Operator: Thank you for standing by. This is the conference operator. Welcome to the First Quantum Minerals Ltd First Quarter Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Bonita To, Director of Investor Relations. Please go ahead.

Bonita To: Thank you, operator. And thank you everybody for joining us today to discuss our first quarter results. Before we begin, I will draw your attention to the fact that over the course of this call, we will be making several forward-looking statements. And as such, I encourage you to read the cautionary note that accompanies this presentation, our MD&A and a related news release. As a reminder, the presentation which accompanies this conference call is available on our website, and that all dollar references are in US dollars unless otherwise noted.

On today’s Tristan Pascall, our Chief Operating Officer will provide an overview of the operations and performance during the quarter. Followed by Hannes Meyer, our Chief Financial Officer, who will review the financial results. Tristan will wrap things up after which we’ll open up the lines to take questions. And with that I’ll turn the call over to Tristan.

Tristan Pascall: Thank you, Bonita.

And thank you everybody for joining us on a call today. Copper production in the first quarter of 2022 was softer than the previous quarter due to mill and power station maintenance at Cobre Panama. And as we saw the impact of an extended rainy season in our Zambian operations. At the same time, our operations faced inflationary pressures, particularly from the end of February onwards as the conflict in the Ukraine and the associated sanctions imposed upon Russia has led to high energy and input costs. Despite these challenges, the first quarter delivered another record in earnings and profits as a result of continued strong metal prices, as their exposure to spot prices has greatly improved, with minimal remaining hedges in place.

This enabled us to continue to deliver on our ongoing priority of reducing debt, which Hannes will speak to more in his presentation. Before going into the operational performance during the quarter, I will address the changes that we made to guidance yesterday evening. The decision to change our guidance early in the year was not taken lightly. However, the world has changed since we provided our guidance in January, and we felt it is important to be transparent on the impact it is having on the company. For the last two years, each of our mines worked and delivered under restrictive conditions presented by the global pandemic, particularly around labor and logistics.

While these restrictions have eased, they do nonetheless continue to be present. And the Ukraine in crisis has laid on a number of further disruptions to an already complex situation. It was paramount that we reset realistic expectations for the year ahead, given the challenges that we see. For 2022, we have lowered our production guidance to a range of 790,000 to 855,000 tons of copper production. The lower guidance reflects the impact on actual progress of mining compared to plan during an extended rainy season at our Zambian operations and high maintenance in Panama.

At Sentinel, the wet ground conditions constrained the planned waste stripping and delayed access to high grade ore in the east of the pit. At both Cobre Panama and Sentinel grades of the ore fit to the plant were impacted as mine production was behind the budgeted schedule in Q1, largely due to a backlog of truck maintenance which impacted machine availability. This was a direct impact of restrictions on labor and resources during the COVID-19 pandemic and is now subsiding. Although the catch up on truck maintenance may take several months to resolve. At both Sentinel and Cobre Panama grades are expected to return to plan levels over the coming months.

At Kansanshi, the feed grades to the plant were lower than plan and we consider this pattern will likely continue for the remainder of the year. On to costs, when we realized when -- we released our cost guidance in mid-January, it was based on the inflationary pressures that we were seeing at that time, since early end of February, early March as a result of the conflict in Ukraine and the sanctions imposed upon Russia, most of our major input costs such as fuel, explosives, sulfur, freight, reagents and steel have increased significantly globally. I would note that our collars at Cobre Panama in part have insulated us from the full impact of electricity price inflation. While, it is too early to determine if these global cost increases are structural or transitory in nature, the impact of these higher costs cannot be ignored, and we felt more prudent to plan for the year under conservative cost scenario that assumes these cost pressures remained for the balance of 2022. Moving on to discussions in our host countries, I spent time in the quarter in Zambia, meeting with the President and senior ministers in his administration to plot a path forward for our business in Zambia.

I'm grateful for their efforts and the collaborative nature of these discussions, which we hope will ensure that the appropriate and enduring investment conditions exist for First Quantum to advance the Kansanshi S3 expansion and the enterprise nickel project. Discussions with the government include seeking an agreed mechanism for repayment of VAT owed to the company. These discussions continue to be constructive such that we are hopeful that we can reach resolution in the very near term, and advanced both projects this year as reflected in our guidance. In Panama discussions with the government are ongoing, the parties continue to finalize the details behind the benefits of a $375 million per year contribution from Cobre Panama on a gross profit based royalty. These details include the necessary protections to the company's business for downside copper price and production scenarios, and to ensure that the new contract and legislation are both durable and sustainable.

