Q1 2024 First Quantum Minerals Ltd Earnings Call

Thank you for standing by this is the conference operator welcome to the first quantum minerals limited first quarter 'twenty 'twenty four results conference call. As a reminder, all participants are in listen only mode and the conference is being recorded.

Operator: Thank you for standing by. This is the conference operator. Welcome to the First Quantum Minerals Limited first quarter 2024 results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then 0. I would now like to turn the conference over to Bonita To, Director of Investor Relations. Please go ahead.

After the presentation, there will be an opportunity to ask questions. The joined the question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing Star then zero I would now like to turn the conference over to Benita to director of Investor Relations. Please go ahead.

Ed.

Benita: Thank you operator, and thank you everyone for joining us today to discuss our first quarter results Joe.

Bonita To: Thank you, operator. And thank you, everyone, for joining us today to discuss our first 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, RMDNA, and the related news release. As a reminder, the presentation is available on our website and that all dollar references are in U.S. 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. And with that, I will turn the call over to Tristan for his opening remarks.

Benita: 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 are N DNA and the related news release.

Benita: As a reminder, the presentation is available on our website and that all dollar references are in U S dollars unless otherwise noted.

Benita: On today's call are Tristan Castle, our Chief Executive Officer, Blind Mcwilliam, our Chief Financial Officer, and really got any horse, our chief operating officer.

Tristan Pascall: And with that I will turn the call over to Tristan for opening remarks.

Tristan Pascall: Thank you Anita and thank everybody for joining us for our first quarter update Tonight.

Tristan Pascall: Thank you, Bonita, and thank you everybody for joining us for our first quarter update today. Shortly following our fourth-quarter results, we announced our comprehensive refinancing package that involved an amendment and extension of our corporate loan facility, a $1.6 billion second lien bond offering, and a $1.15 billion equity bought deal offering. These transactions, combined with our $500 million copper prepay agreement with our long-standing customer, Shunksy Copper, have strengthened the company's balance sheet significantly, to which Ryan will speak more later, and provide the company with the necessary time and space to deliver the Consanche S3 expansion whilst we work towards a resolution for COGPANIMA.

Tristan Pascall: Okay.

Tristan Pascall: Shortly following our fourth quarter results, we announced a comprehensive refinancing package that involved an amendment and extension of our corporate loan facilities of $1 6 billion dollar second lien bond offering and the 1.15 billion dollar equity bought deal offering.

Tristan Pascall: These transactions combined with L 500 million dollar copper prepay agreement with our long standing customer Shaanxi Copel.

Tristan Pascall: Strengthened the company's balance sheet significantly to withdraw and speak more on later.

Tristan Pascall: It provides the company with the necessary time and space to deliver that Constancia is three expansion.

As we work towards the resolution for Cobre Panama.

Tristan Pascall: With the closing of the transactions in the first quarter. The focus is for both convention and enterprise to deliver operationally.

Tristan Pascall: With the closing of these transactions in the first quarter, the focus is for both Consantia and Sentinel and Enterprise to deliver operationally. During the quarter, Zambia declared a state of national emergency due to drought conditions that have brought about challenges in food security and electricity generation across the country.

Tristan Pascall: During the quarter that Zambia declared a state of national emergency due to drought conditions to the board about challenges and food security and electricity generation across the country.

Tristan Pascall: We have seen that the country is adopting a proactive and organized response to these national challenges. We also note that at the end of the first quarter, Zambia successfully completed its debt restructuring with both official and private sector creditors, which is a solid step forward for the country. Due to the drought conditions, the State Electricity Utility, ZESCO, announced a comprehensive electricity management plan that includes power reductions to the mining sector. Based on our bilateral discussions with ESCO, it is expected that their capacity to deliver power to our Zambian operations will be curtailed by approximately 20%, equivalent to around 60 to 80 megawatts on the current forecast from May 1st to the end of this year.

Tristan Pascall: We have seen that the countries are adopting a proactive and organize response to these national challenges.

We also note that during the first quarter, Zambia successfully completed its debt restructuring we bought it.

Tristan Pascall: And private sector creditors, which is a solid step forward for the country.

Tristan Pascall: Due to the drought conditions.

Tristan Pascall: The state electricity utility Cisco announced a comprehensive electricity management plan that include power reductions to the mining sector.

Tristan Pascall: Based on our bilateral discussions with this guy it is expected that the capacity to deliver power to our Zambian operations would be quote could tie up by approximately 20% equivalent to around 60 to 80 megawatts on the current forecast from my first to the end of this year.

Tristan Pascall: In anticipation of these challenges the company's primary objective is to prioritize production, particularly at today's copper prices.

Tristan Pascall: In anticipation of these challenges, the company's primary objective is to prioritise production, particularly at today's copper prices. With that in mind, in working with ZESCO and by proactively engaging with alternative power providers, I am pleased to share that we are in the process of finalizing binding agreements for power from Mozambique and Namibia that will cover the reductions requested from ZESCO. Related to this, on April 11, First Quantum received a force majeure notice from ZESCO to formalize the request for power reductions, thereby allowing First Quantum to independently contract power from these alternative sources.

Tristan Pascall: With that in mind, and working with Jessica and by proactively engaging with alternative power for all this I'm pleased to share that we are in the process of finalizing binding agreements for Powell from nice and peak in Namibia that will cover the reductions requested from Jessica.

Tristan Pascall: Related to these on April 11, first quantum received a false news you'll notice from the best Guy to formalize the request for power reductions.

Tristan Pascall: By allowing first quantum to independently contract Powell from these alternative sources.

Tristan Pascall: As such we anticipate that we will be able to substitute the palca tayo by Jessica with imports and avoid any major interruptions to our Zambian operations based on current forecast.

Tristan Pascall: As such, we anticipate that we will be able to substitute the power curtailed by ZESCO with imports and avoid any major interruptions to our Zambian operations based on current forecasts. The imported power will come at a higher cost, to which Ryan will provide more details later, but will allow us to maintain our production as planned without a large impact on our overall cost base.

Tristan Pascall: The imported Pal will come at a higher cost to which Ron will provide more details later.

Tristan Pascall: But will allow us to maintain that production as planned without a large impact on our overall cost base.

Tristan Pascall: I used to cover Panama, where the mine remains in a state of preservation and safe country, which Rudy will review some of the work that they see titles with respect to the plant and equipment.

Tristan Pascall: Over to Cobra Panama, where the mine remains in a state of preservation and safe management, Rudi will review some of the work that this entails with respect to the plants and equipment. The mine remains clear of blockades, allowing the delivery of necessary supplies for the P&SM program. As I noted on our last conference call, at the request of MISI, the Ministry of Commerce, we submitted a preliminary draft that formalized the P&SM plan and its associated costs, estimated at around $15-20 million per month.

Tristan Pascall: The mine remains clear blockade, allowing the delivery of necessary supplies for the P. M. S N program.

Tristan Pascall: And as I noted on our last conference call at the request of me see the Minister of Commerce Ministry of Commerce, We submitted a preliminary draft to formalize the P. M. S N plan and its associated costs estimated at around $15 million to $20 million per month.

Tristan Pascall: In March, MECI requested some clarifications and additional information, and in response, Cobra Panama submitted an updated and expanded PMSN plan. We also submitted a request to the National Authority of Public Services to extend the auto generator license to restart the power plant, which is critical to the ongoing implementation of the P&SM plan.

Tristan Pascall: In March May see requested some clarifications and additional information and in response Cobre, Panama has submitted updated and expanded Pannison plan.

Tristan Pascall: We also submitted a request to the National authority of public services to extend the auto generated license to restart the Powerpoint, which is critical to long gun implementation opinion and S implant.

Tristan Pascall: Yeah.

Tristan Pascall: Earlier this month, government delegations, including representation from various ministries, undertook site inspection and verification visits as part of their process to evaluate the P&SM plan. In regards to the environmental standing of the mine, we recently received the findings of Neander Mente, the Ministry of the Environment's compliance audit for the period from June to October 2023, undertaken by the government's independent auditors, CADESA. Their report found that Cobra Panama was 100% compliant with its environmental commitments and legislative obligations.

Tristan Pascall: Early this month government delegations, including representation from various ministries undertook site inspection and verification visits as part of their processes to evaluate the ski and the same plan.

Tristan Pascall: Yes.

Tristan Pascall: In regards to the environmental standing of the mine. We recently received the finding of me in the meantime.

Tristan Pascall: Student bombs compliance audit for the period from June to October 2023 undertaken by the governments independent auditors ADESA.

Tristan Pascall: They report finds that Cobre, Panama was 100% compliant when its environmental commitments and legislative obligations.

Tristan Pascall: On health and safety, there were five instances of non-compliance relating to three commitments of the total 371 commitments under the ESIA, which at the time were being actively addressed. The summary report will be published shortly on the Cobra Panama Transparency website. As well, approximately 121,000 dry metric tons of copper concentrate remained on site. The company was advised on January 29 by the Attorney General of Panama that minerals extracted through mining concessions granted in accordance with the mining code belong to the concessionaire. The shipment of the concentrates is included as part of the PMSN plan.

