First Quantum Minerals Reports Operational and Financial Results for Three Months and Nine Months Ended September 30, 2004.VANCOUVER Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography -- First Quantum Minerals First Quantum Minerals Ltd. is a growing mining and metals company whose principle activities include mineral exploration, development and mining. The Company produces LME grade "A" copper cathode, copper in concentrate, gold and sulphuric acid. Ltd. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :FM)(LSE LSE - Language Sensitive Editor :FQM FQM Fédération Québécoise des Municipalités (Canada) FQM Fédération Québécoise des Massothérapeutes FQM Food Quality Management FQM Fundamental Query and Manipulation FQM Field Quality Management ) (All figures expressed in US dollars) First Quantum Minerals Ltd. is pleased to announce results for the three month and nine month periods ended September September: see month. 30, 2004. The complete financial statements are available for review at www.first-quantum.com.
Summary Table
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2004 2003
Third Nine Third Nine
Quarter Months Quarter Months
Financial Data ('000) (Jul-Sep) (Jan-Sep) (Jul-Sep) (Jan-Sep)
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Cash flow, (before
operating working
capital movements) 12,939 36,535 5,830 9,879
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Cash flow, (after
operating working
capital movements) 10,445 27,937 7,979 8,619
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Net earnings (loss) 8,014 18,793 3,348 3,143
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Weighted average shares
outstanding ('000) 60,667 59,861 54,707 48,872
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Per Share Data
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Cash flow, (before
operating working
capital movements) 0.21 0.61 0.11 0.20
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Cash flow, (after
operating working
capital movements) 0.17 0.47 0.15 0.18
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Net earnings (loss) 0.13 0.31 0.06 0.06
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Operating Data
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Finished Copper
Production (tonnes) 11,330 30,604 8,862 19,955
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Sulphuric Acid
Sold (tonnes) 16,884 56,796 20,275 59,539
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Total Cost
(C3) Copper (US$/lb) 0.68 0.64 0.47 0.60
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Cash Cost
(C1) Copper (US$/lb) 0.45 0.45 0.42 0.43
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Notable Events - Record quarterly copper production of 11,330 tonnes from Bwana Mkubwa. - Kansanshi copper-gold project 96% complete at quarter end. In November November: see month. , the ZESCO ZESCO Zambia Electricity Supply Corporation ZESCO Zoll Equipment Supply Company power line was energized and commissioning is underway. - Final agreements executed to acquire the Guelb Moghrein Copper-Gold Deposit in Mauritania Mauritania (môrĭtā`nēə), officially Islamic Republic of Mauritania, republic (2005 est. pop. 3,087,000), 397,953 sq mi (1,030,700 sq km), NW Africa. . Financial Results (see attached financial statements) Third Quarter revenues were $31 million (Q2: $27m; Q1: $26m; Q3'03: $18m) which principally comprised copper revenues of $29 million (Q2: $23m; Q1: $22m; Q3'03: $15m) and acid revenues of $2 million (Q2: $3m; Q1: $4m; Q3'03: $3m). The improved copper revenues in the third quarter can be attributed to an 18% increase in copper sold, due to higher copper production at Bwana, coupled with a 5% increase in the realized copper price. Gross profit for the third quarter of 2004 was $17 million (Q2: $14m; Q1: $13m; Q3'03: $6m) reflecting the increased copper revenues from Bwana and the higher copper prices received. The cash flow from operating activities, after changes in working capital, was $10 million (Q2: $10m; Q1: $5m; Q3'03: $6m) or $0.17 per share (Q2: $0.16; Q1: $0.09; Q3'03: $0.16). Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was adversely impacted by movements in working capital of $2 million for the quarter. The cash flow from operating activities, before changes in non-cash working capital, was $13 million (Q2: $11m; Q1: $12m; Q3'03: $6m) or $0.21 per share (Q2: $0.19; Q1: $0.21; Q3'03: $0.12). Net earnings for the third quarter were $8 million (Q2: $4m; Q1: $7m; Q3'03: $3m) or $0.13 per share (Q2: $0.07; Q1: $0.11; Q3'03: $0.06). The realized copper price rose to $1.16 per pound (Q2: $1.11/lb; Q1: $1.03/lb; Q3'03: $0.77/lb). The average LME See London Metal Exchange. LME See London Metal Exchange (LME). price for the third quarter was $1.27 per pound (Q2: $1.23/lb; Q1: $1.23/lb; Q3'04: $0.80). The difference between the LME price and the realized price was due to realization charges and hedging activities. During the three months ended, September 30, 2004, the company delivered into 3,000 tonnes of copper forward sales forward sales npl → ventas fpl a término contracts at an average realized price of $0.88 per pound. For the first nine months of 2004, revenues increased to $84 million (2003: $41m; 2002: $39m) which comprised copper revenues of $74 million (2003: $32m; 2002: $9m), acid revenues of $9 million (2003: $9m; 2002: $9m) and other revenue of $1 million (2003: $0m; 2002: $22m). Revenues were up 105% on the comparative period due to improved copper prices and a 53% increase in copper production at Bwana. Acid revenues have remained consistent