First Quantum Minerals Q2 2026 Earnings Report

First Quantum Minerals EPS Results

• Actual EPS: -C$0.19
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

First Quantum Minerals Revenue Results

• Actual Revenue: $2.16 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

First Quantum Minerals Announcement Details

• Quarter: Q2 2026
• Date: 7/28/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, July 29, 2026
• Conference Call Time: 9:00AM ET

First Quantum is engaged in the production of copper, nickel and gold, and related activities including exploration and development. The Company has operating mines located in Zambia, Türkiye and Mauritania. The Company's Cobre Panamá mine was placed into a phase of Preservation and Safe Management in November 2023. The Company's Ravensthorpe mine was placed into a care and maintenance process in May 2024. The Company is progressing the Taca Taca copper-gold-molybdenum project in Argentina and is exploring La Granja and the Haquira copper deposits in Peru.

First Quantum Minerals Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Cobre Panamá resumed stockpile processing ahead of schedule: Milling train 3 produced first concentrate in June, with 2.1 million tonnes processed and approximately 3,200 tonnes of copper produced in Q2. Train 2 has since taken over, and the company expects its first shipment in August.
• Neutral Sentiment: The future of Cobre Panamá remains dependent on Panama’s ministerial commission, which is reviewing the mine’s audit and has not provided a decision timeline. The audit reported an 87.73% compliance score, while identifying further work needed in areas including reforestation, biodiversity, and restoration.
• Positive Sentiment: Second-quarter copper production rose 4% quarter over quarter to just over 100,000 tonnes, led by higher output at Sentinel and the restart of Cobre Panamá stockpile processing. First Quantum maintained its 2026 copper, gold, and nickel production guidance and expects stronger copper production in the second half.
• Positive Sentiment: Revenue increased 8% to $1.5 billion and EBITDA rose 23% to $400 million, helped by stronger copper prices, higher sales, and $12 million from surplus sulfuric acid sales. The company also ended its copper and gold hedges, giving it full exposure to spot prices and potential upside from current copper strength.
• Negative Sentiment: Fuel inflation remains a material cost risk: diesel averaged $1.59 per litre in Q2 versus $0.91 in Q1, and management estimates roughly $0.25 per pound of potential upside risk to cost guidance if current fuel, currency, and gold-price conditions persist. Net debt increased to $5.4 billion, although liquidity remained approximately $2 billion.

Presentation

[Operator]

Good morning, welcome everyone to the First Quantum Minerals second quarter 2026 results conference call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. At this time, I would like to turn the conference over to Bonita To, Director, Investor Relations and Capital Markets. Please go ahead.

[Bonita To, Director of Investor Relations and Capital Markets at First Quantum Minerals]

Thank you, operator. Thank you everyone for joining us today to discuss our second quarter results. During the call, we will be making forward-looking statements, and as such, I encourage you to read the cautionary notes that accompany this presentation, our MD&A, and the related news release. As a reminder, the presentation is available on our website and that all dollar references are in US dollars unless otherwise noted. On today's call are Tristan Pascall, our Chief Executive Officer, Ryan MacWilliam, our Chief Financial Officer, and Rudi Badenhorst, our Chief Operating Officer. With that, I will turn the call over to Tristan for opening remarks.

[Tristan Pascall, CEO at First Quantum Minerals]

Thank you, Bonita. Thank you everybody for joining us on the call today. It's been a very busy first half of the year for First Quantum and in the broader markets. I'm pleased to have this opportunity to discuss these updates alongside our second quarter results. During the second quarter, we continued to deliver steady operations, and it was pleasing that the S3 circuit at Constancia continued to operate above expectations, which Rudi will discuss later in the call. We remain well-positioned for further production in the second half of the year with continued solid performance from S3, the bottleneck in work at Sentinel, and the processing of stockpile ore at Cobre Panamá. With our hedging program concluded, as Ryan will discuss later, we are once again fully exposed to spot copper prices.

[Tristan Pascall, CEO at First Quantum Minerals]

Alongside stronger production, this will position the company for improved free cash flow generation at current copper prices. We remain well-positioned in terms of our cash flow, liquidity, and balance sheet to cope with ongoing market volatility, even as we continue our focus on cost management across the business. At Cobre Panamá, we continued work on the stockpile processing program during the quarter with an acute focus on safety, equipment integrity, and operational stability. This measured approach allowed for the successful re-commissioning of one of the site's three milling trains, Train 3, in May, and the production of first concentrate in June, which is earlier than our third quarter target. I'm very pleased with this performance, and I would like to thank the team on site, including the approximate 1,000 skilled Panamanians who have rejoined or newly joined Cobre Panamá.

[Tristan Pascall, CEO at First Quantum Minerals]

This achievement reflects their hard work and the effectiveness of the Preservation and Safe Management program maintained over the past several years that enabled a high level of readiness and reliability across the operation. Following the successful re-commissioning, the focus was on operational stabilization. I'm pleased to report that Train 3 achieved stable operations and a total of 2.1 million tons of ore was processed through the second quarter to produce approximately 3,200 tons of copper in concentrate. Stockpile processing through Train 3 has performed well with both mechanical and operational performance tracking within expectations. Cobre Panamá now has approximately 3,000 people on site. We have restarted procurement amongst local Panamanian suppliers. Our activities to date continue to provide confidence in the team and in the asset.