Tristan Pascall: On health and safety. They were five instances of noncompliance related to three commitments of the total 371 commitments under the Sinai, which at the time would be actively addressed this.

Tristan Pascall: The summary report will be published shortly on the Cobra, Panama transparency website.

Tristan Pascall: Well approximately 121000 dry metric tons of copper concentrate remains on salt.

Tristan Pascall: The company was advised on January 29 by the Attorney General of Panama that minerals extracted through mining concessions granted in accordance with the mining code belong to the concessionaire.

Tristan Pascall: The shipment of the concentrate is included as part of the P. M. S N planning.

Tristan Pascall: And protecting our investment in Panama, we continue to move forward without to arbitration proceedings that thing to Canada, Panama Free trade agreement and the second one is for the arbitration clause of the refresh concession contract.

Tristan Pascall: In protecting our investment in Panama, we continue to move forward with our two arbitration proceedings, that being the Canada-Panama Free Trade Agreement and the second one as for the arbitration clause of the refreshed concession contract. However, as we have consistently stated, arbitration is not our preferred outcome, and we remain committed to Panama and being part of a long-term solution that delivers the best outcome for the country and the people of Panama.

Tristan Pascall: However, as we've consistently stated arbitration ignore that preferred outcome and we remain committed to Panama and being part of a long term solution that delivers the best outcome from the country and the people of Panama.

Tristan Pascall: The next few months will be a period of change for the country, with elections to be held on May 5th and a new president to officially take office in early July. In the meantime, we will continue to engage constructively with the current administration to ensure the environmental stability and asset integrity of Cobra Panama. We also continue to seek to listen to and learn from the people of Panama. With that, I will conclude my opening remarks and pass the call to Rudi to review our operational results.

Tristan Pascall: The next few months will be a period of change for the country.

Tristan Pascall: With elections to be held on may 5th and a new president to officially take office in early July.

Tristan Pascall: In the meantime, we will continue to engage constructively with the current administration to ensure the environmental stability and asset integrity of Cobre Panama.

Tristan Pascall: We also continue to seek to listen and learn from the people of Panama.

Tristan Pascall: With that I will conclude the opening remarks and pass the call to Rudy to review our operational results.

Tristan Pascall: Yes.

Rudy: Thank you Justin and thank everybody for joining our call today.

Rudi Badenhorst: Thank you, Tristan. And thank you, everybody, for joining our call today.

Rudy: That's just mentioned the cover put them online remains in a phase of preservation and safe management and with the absence of protection from Panama total copper production for the first quarter.

Rudi Badenhorst: As Tristan mentioned, the Copper Panama mine remains in a phase of preservation and safe management, and with the absence of production from Panama, total copper production for the first quarter was approximately 101,000 pounds, a decrease of 37% from the fourth quarter. As a result of the lower production volume, Group-wide copper C1 cash costs were $0.20 higher than the preceding quarter, averaging $2.02 a pound. However, looking at the business excluding

Rudy: Was approximately 101000 tonnes a.

Rudy: A decrease of 37% from the fourth quarter.

Rudy: As a result of the lower production volumes group wide Capa C. One cash costs were 20 cents higher than the preceding quarter, averaging $2 two seems about.

Rudy: Looking at the business, excluding cobre, Panama However.

Rudi Badenhorst: Copper production was 3,021 tonnes higher, quarter over quarter, resulting from improving production at Sentinel, while Copper C1 cash costs were 6 cents lower, which Ryan will speak about in his financial overview. At Cobre Panama, preservation and safe management work during the quarter involved a 14-day preservation and maintenance cycle at the process plant, with equipment being run and monitored for periods to help maintain the integrity of the plant. With the major upper class mobile equipment, the maintenance cycle involved daily inspections and weekly startup in order to keep the fleet in good working condition. Oh, it's consensual.

Rudy: Copper production was 3021 times higher quarter over quarter.

Rudy: All thing from improving production at Sentinel.

Rudy: Well a couple of C. One cash costs were six cents lower two which Ron will speak to in his financial overview.

Rudy: That's probably a Panama.

Rudy: Isolation unsafe management lift during the quarter involved a 14 day preservation and maintenance cycle at the breakfast club.

Rudy: With equipment being run and monitored for periods to help maintain the integrity of the plant.

Rudy: With a major also called class mobile equipment, the maintenance cycle involved daily inspections.

Rudy: The weekly starts up in order to keep the fleet and good looking foundation.

Speaker Change: Oh it is concerned she.

Rudi Badenhorst: Copper production totaled 31,000 tons in the first quarter. However, production was down slightly in the quarter due to low acid stock availability to treat the higher grade oxide material as a result of an unplanned smelter shutdown. Despite lower production volumes, Copper C1 cash costs were down quarter and quarter to $2.34 per pound. As quarter 4 costs were impacted by a one-time catch-up charge on new electricity rates from a new 10-year power supply agreement with ZESCO that we entered into at the end of 2023.

Copper production totaled 31000 tons in the first quarter.

Speaker Change: Production was down slightly in the quarter due to low acid stuck availability to treat the high grade oxide material.

Speaker Change: As a result of an unplanned smelter shutdown.

Speaker Change: Despite lower production volumes.

Speaker Change: Let's see one cash cost were down quarter on quarter to $2 34 per pound.

Speaker Change: That's quite a full costs were impacted by a onetime catch up charge.

Speaker Change: New electricity rates from a new 10 year power supply agreement with Cisco because we entered into at the end of 'twenty 'twenty C.

Speaker Change: We have maintained consensus production guidance for this year at 130 to 150000 tons of copper.

Rudi Badenhorst: We have maintained Conscienti's production guidance for this year at 130,000 to 150,000 tonnes of copper, with copper grades expected to improve over the course of the year as mining progresses at higher elevation areas with higher grade material emanating from the Main 15 and Main 17 cutbacks. Saint-Anne had a strong core.

Speaker Change: Copper grades are expected to improve over the course of the as mining progresses at high elevation areas with higher grade material emanating from the 915 and 917 cutbacks.

Speaker Change: So you can all had a strong quarter.

Rudi Badenhorst: Producing just over 62,000 tons of copper, which was a 4% improvement from the fourth quarter. This was driven mainly by grade as mining activity was able to progress as planned to high-grade areas in Stage 1 and the saddle zone between Stage 1 and Stage 2 pits. Throughput, however, was lower than the fourth quarter due to a planned shutdown that was deferred from the preceding year.

Speaker Change: I think just over 62000 tonnes of copper, which was a 4% improvement from the fourth quarter.

Speaker Change: This was driven mainly by grade as mining activity was able to progress as planned to high grade areas in stage, one and the saddle zones between stage, one and stage two but.

Speaker Change: Throughput, however was lower than the fourth quarter due to a plant shutdown that was deferred from the preceding year.

Rudi Badenhorst: Copper C1 cash cost of $1.85 per pound is unchanged from the preceding quarter as the benefit of higher volumes was offset by higher electricity rates from the new power supply agreement with Jesco and Hia Fred Corp. associated with concentrates that were shipped to third-party smelters during the smelter shutdown at Consangio. Copper production guidance for Sentinel has been maintained at 220 to 250,000 tons. Copper grades were higher in the first quarter and are expected to normalize for the remainder of the year, while throughput is expected to improve over the course of the year, as development of the Stage 3 Western Cutback and the relocation of Input Crusher 3 continue to progress well, and will enable improved mining productivity and increased availability of software materials at Enterprise.

Speaker Change: Couple of C. One cash cost of $1 85 per pound is unchanged from the preceding quarter as the benefit of higher volumes was offset by higher electricity rates from the new pellet supply agreement with Tesco.

Speaker Change: And higher freight costs associated with concentrate that was shipped to third party smelter is getting.

Speaker Change: Smelter shutdown at convention.

Speaker Change: Copper production guidance with Haynesville hasn't been maintained at 220 to 250000 tons.

Speaker Change: Couple of grades were higher in the first quarter and are expected to normalize for the remainder of the year well.

Speaker Change: Well throughput is expected to improve over the course of the AR that's.

Speaker Change: Development of the state's three western cut back and the relocation of infant Gotcha Gotcha three continues to progress well.

Speaker Change: And will enable improved mining productivity and increased availability of softer material.

Speaker Change: At enterprise.

Rudi Badenhorst: Mining operations continue to ramp up, with the operations producing 4,000 tonnes of nickel in the first quarter. During the quarter, there was a noticeable improvement in recoveries with the expansion of the flotation cleaner circuit. Work continues towards commercial production and full ramp-up later in this year with additional equipment mobilized to increase mining volumes and the final ramp-up of the process plant to full capacity. Production guidance in 2024 for the enterprise continues to be 10 to 20,000 tons of contained nickel.