with the comparative periods as slightly higher acid prices and acid production has offset higher internal consumption due to the increase in copper production at Bwana. The increase in other revenue can be attributed to interest income on cash balances. Gross profit for the first nine months of 2004 was $44 million (2003: $12m; 2002: $3m) reflecting the increased copper revenues from the Bwana Mkubwa SX/EW facility and the higher copper prices received. The cash flow from operating activities, after changes in working capital, was $28 million (2003: $8m; 2002: $(5m)) or $0.47 per share (2003: $0.16; 2002: $(0.10)). Cash flow from operating activities was impacted adversely by movements in operating working capital of $9 million for the nine month period. The cash inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. from operating activities, before changes in working capital, was $37 million (2003: $10m; 2002: ($1m)) or $0.61 per share (2003: $0.20; 2002: $(0.02)). Net earnings for the nine months increased to $19 million (2003: $3m; 2002: $(3m)) or $0.31 per share (2003: $0.06; 2002: $(0.06)). The realized copper price rose to $1.10 per pound (2003: $0.71/lb; 2002: $0.65/lb). The LME copper price remained strong for the first nine months of 2004 with LME copper inventories falling and demand remaining strong from China. The average LME price for the first nine months of 2004 was $1.24 per pound (2003: $0.77/lb; 2002: $0.71/lb). The difference between the LME price and the realized price was due to realization charges and hedging activities. During the nine months ended, September 30, 2004, the company delivered into 9,000 tonnes of copper forward sales contracts at an average realized price of $0.87 per pound. Bwana Mkubwa SX/EW Facility, Zambia Zambia (zăm`bēə), officially Republic of Zambia, republic (2005 est. pop. 11,262,000), 290,584 sq mi (752,614 sq km), central Africa. (100%) During the third quarter of 2004, Bwana Mkubwa produced 11,330 tonnes of copper (Q2: 9,585t; Q1: 9,689t; Q3'03: 8,862t) and also produced 35,920 tonnes of sulphuric acid sulphuric acid: see sulfuric acid. (Q2: 34,265t; Q1: 34,344t; Q3'03: 36,245t) of which 16,884 tonnes of sulphuric acid (Q2: 19,149t; Q1: 20,763t; Q3'03: $20,275t) were sold externally. Cost of sales, for the second quarter 2004 was $14 million (Q2: 13m; Q1: 12m; Q3'03: $11m) at the combined Bwana/ Lonshi operation. For the third quarter, cash costs (C1) were $0.45 per pound (Q2: $0.48/lb; Q1: $0.39/lb; Q3'03: $0.42/lb) and total costs (C3) were $0.68 per pound (Q2: $0.67/lb; Q1: $0.53/lb; Q3'03: $0.47/lb) of copper. In comparison to the second quarter, the improvement in cash costs can be explained by an improved acid credit of $0.01 per pound and nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. for site bonuses of $0.02 per pound that related to the second quarter. The increase in costs from the first quarter to the second quarter was due to a lower acid credit $0.03 per pound, the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. accruals of $0.02 per pound, and increased ore costs. The increase in acid production in the third quarter reflects the maintenance shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of Bwana's larger acid plant in the second quarter. For the nine months ended September 30, 2004, copper production increased to 30,604 tonnes (2003: 19,955t; 2002: 6,283t). The 53% increase in production has resulted from a steady state of production being reached as well as Bwana realizing the benefits of the new ore-delivery system and other processing initiatives. In addition, the electrical current flow through the new tankhouse at Bwana has been increased which has enabled more copper to be plated. Cash costs (C1) for the nine months were $0.45 per pound (2003: $0.43/lb; 2002: $0.19/lb) and total costs (C3) were $0.64 per pound (2003: $0.60/lb; 2002: $0.37/lb). Cash costs (C1) have risen from 2003 to 2004 as a result of the increase in copper production, the acid credit per pound of copper produced has fallen to $0.06 per pound from $0.11 per pound in the first nine months of 2003. In addition, the cost of ore processed has increased approximately $0.04 per pound from 2003. The decrease in acid credit and increase in ore costs has been partially offset by improved processing costs at Bwana. Acid production was 104,529 tonnes (2003: 102,835t; 2002: 96,980t), of which 56,796 tonnes (2003: 59,539t; 2002: 60,529t) of surplus acid production was sold to external customers. The increase in acid production for the nine months can be predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. explained by the timing of planned maintenance programs. The increase in acid production has only been partially reflected in the surplus acid sales as more acid has been consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. internally due to higher copper production. Lonshi Copper Mine, Democratic Republic of Congo Congo, river, Africa Congo (kŏng`gō) or Zaïre (zī`ēr, zäēr`), great river of equatorial Africa, c. (100%) During the third quarter, approximately 257,000 tonnes (Q2: 85,000t; Q1: 66,000t; Q3'03: 260,000t) of ore grading 4.7% (Q2: 5.2%; Q1: 4.3%; Q3'03: 4.8%) and approximately 5,147,000 tonnes (Q2: 2,854,000t; Q1: 1,036,000t; Q3'03: 1,833,000) of waste were mined from Lonshi. The strip ratio (ratio of waste to ore) for the quarter was approximately 16:1, which was greater than the revised life to date mine strip ratio of 12:1. As a result of the greater than mine life strip ratio, the company deferred approximately $1.0 million in mining costs