[Tristan Pascall, CEO at First Quantum Minerals]

Environmental stewardship remains a core priority. The stockpile processing will mitigate environmental and operational risks associated with a prolonged on-site storage of mineralized material. During quarter two, the remaining milling trains, Train 1 and Train 2, along with the regrind and column areas, were undergoing inspection, repairs, and preventative maintenance to support the next phase of the stockpile processing program. Indications are that the extent of the repairs are similar to Train 3 and the other concentrate column areas, respectively. Subsequent to the quarter end, processing was successfully swapped over from milling Train 3 to milling Train 2 as part of the maintenance cycling strategy. The power station and port continue to operate well. We expect our first concentrate shipment in August. Concentrate grades will be lower while we continue inspection, repairs, and preventative maintenance of the regrinds and columns area of the Cobre Panamá process plant.

[Tristan Pascall, CEO at First Quantum Minerals]

Due to the global shortage, there is strong demand for the concentrate. At the current processing rates and spot copper prices, we expect free cash flow from Cobre Panamá to be neutral to positive. Moving forward, we will remain focused on maintaining this conservative and measured approach in order to ensure the highest quality operations. With an estimated 38 million tons of mineralized ore containing approximately 70,000 tons of recoverable copper, we anticipate there is sufficient stockpile to support around 12 months of processing at current rates. In quarter, the comprehensive audit of Cobre Panamá was published and is now available to the public on the MiAmbiente website. The audit process spanned approximately eight months and involved the preparation and submission of thousands of Participation in interviews and support from numerous site inspections and field visits.

[Tristan Pascall, CEO at First Quantum Minerals]

This was undoubtedly the most extensive and rigorous independent review ever undertaken at Cobre Panamá. One of the most thorough independent audits of any mine globally. The audit concluded that Cobre Panamá is a professionally managed and technically sound operation with a high degree of regulatory compliance, achieving an overall score of 87.73 out of 100. Importantly, the report found that the project's core systems, infrastructure controls, and management processes are functioning effectively. As with any comprehensive review of this nature, the audit also identified areas where further improvements can be made. 361 out of 370 commitments were fulfilled, with seven areas being in partial compliance, but with no areas fundamentally absent. Improvements required in these areas are related primarily to long-term reforestation, biodiversity, and restoration programs that are correctable and not considered acute environmental incidents.

[Tristan Pascall, CEO at First Quantum Minerals]

We welcome these findings, as continuous improvement has always been a fundamental part of how we operate, and we view the recommendations as a valuable opportunity to further strengthen an already robust operation. The audit is now being reviewed by a high-level ministerial commission led by the Ministers of Commerce and Industry, Economy and Finance, and the Environment. As communicated publicly by government, the ministerial commission is undertaking a comprehensive technical evaluation of the audit findings and will provide an informed recommendation on the future of the mine to the president in due course. In the meantime, we remain focused on the safe execution of the stockpile processing program, and we remain ready to engage constructively with the government of Panama to achieve a fair and durable resolution for the mine. Additionally, we continue outreach efforts through workforce and community initiatives in Panama.

[Tristan Pascall, CEO at First Quantum Minerals]

It is pleasing to share that our recruitment initiatives to support the hiring of staff for preservation activities achieved over 50% participation from communities in the mine's local area of influence, and the participation rate from women was approximately 17%. Our educational program added over 500 students during the quarter and now supports over 4,000 students in Panama. While our entrepreneurial program graduated over 700 individuals during the same period, taking the total to over 1,000 graduates to date. We have also launched a new environmental education initiative, which is expected to reach more than 50,000 students in school across Panama. Moving over to Zambia, I want to thank the team at Kansanshi for co-hosting the 2026 International Mine Rescue Competition. This was a significant achievement, not only for Kansanshi and First Quantum, but also for Zambia, as it marked the first time an African nation has hosted this event.

[Tristan Pascall, CEO at First Quantum Minerals]

The competition brought together 22 teams from 10 countries across four continents and tested participants under real-world emergency response scenarios. We are proud to have played a role in bringing the global mining community together in Zambia towards improving safety performance across our industry. Continuing in Zambia, I am proud to share that 2026 marks a significant milestone year for First Quantum as we celebrate 30 years of partnership, investment, and shared growth with the people of Zambia. Over the past three decades, we have invested not only in world-class mining operations, but also in the people, communities, local suppliers, and local businesses, helping to create lasting value and opportunities across the country. Our success is closely linked to the success of the communities in which we operate, and that belief continues to guide our approach today.

[Tristan Pascall, CEO at First Quantum Minerals]

A recent example is the handover of infrastructure and learning materials valued at more than ZMW 12.9 million to several schools in Solwezi, helping create better learning environments and opportunities for young people. Ultimately, it is the talent, dedication, and ambition of Zambians that power our operations and position us for the future. As we celebrate our 30-year milestone, we remain committed to operating safely, responsibly, and transparently and continuing to be a long-term partner in Zambia's development. Thank you, and I will now pass the call to Rudi to discuss our operational results.

[Rudi Badenhorst, COO at First Quantum Minerals]

Thank you, Tristan. Higher production at Sentinel and the commencement of stockpile ore processing at Cobre Panamá led to a 4% quarter-over-quarter increase for total copper production of just over 100,000 tons in the second quarter. Copper sales totaled 93,300 tons, approximately 7,000 tons below production due to timing differences between sales and production. At Kansanshi, copper production in the quarter was 44,000 tons, down approximately 1,000 tons from the previous quarter due to lower throughput as the S3 and mixed circuits underwent plant maintenance during the period. The S3 concentrator, however, delivered the highest monthly throughput in May since commissioning and operated above design capacity throughout the second quarter. This performance was driven by increased operating time, strong utilization, and milling rates, which supported the processing of long-term, lower-grade stockpiles.