Speaker Change: Mining operations continued to ramp up the operation producing 4000 tonnes of nickel in the first quarter.

Speaker Change: During the quarter there wasn't a noticeable improvement in recoveries for the expansion of the flotation cleaner circuit.

Speaker Change: Work continues towards commercial production and full ramp up likely to them. This year with additional equipment mobilized to increase mining volumes and the final ramp up of our purchase plant to full capacity.

Speaker Change: Production guidance in 'twenty 'twenty four for enterprise continues to be 10 to 20000 tons of contained nickel.

Speaker Change: Continuing with nickel production.

Rudi Badenhorst: Ravensthorpe produced approximately 3,700 tons of contained nickel during the quarter. In February of this year, the operation implemented a new strategy with a focus on improving margins by suspending mining at Schumacher Levee and bypassing the high-pressure acid leach unit. While margins did improve in the first quarter, combined with maintenance challenges, weak nickel prices, and low payability, they continue to result in significant margin pressure at the operation. Thank you, and I will now hand the call over to Ryan to review the finances.

Speaker Change: They've installed produced approximately 3700 tons of contained nickel during the quarter.

Speaker Change: In February of this year.

Speaker Change: The operation implemented a new strategy with a focus on improving margins, but the spending mining at shoemaker Levy and bypassing the Hyatt.

Speaker Change: Leach units.

Speaker Change: While margins did improve in the first quarter operating costs Nonetheless remain high.

Speaker Change: This.

Speaker Change: Combined with maintenance challenges week nickel prices and low pay abilities continues to result in significant margin pressure at the operation.

Speaker Change: Thank you and I will now hand, the call over to Ryan to review the financials.

Ryan MacWilliam: Starting with the market, copper prices broke out in March from recent ranges and traded to the highest level since April 2023. Copper is now at around $4.40 per pound, albeit much of this increase only occurred after the quarter end, so this is not reflected in these financials. This price increase has been partly driven by the collapse in copper treatment charges, which is to some extent the result of the situation at Kobe, Panama, and the resulting potential smelt production cuts in China. This copper price increase since the cessation of operations at Cabo Panama will contribute to making the green energy transition more expensive. And as a result, extend the time that it will take the world to decarbonize.

Thank you Rudy.

Ryan: Today with the market.

Ryan: Prices breakouts in March from recent ranges and tried it to the highest level since April 2023.

Ryan: Copper is not around $4.40 per pound, albeit much of this increase are incurred after the quarter end. So this is not reflected in these financials.

Ryan: This price increase has been partly driven by the collapsing copper treatment charges, which is to some extent. The result of the situation of cobre, Panama and the resulting potential smelter production cuts in China.

Ryan: There's a couple of price increase since the cessation of operations at Cobre, Panama will contribute to making the green energy transition more expensive.

Ryan: And as a result extend the time that it will take the world Decarbonize.

Ryan: Moving on to our financials, where it was a noisy quarter. Despite the solid operational performance that really described.

Ryan MacWilliam: Moving on to our financials, where it was a noisy quarter despite the solid operational performance that Rudy described. This was due to it being the first full quarter without Cobra Panama production. Revenue and EBITDA both declined quarter over quarter as Cobra Panama remained in the phase of P&SM.

Ryan: This was due to it being the first full quarter without cobre, Panama production.

Ryan: Revenue and EBITDA, both declined quarter over quarter as credit Panama remained in the phase of PM to seven.

Ryan: Excluding cobre, Panama revenue and EBITDA increased by 11% and 17% respectively, mainly on the back of improved operational performance and higher metal prices.

Ryan MacWilliam: Excluding Curb It Panama, revenue in EBITDA increased by 11% and 70%, respectively, mainly on the back of improved operational performance and higher metal prices, impacting EBITDA with P&SM costs at Kobe Panama of $63 million due to a larger workforce than budgeted at the start of the quarter. The workforce reductions have now been completed, and as such, going forward, we expect these costs to normalize to the $15 to $20 million per month ratio. Our Q1 net loss attributable to shareholders improved to $159 million this quarter, as Q4 last year was impacted by both the impairment at Ravensthorpe and the tax expense at Cobre Panama.

Ryan: Impacting EBITDA with P. M S N costs at Cobre, Panama $63 million due to a larger workforce and budgeted at the start of the quarter.

Ryan: Workforce reductions have now been completed and as such going forward. We expect these costs to normalize to the $15 million to $20 million per month rate.

Ryan: Our Q1 net loss attributable to shareholders improved to $159 million this quarter.

Ryan: As Q4 last year was impacted by both the impairments at Ravensthorpe and the tax expense at Cobre Panama.

Ryan: Moving onto costs, excluding cobre, Panama copper C. One cash costs reduced 3% to $2.01 per pound.

Ryan MacWilliam: Moving on to costs, excluding Copa Panama, Copa's C1 cash costs were reduced 3% to $2.01 per pound. This was attributable to improved production, lower fuel costs, and the absence of a once-off catch-up charge on new electricity rates in Zambia last quarter. This was partially offset by the impact of asset purchases and higher freight costs, as Rudi mentioned. As Tristan described, as a result of the power shortages in Zambia, our operations will procure approximately 20% of their power from outside the country. The contracts in this respect are currently being finalized, with key terms agreed upon. The imported power will predominantly be a mix of hydro, solar, and natural gas from Mozambique and Namibia.

Ryan: This was attributable to improved production.

Ryan: Lower fuel costs and the absence of a one one sort of catch up charge on your electricity rates since I've got last quarter.

Ryan: This was partially offset by the impact of asset purchases and higher freight costs as already mentioned.

Ryan: As Christa described as a result of the Polish shortages in Zambia, our operations will procure approximately 20% of their power from outside the country.

Ryan: The contracts in this respect are currently being finalized with key terms agreed.

The important pas will predominantly be a mix of hydro solar and natural gas from Mozambique Namibia.

Ryan: While the important part imported pilot will be more expensive than the rates that we have with that Scott.

Ryan MacWilliam: While the imported power will be more expensive than the rates that we have with ESCO, the impact on the overall cost structure will be modest, given power represents about 7% of our cost. We expect an incremental cost of approximately $25 million for the remainder of the year, which is equivalent to a 3 cent impact on our C1 cash curve. In other areas, inflationary pressures have stabilized, and prices are tracking favorably to the assumptions we're using for our cost guidance.

Ryan: The impact to the overall cost structure will be modest given power represents about 7% of our costs.

Ryan: We expect an incremental cost of approximately $25 million for the remainder of the AR, which is equivalent to a three impacts, but I'll see one cash cost.

Ryan: In other areas inflationary pressures have stabilized and prices are tracking favorably to the assumptions, we're using for our cost guidance.

Ryan MacWilliam: As an example, our guidance is based on an oil price of $90 per barrel, while spot prices have averaged in the low 80s year to date. Additionally, the gold price is averaged well above $2,000 per ounce, but our cost guidance assumes a gold price of $1,900.

Ryan: As an example, our guidance is based on an oil price of $90 per barrel, while spot prices have averaged in the low eighties yet to date.

Ryan: Additionally, the gold prices averaged well above $2000 comps on all cost guidance assumes a gold price of 1900 dogs.

Ryan MacWilliam: Taking all this into account, we remain comfortable with our C1 cash cost guidance range for the year, $1.80 to $2.05 per pound. Additionally, during the quarter, we took a proactive approach to address our liquidity position and near-term bond maturities through a number of capital markets actions and a $500 million copper prepayment. These actions included amending and extending our corporate loan facility, a $1.15 billion equity issue, and a $1.6 billion second lien secured bond.

Ryan: Taking all this into account we remain comfortable with our C. One cash cost guidance range for the year of $1 80 to $2.05 per pound.

Ryan: Onshore balance sheet.

Ryan: During the quarter, we took a proactive approach to address our liquidity position and near term bond maturities through a number of capital markets actions and a $500 million copper prepayments.

Ryan: These actions included amending and extending our corporate loan facility.

Ryan: <unk>, one 5 billion on an equity issuance and a $1 6 billion second lien secured bond.

We appreciate the support that we receive from our shareholders bondholders and banks as part of this transaction.

Ryan MacWilliam: We appreciated the support that we received from our shareholders, our bondholders, and our banks as part of this transaction. The bond and equity offerings were oversubscribed, and we received hundred percent consent from our bank. Changes in our corporate facility include revising our leverage covenants, deferring our debt amortization until June next year, and pushing out the facility maturity to April 2027. Proceeds from the equity and debt offerings allowed us to redeem our 2025 and 2026 bonds in full and repay a sizable portion of our revolving credit facility.

Ryan: The bond and equity offerings over subscribed and 100 per se of consent from our banking group.

Ryan: Changes in our corporate facility and crude revising our leverage covenants.

Ryan: Our debt amortization until June next year, pushing out the facility maturity to April 2027.

Ryan: Proceeds from the equity and debt offerings allowed us to redeem our 2025 and 2026 bonds in full and repay a sizeable portion of our revolving credit facility.