for the third quarter. The focus at Lonshi this quarter was on push backs in the south and east of the mine, to effectively provide a greater floor from which ore can be mined in the fourth quarter. The significant increase in the mining operations during the third quarter from the start of the year has come about due to the larger mining fleet that is now operating at Lonshi. For the nine months ended September 30, 2004, approximately 407,000 tonnes (2003: 273,000t; 2002: 633,000t) of ore grading 4.8% (2003: 4.8%; 2002: 5.6%) and approximately 9,036,000 tonnes (2003: 3,603,000t; 2002: 3,183,000t) of waste were mined in total. Due to the increased copper production at Bwana and the need to re-establish re-establish Verb to create or set up (an organization, link, etc.) again re-establishment n a strategic stockpile stock·pile n. A supply stored for future use, usually carefully accrued and maintained. tr.v. stock·piled, stock·pil·ing, stock·piles To accumulate and maintain a supply of for future use. , the size of the mining fleet at Lonshi has increased significantly to cope with this increased demand. The strip ratio for the first nine months was 22.2:1 (2003: 13.2:1; 2002: 5:1). As a result the Company has deferred costs of approximately $2.6 million since December December: see month. 31, 2003 (2003: $2m) associated with its mining program. The on-going Adj. 1. on-going - currently happening; "an ongoing economic crisis" ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" exploration program at Lonshi has increased the mine reserve to 225,000 tons of acid soluble soluble /sol·u·ble/ (sol´u-b'l) susceptible of being dissolved. sol·u·ble adj. Capable of being dissolved, especially easily dissolved. copper as at April 1, 2004. In the light of this reserve increase, and the prevailing improvement in copper price, a new mine plan was generated. The new mine plan has a life-of-mine stripping ratio of 12:1 compared to the previous plan of 8:1. Kansanshi Copper-Gold Deposit, Zambia (80%) Debt facilities totaling $221 million are available for construction of Kansanshi. The Company will draw upon these facilities as required and as at September 30, 2004 approximately $129 million has been drawn. As of September 30, 2004, the project is approximately 96% complete with construction being 92% complete. In addition, in November the ZESCO power line was energized and commissioning commenced. The budgeted capital cost to complete Kansanshi has increased from the revised estimate Revised estimate The third estimate of GDP released about three months after the measurement period. (April, 2004) of $180 million to approximately $200 million. The original GRD GRD Guard GRD Grenada (ISO Country code) GRD Greek Drachma (old currency code; replaced by EUR) GRD Gulf Region Division (US Army Corps of Engineers) Minproc Definitive Feasibility Study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. (DFS (Distributed File System) An enhancement to Windows NT/2000 and 95/98 that allows files scattered across multiple servers to be treated as a single group. With Dfs, a network administrator can build a hierarchical file system that spans the organization's LANs and ) estimate was $163 million. Approved major variations include expansion of the sulphide sulphide: see sulfide. circuit within the mill, funding required under the ZESCO power supply agreement, additional earth moving equipment and capital adjustments to reflect foreign exchange rate changes since December, 2002. The original DFS for Kansanshi envisioned the treatment of 4 million tonnes of oxide oxide, chemical compound containing oxygen and one other chemical element. Oxides are widely and abundantly distributed in nature. Water is the oxide of hydrogen. Silicon dioxide is the major component of sand and quartz. ore and 2 million tonnes of sulphide ore upon commissioning. Improvements carried out to the sulphide milling circuit during construction will double name plate throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. to approximately 4 million tonnes per year of sulphide ore. This will result in copper concentrate production outperforming the DFS forecasts in the early years of operation. A consultant is currently preparing an independent report taking into account the expanded sulphide capacity and the impact upon annual production rates and unit costs. Results of the report will be published upon receipt. In addition, studies continue to consider bringing forward an additional sulphide circuit expansion, originally scheduled in the DFS for years three and five, with the aim of further increasing copper output to approximately 130,000 tonnes finished copper per year. Lufua Copper Deposit, Democratic Republic of Congo (100%) In May, First Quantum announced the results of an independent copper-cobalt resource estimate completed at its wholly owned Lufua Project located in Haut Katanga Province For other uses, see Katanga (disambiguation). Katanga is the southern province of the Democratic Republic of the Congo, due under the new constitution to be replaced by four smaller provinces by February 2009. , 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 million tonnes of contained copper. In addition, drilling has outlined a discrete, high grade cobalt Cobalt, town, Canada Cobalt (kō`bôlt), town (1991 pop. 1,470), E Ont., Canada, NE of Sudbury, near Lake Timiskaming. Once a center for cobalt and silver mining, the area is now economically depressed. resource of 5.6 million tonnes grading 0.169% cobalt that occurs within the larger copper resource. Mineralization Mineralization The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. at Lufua is hosted predominantly within altered and veined Katangan metapelites, interpreted to be contained within a shallow south eastwardly plunging plunge v. plunged, plung·ing, plung·es v.tr. 1. To thrust or throw forcefully into a substance or place: , north eastward dipping, overturned anticline anticline: see fold. , with the thickest mineralization developed in the nose region of this fold. Oxidation oxidation /ox·i·da·tion/ (ok?si-da´shun) the act of oxidizing or state of being oxidized.ox·idative ox·i·da·tion n. 1. The combination of a substance with oxygen. 