[Rudi Badenhorst, COO at First Quantum Minerals]

S3 continues to take a high proportion of feed from surface stockpiles, which are tarnished and lower-grade than freshly mined ore. Copper production guidance for 2026 remains unchanged at 175,000 tons-205,000 tons, whilst gold production guidance is 110,000 ounces-120,000 ounces. This will be supported by continued strong performance at S3. Additionally, while ore will continue to be predominantly sourced from low-grade stockpiles, fresh ore from the southeast dome that is harder and higher in grade will be gradually introduced in the S3 circuit during the second half of this year. Also at Kansanshi, we opportunistically sold surplus sulfuric acid during the quarter. Through proactive management of higher acid-consuming oxide ore and acid inventories, we generated surplus acid available for third-party sales totaling approximately 36,000 tons and expect sales to continue into the third quarter.

[Rudi Badenhorst, COO at First Quantum Minerals]

At Sentinel, copper production was 50,000 tons, an increase of 5,000 tons from the previous quarter. This increase was attributed to higher grades and recoveries offset by lower throughput, a result of the planned five-day total plant shutdown at Trident that was completed in June. We continue to effectively manage through bolt fatigue with Ball Mill 2 and expect to resolve the issue permanently during the annual plant maintenance downtime in 2027 with the replacement of a section of the third can and discharge end. Production guidance for 2026 remains unchanged at 190,000 tons-220,000 tons of copper. Production is weighted towards the second half of the year, with improving mill throughput and an improvement in grades as mining progresses within Stage 2 of the pit. Enterprise produced just over 11,000 tons of nickel, a 9% decrease from the previous quarter, mainly due to the aforementioned total plant shutdown.

[Rudi Badenhorst, COO at First Quantum Minerals]

Production guidance for 2026 is maintained at 30,000 tons-40,000 tons of contained nickel. We are continuing to focus on improving ore quality and grade control through ongoing RC drilling, while also refining mining practices, including reducing the ore bench heights to minimize dilution and enhance recovery. Ore grades at Enterprise are expected to be lower in the third quarter, but in line with the mine plan. The development of permanent ramps is underway to improve mining productivity, and the pit dewatering stage tank pad is scheduled to be handed over to our projects team in early July, after which mining activities will focus on increasing the ore footprint through lowering current cutbacks, sump development, and south wall mining in preparation for the oncoming rainy season.

[Rudi Badenhorst, COO at First Quantum Minerals]

Lastly, looking at Guelb, copper production was 2,000 tons and gold production was 6,300 ounces, which includes output from reprocessed tailings through the CIL plant. Production guidance for 2026 remains approximately 7,000 tons of copper and 30,000-40,000 ounces of gold. The operation will continue processing sulfide copper ore plus gold-containing tailings through the CIL plant, with intermittent stockpiled oxide gold ore treatment to support the most favorable transition to full oxide ore gold production. In summary, as Tristan noted, we delivered consistent operations in the second quarter and we are set up well to deliver stronger copper production in the second half of the year. Thank you. With that, I will turn the call over to Ryan for the financial review.

[Ryan MacWilliam, CFO at First Quantum Minerals]

Thank you, Rudi. The copper price remained strong in the second quarter, trading between $5.50-$6.40 per pound. This was due to tariff-related stockpiling in the U.S., a tight copper concentrate market, and sulfuric acid supply concerns. Continued strong demand meant global warehouse inventories declined significantly towards the end of the quarter, with a 62% drop in SHFE deliverable inventories quarter-over-quarter. Turning to our financial performance. Revenue increased by 8% to $1.5 billion, driven by higher copper prices and increased sales. As Rudi noted, we opportunistically sold our surplus sulfuric acid, contributing around $12 million in revenue. EBITDA increased by 23% to $400 million. A stronger revenue more than offset the impact of higher fuel and contracted costs. It is also worth noting that EBITDA was impacted by hedge losses and P&SM costs at Cobre Panamá.

[Ryan MacWilliam, CFO at First Quantum Minerals]

Both headwinds fall away for the second half of the year, with the hedge program now complete and Cobre Panamá stockpile processing underway, with first shipments expected in August. Excluding Cobre Panamá, our copper C1 costs were $0.03 lower quarter-over-quarter, benefiting from improved Zambian production, which was partially offset by higher fuel costs and reduced gold by-product credits. Including Cobre Panamá, C1 cash costs were $0.03 higher, with a $0.06 impact relating to elevated production costs from stockpile processing. As expected, the increase in fuel prices was a headwind on costs, along with the weakening gold price. Diesel prices through the quarter averaged $1.59 per liter, in contrast to the $0.91 per liter paid in Q1. With the two to three month lag in fuel deliveries, elevated fuel prices are expected to continue flowing through our cost base in the third quarter.

[Ryan MacWilliam, CFO at First Quantum Minerals]

While Q2 saw pockets of improved diesel availability and some easing from peak prices, recent developments in Russia and the Middle East have reintroduced volatility in global fuel markets. As a result of this unpredictability, we have left our C1 cash cost guidance unchanged. As disclosed last quarter, should current fuel, kwacha, and gold prices persist, there is a roughly $0.25 upside risk to our cost guidance. Our capital guidance, which already includes Cobre Panamá's stockpile processing, also remains unchanged. We've incurred around $60 million for the Cobre Panamá processing program to date. This is within the $250 million of required spend previously guided to. In the rest of the business, capital spending broadly aligns with expectations at the start of the year. Our hedge program for both copper and gold is now complete.