Ryan: That's materially Derisked, our liquidity position through 2025 to support the delivery of the <unk> III project in Zambia and resolution in Panama.

Ryan: Net debt decreased by $1, one $4 billion during the quarter to $5 3 billion. As a result of these financings, partially offset by the impact of working capital movements in Zambia and payments to suppliers of Cobre, Panama related to orders placed before the Hudson operations last year.

Ryan MacWilliam: This materially de-risks our liquidity positions through 2025 to support the delivery of the S3 project in Zambia and resolution in Panama. Net debt decreased by $1.14 billion during the quarter to $5.3 billion as a result of these financing. Although partially offset by the impact of working capital movements in Zambia and payments to suppliers of Cobra Panama related to orders placed before the Hulton operations last, the quantity improved to $1.8 billion at the end of the quarter, comprised of approximately $700 million in cash and $1.05 billion of undrawn revolver.

Ryan: Liquidity improved to $1 $8 billion at the end of the quarter comprised of approximately $700 million in cash and $1 <unk> 5 billion of Undrawn revolver.

Ryan: I'd say accounting standards, the prepayments have been recognized as a liability on the deferred revenue.

Ryan: Revenue will be recognized in line with deliveries in the prepaid amounts will reduce over the second and third years in accordance with deliveries.

Ryan: From an accounting perspective, the prepay is not recognized as debt and is included within reported net debt and has nothing to do with her within reported net debt.

Tristan Pascall: As per accounting standards, the prepayment has been recognized as a liability under deferred revenue. Revenue will be recognized in line with delivery, and the prepaid amounts will reduce over the second and third years in accordance with delivery. From an accounting perspective, the prepay is not recognized as debt and is included within reported net debt. However, the prepayments will be treated at depth by our lenders and covenant calculations.

Ryan: However, the prepayments will be treated as deaths by our lenders and covenant calculations.

Ryan: We continue to manage our balance sheet with discipline by focusing on initiatives underway, such as further working capital optimization and reductions in operating and capital expenditures through driving improved efficiencies.

Ryan: As previously announced measures optionality and flexibility to continue.

Ryan: Such as the sales prices for the last Christmas mine in Spain, as well as potential minority investments in the company's ambient business.

Ryan: And that brings the finance section two and then I'll now hand, the call back to Justin.

Justin: Thank you Ron.

Justin: We continued to make good progress on the Constancia is three expansion project, which remains on track for construction completion in mid 2025.

Tristan Pascall: We continue to manage our balance sheet with discipline by focusing on initiatives underway such as further working capital optimization and reductions in operating capital expenditures through driving improved efficiency. As previously announced, measures for optionality and flexibility continue, such as the sales process for the Las Cruces mine in Spain, as well as potential minority investments in the company's ambient business. And that brings the finance section to an end. I'll now hand the call back to Tristan.

Justin: Our focus is on project cost control, whilst ensuring the quality of construction execution.

Justin: We continue to receive deliveries during the quarter and late deliveries of major long lead items will continue through the remainder of the year.

Justin: During the quarter. The primary crusher excavation was completed and we received first deliveries of Sag mill components. This is the six mill the same size, but the project team is installed and we are pleased so far with progressive rate against the schedule.

Tristan Pascall: We continue to make good progress on the Consanche S3 expansion project, which remains on track for construction completion in mid-2025. Our focus is on project cost control whilst ensuring the quality of construction execution. We continue to receive deliveries during the quarter, and these deliveries of major long-lead items will continue through the remainder of the year. During the quarter, the primary crusher excavation was completed, and we received the first deliveries of sagnal components. This is 6mm the same size that the project team has installed, and we are pleased so far with progress against the schedule.

Justin: The consensus smelter expansion to $1 6 million tonnes Brendan feed capacity remains on track for first production in 2025.

Speaker Change: Before I hand over the call to take questions I would like to circle back to the comprehensive financing transactions that I open today's call with.

Speaker Change: There was a lot of complexity and putting together this package with respect to the inter dependency of each transaction and the short timeframe to put together and execute the transactions.

Speaker Change: There were a lot of teams within the first one to know worked tirelessly on this and I want to thank them all for their hard work.

I would also like to thank our shareholders banking partners and bondholders for their confidence in strong support of the company.

Speaker Change: Yeah.

Speaker Change: That being said, however, I want to reassure investors that the hard work does not stop there.

Tristan Pascall: Similarly, the Consange Smelter expansion to 1.6 million tonnes per annum feed capacity remains on track for first production in 2025. Before I hand over the call to take questions, I would like to circle back to the comprehensive financing transactions that I opened today's call with. There was a lot of complexity in putting together this package with respect to the interdependence of each transaction and the short time frame to put it together and execute the transactions.

Speaker Change: We will continue our work to prudently manage the balance sheet at the mines, we remain laser focused on operational delivery and identifying further operational efficiencies and.

Speaker Change: And finally at the Constancia three expansion as I noted earlier the focus our focus is on cost control quality and timely execution.

Speaker Change: This project will be key to restoring first going through strong cash flow generation.

Speaker Change: Thank you for your attention and I will now pass the call to the operator to open the lines for questions.

Speaker Change: Okay.

Speaker Change: Thank you.

Tristan Pascall: There were a lot of teams within First Quantum that worked tirelessly on this, and I want to thank them all for their hard work. I would also like to thank our shareholders, banking partners, and bondholders for their confidence and strong support of the company. That being said, however, I want to reassure our investors that the hard work does not stop there. We will continue our work to prudently manage the balance sheets.

Speaker Change: We'll now begin the analyst question and answer session analysts are permitted to ask one question and one follow up and you're welcome to rejoin the queue. If they have more.

Operator: So join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request.

Operator: If youre using a speakerphone please pick up your handset before pressing any keys to withdraw your question. Please press Star then two.

Operator: Okay.

Operator: The first question comes from Greg Barnes.

Tristan Pascall: At the mines, we remain laser-focused on operational delivery and identifying further operational efficiencies. And finally, at the Consantia S3 expansion, as I noted earlier, the focus is on cost control, quality, and timely execution. This project will be key to restoring First Quantum's strong cash flow generation. Thank you for your attention, and I will now pass the call to the operator to open the line for questions.

Greg Barnes: With TD Securities. Please go ahead.

Greg Barnes: Good morning, everyone, just a couple of questions.

Greg Barnes: First off the application to restart the power plants that just solely to support the care and maintenance plan or the broader implications behind that and the second question is just around the delays there.

Speaker Change: Actually selling that to concentrate the stores in the Florida corporate kind of law.

Speaker Change: Okay.

Speaker Change: Sure, Greg and Greg Thanks, before I answer your question I heard that you are retiring and I believe you are longing longest covering analyst so Greg I want to thank you for your many years of support we will Miss your coverage and I wish you a happy retirement, but.

Operator: Thank you. We will now begin the analyst question and answer session. Analysts are permitted to ask one question and one follow-up and are welcome to rejoin the queue if they have more. To join the question queue, you may press star, then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys.

Speaker Change: Two to your questions look firstly on the power plant are what we put forward was a rejuvenation of the auto generated license, which is for the full 300 megawatts, we wont need all of that powerful the P. N S. In plan, but we note that power prices for retail customers in Panama.

Operator: To withdraw your question, please press star, then two. The first question comes from Greg Barnes with TD Securities; please go ahead. Morning, everyone. Just a couple of questions, Tristan. First off, the application to

Speaker Change: A mind very high and.

And we think that that power our into the market. We will do a lot to bring down the cost for ordinary kind of mining citizens intend to their energy costs.

Tristan Pascall: Sure, Greg. And Greg, thanks. Before I answer your question, I heard that you are retiring, and I believe you are our longest-serving analyst. So, Greg, I want to thank you for your many years of support. We'll miss your coverage and wish you a happy retirement.

Speaker Change: However, that really that decision will be up to the regulator.

Speaker Change: Whether we just look at one units will both units are running.

Tristan Pascall: To your questions, firstly on the power plant, what we put forward was the renewal of the auto generator license, which is for the full 300 megawatts. We won't need all of that power for the PNSM plan, but we note that power prices for retail customers in Panama remain very high, and we think that putting that power into the market will do a lot to bring down the cost for ordinary Panamanian citizens in terms of their energy costs.

Speaker Change: In regards to the concentrate the 121000 tons sitting at the port Yeah in terms of timetable for when that will get out I think.

Speaker Change: We know the minister of Communist as recent comments.

Speaker Change: Comments that they are looking closely at the peak and it's implanted and he might comment that he would like to see that the approved before the election.

Speaker Change: Obviously the U can.

Speaker Change: Context of of election politics, and the strong debates around that so you know balance of probability it probably spills either after the election.

Tristan Pascall: However, really, that decision will be up to the regulator as to whether they look at one unit or both units running. Secondly, in regards to the concentrate, the 121,000 tonnes sitting at the port, yeah, in terms of timetable for when that will get out, I think we note the Minister of Commerce's recent comments that they are looking closely at the PNSM plan, and he made a comment that he would like to see that approved before the election.