2. extends to variable depths across the deposit, and is strongly influenced by post mineral faulting. Higher grade cobalt mineralization is preferentially pref·er·en·tial adj. 1. Of, relating to, or giving advantage or preference: preferential treatment. 2. developed on the upper limb In human anatomy, the upper limb (also upper extremity) refers to what in common English is known as the arm, that is, the region of the shoulder to the fingertips. It includes the entire limb, and thus, is not synonymous with the term upper arm. of the anticline. The deposit is open along strike to the northwest, and the upper limb is open down dip to the northeast. Lufua is located near the town of Sakania Sakania is a town in the far south of the Democratic Republic of Congo, near the border with Kenya. Transport It has a station on the Congo Rail system. in the DRC DRC Democratic Republic of Congo DRC Down (Stage) Right Center DRC Director(ate) of Reserve Components DRC Disability Rights Commission (United Kingdom) , within 2 km of the Zambian border, and the paved pave tr.v. paved, pav·ing, paves 1. To cover with a pavement. 2. To cover uniformly, as if with pavement. 3. To be or compose the pavement of. highway that parallels it, roughly equidistant e·qui·dis·tant adj. Equally distant. e  qui·dis tance n. between the city of Ndola Ndola (əndō`lä), city (1990 est. pop. 376,311), N central Zambia, near the Congo. It is a commercial, mining, and manufacturing center, located in the Copperbelt. Copper mining in Ndola long antedates the coming of the Europeans (c.1900). (35 kilometres) to the southeast
and the Mopani Mopani or mopane can be:
Guelb Moghrein Copper-Gold Deposit, Mauritania (80%) During the second quarter, First Quantum announced the purchase an 80% interest in the Guelb Moghrein copper - gold project in Mauritania. As at November 1, 2004, all agreements applying to the acquisition have been finalized See finalization. . The Guelb Moghrein copper-gold deposit is located 250 kilometres northeast of the nation's capital, Nouakchott, near the town of Akjoujt, and is accessible by paved highway. It consists of an open pit mineable, copper/gold deposit containing a measured and indicated resource of 23.7 million tonnes grading 1.88% total copper and 1.41 gram per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. gold, as estimated by Kilborn-SNC Lavalin Europe Limited, for a previous owner. This resource was estimated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the Australasian Code for Reporting of Identified Mineral Resources Noun 1. mineral resources - natural resources in the form of minerals natural resource, natural resources - resources (actual and potential) supplied by nature and Ore Reserves, July 1998, and hence is believed to have been done to the industry standards then pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. . The resource, which First Quantum considers relevant, has not been verified ver·i·fy tr.v. ver·i·fied, ver·i·fy·ing, ver·i·fies 1. To prove the truth of by presentation of evidence or testimony; substantiate. 2. by a Qualified Person for First Quantum as required by National Instrument 43-101. First Quantum is not treating the resource as a National Instrument 43-101 defined resource and therefore it should not be relied upon. First Quantum intends to establish a new resource under National Instrument 43-101 guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. in due course. First Quantum intends to develop Guelb Moghrein with production expected by the fourth quarter of 2005. Production will be initially targeted at approximately 30,000 tonnes of copper and 50,000 ounces of gold per year in the form of a copper-gold concentrate which will be trucked to the port of Nouakchott and exported to International smelters. 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 a privately held company privately held company A firm whose shares are held within a relatively small circle of owners and are not traded publicly. registered in Zambia. The carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of this investment 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 months of 2004. As the majority owner of Mopani is a private company, only limited public information is available for dissemination dissemination Medtalk The spread of a pernicious process–eg, CA, acute infection Oncology Metastasis, see there . Notwithstanding, in a recent article, Mopani Chief Executive Officer Tim Henderson told Reuters Reuters British cooperative news agency. Founded in 1851 by Paul Julius Reuter, it was initially concerned with commercial news but began to serve a growing newspaper clientele after the London Morning Advertiser subscribed in 1858. copper production for 2004 was expected to increase 23 percent to 165,000 tonnes, 5,000 tonnes higher than the initial budget, from 134,000 tonnes last year. In addition Mr. Henderson said an expansion program at Mopani