[Ryan MacWilliam, CFO at First Quantum Minerals]

We incurred hedge losses of $159 million for copper and $5 million for gold during the quarter. This program was put in place to provide greater cash flow certainty through the S3 project delivery period. With strategic hedge book now fully settled, we have no further hedges in place, giving us full exposure to spot copper and gold prices going forward. As Tristan noted, our stronger production expected in the second half of the year. With that stronger production, we are well set up for free cash flow generation at current copper prices. On the balance sheet, we were pleased to close out the Cobre Las Cruces and Çayeli transactions during the quarter. These sales reflect our disciplined approach to portfolio management and focus on our core strategic priorities. They delivered a gain on disposal of $271 million, with the net proceeds deployed towards short-term debt.

[Ryan MacWilliam, CFO at First Quantum Minerals]

Net debt increased by $123 million-$5.4 billion. This reflected planned CapEx, tax, and interest outflows, partly offset by EBITDA generation and favorable working capital movements. We closed the quarter with a strong liquidity of about $2 billion, including $771 million in cash and $1.25 billion of undrawn revolver capacity. Overall, it was a solid financial quarter, with strong execution driving resilient margins. We're maintaining a disciplined approach to capital management, keeping balance sheet strength, liquidity, and a continued focus on deleveraging at the center of how we make decisions. Combined with our full spot copper price exposure, this positions us well to navigate market volatility while continuing to advance our strategic priorities. With that, I'll hand the call back to Tristan.

[Tristan Pascall, CEO at First Quantum Minerals]

Thank you, Ryan. On to our development projects. During the quarter, we were very pleased to publish a technical report for our La Granja project in Peru. The report provided an updated mineral resource containing an estimated 23 million tons of copper, 600 million ounces of silver, and 6.7 million ounces of gold, which positions the project as the second-largest greenfield copper resource globally.

[Tristan Pascall, CEO at First Quantum Minerals]

The report also included geological and metallurgical work that indicates that a significant portion of the arsenic mineralization is structurally controlled and associated with high-grade copper zones. Based on work completed to date, we believe arsenic can be effectively managed by segregation, blending, and through commercial offtake arrangements. That, as a result, the mine can be developed as a large-scale open-pit operation with a conventional flotation flow sheet. It is still early days for La Granja. However, the technical report underscores the project's potential to become a Tier 1 multi-generational mining operation.

[Tristan Pascall, CEO at First Quantum Minerals]

Our focus is now on advancing the permitting process, and our key priorities include the progression of baseline environmental and social studies, continued stakeholder engagement, and preparation for the detailed environmental impact assessments. At Taca Taca, we continue to progress work to de-risk the project. This includes the mining ESIA, which is expected later this year following completion of the public consultation process. In parallel, ongoing water supply assessments are evaluating incremental supply opportunities that could provide greater flexibility. We are also finalizing our application under Argentina's RIGI investment incentive regime and intend to submit it once the ESIA approval and required water use concessions have been secured. As I noted earlier, it has been a busy first half of the year with our operations and development projects. However, our priorities remain very clear.

[Tristan Pascall, CEO at First Quantum Minerals]

First and foremost, the priority is to progress towards a durable resolution at Cobre Panamá. Secondly, maintain safe, lean, and productive performance across our operations. Thirdly, strengthening the balance sheet to ensure the company is well-positioned to support future growth in a disciplined manner. With that, operator, I am happy to open the line for questions, please.

[Operator]

Thank you. We will now begin the question-and-answer session. If you have dialed in or would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. We ask that you please limit yourself to one question and one follow-up to allow everyone an opportunity to ask a question. We will take our first question from Orest Wowkodaw at Scotiabank.

[Orest Wowkodaw, Analyst at Scotiabank]

Hi, good morning. Hoping you could provide us an update on Cobre Panamá, and I am wondering specifically if there is any expectation on when you would expect the government to move in terms of the next steps of their audit review, in terms of conclusion moving forward. Secondly, I am also curious if you can comment on the media report recently that spoke about Panama setting up a state mining company that was looking for interest in the mine. Thank you.

[Tristan Pascall, CEO at First Quantum Minerals]

Hi, Orest. Thanks for the question. Sure. In terms of timing of the audits process and the recommendations coming out of the ministerial commission, our engagement with the government of Panamá has been focused on the Preservation and Safe Management plans, and more recently on the stockpile processing programs. The ministerial commission that was announced on the fourteenth of July, has established a regular schedule of meetings.

[Tristan Pascall, CEO at First Quantum Minerals]

They've made public statements on their goal to produce results as soon as possible, and that the recommendations around that need to be holistic, need to look through the technical reports and the substantial amount of effort involved in the thousands of pages there, also associated economic, environmental, and legal implications of the audit reports and around the mine. Orest, we remain ready to engage as the process advances, it will be the government that determines the next steps and timeline. We don't have a clear timeline as yet regarding the decision-making process, we know that they're very focused on this topic. Now with all the facts in hand from the audit, we think they are moving into a decision-making phase. For us, and while we await next steps from government, our focus is on executing the stockpile processing program safely and responsibly, preserving the environments at the site, working with the communities around, and ensuring the integrity of the assets at Cobre Panamá.

[Tristan Pascall, CEO at First Quantum Minerals]

In terms of your second question, we saw the article from Reuters. As you know, Orest, we don't comment on media speculation. As I said, the government of Panama have completed that audit, and they've formed the ministerial commission to review those results and make recommendations on the future of the mine. President Mulino has been clear that decisions regarding the mine will be communicated by the government once that review is complete and not before. Until then, I would suggest any updates from unconfirmed sources are just speculation and should be treated as such.

[Operator]

We'll take our next question from Richard Garchitorena at Barclays.