Speaker Change: We just have to wait and see as to what the timing of these things.

Speaker Change: Alright, thanks for that system and I think it's been 23 years and it's been a hell of a ride them honestly never a dull moment.

Speaker Change: So thanks a lot.

Yeah.

Speaker Change: The next question comes from RSV Codell with Scotiabank. Please go ahead.

Izak Jan Rossouw: Hi, Good morning, my questions without Cobra, Panama, as well and with the election and Panama now I guess within two weeks is it your expectation that there will be a window to reengage with the new administration when they come to power in July in terms of negotiating some kind of restarted agreement.

Tristan Pascall: Obviously, it's in the context of election politics and the strong debates around that, so, in balance and probability, it probably spills over after the election. We'll just have to wait and see as to what the timing is.

Speaker Change: Thanks, Yeah, so sidney.

Operator: The next question comes from Orest Wowkodaw with Scotiabank. Please go ahead. Hi, good morning.

Our job at the moment in Panama is to be listening to understand.

Orest Wowkodaw: Hi, good morning. I have questions around Cobra Panama as well. I mean, with the election in Panama now, I guess within two weeks, is it your expectation that there will be a window to re-engage with the new administration when they come to power in July in terms of negotiating some kind of restart agreement?

Speaker Change: The voices that speak on on the mine and the future mining in Panama with regard to the election.

Speaker Change: We certainly we want to see a strong democratic process, we will work with whichever party is successful and whoever the successful presidential candidates is and you know the context around that will be to meet the.

Tristan Pascall: Thanks Orest. Yeah, certainly, you know, our job at the moment in Panama is to be listening, to understand the voices that speak about the mine and the future of mining in Panama. With regard to the election, you know, we certainly want to see a strong democratic process. We will work with whichever party is successful and whoever the successful presidential candidate is. And, you know, the context around that will be to meet, you know, the challenges around the mine but the challenges for the country as well.

Speaker Change: The challenges around the mine, but the challenges for the country as well and certainly we would be seeking to approach those conversations with humility listening understanding what's going on.

Speaker Change: And to work forward on the path forward to resolve the situation to the benefit of the people of Panama.

Speaker Change: And and working with whoever is successful in the election.

Speaker Change: Okay as a follow up to.

Tristan Pascall: And certainly, we would be seeking to approach those conversations with humility, listening, understanding what's going on, and working forward on a path forward that resolves the situation to the benefit of the people of Panama and working with whoever is successful in the election.

Speaker Change: 15 to 20 million sort of a care and maintenance costs per month, right now with Cobra, Panama shut down.

Speaker Change: If if if there isn't any eminent restart of the mine how long is the company prepared to fund that from its corporate balance sheet.

Tristan Pascall: Okay, as a follow-up to the 15 to 20 million dollars in care and maintenance costs per month right now with Cobra Panama shut down. If there isn't an imminent restart of the mine, how long is the company prepared to fund that from its corporate balance? Yeah, thanks.

Speaker Change: Yeah. Thanks, <unk>, so that the $15 million to $20 million per month is based on the current level of 1400 people on thoughts and that's it.

Speaker Change: Ron alluded to we brought that down during the quarter to that level.

Tristan Pascall: Yes, thanks, Orest. So the $15 to $20 million per month is based on the current level of 1,400 people on site. And as Ryan alluded to, we brought that down during the quarter to that level. We will evaluate that continuously and monitor it continuously. And it will be based on our ability to meet the environmental compliance standards there. But you know, certainly, without clear pathways on the P&SM plan, and so on, we will need to manage those costs each month through the course of the year.

Speaker Change: We will evaluate that continuously and monitor it continuously.

Speaker Change: And it will be based on our ability to meet the environmental compliance standards. There are but you know certainly a without clear pathway from the penis implant and so on we will need to manage those costs are each month through the course of the year.

Speaker Change: The next question comes from Jackie breast biopsy with BMO capital markets. Please go ahead.

Jackie: Alright, thanks, very much and I guess my first question I'll ask can you talk a little bit about Zambia in the power situation, there and maybe what activities are being done by desk.

Operator: The next question comes from Jackie Przybylowski with BMO Capital Markets. Please go ahead.

Jackie Przybylowski: Thanks very much. I guess my first question I'll ask is, can you talk a little bit about Zambia and the power situation there, and maybe what activities are being done by ZESCO to improve that power situation? And I know you guys had some mention in your MD&A, so maybe can you talk a little bit about how you're supporting those activities?

Jackie: Improve that power situation and I know you guys had mentioned in your MD&A. So maybe can you talk a little bit about how your support.

Jackie: Those activities.

Jackie: Yeah.

Speaker Change: Yeah sure Jackie I respond been really can kick in with some detail yeah. So we.

Speaker Change: Firstly to say, we'd see the Zambian government is managing the challenges on power and food security arising from the drought.

Tristan Pascall: Yeah, sure. Jackie, I'd respond, and then Rudi can kick in with some detail.

And proactive manner, which is very positive given the level of challenge. We we similarly, we've been very proactive in reaching out to our other alternatives in terms of the arrangements with Cisco, we can do that under the force majeure.

Tristan Pascall: Yeah, so we, you know, firstly to say we see the Zambian government is managing the challenges of power and food security arising from the drought in a proactive manner, which is very positive given the level of challenge. We, similarly, have been very proactive in reaching out to other alternatives, and in terms of the arrangements with ESCO, we can do that under force majeure. Rudi can comment on the level of power and the origination, but our intent is that we will be able to subsidise the reduction of power forecast by ESCO with alternate suppliers until we don't see any impact to production at this stage based on current forecasts. Thanks, Tristan.

Speaker Change: Rudy can comment on the level of pound the origination.

Speaker Change: But our intent is that.

Speaker Change: We will be able to subsidize the reduction of power forecast by the ESCO with alternate suppliers and so we don't see any impact to production at this stage by some come forecast Rudy.

Rudy: Hi, Jackie.

Rudy: Well.

Rudy: Said.

Rudy: And then as part of the D D.

N D N a.

Rudy: Had a question just about 20% reduction across both site, which includes enterprise.

Rudi Badenhorst: Thanks, Tristan. Hi Jackie, and as part of the MD&I. The request was for a 20% reduction across both sites, which includes enterprise, and that equates to... 80, 60 to 80 megawatts from the 1st of May. So we were quite proactive with Zesco when the emergency situation was called by the President and engaged with power providers across the Southern African Power Pool and have managed to come to an agreement with two providers without mainly being brought in via the utility provider in Mozambique, EDM, and also through NAMPOWER.

Rudy: That equates to.

Rudy: 60 to 80 megawatts.

Rudy: From the first of my so we were quite proactive with Cisco.

Rudy: When the emergency situation was called by the President and engaged with our providers across the southern African power pool and.

Rudy: And has vanished two to.

Rudy: To come to an agreement with to provide us with.

Rudy: Oh.

Rudy: Namely being voting by the utility provider in Mozambique, EDM and also through non power.

Rudi Badenhorst: This will be effective on the 1st of May, and indications are that because of the proactive nature that the government has taken, it's unlikely it will only run until the end of this year as we move into another wet season. Everybody's talking about drugs, but we are being proactive and engaging other entities outside that South African Power Pool for potential supply going forward.

Rudy: This will be effective on the first of mind.

Rudy: Indications are that and.

Rudy: Because of the attractive nature of the government has taken us in all likelihood will only run up until.

Rudy: The end of this year has been moving to the Internet another wait season.

Rudy:

Speaker Change: Everybody's talking about the drought.

Speaker Change: And but.

Speaker Change: But we are being proactive in engaging the other entities.

Speaker Change: Outside of the South African power pool.

Speaker Change: Tension supply going forward.

Speaker Change: So I guess I guess, what I was hoping that if you could mention a little bit more about like the longer term power supply and like how Hum Zambia me.

Jackie Przybylowski: So I guess, I guess what I was hoping you could mention a little bit more about the longer-term power supply and how Zambia may sort of prevent this situation from happening again. I think in the MD&A, you mentioned that you guys are looking at contributing to wind and solar and some other projects. So just wondering, like, how you might see the grid evolve over time? Just to prevent this from happening in the future.

Speaker Change: Prevent this situation from happening again I think in the MD&A you had mentioned that you guys are looking at picture basis.

Speaker Change: Another project I'm, just wondering like how you might get a great evolve over time.

Speaker Change: Just to just to prevent this from happening in the future.

Rudy: Rudy Yeah sure.

Rudy: Yeah.

Rudi Badenhorst: As you know, we're in the process of finalizing the installation of solar and wind with Total Energy. We're also actively discussing additional hydro generation with other players in the Zambian power market, including Invesco. Invesco themselves are actively engaged with EDM to secure an additional 200 megawatts of power from the 1st of January next year. That is quite far down the road as far as their discussions are concerned. And the opening up of..., but I've heard participants in the electricity market in Zambia certainly generated a lot of interest, and there are quite a lot of companies keen on developing additional hydro and solar operations in Zambia.