will boost finished copper output to 190,000 tonnes by 2005. Henderson said the Mufulira smelter, which currently has a handling capacity of 420,000 tonnes of copper concentrate per year, would eventually be expanded to handle 850,000 tonnes of copper concentrate. Investments -Anvil The Company holds a 17.1% (2003: 17.0%; 2002: 18.6%) interest in Anvil anvil Iron block on which metal is placed for shaping, originally by hand with a hammer. The blacksmith's anvil is usually of wrought iron (sometimes of cast iron), with a smooth working surface of hardened steel. Mining Limited (Anvil), a public company quoted on the Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. (ASX ASX See: Australian Stock Exchange ), Berlin, and most recently, the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. (TSX). The Company currently holds 36,996,171 shares (2003: 34,029,857; 2002: 31,148,857) listed on the ASX and acquired 330,000 shares listed on the TSX during the second quarter. The carrying value of this investment as at September 30, 2004 was $5 million (2003: $3m; 2002: $3m). The market value of this investment as at September 30, 2004 was approximately $17 million (2003: $11m; 2002: $2m). On June 2, 2004, Anvil completed a Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. initial public offering. The purpose of this offering was to enhance Anvil's ability to access the larger North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. capital markets and enhance opportunities for the development and growth of Anvil. Further information on Anvil can be found at www.anvil.com.au. Outlook Based on copper production of 30,604 tonnes for the first nine months of 2004, the Bwana Mkubwa SX/EW processing facility is now expected to produce approximately 40,000 tonnes of copper cathode in 2004. This represents a 14% increase over the original 2004 forecast of 35,000 tonnes of copper. During October, Bwana Mkubwa produced 3,828 tonnes of copper cathode. During the fourth quarter Bwana will deliver into 3,000 tonnes of copper forward sales contracts at an average realized price of $0.88 per pound thereafter all production is unhedged. At Kansanshi, construction is nearing practical completion. Waste stripping and ore stockpiling stock·pile n. A supply stored for future use, usually carefully accrued and maintained. tr.v. stock·piled, stock·pil·ing, stock·piles To accumulate and maintain a supply of for future use. have commenced. The new 330Kv ZESCO power line has been energized and commissioning is underway. During the remainder of 2004 and the first quarter of 2005, activation activation /ac·ti·va·tion/ (ak?ti-va´shun) 1. the act or process of rendering active. 2. the transformation of a proenzyme into an active enzyme by the action of a kinase or another enzyme. 3. of the mill, flotation flotation or froth flotation Most widely used process for extracting many minerals from their ores. The method separates and concentrates ores by altering their surfaces so that they are either repelled or attracted by water. , leach leach v. leached, leach·ing, leach·es v.tr. 1. To remove soluble or other constituents from by the action of a percolating liquid. 2. , filtration filtration: see sewerage; water supply. Filtration The separation of solid particles from a fluidsolids suspension of which they are a part by passage of most of the fluid through a septum or membrane that retains most of the solids , solvent extraction Solvent extraction A technique, also called liquid extraction, for separating the components of a liquid solution. This technique depends upon the selective dissolving of one or more constituents of the solution into a suitable immiscible liquid solvent. , and electrowinning facilities will take place as well as build-up build·up also build-up n. 1. The act or process of amassing or increasing: a military buildup; a buildup of tension during the strike. 2. of in circuit inventory. Commissioning will be prioritized, with the staged introduction of water and ore through the plant, commencing with the sulphide circuit, and followed by the oxide circuit. Commercial production is expected to begin in March of 2005. At the newly discovered Lufua project in the DRC, in-fill drilling to move the resource into the reserve category is underway. Metallurgical met·al·lur·gy n. 1. The science that deals with procedures used in extracting metals from their ores, purifying and alloying metals, and creating useful objects from metals. 2. testing and preliminary feasibility work are also in progress. Updated resource/reserve statements, as well as a Project Engineering Report, are expected to be published in the first quarter of 2005. At Guelb Moghrein, in Mauritania, MDM (Modular Digital Multitrack) An audio recorder that mixes and records multiple tracks of digital audio. The two major MDM technologies are ADAT and DTRS. See ADAT and DTRS. Processing, an Australian engineering company, is nearing completion of a Project Engineering Report (PER). The results of the PER will be published in the fourth quarter of 2004. The PER will be used to solicit selected engineering groups for design and construction proposals. The contracts for the plant construction are expected to be awarded early in 2005. Guelb Moghrein is expected to be financed through a combination of cash on hand, project debt and end user/supplier finance. An exploration drill program of approximately 5,000 metres will begin in January 2005 on selected high priorities targets within the 8,000 square kilometer kilometer one thousand (103) meters; 3280.83 feet; five-eighths of a mile; abbreviated km. Guelb Moghrein exploration tenement A comprehensive legal term for any type of property of a permanent nature—including land, houses, and other buildings as well as rights attaching thereto, such as the right to collect rent. . A substantial exploration program is underway for the DRC Pedicle pedicle /ped·i·cle/ (ped´i-k'l) a footlike, stemlike, or narrow basal part or structure. ped·i·cle n. 1. A constricted portion or stalk. 