[Richard Garchitorena, Analyst at Barclays]

Great. Thanks for taking my question. Just to follow up on Cobre Panamá, I guess, in terms of the final audit, was there anything specific that surprised you? Anything that you weren't expecting that may cause you to sort of change the plan going forward in terms of the prep work that you're doing ahead of a decision from the government?

[Tristan Pascall, CEO at First Quantum Minerals]

Hi, Richard. Thanks. Look, the audit overall was a very thorough process. We were very satisfied with the level of engagement from SCS, the independent auditor, but also with government as we went through. A lot of interviews, a lot of site visits. It was extremely comprehensive. I think overall, the mark, the 87.7 out of 100 score, I think reflects a high level of compliance. There was 361 areas of full compliance and then seven areas of partial compliance. I think there are two areas of misallocation, but there's seven areas of partial compliance. But the areas that were drawn out, in particular, rehabilitation, biodiversity, look, we were aware of. For example, on rehabilitation, reforestation, I'm sorry, we were aware that during the period of closure, of suspension of the mine, that we hadn't been able to do that work.

[Tristan Pascall, CEO at First Quantum Minerals]

It's no surprise that some of those reforestation areas had slid backwards. We were at some 54.7% completion of the target, which was over the life of the mine, but we had lost ground because during this closure, we hadn't been spending money on those areas without the lack of clarity. Similarly, on biodiversity, ecosystem conservation, species protection, we're very aware, and we think this provides the opportunity to strengthen what is a very high level of compliance already. But what we did see in those non-compliances, there wasn't any broader breakdown in environmental management. There were no acute environmental issues that were of major concern. Instead, really, they identify areas of further work where we need to document further. And we're reviewing and identifying those areas and certainly we're keen to address those, and ensure that we continue to improve the standards of Cobre Panamá.

[Richard Garchitorena, Analyst at Barclays]

Great. Thanks. And on the costs, $60 million incurred in the second quarter, intact for the full year guidance. The cash cost expectation of $450, that's still on track, or is there anything that you've seen, maybe scope that you could do better than that?

[Tristan Pascall, CEO at First Quantum Minerals]

Thanks, Richard. Ryan, do you want to take that question on costs so far at Panama?

[Ryan MacWilliam, CFO at First Quantum Minerals]

Yeah, sure. Richard, in short, the circa $4.40 C1 costs we have expected at Cobre Panamá, we still expect to be in line with that through the balance of the year. I'd say we're on track for guidance, we're on track for costs in Panamá following the successful ramp-up of the stockpile processing in Q2.

[Operator]

We'll move to our next question from Lawson Winder at Bank of America.

[Lawson Winder, Analyst at Bank of America]

Sure. Thank you very much, operator. Hello, Tristan, Rudi, and Ryan. Thank you for today's update. Just on Cobre Panamá, again, just thinking around timing, what is your latest thinking on how long it would require to ramp up Cobre Panamá to run rate once the fiscal framework is in place and all approvals secured? You noted the workforce at 3,000 people. That's really impressive. How do you expect that ramp-up to trend for the balance of the year? I'm just trying to think of what place you might be in at year-end in terms of total employment and that ability to ramp up the mine. Thank you.

[Tristan Pascall, CEO at First Quantum Minerals]

Thanks, Lawson. Thanks for the question. First thing to note is, we're not in that mode yet of a full staff, we're working through the government process. As I said, we'll wait for government around that timetable. If and when that comes through, in terms of our timeline to full production, the stockpile processing activity now covers most of the areas. Really, it's the mining activity, in particular, drill and blast or waste stripping or full fleet mobilization that we're not involved in at this stage. The fleets have been well-maintained during this period of closure. Ultimately, the full restart will depend on our ability to restart mining, both in Botija and in the Colina areas, to catch up with those processing rates. That's really the challenge.

[Tristan Pascall, CEO at First Quantum Minerals]

That will come back to people, which you point out there, onboarding and training the workforce, getting operators and maintenance personnel back. We've been very pleased with how the Panamanians have responded and come back into the workforce. Some 1,000 people already. Everybody on a truck right now that's involved in the stockpile processing, as a truck operator, was previously hired at Cobre Panamá, and we're very excited to have those people back and give them, again, meaningful employment in the context of a large unemployment number in Panama. Some 10% of the country is searching for employment. If the working-age population of Panama is two million, that's 200,000 people that are out there looking for work. I think that gives us opportunities to bring people back.

[Tristan Pascall, CEO at First Quantum Minerals]

We will need to get up to some 6,000 people in the event we do move to a full production ramp-up. The constraint will be how quickly we can bring people on board and train them. I think it will be the highest level skills that will be the hardest. We'll certainly be able to get to 80% or 90% of our throughput within the six to nine months that we've spoken about, and we think that guidance remains relevant, as good as we have for the time being. The last 10%-20% of optimization will take time and rely on really those high level of skills. Lawson, that's how we see it. It will still take six to nine months, we think.

[Operator]

We'll move to our next question from Matthew Murphy at BMO Capital Markets.

[Matthew Murphy, Analyst at BMO Capital Markets]

Hi. More questions on Cobre Panamá. Congratulations on the restart. This ministerial commission, it's a regular schedule meeting that's happening between the ministers. Do you have any insight into when those meetings happen, how frequently? Is it your understanding you could be engaged at any time? Presumably, regardless of what they say, they'll have to engage with you. Do you know, is your expectation that process has to finish, there has to be some recommendations made to the president, and then you'd be consulted? If you have any insight into what's on the government's agenda right now, do you think the mine is first and foremost, or are there other events going on in Panama?