Once an agreement is concluded, and the full contract is documented, it is expected that the newly drafted legislation would be put to the National Assembly. Turning to our operations, the company produced approximately 182,000 tons of copper during the first quarter, down around 10% quarter-over-quarter for the reasons I noted earlier. We saw some improvement in the shipping environment in January and February and sales for the quarter totaled 197,000 tons, the shipping environments since March has become more challenging due to the Ukraine conflict. China's COVID lockdown which has impacted its port and the recent flooding in Durban in South Africa. This has created congestion and some delays in shipping our products during Q1, mostly in smaller volumes which are shipped from Zambia and Ravensthorpe in containers.

We expected challenging shipping environment to persist for the remainder of this year. With respect to the port of Durban damage has been extensive from the heavy rains, some port operations have already resumed. However, priority has been given to shipments of seasonal produce and it may still take a few months until operations of the port returned to normal. In the meantime, the company's rerouting shipments of its much Zambian production as possible by other South African ports, which may themselves experience some capacity constraints. Cobre Panama's performance of 78,000 tons for the quarter was impacted by SAG mill relines performed early in the quarter, as well as the backlog of truck maintenance which I spoke earlier.

The mills have since ramped up well and Cobre Panama achieves a record monthly mill throughput of 7.6 million tons in March. And we have the benefit of six new trucks which have already arrived on site at the end of Q1 for the Kalumbila pit. We remain confident that mill throughput will ramp up over the course of 2022 to achieve between 85 and 90 million tons for the year. Along with the cost inflation resulting from the Ukraine crisis, Cobre Panama's cash costs of $1.65 per pound were also impacted by exposure to spot prices during the plan maintenance to Unit 1 at the power station that was completed at the end of January. However, with the maintenance complete costs have moved back in line with the collar and coal prices for the mine.

This collar prevents further exposure to increases in the coal price until December 2023. At Kansanshi, copper production of approximately 42,000 tons in the quarter was in part impacted by the rainy season. But production also reflected the nature of the ore body in the reduction in oxide ores and the ongoing challenge of the selective hydrate methodology in sulphide ores. Sentinel’s copper production of 52,000 tons for the quarter was particularly impacted by the rainy Season where higher than normal rainfall impacted ground conditions and delayed access to higher grade ore in the east of the pit. As noted earlier, also contributing to the restriction of ore movement was limited truck availability and a backlog of truck maintenance due to restrictions on labor and resources during the COVID-19 pandemic.

Our revised corporate production guidance assumes great improvement in the second half of this year. The Fourth in-pit crusher was successfully commissioned during the quarter which is expected to stabilize mine ore feed at an annualized rate of 62 million tons per annum. Turing to some of our ESG highlights from the quarter, I'd like to start by congratulating our teams at Kansanshi and Sentinel, who were honored with six awards from the Zambian responsible business awards across various categories, including the 2021 Company of the Year, Corporate Social Responsibility award. These awards recognize organizations who take action while building coalitions across communities. And it's great to see our programs in public health support, education, and environmental stewardship being recognized.

In Mauritania, 132 women recently completed our annual female empowerment program. This targets improving literacy, numeracy and livelihoods in the poorest neighborhoods have actually close to our wellness rain mine to improve standards of living. Moving to Panama, where we continue to support the development of our host communities with a range of programs. In February, we were happy to sponsor the world neighborhood basketball tournament, which took place in Cologne. Over 1,100 children took part in the five day festival of sport and culture, which highlighted the importance of sports and the development and wellbeing of our communities, as well as our ongoing commitment to supporting them.

And with that, I'll turn it over things to Hannes and I'll be back in a few minutes to wrap up.

Hannes Meyer: Thanks, Tristan, and Good day to everyone. I would like to direct you to the slides titled financial overview. That's slide 11. Strong financial performance of the quarter was driven by higher realized metal prices benefiting from a reduced hedge profile and resulted in a significant increase in EBITDA and net earnings with a record -- quarterly record in both gross profit of $908 million and adjusted earnings per share of $0.70, and a further notable reduction in net debt.

