resources Limited, sold its equity ownership stake inAnvil Mining Limited ("Anvil") (TSX-AVM and ASX-AVM). The sale consisted of4,029,617 Anvil common shares for net proceeds of US $22 million. First Quantumcontinues to hold 296,631 warrants to purchase 296,631 Anvil common shares at aprice of US $0.92 per share. The warrants, which have an expiry date of January15, 2006, are held for investment purposes and the shares issued on exercise maybe sold in the future. A gain on the sale of approximately US $16 million willbe booked in the first quarter of 2005. In March, the Board of Directors established a dividend policy under which FirstQuantum will pay an inaugural dividend of Canadian six cents per share inrespect of the year ended December 31, 2004. The dividend will be paid on April25, 2005 to shareholders of record on April 11, 2005. The Board of Directors plans to implement a progressive dividend policy withfuture payments established in line with annual results and net cash generation. The Board of Directors expects First Quantum to pay two dividends a year. It isintended that in any year an interim dividend will declared upon announcement ofthe first six month results and a final dividend will be declared uponannouncement of the full year results. It is proposed that the interim dividendwill be set at approximately one-third of the total dividends paid in theprevious financial year. 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 450-800 West Pender Street, Vancouver, British Columbia, Canada V6C 2V6 Tel: (604) 688-6577 Fax: (604) 688-3818 Toll Free: 1 (888) 688-6577 E-Mail: [email protected] OPERATION STATISTICS by QUARTER - 2004 Bwana Mkubwa SX/ EW Facility, ZambiaCopper & Acid Production First Second Third Fourth Full Quarter Quarter Quarter Quarter Year Ore Processed - (tonnes) 208,667 236,887 278,392 256,066 980,012Copper Grade - (acid soluble %) 5.2 4.6 4.6 5.0 4.8Contained Copper - (tonnes) 10,904 10,813 12,908 12,824 47,449Recovery - (%) 89 89 88 85 88 Finished Copper Production (tonnes) 9,689 9,585 11,330 10,942 41,546Total Cost (C3) Copper ($/lb) 0.53 0.67 0.68 0.59 0.62Cash Cost (C1) Copper ($/lb) 0.39 0.48 0.45 0.48 0.46 Sulphuric Acid Produced (tonnes) 34,344 34,265 35,920 35,671 140,200Sulphuric Acid Sold (tonnes) 20,763 19,149 16,884 9,664 66,460 Notes: C1 - costs are cash operating costs, including mining, processing, siteadministration and refining; net of by product credits. C3 - costs are total production costs, including mining, processing, siteadministration and refining; depreciation and amortization charges; royalties,related head office, interest costs and finance charges; net of by productcredits. Consolidated Balance SheetsAs at December 31, 2004 and December 31, 2003(expressed in thousands of US dollars) 2004 2003 $ $ (Restated)Assets Current assetsCash and cash equivalents (note 19) 50,356 25,592Restricted cash (note 9) 1,931 -Accounts receivable and prepaid expenses 21,927 4,441Inventory (note 4) 31,674 17,576 105,888 47,609 Investments (note 5) 15,340 12,632 Exploration properties (note 6) 444 2,242 Property, plant and equipment (note 7) 319,222 96,603 Other assets and deferred charges (note 8) 32,167 3,049 473,061 162,135 Liabilities Current liabilitiesAccounts payable and accrued liabilities 33,884 17,737Current taxes payable (note 12) 3,248 -Current portion of long-term debt (note 9) 22,865 12,993Current portion of other liabilities (note 11) 12,012 3,333 72,009 34,063 Long-term debt (note 9) 191,661 32,374 Asset retirement obligations (note 10) 3,762 4,182 Other liabilities (note 11) 33,286 3,114 Future income tax liability (note 12) 12,313 4,589 313,031 78,322 Minority interests 2,190 2,190 315,221 80,512 Shareholders' Equity Equity accounts (note 13) 161,776 113,102 Deficit (3,936) (31,479) 157,840 81,623 473,061 162,135 (a) Commitments and contingencies (note 21) Subsequent event (note 22) Approved by the Board of Directors R. Stuart. Angus, Director Robert A. Watts, Director The 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 years ended December 31, 2004 and 2003(expressed in thousands of US dollars) 2004 2003 $ $ (Restated)RevenuesCopper 103,352 49,419Acid 10,171 11,035 113,523 60,454 Costs and expensesCost of sales 53,770 41,299Depletion and amortization 10,873 7,761Exploration 3,063 620Foreign exchange loss 260 969General and administrative 6,171 2,852Interest and financing fees on long-term debt 3,040 1,759Other income (985) (419) 76,192 54,841 Earnings before income taxes and equity earnings 37,331 5,613 Income taxes (note 12) 11,006 1,397 Equity earnings (note 5) 1,685 366 Net earnings for the year 28,010 4,582 Deficit - Beginning of year (note 2) (31,479) (36,061) Prior period restatement (stock-based compensation) (note 2) (467) - Deficit - End of year (3,936) (31,479) Earnings per common shareBasic 0.47 0.09Diluted 0.46 0.09 The 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 years ended December 31, 2004 and 2003(expressed in thousands of US dollars) 2004 2003 $ $ (Restated) Cash flows from operating activitiesNet earnings for the year 28,010 4,582Items not affecting cashDepletion and amortization 10,873 7,761Accretion 416 702Provision for deferred stripping - 2,718Equity earnings (1,685) (366)Unrealized foreign exchange (gain) loss (1,180) 1,253Future income tax expense 7,724 1,386Stock-based compensation expense 1,227 -Other 878 16 46,263 18,052Change in non-cash operating working capitalIncrease in accounts receivable and prepaid expenses (9,455) (1,224)Increase in inventory (14,514) (4,457)Increase in accounts payable and accrued liabilities 8,397 4,514 30,691 16,885 Cash flows from financing activitiesMovement in restricted cash (1,931) -Proceeds from long-term debt 179,455 47,283Repayments of principal on long-term debt (17,401) (29,490)Proceeds from issue of common shares and warrants 46,983 24,164Payment for deferred finance fees (7,635) (1,176) 199,471 40,781 Cash flows from investing activitiesNet payments to acquire property, plant and equipment (193,245) (39,158)Payments for investments (1,023) -Prepaid power payments (6,988) -Payments for deferred exploration and stripping costs (4,849) (1,248)Proceeds on disposal of investments - 152 (206,105) (40,254) Effect of exchange rate changes on cash 707 - Increase in cash and cash equivalents 24,764 17,412 Cash and cash equivalents - Beginning of year 25,592 8,180 Cash and cash equivalents - End of year 50,356 25,592 The notes are an integral part of these consolidated financial statements. For a copy of the notes visit our website at www.first-quantum.com Segmented InformationFor the year ended December 31, 2004(expressed in thousands of US dollars) BLO KCP GMP CDA Total $ $ $ $ $ External revenues 113,523 - - - 113,523(b) Costs and expensesCost of sales 53,770 - - - 53,770Depletion and amortization 9,552 - - 1,321 10,873Exploration 1,975 - - 1,088 3,063Foreign exchange (gain) loss (153) - - 413 260General and administrative - - - 6,171 6,171Interest and financing fees 2,803 - - 237 3,040Other income (77) - - (908) (985) Total costs and expenses 67,870 - - 8,322 76,192 Segment profit (loss) before the undernoted 45,653 - - (8,322) 37,331itemsEquity earnings - - - 1,685 1,685Income tax 11,006 - - - 11,006 Segment profit (loss) 34,647 - - (6,637) 28,010 Property, plant and equipment additions 19,041 204,923 10,272 3,689 237,925 Total assets 154,132 304,284 10,475 180,317 649,208Intercompany balances included in total assets (46,393) - - (129,754) (176,147) Total consolidated assets 107,739 304,284 10,475 50,563 473,061 Definitions: BLO - Combined operations of Bwana/LonshiKCP - Kansanshi Copper ProjectGMP - Guelb Moghrein ProjectCDA - Corporate Development and Administration, includes Frontier, Connemara and Carlisa The notes are an integral part of these consolidated financial statements. For a copy of the notes visit our website at www.first-quantum.com Segmented InformationFor the year ended December 31, 2003(expressed in thousands of US dollars) BLO KCP GMP CDA Total $ $ $ $ $ External revenues 60,454 - - - 60,454(c) Costs and expensesCost of sales 41,250 - - 49 41,299Depletion and amortization 7,632 - - 129 7,761Exploration - - - 620 620Foreign exchange loss (gain) 1,591 - - (622) 969Gain on disposal (138) - - - (138)General and administrative - - - 2,852 2,852Interest and financing fees 1,713 - - 46 1,759Other income (52) - - (229) (281) Total costs and expenses 51,996 - - 2,845 54,841 Segment profit (loss) before the undernoted 8,458 - - (2,845) 5,613itemsEquity earnings - - - 366 366Income tax 1,397 - - - 1,397 Segment profit (loss) 7,061 - - (2,479) 4,582 Property, plant and equipment additions 14,659 27,896 - 76 42,631 Total assets 84,545 44,731 - 130,798 260,074Intercompany balances included in total assets (4,220) - - (93,719) (97,939) Total consolidated assets 80,325 44,731 - 37,079 162,135 The notes are an integral part of these consolidated financial statements. For a copy of the notes visit our website at www.first-quantum.com -------------------------- (a) 2004 signing directors: R. Stuart Angus and Robert A. Watts per M. Patterson - ac(b) Remove underline per M. Patterson - March 8/05 - ac(c) Remove underline per M. Patterson - March 8/05 - ac This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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