[Tristan Pascall, CEO at First Quantum Minerals]

Yeah. Thanks, Matthew. Look, in regards to the ministerial commission, certainly the commission has established a schedule of regular meetings, and I don't think not all of those are published, but the indication when they first announced around the July 14th was sort of 2x-3x a week. There's a lot to go through. I think at that time when Minister Molto, the Minister of Commerce, spoke around what was involved, he made it very clear how much effort would be involved, going through in a diligent way through the entire comprehensive orders. We respect that process. We don't necessarily think that there can't be engagement in parallel, that would be an opportunity. However, we will take our guidance from government around this timetable.

[Tristan Pascall, CEO at First Quantum Minerals]

Certainly, there's an indication from the Minister of Commerce around their commitments to go through this in a serious manner and report back to the president their recommendations for what the future of the mine will be.

[Operator]

We'll take our next question from Anita Soni at CIBC World Markets.

[Anita Soni, Analyst at CIBC World Markets]

Thank you. Good morning, and thanks for taking my question, Tristan. My question was just around restart costs. I think we established, or you guys have indicated it was around $250 million, including working capital, to get the processing plant restarted. The second leg, as you restart the mining operations, could you give us an idea of what the capital would look like for that portion of it?

[Tristan Pascall, CEO at First Quantum Minerals]

Sure. Anita, thanks for the question. Again, we're not at that phase yet, we will follow government process around engagement, and the steps forward from here. If and when that happens, we said previously before that we think the total involved would be some $350 million-$500 million, of which this $250 million for the initial stockpile processing would be included. We have no reason to change those numbers at the moment. We think that's reasonable. Ryan, we gave some guidance around the cost of those operations. Maybe you could just fill in on the cost side of things, the operating cost side.

[Ryan MacWilliam, CFO at First Quantum Minerals]

Yeah, sure. As you said, Tristan, $250 million in terms of that ramp-up is appropriate. We've spent around $60 million of that as of June 30th. The rest of that will come through in the balance of the year. Then to go from there, if we get to the point that, as Tristan said, we're moving to full operations, that's an incremental $200 million split across additional operating costs, working capital, and CapEx. In that respect, we're obviously waiting for the government's guidance on next steps before we get into that. Broadly, in line with expectations in terms of Cobre Panamá stockpile processing across both the ramp-up and start-up costs and the operating costs we're seeing coming out of that.

[Anita Soni, Analyst at CIBC World Markets]

Okay. Thank you. I think that's it for my questions. Most of the other ones have been asked.

[Operator]

We'll go next to Ian Rossouw at Barclays.

[Ian Rossouw, Analyst at Barclays]

Thank you. Just coming back to Cobre Panamá and the stockpile processing. Just sort of curious, what determines the decision in terms of the throughput rate? Obviously, you say it's 38 million tons. I guess, that's basically the one line for a year. If you wanted to increase the throughput rates, would you be able to do that and perhaps treat two lines? Just wanted to get your sort of thoughts around that. Ryan, just on that sort of spending within, you mentioned in Q2, the $60 million. I see you stripped out some of that, about $40 million out of EBITDA. Will you do that again in Q3, or was that just a one-off?

[Tristan Pascall, CEO at First Quantum Minerals]

Thanks, Ian. Yeah, in terms of what could be done with the stockpile ramp-up, we were pleased to have the first production ear come through from Train 3, and I guess it's testament to the amount of effort by the team there on the preservation activities over the last 2.5 Years and the investment made by the company to ensure asset integrity, that we've been able to see those start up well. There's been a lot of acute focus on safety. Really a focus on making sure we do things reliably rather than with velocity or with excess speed, really that we build a solid platform. Train 3 started up very well. We had liners there that we want to exhaust, and we've now used those liners. We've now taken Train 3 down and we've already moved across onto Train 2.

[Tristan Pascall, CEO at First Quantum Minerals]

Your question is whether we could bring on, say, Train 1, as we go and do the reline on Train 3, and that's a possibility. It's really limited by people and bringing people back. At this stage, the 3,000 that we have on site, it feels appropriate. We're only able, for example, to give out six-month contracts at the moment because of the nature of the limited activities that we're allowed to do. At the higher skill level, that will be a challenge until and if and when we get a green light, we will be able to provide people greater clarity around their employment. We could potentially add another train, but at this stage, we're focused around moving now on Train 2, and at that level, we'd consider we'd have enough stockpiles for around 12 months of operation.

[Tristan Pascall, CEO at First Quantum Minerals]

In terms of the costs, Ryan, could you take that question?

[Ryan MacWilliam, CFO at First Quantum Minerals]

Sure. Ian, the $250 million in restart for the stockpile processing is broken up in three components. The first is $50 million of working capital outflows, that doesn't report to EBITDA. The second is $100 million of CapEx, that also doesn't go into EBITDA. Then to the crux of your question, the third is $100 million of operating costs associated with the commissioning. That's what we've adjusted EBITDA for. We've taken that out of adjusted EBITDA. You saw a $40 million adjustment, in Q2, we expect to take the balance, the $60 million adjustment as we spend that in the second half of the year out of EBITDA. In short, none of that $250 million is flowing through to EBITDA.

[Operator]

We'll move to our next question from Myles Allsop at UBS.

[Myles Allsop, Analyst at UBS]

Great. Thank you. Yes, a few quick questions, maybe first on Taca Taca. Should we be concerned that the ESIA and the water permits are taking longer to come through? Could it take another 12 months and we missed the RIGI deadline and we're in trouble? What's happening there? That's the first question.