Rudy: As you know we are in the process of finalizing.

Rudy: The installation of soda and.

Rudy: And wind.

Rudy: The total energy Bill.

Rudy: We are also actively discussing additional hydro generation with other players in the Zambian power market, including viscose.

Rudy: Invesco themselves actively engaged with EDM to secure an additional 200 megawatts of power from the first of January next year.

Rudy: That is quite far down the down the road as far as these discussions are concerned.

Rudy:

Rudy: And the opening up of all right.

Rudy: Private.

Rudy: Participants in the electricity market in Zambia sits in the agenda that there's a lot of interest and there's quite a lot of companies are keen on developing additional hydro.

Rudy: So not all collections who's on death.

Tristan Pascall: Yeah Jackie, I'll just add, last time we saw the effects of El Nino in Zambia through 2014 period was really for a period no more than around 12 months. We've seen the rainfall in the northwest has largely been unaffected, though certainly the impact on southern and central province has been marked, but for example in this last month we've had around more than 100, 150 millimeters of rain at the sites and so potentially we will see inundation coming from Angola and so on into Kariba but that's not what we're planning for, we're planning for the worst perspective there and then as Rudi says, if it does prolong working with ZESCO and others we believe we will have enough power in place for the S3 expansion next year, although you know the indications are in El Nino it's really just a one-year impact.

Speaker Change: Yeah, Jackie I'll, just add last time, we saw they fix that they'll Nino.

Speaker Change: In Zambia through 2014 period was really for no more than around 12 months we.

Speaker Change: We've seen the rightful in northwest has largely been unaffected I certainly the impact on southern and central provinces being marked.

Speaker Change: But for example in this last month, we've had around more than 100 150 millimeters of rain.

Speaker Change: At the thoughts and so potentially we will see inundation coming from Angola, and so on into kariba, but that's not what we're planning for we're planning for the worst perspective there.

Speaker Change: And then as Rudy says.

Speaker Change: If it does prolong.

Speaker Change: Working with Cisco and others. We believe we will have enough power in place for the industry expansion next year, although the indications are and <unk>. So it's really just a one year impact.

Operator: The next question comes from Chris LaFemina with Jeffries. Please go ahead.

Speaker Change: Okay.

Okay.

Christmas: The next question comes from Christmas time, and now with Jefferies. Please go ahead.

Christopher LaFemina: Thanks, Operator. Hey guys, thanks for taking my question.

Christmas: Thanks, Operator, Hey, guys. Thanks for taking my question.

Christopher LaFemina: Congratulations on all the initiatives to strengthen the balance sheet. I just wanted to kind of understand the progression of net debt and your covenants going forward. So if you look at the first quarter EBITDA run rate, which was obviously a period of a much slower capital price than we're in right now, you'd be below the required EBITDA to not breach the covenants. And, I mean, the strength in spot prices since then, that clearly helps.

That's in all of the initiatives to strengthen the balance sheet I just wanted to kind of understand the progression of net debt and your covenants going forward. So if you look at the first quarter EBITDA run rate, which was obviously a period of a much silica appetite symbol in right now.

Would be below required.

Christmas: Quite a bit that to that can you just the covenants.

Christmas: Spanking spot prices since then that clearly helps.

Speaker Change: You seem to be generating positive free cash flow, but I'm wondering what else you can do.

Christopher LaFemina: And what sort of flexibility do you have around CapEx to reduce your spending, again, in the event of commodity prices weakening, and you have to take a little bit more aggressive measures to strengthen the balance sheet further? Thanks.

In the event that a copper price of commodities in general we can again, what you can do to strengthen the balance sheet between now and year end.

Speaker Change: In addition to considering asset sales that could protect you against breaching the covenants in them.

One specific question was really around the working capital builds like that but I think you had a 280 million working capital build in the first quarter, we see that reverse over the course of the year and what sort of flexibility you have around capex, reducing spending.

Ryan MacWilliam: Thank you. Ryan, do you want to take that one?

Speaker Change: Spending again in the event that commodity prices weakening and you have to take a little bit more aggressive measures to.

Speaker Change: To strengthen the balance sheet better thanks.

Thank you Ron do you want to take that one sure Hi, Chris.

Ryan MacWilliam: Thank you for your comments. The first is that I wouldn't take Q1 as a proxy for the rest of EBITDA, and that's for a few reasons. As you note, the run-up in copper prices has predominantly only happened in Q2. Secondly, there were a number of one-offs in Q1. This included the fact that some of the lagging costs from the shutdown of Cobra Panama only flowed through this quarter, together with the fact that, as we noted earlier in the discussion, we only brought down the number of employees at Cobra Panama during the course of the quarter.

Ron: Couple of comments.

Ron: Yeah.

Ron: The first is I wouldn't take Q1 as a proxy for the rest of the EBITDA and that's for a few reasons as you know the run up in copper prices is predominantly only happened in Q2. Secondly, there were a number of one offs. In Q1. This included the fact that some of the lagging costs from the shutdown of Cobre, Panama only flowed through this quarter to get.

Ron: With the fact that as we noted earlier.

Ron: The discussion that we only brought down the numbers of employees at Cobre, Panama through the course of the quarter. So we're not going to move to more run rate level.

Ryan MacWilliam: So we're not going to move to a higher run rate level at Cobra Panama, together with the fact that you should see us see some strengthening on the cost side through our Zambian business through the balance of the year. But certainly, beyond that, if we do see a weaker copper price environment or we do see other headwinds come up, we'll be very closely monitoring capital spend, as you note. And we also continue other balance sheet strengthening initiatives, namely the Las Cruces sale process and being open to a minority investment in Zambia that we discussed earlier in the call.

Ron: Cobre, Panama together with the fact that you should see some strengthening on the cost side Trump Zambian business through the balance of the yet, but certainly beyond that if we do see a weaker copper price environment. We do see other headwinds come up we'll be very closely monitoring capital spend as you know and we also continue to other balance sheet strengthening.

Ron: Initiatives.

Ron: I was curious the sale process of being open to a minority investment in <unk> that we discussed earlier in the call.

Ron: And then what about the working capital build in the first quarter or is that seasonality should we see that reverse I forget progresses.

Ryan MacWilliam: And then what about the working capital buildup in the first quarter? Is that seasonal? Should we see that reverse as the year progresses?

Yeah. So the two two drivers there one was some of the payments for kind of lagging payments that came associated with the shutdown of cobre Panama.

Ryan MacWilliam: Yeah, so there are two drivers there. One was some of the payments for the kind of lagging payments that came associated with the shutdown of Cobra Panama. That flowed through; those payments flowed through in Q1, so I'd say that wouldn't necessarily reduce. But certainly on the Zambian side, we did drive our working capital down to lower levels in Q4, that came back a bit in Q1, and you may see some of that reverse out through the balance of this year.

Ron: That flowed through those payments flow through in Q1, so I would say that wouldn't necessarily reduce them, but certainly on.

Ron: The Zambian side, we did drive our working capital down to lower levels in Q4 that came back a bit from Q1 and you may see some of that reverse out through the balance of this year. So certainly you wouldnt expect the change in working capital that we had in Q1. It was unusual for us that obviously impacts the net debt somewhat.

Ryan MacWilliam: So certainly, you wouldn't expect the change in working capital that we had in Q1 was unusual for us; it obviously impacted net debt somewhat, and that wouldn't continue to pay out through the balance of the year.

Ron: That will continue to play out through the balance of the year.

Ron: Yeah.

Operator: The next question comes from Ralph Profiti with eight capital. Please go ahead.

Ron: The next question comes from Ralph <unk> with eight capital. Please go ahead.

Ralph M. Profiti: Thanks, Operator. Good morning, everyone.

Ralph: Thanks, operator, and good morning, everyone.

Tristan Pascall: So firstly, on S3, you know, Tristan and Ryan, it looks like cost controls have been kept in check, and you're doing a good job there. I'm just wondering if you have a number or just the risk of inflationary pressures at S3, how much of the CapEx is committed and locked in at this point?

Ralph: So firstly on the S. Three.

Ralph: Tristan Orion it looks like cost controls have been kept in check and youre doing a good job. There I'm. Just wondering if you have a number or just some risk of inflationary pressures that have three how much of the capex is.

Ralph: Is committed and locked in at this point.

Tristan Pascall: Yeah, Hi, Ralph.

Tristan Pascall: Yeah, hi Ralph. So at the end of March, we were at the end of Q1, and we had around $600 million committed, and of that, $385 million incurred. So that gives you an idea in terms of the run rate to finish. Most of that now turns to the construction activities that are in the country in Zambia, the logistics chain of getting equipment to Zambia. Again, at the moment, you know, the cost of that transport; we don't see any alarm bells there.

Tristan Pascall: The end of March we were at the end of Q1, we went through around 600 million committed.