2. region where First Quantum controls approximately 11,000 square kilometers of prospective geology geology, science of the earth's history, composition, and structure, and the associated processes. It draws upon chemistry, biology, physics, astronomy, and mathematics (notably statistics) for support of its formulations. . Drilling will test several copper soil anomalies including Lufua East, Ndongo, Ndongo East and Lonshi South. Drilling has commenced in Zambia at the Mkushi prospect and will also take place in Joint Venture with BHP Billiton BHP Billiton is the world's largest mining company.[1] Its origin is in the 2001 merger of Australia's Broken Hill Proprietary Company (BHP) and the UK's Billiton, which has a South African background. The result is a dual-listed company. at Mwinilunga and Luamata. In Chile, a generative gen·er·a·tive adj. 1. Having the ability to originate, produce, or procreate. 2. Of or relating to the production of offspring. generative pertaining to reproduction. exploration program utilizing satellite imagery Satellite imagery consists of photographs of Earth or other planets made from artificial satellites. History The first satellite photographs of Earth were made August 14, 1959 by the US satellite Explorer 6. has yielded several potential targets. Follow up field work on colour alteration Modification; changing a thing without obliterating it. An alteration is a variation made in the language or terms of a legal document that affects the rights and obligations of the parties to it. anomalies is in progress. On Behalf of the Board of Directors of First Quantum Minerals Ltd. G. Clive CLIVE Computer-aided Learning in Veterinary Education. A consortium of six veterinary schools in the United Kingdom providing computer based learning in veterinary undergraduates courses. Newall 12g3-2b-82-4461 Listed in Standard and Poor's Noun 1. Standard and Poor's - a broadly based stock market index Standard and Poor's Index Sedar Profile #00006237 Certain of the information contained in this news release constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements, including but not limited to those with respect to the prices of gold, copper and sulphuric acid, estimated future production, estimated costs of future production, the Company's hedging policy and permitting time lines, involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual prices of copper, gold and sulphuric acid, the factual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company's documents filed from time to time with the British Columbia Securities Commission The British Columbia Securities Commission (BCSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of British Columbia. External links
The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for the period ended December 31, 2002. The following discussion and analysis of the Company's results of operations should also be read in conjunction with the unaudited consolidated financial statements and related notes.
OPERATION STATISTICS by QUARTER - 2004
Bwana Mkubwa SX/ EW Facility, Zambia
Copper & Acid Production
--------------------------------------------------------------------
First Second Third Fourth Year
Quarter Quarter Quarter Quarter To Date
--------------------------------------------------------------------
--------------------------------------------------------------------
Ore Processed
- (tonnes) 208,667 236,887 278,392 - 723,946
--------------------------------------------------------------------
Copper Grade - (acid
soluble %) 5.2 4.6 4.6 - 4. 8
--------------------------------------------------------------------
Contained Copper
- (tonnes) 10,904 10,813 12,908 - 34,625
--------------------------------------------------------------------
Recovery - (%) 89 89 88 -
--------------------------------------------------------------------
--------------------------------------------------------------------
Finished Copper
Production (tonnes) 9,689 9,585 11,330 - 30,604
--------------------------------------------------------------------
Total Cost
(C3) Copper ($/lb) 0.53 0.67 0.68 - 0.64
--------------------------------------------------------------------
Cash Cost
(C1) Copper ($/lb) 0.39 0.48 0.45 - 0.45
--------------------------------------------------------------------
--------------------------------------------------------------------
Sulphuric Acid
Produced (tonnes) 34,344 34,265 35,920 - 104,529
--------------------------------------------------------------------
Sulphuric Acid
Sold (tonnes) 20,763 19,149 16,884 - 56,796
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--------------------------------------------------------------------
Notes: C1 - costs are cash operating costs operating costs npl → gastos mpl operacionales , including mining, processing, site administration and refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar ; net of by product credits. C3 - costs are total production costs, including mining, processing, site administration and refining; depreciation and amortization charges; royalties, related head office, interest costs and finance charges; net of by product credits.