[Tristan Pascall, CEO at First Quantum Minerals]

Yes, sure, Myles. Thanks. Taca Taca, yes, there have been some slight delays. We applied for the ESIA and water permit with the provincial authorities in Salta. There have been some role changes there, as new people have come in, I think it's natural that they take a while to get behind the desk. As we see things in terms of questions and backwards and forwards, we think we're sort of through that question round. Our understanding is the process will move forward in due order. We've had confirmation that the application is under review, we haven't received any further information requests for some time. That says to us that it's now in the serious stage of review. Obviously, with those role changes, it has taken a little longer, but we're not concerned about that given the feedback that we're getting from Salta.

[Myles Allsop, Analyst at UBS]

Okay. That's reassuring. Maybe secondly, a question for Ryan on the unit cost inflation. You say that you got $0.25 risk from currency and fuel, and additional risk if current conditions persist. If we say midpoint of guidance is, what, $2.28, at spot diesel and currency, how much should we think unit cost will be? Is it $0.30, $0.40 higher than the midpoint of the current guidance range?

[Tristan Pascall, CEO at First Quantum Minerals]

Ryan, do you want to take that?

[Ryan MacWilliam, CFO at First Quantum Minerals]

Yeah. Thanks, Myles. In short, that $0.25 is if you take our current guidance and you inflate the rest of the year costs for spot fuel, spot kwacha, and spot gold. I take the midpoint of our cost guidance and add the $0.25 in if we assume we see a higher cost environment than we're seeing today continue in a pretty static manner for the balance of the year.

[Operator]

We'll go next to Cody Hayden at Deutsche Bank.

[Cody Hayden, Analyst at Deutsche Bank]

Hello. Thank you for taking my question. Just on Taca Taca, I think you've previously spoken about the potential to bring in a strategic partner. I was wondering if your thinking has evolved on this or if there are any updates you can share regarding partnership discussions or funding considerations at this stage. Thank you.

[Tristan Pascall, CEO at First Quantum Minerals]

Thanks, Cody. Thanks for the question. Ryan, do you want to talk about potential partners and partnership at Taca Taca?

[Ryan MacWilliam, CFO at First Quantum Minerals]

Sure. Our real focus on Taca Taca at the moment is on de-risking the project. Those activities are the ones that Tristan's talked about around the ESIA work, around preparing the RIGI application. From a funding perspective, I think we're fortunate that we have a range of options. We've previously talked about the fact that we can look at putting a project finance in place. We've signed a working agreement with the IFC in preparation for that potential work stream. We've talked about the fact that we could bring a partner in. We've talked about the fact that there are significant gold byproduct credits associated with Taca Taca that would be amenable to streaming. We will consider all of those options in due course. It is early stage in terms of looking at funding options.

[Ryan MacWilliam, CFO at First Quantum Minerals]

I'd say our real focus at the moment is on de-risking the project in advance of those considerations.

[Cody Hayden, Analyst at Deutsche Bank]

Got it. Secondly, if I may, just back to Cobre Panama. Following the environmental audit, have you observed any meaningful shift in public sentiment towards the mine through your community engagement? Just kind of wondering how that's maybe progressed with recent updates. Thank you.

[Tristan Pascall, CEO at First Quantum Minerals]

Sure, Cody. On the public perception side, yeah, we actually logged in a new poll just in the last 24 hours or so. That was a group called Doxa. They're one of the authorized polling companies in Panama alongside Gallup. It's not quite the same methodology as Gallup, but what we've seen compared to the last Gallup survey in May, which was a 55% approval rating, that Doxa were reporting a 63% favorable opinion of Cobre Panama.

[Tristan Pascall, CEO at First Quantum Minerals]

Alongside that, some of the questions that were asked, 55% of Panamanians supported President Mulino negotiating a new agreement with Cobre Panama, 68% of people believe mining creates jobs, 63% believe it contributes to economic growth, and 67% believe it generates significant revenues for the country. That's in the context, Cody, where we have been continuing our outreach efforts on social media fairs, live events. I think to date or since this year, we've had some, and last year, some 420,000 direct engagements with people since suspension. Really that's been about educating people around the benefits of the mine, to discuss the sovereignty of Panama over its national resources, to talk about contributions to the economy and what that means in a local context on the ground with people, and our commitments to mining responsibly with the highest standards.

[Operator]

Our next question comes from Craig Hutchison at TD Cowen.

[Craig Hutchison, Analyst at TD Cowen]

Hi guys. Thanks for taking my question. I just wanted to ask on the African assets, sales have lagged production here for a couple quarters in a row. Can you just maybe talk to some of the logistical issues there and whether you think we could see that reverse itself in the third quarter? Thanks.

[Tristan Pascall, CEO at First Quantum Minerals]

Thanks, Craig. Ryan, do you just want to talk about production versus sales?

[Ryan MacWilliam, CFO at First Quantum Minerals]

Yeah, sure. Craig, where we saw the big difference was in Q1, and that was really just a function of ending the year-end last year with very low finished good inventories. I'd say to some extent what you've seen is that normalize through mostly Q1, but also coming into Q2. The export channel is working well through the variety of transport corridors and ports that we're using. As I say, that delta is principally driven by the low starting inventories at the end of last year. We expect fairly stable sales versus production for the balance of this year.

[Craig Hutchison, Analyst at TD Cowen]

Okay, great. Just on the sulfuric acid, you flagged potential surplus in Q3 here. Is that something that could be material and potentially lower cost, or is it fairly small volumes?