Tristan Pascall: And of that 395 do you mean could so that gives you an idea in terms of.

Tristan Pascall: The run rate to finish most of that to ins and outs of the construction activities that is in country in Zambia, the logistics chain of getting equipment, two to Zambia and at the moment.

Tristan Pascall: Cost of that transport, we don't see any alarm bells, there and then in country the construction erection and so on.

Tristan Pascall: And then in the country, the construction erection, and so on. And all that's really around labor and equipment. And so at this stage, we feel comfortable on that as well. So we don't all the long leads being procured, the final engineering closing out on the instrumentation and control side of things, we don't really see any alarm bells. We haven't been really impacted by the situation in the Red Sea and the Suez Canal, one month here or one month there on small components, but overall, it doesn't affect schedule or cost.

Tristan Pascall: And all of that is really around labor and equipment.

Tristan Pascall: And so at this stage, we feel comfortable on that as well so we don't.

Tristan Pascall: All the long leads being procured the final engineering closing out on instrumentation and control side of things, we don't really see any alarm bells, we havent been really impacted by the situation in the Red Sea and the Suez Canal, one month here or one month, there on small components, but overall effect.

Tristan Pascall: Schedule or cost.

Tristan Pascall: Okay, that's excellent to hear. Secondly, what is the scalability of outsourcing power in Zambia over and above 80 megawatts, if needed? Is this a feature that's going to, or is being put in place in these contracts? And is it likely that anything incremental, if needed, would be done at the contracted rates?

Tristan Pascall: Okay.

Excellent to hear.

Tristan Pascall: Secondly, what is the scalability of outsourcing powered Zambia over and above our 80 megawatts. If needed is this a feature that's going is being put in place in these contracts and is it likely that anything incremental if needed would be done at the contracted rates.

Speaker Change: Yeah, Ralph the yes. The answer is yes, we have some flexibility there to to ratchet up if the situation deteriorates.

Tristan Pascall: Yeah, Ralph, the answer is yes, we have some flexibility there to ratchet up if the situation deteriorates. At this stage, we think VSCO has been very proactive about addressing the situation, and the forecasts look pretty reasonable to us, but we have that flexibility.

Speaker Change: At this stage, we see viscose being.

Ralph: Very proactive about addressing the situation and the forecast look pretty reasonable to us, but we have that flexibility.

Ralph: The next question comes from Gordon Lawson with paradigm capital. Please go ahead.

Operator: The next question comes from Gordon Lawson with Paradigm Capital. Please go ahead.

Gordon Lawson: Hey, good morning.

Gordon Lawson: Hey, good morning. A simple accounting question for you here on the enterprise project. So we briefly saw some cash cost guidance provided in the $4 to $6 range with your 2022 production results. But now that we're treating the asset as part of Sentinel and Trident, how should we think of these costs in terms of operating and by-product credits once it's commercial?

Gordon Lawson: Simple accounting question for you here on the Enterprise project.

Gordon Lawson: So we briefly saw some cash cost guidance provided in the four to $6 range.

Gordon Lawson: 2022 production results, but now that we're treating the outset as part of Sentinel and Trident.

Gordon Lawson: How should we think of these costs in terms of operating in by product credits once it's commercial.

Tristan Pascall: Sure. So what we're going to do is we're going to report on copper and nickel separately. Enterprise Nickel revenues won't go against the Sentinel Copper revenues. So we expect we've disclosed the Sentinel Copper C1 costs, and similarly, we'll report Enterprise C1 costs when that comes into commercial production, which we expect Q2, Q3, and that'll start around C6 dollars per pound C1 and ramp down from there as Enterprise continues to ramp up production.

Speaker Change: Sure. So what we're gonna do is we're gonna reports on copper and nickel separately so that is.

Speaker Change: Enterprise Nicole revenues, one go against the Sentinel copper revenues, so we expect.

Speaker Change: We've disclosed the Sentinel copper seaborne costs and somebody will report enterprise C. One costs when that comes into commercial production would you expect Q2 Q3, so that'll start around $6 per pound.

Speaker Change: One and ramped down from there.

Speaker Change: <unk> continues to ramp up production.

Speaker Change: Okay.

Gordon Lawson: Okay, I figured as much about the check. And still on enterprise. You've got the first column for the Jameson cell providing better recoveries. I'm just curious if the second column is expected to include more flexibility in terms of ore characteristics.

Speaker Change: Sure. It is much about the check.

Speaker Change: And still on enterprise.

Speaker Change: You've got the first column for the gentlemen, Jameson cell, providing better recoveries. Some of them just curious if the second column is expected to.

Speaker Change: Include more flexibility in terms of ore characteristics.

Rudi Badenhorst: Yeah, Rudi, do you want to comment on that at Enterprise? Yeah, Gordon.

Speaker Change: Yeah, Rudi do you want to comment on that and then front yeah Gordon.

Rudi Badenhorst: Yeah, Gordon. We've also included the additional talc float cells, which are working pretty well. You know, we are seeing some really incredible recoveries at Enterprise at this moment in time, way above the 70-75% mark with very good concentrate grades and clean concentrate, which our customers are very appreciative of.

Speaker Change: He.

Speaker Change: Also included the additional talc float cells, which is working pretty well.

Rudi: Yeah, we are seeing some really incredible recoveries at enterprise at this moment in time, where.

Speaker Change: Above the 70, 75% mark with very good concentrate grades and clean concentrate which our customers are very appreciative.

Operator: The next question comes from Ioannis Masvoulas with Morgan Stanley. Please go ahead.

Speaker Change: Yeah.

Okay.

Speaker Change: The next question comes from Anna <unk> with Morgan Stanley. Please go ahead.

Anna: Yes, Hello, Thank you very much for the presentation.

Ioannis Masvoulas: Yes, hello. Thank you very much for the presentation. Question on Panama. In a scenario that you're allowed to restart Cobra Panama operations in the second half of this year, how long would it take to fully ramp up as you would need to rehire people, repower equipment, etc.?

Anna: Oh, a question on Panama in a scenario that you're allowed to restart cobre, Panama operations into the second half of this year.

Anna: What would it take to fully ramp up as you would need to be harder people repower equipment et cetera.

Tristan Pascall: Thanks Ioannis, I appreciate the question. I don't know that we're at a phase now where we're talking about restarting or what that could look like. I mean, on a theoretical basis, I think the closer it does happen, the easier it is, as you said, and that's really around people and suppliers and so on. But I think there's a lot to come in terms of discussion leading up to the election and then working with whoever comes through in the election about solving the challenges for the country, solving the challenges around the mine and working that through, and listening to the people of Panama to resolve the situation

Speaker Change: Yeah. Thanks for your honesty I appreciate the question I don't know that weird that phase now where we.

Speaker Change: Talking about reached out to or what that could look like I mean on a theoretical basis I think it's close.

Speaker Change: Close to that it does happen the easier. It is do you see it and that's really around our people and supplies and so on but I think there's a lot to come in terms of.

Speaker Change: Discussion Oh.

Speaker Change: Leading up to the election, and then working with whoever comes through in the election about solving the challenges for the country.

Speaker Change: The challenges around the mine and working that through listening to the people of Panama to resolve the situation.

Speaker Change: Okay very clear. Thanks for that then just a follow up in terms of the concentrate that you have stored.

Ioannis Masvoulas: Okay, very clear. Thank you for that. And just to follow up, in terms of the concentrate that you have stored, how long can you keep that material in the warehouse until there is a degradation in quality that might impair your ability to monetize the amount you're expecting? Thanks, Ian.

Speaker Change: How long can you keep that material in the warehouse and feel that there is a degradation in quality.

Speaker Change: My impair your ability to monetize.

Speaker Change: Monetize the amount you were expecting.

Tristan Pascall: Thanks Ioannis. Yeah, look, our main concerns there are the environmental and the quality of the concentrate. So it's largely chalcopyrite, so that is C, U, S, and Fe. And it's the S, you know, so we see some heating because of the sulphur in there, and then you get gas coming off, SO2 and so on, and that's not good for the environment, and it might heat up to sort of 60 or 70 degrees centigrade.

Speaker Change: Thanks for your honesty, Yeah, I'll look at main concerns there are environmental on the quality of the concentrate so it's largely check of pyrite. So that is C. U S and S. A and it's the S. So we see some heating because of.

Speaker Change: Offering there and then you get gas coming off it's like two and so on and that's not good for the environment and as you might hate up to sort of 60 or 70 degrees centigrade and so that's the degradation. We worry about let's say you complain until that.

Tristan Pascall: And so that's the degradation we worry about. The C, U component of that doesn't degrade. So in terms of the pyrometallurgical process that follows in the treatment of the chalcopyrite in the smelter, you still get all of those C, U units through. So we don't see issues with the production of copper afterwards. It's more on the environmental side, and that's why it's critical that that material does move.

Speaker Change: Doesn't the great. So.