This was despite the inflationary pressures on cost. Gross profit and EBITDA of $908 million and $1.2 billion respectively, were significantly higher than the comparable quarter in 2021. As a result, there was a significant improvement reflected in net earnings attributable to shares of the company of $385 million and adjusted earnings of $480 million. Net earnings include a $40 million nonrecurring cost in connection with previously sold assets. Net debt decreased by $238 million this quarter, bringing the net debt level down to $5.8 billion as of March 31, 2022 with a debt reduction program on track.

Cash flow from operating activities were $666 million for the quarter, $77 million lower than the same quarter in ’21 due to high receivable working capital balances at the end of the quarter, principally due to higher realized metal prices. Copper C1 cash cost of $1.61 per pound was $0.37 per pound higher than the comparable quarter in 2021, impacted mainly by inflationary pressures seen over the past year and lower production. The conflict in Ukraine and the associated wide reaching sanctions imposed on Russia has led to sustain higher energy and commodity prices which as Tristan covered earlier has further contributed to the global inflationary environment since the company provided to year guidance in January 2022. Turning to the next slide, financial overview continued, within the quarterly summary table all metrics except for cash flow from operating activities and made date of quarterly records for the company with high realized metal prices driving strong financial results. Turning to the next slide on corporate unit cash cost.

Copper C1 cash cost and all-in sustaining cost of $1.61 per pound and $2.27 per pound were recorded in the quarter. Total Copper C1 cash cost was $0.37 higher than Q1 ‘21 including the additional inflationary impact with increased -- increases seen in fuel, explosives, freight, reagents and steel, as well as sulfur which impacts our Ravensthorpe nickel operation. During January, Cobre Panama also experienced higher power costs during the January power plant maintenance period. Q1 guidance has been increased to $1.45 to $1.60 per pound, to take account of the increases to cost environment since guidance was issued, as well as changes to our production guidance. All-in sustaining costs for the quarter was $0.55 higher than Q1 last year, due to higher C 1 cost and further impacted by higher royalty costs due to higher copper prices.

All-in sustaining costs guidance has been increased to $2.15 to $2.30 per pound to take account of higher royalties as well as increased C1 costs. The next slide provides more detail on the significant increase in gross profit year-on-year. Gross profit increased by 68% compared to Q1 2021, primarily due to higher realized metal prices and reduced hedge profile, which mitigated the impact of the higher operating cash costs and royalties as well as the lower sales volumes. Turning to the next slide on net debt evolution, the company's net debt is reduced by $1.8 billion since Q2, 2020 to an amount of $5.8 billion at quarter end, the company's leverage ratio was 1.4x at the quarter end. The 21 corporate facility as a single net debt to EBITDA covenant not exceeding 3.5x as tested on a semiannual basis after the June and December results.

Turning to the next slide on debt maturity and hedge profile. On 1st of April, the company redeemed at par $500 million of the remaining $1 billion senior unsecured notes due in 2023, which leaves $500 million remaining of this bond. No new hedges were placed in a quarter with all hedges maturing during quarter two. At quarter end, the company had 15,000 tons of unmargined zero cost copper collars, sales contracts outstanding with maturity to the end of June 2022 at the weighted average price of $3.75 per pound to $4.63 per pound. Thank you and I will now hand back over to Tristan.

Tristan Pascall: Thanks Hannes. Despite the operational and inflationary challenges presented in the first quarter, we remain committed to improving our balance sheet. As Hannes commented, we continue to reduce our debt position during the quarter and also announced the early redemption of CD notes subsequent to the quarter. We also remain committed to our brownfield projects which continue to be compelling economics despite the global inflationary environment. At Cobre Panama, the CP 100 expansion is now well underway with 55% of the overall project complete, procurements is 100% complete with supply x works almost fully complete and delivered to site is 80% complete.

In the first quarter of 2022, we took delivery out of six out of eight additional Ultra class haul trucks, with the remaining two to be delivered during the second quarter of 2022. These units will support an additional rope shovel which is expected to become operational during the second half of 2022. Pre strip work for the cleanup pit and earthworks for the associated overland conveyor and in-pit crusher crushing facility have commenced and are expected to continue throughout 2022 and end into 2023. In terms of the potential impact from the tight shipping market construction completion continues to be targeted for 2023. Ball Mill 6 and its gearless drive [Indiscernible] already on site.