[Ryan MacWilliam, CFO at First Quantum Minerals]

Yep. Craig, what we saw is an $18 million benefit from selling that sulfuric acid in Q2. We're seeing that continue. In Q2, that had around a $0.05 benefit to our C1 cost because the acid reports as a by-product. We see potential for similar sorts of sales through the second half of this year, potentially another $0.05 benefit. Obviously, that's very contingent on what happens in the Middle East and do we see sulfuric acid come back to the market. I would say Q3, we both expect higher diesel prices to hit our costs and that will be a tailwind, and then we do expect some sulfuric acid sales in Q3 to somewhat offset those diesel costs.

[Operator]

We'll move next to Marcio Farid at Goldman Sachs.

[Marcio Farid, Analyst at Goldman Sachs]

Thank you. Just a quick one on my side. I know we've talked about the cost to process the stockpile at Cobre Panamá at $4.5 per pound in terms of C1. We've talked about the CapEx and operating cost for the ramp-up as well. Just wondering if it's maybe too early, how should we think about once Cobre Panamá is eventually at steady state and nameplate capacity, how should we think about the C1 and operating cost for that operation, considering maybe three and a half years of cost inflation that we have observed globally? That would be great. Thank you.

[Tristan Pascall, CEO at First Quantum Minerals]

Thanks, Marcio. Ryan, are you able to take that question on costs?

[Ryan MacWilliam, CFO at First Quantum Minerals]

Sure, Marcio. I think it is too early to put out specific guidance. As Tristan noted, we are laser-focused on the stockpile processing, doing that in a stable, environmentally responsible, and safe manner. If the government takes next steps at that stage, we will consider both more detail around the ramp-up cost to full operations and also the operating costs associated with those operations. We would expect the operating philosophy and approach would be similar to what it previously was, in terms of cost performance. If you take those operating costs that we saw three years ago and inflate that by what you have seen across large copper mines in the industry, I think that would be a sensible way of considering what would that look like on a full restart.

[Ryan MacWilliam, CFO at First Quantum Minerals]

You are getting closer to the, probably before we were at 1 C1-150 C1, and now we are probably going to be somewhere between 150 C1-180 C1.

[Marcio Farid, Analyst at Goldman Sachs]

Okay. That is great. A quick follow-up. Obviously, the gold and copper hedges come to an end this quarter, are fully exposed to spot now. Is that a plan to eventually review the hedging policy and add some hedges again, or the plan is just to stick with spot exposure for now? Thanks, Ryan.

[Ryan MacWilliam, CFO at First Quantum Minerals]

Sure, Marcio.

[Marcio Farid, Analyst at Goldman Sachs]

Go on.

[Ryan MacWilliam, CFO at First Quantum Minerals]

Philosophically, we think about hedging as an insurance tool. We've put in hedges when we've had periods of high capital spend combined with leverage on the balance sheet, and we did see that last year with Panama offline and the S3 project underway. With S3 now being completed, the strong copper price has meant that we've let those hedges roll off. I think our plan would be to stay unhedged, but we always have that as a tool in the toolbox. If we see capital spending coming or we think the balance sheet needs extra protection, we will revisit that. As I said, as we sit here today, because of the strong outlook for the second half of this year and strong copper prices into next year, there's no near or medium-term plan to go back into hedging.

[Operator]

We'll take our final question today from Myles Allsop at UBS.

[Myles Allsop, Analyst at UBS]

Great. Thanks. Just a quick follow-up question on Cobre Panamá. Obviously, if the government gets too aggressive with the proposal as and when it comes, how quickly can you revert back to arbitration and how confident are you that you can kind of defend shareholder value here?

[Tristan Pascall, CEO at First Quantum Minerals]

Thanks, Myles. Sure. Look, our arbitration remains in suspension, but all the company's rights are protected there, Myles, and we can reinitiate that. The panel was established. What we see is that we've seen constructive progress in Panama. There's been good progress to date, and we can point to really concrete progress milestones around the Preservation and Safe Management plan approval last year, then moving into concentrate sales, restart of the power plant, then more recently, processing of the stockpiles, both to ensure integrity of the assets and also environmental stewardship, but that is a step forward in terms of re-employment, hiring back 1,000 people. We see that as good faith. Arbitration is not the preferred outcome, and we would look to deal with the matter in a constructive mode.

[Tristan Pascall, CEO at First Quantum Minerals]

In terms of aggression, we think that it needs to be balanced between economic realities and reputation, but also consciousness of providing benefit to Panamanians, and full transparency around that process. That's our focus. As I said, arbitration is not a preferred outcome, but all our rights are protected there.

[Myles Allsop, Analyst at UBS]

Great. Thank you. Good luck.

[Operator]

That concludes our Q&A session. I will now turn the conference back over to Tristan Pascall for closing remarks.

[Tristan Pascall, CEO at First Quantum Minerals]

Thank you, operator, and thank you everybody for your valuable time today.

[Operator]

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• Bonita To, Director of Investor Relations and Capital Markets
• Tristan Pascall, CEO
• Rudi Badenhorst, COO
• Ryan MacWilliam, CFO

Analysts

• Orest Wowkodaw, Analyst at Scotiabank
• Richard Garchitorena, Analyst at Barclays
• Lawson Winder, Analyst at Bank of America
• Matthew Murphy, Analyst at BMO Capital Markets
• Anita Soni, Analyst at CIBC World Markets
• Ian Rossouw, Analyst at Barclays
• Myles Allsop, Analyst at UBS
• Cody Hayden, Analyst at Deutsche Bank
• Craig Hutchison, Analyst at TD Cowen
• Marcio Farid, Analyst at Goldman Sachs