Speaker Change: Terms of the par metallurgical process that follows in the treatment of the chocolate pyrite in the smelter.

Speaker Change: You still get all of those C units through so we.

Speaker Change: We don't see issues on on Pi.

Speaker Change: On the production of copper afterwards, it's more on the environmental saw them. That's why it's critical that that material does move.

Speaker Change: Yeah.

The next question comes from Dalton Barreto with Canaccord Genuity. Please go ahead.

Dalton Baretto: Thank you and good morning, everybody.

Dalton Baretto: Tristan and.

Dalton Baretto: In regards to Panama, I think you've used the term listening to the people three or four times and in today's call.

Operator: The next question comes from Dalton Baretto with Canaccord Genuity. Please go ahead.

Dalton Baretto: Just wondering you know based on this less thing.

Dalton Baretto: Have you guys learned so far and what's your current assessment of the gap towards acceptance of the mine restarting. Thank you.

Dalton Baretto: Thank you. Good morning everybody. Tristan, in regard to

Dalton Baretto: Yeah, and I think Panama is understanding the impact that the mine has had on the broader economy and understanding the role that Panama can play as a responsible producer of copper in the global market that requires these.

Tristan Pascall: Yeah, Dalton, I think Panama is understanding the impact that the miners had on the broader economy and understanding, you know, the role that Panama can play as a responsible producer of copper in a global market that requires these metals for the energy transition and to continue to uplift developing countries. You know, the standards that have been applied to Cobra Panama are amongst the highest in the world, and we see that in terms of, as we're speaking about the CADESA report that came back, that is the government's independent auditor inspecting the site in the run-up to when the closure, the cessation of operations came through from June to October and found 100% compliance.

Dalton Baretto: <unk> for the energy transition and to continue to uplift developing countries.

Dalton Baretto: The standards that have been applied to cobre, Panama amongst the highest in the world and we see that in terms of.

Dalton Baretto: Speaking about the cadets a report that came back that as the government.

Dalton Baretto: In government independent Auditor inspecting the thought in the run up to when the closure the cessation of operations came through from June to October and found 100% compliance so.

Tristan Pascall: So, you know, minds of this size and status are needed to supply those critical materials. On our side, I think very definitely listening to people about the issues of sovereignty, the issues around Panamanianization, and really approaching those conversations with humility so that we can learn as much as we can from them. Do you think your message is actually getting through to the average person on the street there? Yeah, Dalton, it's a time now when the country is focused on the political process around the election and, you know, there's a lot of conversation around these issues, a lot of conversation around the change in politics. And the change coming up with a new president must happen; that's a requirement of the constitution that the president will change whichever party goes forward. And in that context, these conversations in the country are important.

Dalton Baretto: Mindful of the size and status are needed to supply those critical materials on the outside I think very differently listening to people about the issues of sovereignty these shoes or in Panama and utilization.

Dalton Baretto: And really approaching those conversations with humility. So that we can learn as much as we can from them.

Dalton Baretto: Yeah.

Dalton Baretto: Do you think your message is actually getting food to the average person on the straight there.

Dalton Baretto: Yeah Delta and it says it's a time now where the country is focused on the political process around the election.

Dalton Baretto: And you know there's a lot of conversation around these issues a lot of conversation around in the change in politics.

Dalton Baretto: And the change coming up with the a new prison that must happen you know that's a requirement of the constitution that the president will change whichever party goes forward.

Dalton Baretto: And in that context, you know these these conversations in the country are important.

Yeah.

Dalton Baretto: The next question comes from Lawson Winder with Bank of America Securities. Please go ahead.

Operator: The next question comes from Lawson Winder with Bank of America Securities. Please go ahead.

Dalton Baretto: Yeah.

Lawson Winder: Good morning. Thank you very much, Operator, both Tristan and Ryan. Thank you for the update today.

Lawson Winder: Good morning, Thank you very much operator focused in Iraq. Thank you for the update today.

Tristan Pascall: One question on Panama. To what extent, if at all, have you pursued a direct challenge to the Supreme Court ruling at the local Panama level, in addition to the two arbitrations? And just your thoughts on whether that would be a reasonable path to pursue, particularly post-election?

Lawson Winder: But one question on Panama to what extent if at all have you pursued a direct challenge to the Supreme Court ruling at the local Panama level. In addition to the two arbitration and just your thoughts on whether that would be a reasonable path to pursue particularly post the election.

Speaker Change: Thanks, Les and Yeah look we acknowledge the decision of the Supreme Court. The Supreme Court. There is no route to appeal if that is the basis by which Supreme Court decisions are made.

Tristan Pascall: Thanks, Lawson. Yeah, look, we acknowledge the decision of the Supreme Court. The Supreme Court, you know; there is no route to appeal. That is the basis by which Supreme Court decisions are made. And so, you know, in terms of the legal argument, again, it's not our preferred route, but, you know, the route there is arbitration around that to understand it more fully, but there is no route to appeal. There is no way to appeal to a Supreme Court decision in Panama.

Speaker Change: And so you know it.

In terms of the legal arguments again, it's no doubt a preferred route but.

Speaker Change: The the.

Speaker Change: The root theories arbitration around that too.

Speaker Change: Understand it more fully but.

Speaker Change: The reason I route to appeal to the Supreme Court decision in Panama.

Speaker Change: Okay. Yeah. Thanks for clearing that up and then just my follow up would be on the Zambian potential Zambian minority asset sale.

Lawson Winder: Okay, yeah, thanks.

Ryan MacWilliam: Thanks for clearing that up. My follow-up would be on the potential Zambian minority asset sale. It is still being considered, but your language suggests that the bar might be quite high in terms of what would be acceptable from First Quantum's point of view. Does it really just come down to value for First Quantum, or are there other considerations, such as maybe structure or the ability to combine with other assets that might also be important?

Speaker Change: It is still being considered but your language suggests that the bar might be quite high in terms of what would be acceptable from first quantum's point of view does it really just come down to value for first quantum or are there other considerations such as such as maybe structure or the ability to combine with other assets that might also be an important year.

Ryan MacWilliam: Ryan, do you want to take a...

Speaker Change: Brian do you want to take that one sure.

Ryan MacWilliam: Lawson, we've been pretty consistent over the last three to four years that as a company, we'll look for opportunities to partner. The reason we sold a stake in Ravensdorf to POSCO, it's the reason we partnered with Rio Tinto at LaGranja, and, similarly, at Zambia. If there's an opportunity to partner that makes sense for us, for our shareholders, and for Zambia, we'll evaluate it. The recent financing transaction we put in place through Q1 means we don't have to enter into a transaction in Zambia, so really, we're about, is there a new partnership from a value, from a long-term workability and relationship perspective that works for all parties, including the country, and that'll be something we keep thinking about through the course of this year. The next question comes from Bryce Adams with CIBC Capital Markets. Please go ahead.

Brian: Listen we've been pretty consistent over the last three to four years that as the company will look for opportunities to partner. The reason we sold a stake in Ravensthorpe to Posco. It's the reason we've partnered with Rio Tinto, the ground, yet and suddenly Zambia, if there's an opportunity to partner that makes sense for us for our shareholders and for Zambia will evaluate at the recent.

Brian: Financing transaction, we put in place through Q1 means we don't have to enter into a transaction in Zambia. So really weigh about holistically is there a new partnership from a value from a long term workability and relationship perspective that works for all parties, including the country and that'll be something we keep thinking about through the course of this year.

Brian: Yes.

Brian: The next question comes from Bryce Adams with CIBC capital markets. Please go ahead.

Bryce Adams: Thank you operator, and thanks for calling for the presentation. My question is a follow on to some of the earlier ones. So Tristan with regards to the upcoming Panama elections are there any parties that you think would be more favorable for cobre Panama resolution.

Operator: Thank you, Operator, and thanks, First Quantum, for the presentation.

Bryce Adams: Yeah, thanks, Bryce. Look, we, you know, First Quantum, we support strong democratic processes. And, and, and, you know, Bryce, we work from the basis that we would seek to work with any of the parties that got through, whoever the final successful candidate would be.

Tristan: Yeah. Thanks, Bryce look we first quantum we support strong democratic processes and and brought we we went from the basis that we would seek to work with.

Tristan: Any of the parties that got through whoever the funnel successful candidate would be.

Tristan Pascall: This concludes the question and answer session. I would like to turn the conference back over to Tristan Pascall for any closing remarks. Please go ahead.

Tristan: Yeah.

Speaker Change: All right I'll leave it at that thanks.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: This concludes the question and answer session I would like to turn the conference back over to Tristan Pascal for any closing remarks. Please go ahead.

Tristan Pascall: Thank you everyone for your attention on today's call, and we look forward to speaking to you again soon at our second quarter update. Thank you.

Tristan Pascall: Thank you everyone for your attention on todays call and we look forward to speaking to you again soon and now our second quarter update thank you.

Operator: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Speaker Change: This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

Speaker Change: [music].

Speaker Change: Uh huh.

Speaker Change: [music].