Consolidated Balance Sheets
As at September 30, 2004 and December 31, 2003
(expressed in thousands of US dollars)
(unaudited)
2004 2003
$ $
Assets (restated)
Current assets
Cash and cash equivalents 49,689 25,592
Restricted cash (note 9 and 14) 6,328 -
Accounts receivable and prepaid expenses 25,406 4,441
Inventory (note 5) 17,835 17,576
------- -------
99,258 47,609
Investments (note 6) 14,372 12,632
Exploration properties 3,697 2,242
Property, plant and equipment (note 7) 256,266 96,603
Other assets and deferred charges (note 8) 11,450 3,049
------- -------
385,043 162,135
------- -------
------- -------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 27,594 17,737
Current portion of long-term debt (note 9) 19,830 16,326
------- -------
47,424 34,063
Long-term debt (note 9) 155,407 32,374
Future income tax liability (note 10) 13,546 4,589
Other liabilities (note 11) 21,561 7,296
------- -------
237,938 78,322
Minority interests 2,190 2,190
------- -------
240,128 80,512
Shareholders' Equity
Equity accounts (note 12) 158,209 113,102
Deficit (13,294) (31,479)
------- -------
144,915 81,623
------- -------
385,043 162,135
------- -------
------- -------
Commitments and contingencies (note 15)
Approved by the Board of Directors
Martin R. Rowley, Director
Robert 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 Deficit
For three and nine months ended September 30, 2004 and 2003
(expressed in thousands of US dollars)
(unaudited)
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
2004 2003 2004 2003
$ $ $ $
Revenues (restated) (restated)
Owned Operations
Copper 28,624 14,658 74,104 31,900
Acid 2,576 3,004 8,673 8,640
Other (187) 167 849 217
-------------------------- ---------------------------
31,013 17,829 83,626 40,757
-------------------------- ---------------------------
Costs and expenses
Cost of sales 14,076 11,335 39,245 28,294
Depletion and
amortization 2,639 2,242 8,017 4,817
Exploration 1,116 205 2,082 389
Foreign exchange
(gain) loss (499) (289) 1,033 935
General and
administrative 1,359 609 3,984 1,813
Interest and
financing fees
on long-term debt 846 308 2,359 1,328
Gain on disposal
of investment - (138) - (138)
-------------------------- ---------------------------
19,537 14,272 56,720 37,438
-------------------------- ---------------------------
Earnings before
income taxes,
non-controlling
interest and
equity earnings 11,476 3,557 26,906 3,319
Tax expense
(note 10) 3,718 704 8,973 635
Non-controlling
interest - - - -
Equity earnings 114 495 719 459
-------------------------- ---------------------------
Net earnings
for the
period 7,872 3,348 18,652 3,143
Deficit -
Beginning
of period
(note 3) (21,166) (36,267) (31,479) (36,062)
Prior period
restatement
(stock-based
compensation)
(note 3) - - (467) -
-------------------------- ---------------------------
Deficit - End
of period (13,294) (32,919) (13,294) (32,919)
-------------------------- ---------------------------
Earnings per
common share
Basic $0.13 $0.06 $0.31 $0.06
Diluted $0.13 $0.06 $0.31 $0.06
Weighted average
number of
shares
outstanding 60,667,644 54,706,646 59,860,749 48,872,358
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 Flows
For three and nine months ended September 30, 2004 and 2003
(expressed in thousands of US dollars)
(unaudited)
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
2004 2003 2004 2003
$ $ $ $
Cash flows from
operating activities (restated) (restated)
Net earnings for
the period 7,872 3,348 18,652 3,143
Items not affecting cash
Depletion and
amortization 2,639 2,241 8,017 4,817
Amortization
of financing fees 162 11 248 83
Environmental
and closure
provisions 90 273 607 545
Equity earnings (114) (495) (719) (459)
Unrealized
foreign exchange
(gain) loss (1,631) (114) 90 1,253
Future income
tax expense 3,705 704 8,957 635
Stock-based
compensation
expense 216 - 683 -
Gain on
disposal
of investment - (138) - (138)
-------------------------- ---------------------------
12,939 5,830 36,535 9,879
-------------------------- ---------------------------
-------------------------- ---------------------------
Change in non-cash operating
working capital
(Increase) decrease
in accounts
receivable and
prepaid expenses (3,258) 367 (6,091) (1,173)
(Increase) decrease
in inventory (1,275) 1,191 (438) (280)
Increase (decrease)
in accounts
payable and accrued
liabilities 2,039 611 (2,069) 193
-------------------------- ---------------------------
10,445 7,999 27,937 8,619
-------------------------- ---------------------------
-------------------------- ---------------------------
Cash flows from
financing activities
Movement in
restricted cash (2,379) - (6,246) -
Proceeds from
long-term debt 90,172 1,618 131,544 22,209
Repayments of
principal on
long-term debt (9,067) (4,844) (14,093) (18,962)
Proceeds from
issue of
common shares
and warrants 402 20,912 43,959 21,573
Payments for
deferred
finance fees (2,569) (253) (4,778) (253)
-------------------------- ---------------------------
76,559 17,433 150,386 24,567
-------------------------- ---------------------------
-------------------------- ---------------------------
Cash flows from
investing activities
Net payments
to acquire
capital
assets