The major outstanding components that remain to be fully delivered are related to the Deacon Order pipeline and the screening project and deliveries are expected to be complete by mid this year. The S3 expansion which is awaiting Board approval involves a 25 million ton per annum expansion of the sulphide ore processing facility increasing annual throughput 53 million tons per annum. Our current guidance for S3 assumes construction in 2023 and ‘24 and first production in 2025. The long lead items yet to be ordered by the Sag mill, ball mill and in-pit crushing station and our current planning assumes a two year delivery time and not [Technical Difficulty]. At the enterprise, still awaiting Board approval, the project has the potential to add 30,000 tons per annum of nickel and our current guidance assumes first production in 2023.

In the context of the current inflationary pressures and tight shifting environment [Technical Difficulty] with a plan largely built as part of the Sentinel complex, and the remaining $60 million, and relating to pre stripping activities. The last cruises underground project is our longer data brownfields project that has the potential to add approximately 45,000 tons of copper equivalent annually to our production profile. A reserve update is expected later this year, which should also provide more detailed CapEx and OpEx estimates. These four brownfield projects have us on track to produce around 1 million tons per annum of copper, while at the same time allowing us to continue our financial discipline in reducing debt and returning capital to our shareholders. Our portfolio of growth options include several major Greenfield opportunities, notably Taca Taca and Haquira.

In 2022, the work plans for these projects are focused in country and on the ground at each site. And we are excited about the long term optionality that these -- both these projects offer. Finally, I want to thank the team at First Quantum. The last two years during the pandemic brought many challenges and current global events have introduced another layer of disruptions to meet them to overcome. I thank the entire team for the efforts and dedication to our success.

Operator, we would now be happy to take questions.

Operator: [Operator Instructions] Our first question comes from Greg Barnes of TD Securities.

Greg Barnes: Yes, thank you, operator, Tristan related to COVID restrictions and all the other issues that have happened over the past couple of years. Are you seeing lagging impacts on your mine plants and mine sequences as a result it'll feed through the balance of this year and into 2023?

Tristan Pascall: Yes, hi, Greg. Thanks for the question.

Yes, look, COVID-19 we have worked for the past two years under fairly serious restrictions. But nonetheless, delivered throughout that time, including the ramp up of Cobre Panama. And we were able to navigate most of the pandemic fairly well. Omicron certainly did impact the operation through December and January, January in this last quarter. And yes, we have seen as a result of that.

So for example, Cobre Panama there was quite an impact on -- of the number of cases in the maintenance section, for example, and that has had an impact on truck availabilities causing some backlog on truck maintenance, beyond what was normal maintenance on the mill relines and so on that was a Cobre Panama during the quarter. So that backlog will take several months, I think to work through. And as a result of that, yes, I think we were behind in Q1 in terms of where we wanted to be in mine schedule, the copper is still in the ground in front of us. We were just not on the schedule to face positions because of that truck availability. As I said in my comments, we now have another further six trucks on site as part of the uplift for the expansion.

And that does give us some flexibility. And we have a program in place to address that backlog of maintenance and catch up. Although, I think that will take a few months.

Greg Barnes: Okay. And you've talked a lot about OpEx inflation, but not a whole lot about CapEx cost inflation and particularly S3.

Do you still have a lot of things or a number of things to order on them for the ball mills and what have you? Are you seeing cost pressures or even scheduling pressures on the S3 project, although selling hasn't been approved yet?

Tristan Pascall: Sure, Greg. Yes, we would like to place orders. I think for those big items, I mentioned that the mills, and the in-pit crushing facilities by the end of this year are going well in Zambia. We have our first look at it. And so the last time we went through that the estimate was really at the end of last year.

So sort of Q3 2021 was the last time we really went into detail on those costs. So there's potential exposure on some of that. I guess the key question is how much of this impact particularly on steel and logistics and freight is transitory in nature, and how much will stick and so by the time we come to do that, we'll certainly be looking at in terms of the order book, I will say that most of that CapEx will come through for S3 towards the end of 2023, and 2024. And in fact, as we said, in the 43-101, will extend into 2025. So it is back weighted in our guidance.

And so if we do see some of this current inflation environment around CapEx unwind, then we use potential to get that back. As I said, Panama we are largely through procurement 100% complete and most of the kit already delivered on the site. And so there's very limited exposure there.

Operator: Our next question comes from Orest Wowkodaw of Scotiabank.

Orest Wowkodaw: Hi, good morning.