and investments (66,484) (11,928) (146,918) (21,655)
Payments for
deferred
exploration
and stripping
costs (3,264) (100) (6,733) (1,163)
Proceeds on
disposal
of investment - 629 - 629
-------------------------- ---------------------------
(69,748) (11,399) (153,651) (22,189)
-------------------------- ---------------------------
-------------------------- ---------------------------
Effect of exchange
rate changes
on cash 999 - (574) -
Increase in
cash and cash
equivalents 17,256 14,033 24,672 10,997
Cash and cash
equivalents
- Beginning
of period 31,434 5,144 25,592 8,180
-------------------------- ---------------------------
Cash and cash
equivalents
- End of
period 49,689 19,177 49,689 19,177
-------------------------- ---------------------------
-------------------------- ---------------------------
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 Information
For three months ended September 30, 2004
(expressed in thousands of US dollars)
(unaudited)
--------------------------------------------------------------------
For the three months ended September 30, 2004, segmented information
is presented as follows:
--------------------------------------------------------------------
BCO KCP CAR CDA Total
$ $ $ $ $
External Revenues 31,198 - - - 31,198
Interest and
other income 161 - - (346) (185)
------- -------- -------- -------- ----------
Total Revenue 31,359 - - (346) 31,013
Cost of Sales 14,076 - - - 14,076
------- -------- -------- -------- ----------
Segment gross
profit 17,283 - - (346) 16,937
Other Expenses
Depletion and
amortization 2,164 - - 475 2,639
Exploration 780 - - 336 1,116
Foreign exchange
loss (gain) 324 - - (823) (499)
General and
administrative - - - 1,359 1,359
Interest and
financing fees 841 - - 5 846
------- -------- -------- -------- ----------
Total Other
Expenses 4,109 - - 1,352 5,461
Segment profit
(loss) before
the under
noted items 13,174 - - (1,698) 11,476
Non-controlling
interest - - - - -
Equity earnings - - - 114 114
Tax Expense 3,718 - - - 3,718
------- -------- -------- -------- ----------
Segment profit
(loss) 9,456 - - (1,584) 7,872
------- -------- -------- -------- ----------
Capital asset
additions 509 77,116 - 166 77,791
------- -------- -------- -------- ----------
Total assets 154,010 214,270 9,522 197,244 575,046
------- -------- -------- -------- ----------
Inter-company
balances included
in total assets (48,807) - - (141,196) (190,003)
------- -------- -------- -------- ----------
Total consolidated
assets 105,203 214,270 9,522 56,048 385,043
------- -------- -------- -------- ----------
--------------------------------------------------------------------
Definitions:
BCO - Combined operations of Bwana and Comisa
CAR - Carlisa holds the interest in Mopani Copper Mines
KCP - Kansanshi Copper Project
CDA - Corporate Development and Administration which includes
Connemara
--------------------------------------------------------------------
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 Information
For nine months ended June 30, 2004
(expressed in thousands of US dollars)
(unaudited)
--------------------------------------------------------------------
For the nine months ended September 30, 2004, segmented information
is presented as follows:
--------------------------------------------------------------------
BCO KCP CAR CDA Total
$ $ $ $ $
External Revenues 82,777 - - - 82,777
Interest and
other income 173 - - 676 849
------- -------- -------- -------- ----------
Total Revenue 82,950 - - 676 83,626
Cost of Sales 39,245 - - - 39,245
Segment gross
profit 43,705 - - 676 44,381
Other Expenses
Depletion and
amortization 7,468 - - 549 8,017
Exploration 1,317 - - 765 2,082
Foreign exchange
loss (gain) (353) - - 1,386 1,033
General and
administrative - - - 3,984 3,984
Interest and
financing fees 2,349 - - 10 2,359
------- -------- -------- -------- ----------
Total Other
Expenses 10,781 - - 6,694 17,475
Segment profit
(loss) before
the under
noted items 32,924 - - (6,018) 26,906
Non-controlling
interest - - - - -
Equity earnings - - - 719 719
Tax Expense 8,973 - - - 8,973
------- -------- -------- -------- ----------
Segment profit
(loss) 23,951 - - (5,300) 18,652
------- -------- -------- -------- ----------
Capital asset
additions 12,455 155,152 - 72 167,679
------- -------- -------- -------- ----------
Total assets 154,010 214,270 9,522 197,244 575,046
------- -------- -------- -------- ----------
Inter-company
balances included
in total assets (48,807) - - (141,196) (190,003)
------- -------- -------- -------- ----------
Total consolidated
assets 105,203 214,270 9,522 56,048 385,043
------- -------- -------- -------- ----------
--------------------------------------------------------------------
Definitions:
BCO - Combined operations of Bwana and Comisa
CAR - Carlisa holds the interest in Mopani Copper Mines
KCP - Kansanshi Copper Project
CDA - Corporate Development and Administration which includes
Connemara
--------------------------------------------------------------------
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
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. |
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