Most of your comments relating to the weaker Q1 and impacts to guidance seem fairly transitory in the sense of sort of just delayed accessing higher grade ore and things like that. But your comments around Kansanshi and the oxide seem different to that and perhaps would suggest or something more pervasive here. Can you give us more color on what you're seeing there with the oxide, and I guess the mixed and whether this is something that you're seeing that's actually below the mine plan from a structural nature and potentially below the multiyear guidance?

Tristan Pascall: Thanks Orest. Hi, yes, look, really two main areas at Kansanshi. So the first was the rainy season, which did continue, we still had heavy rains in mid-April and late April, in Zambia.

So it did push on this year. And so quite a lot of those oxide materials are in locations and the conditions can get quite muddy in order for us to be able to process that material. So that was one impact, we are addressing that over the longer term. And you'll be aware we previously had a shaft that was dewatering under the pit. And we're now involved in thinking a decline that will resolve that into the longer term.

And the decline will finish about the end of next year in terms of the greater dewatering capacity. The other elements at Kansanshi is really around dilution and grade. And that is a longer term element that we see it in the ore body that we become more of a sulphide operation. And really, that's the underlying driver to move across to the S3 project, S3 will change Kansanshi from being selective high grade mine to a far higher volume, medium grade operation and will continue as a world class asset for another 20 years. So I think this is demonstrating that the challenges on grade are there until we get into S.

John Gregory, I don't know whether you would comment any further on the detail. I mean, the only other thing I would add is, in terms of guidance for next year ‘23 and ’24, we're doing a lot of work on stripping. So the strip ratio is currently at around 2.7 versus the budget of 1.9. And we're really pushing quite hard over the last nine months to be sure that we have good grade exposed for ‘23 and ‘24. But John, would you comment any further there?

John Gregory: Yes, sure, Tristan, I think you've covered the main areas.

I would say on the oxide and mixed access has been the issue. As mentioned due to the rain season, it is in the upper weathered zones. So that copper is still there in oxide and we will treat it in going forward. We have modified the mine plants to ensure that we open up a further working areas, so that we will continue that during 2022 and ensure that ‘23 and ’24 deliver the copper that we need, and we predict ahead of the S3 commissioning phase.

Orest Wowkodaw: Sorry, so just to be clear, you're still -- so you don't see any issue with respect to the grades in the ground.

This is more of an access issue.

John Gregory: Yes, the grades on the grounds are reconciling well, from the grade control and ore control models back to the resource model. And we are very confident about grades as seen, its access areas of the mine that we are working and how the mineralization actually presents itself in those particular areas. So we have been producing from areas that we hadn't anticipated in quarter one, primarily due to the wetter than expected conditions, providing wet underfoot, access and restricting us to certain areas.

Operator: Our next question comes from Emily Chieng of Goldman Sachs.

Emily Chieng: Good morning, Tristan and Hannes. Thanks for taking my question. My first one is around the cost inflationary guidance that was announced last night and appreciate the update there. But how should we think about why the upside or downside pressures could be unrelated to that -- to those numbers? Maybe specifically related to fuel costs. How should we think about what's being baked into forecasts at this point?

Tristan Pascall: Hi, Emily.

Thanks. Yes, look, fuel in our mix has -- is one of the sort of strong movers in terms of cost breakdown. So we've seen fuel rise from this time last year at 7% of our cost structure overall to around 10% of our cost structure overall. So it's really moved on. We've seen sort of 25% to 30% increase in prices is what's in, so what's baked in our costs at the moment is if these prices continue, and we meet sort of reasonable production, that is the mid-level of our production will come in sort of mid-level of our cost guidance.

Assuming that these current levels of fuel price, for example, are prevalent for the rest of the year, there's a little bit of upside in those costs if fuel does pick up. If we were at the bottom end of production, then we would be at the top end of the guidance for the year as an example.

Emily Chieng: Understood, that makes sense. And then shifting back into the production side. Appreciate the comments on Kansanshi but if we take a look at what happened in Sentinel, it sounded like that was also an access issue that prevented access to the higher grades, as we say that great improvement incur across throughout ‘20, the second half of the year, should that therefore then bleed into 2023? And perhaps there's some upside to 2023 production guidance, or are we too early to tell at this point?

Tristan Pascall: Yes, Emily, we would leave guidance for ’23, ’24 to next year in January.

But really, yes, it was a scheduling matter to wet conditions and getting into the east of the pit. So particularly there's some high grade there that we want to get into. And we haven't been able to get into it as early as we hoped in the budget plan, that copper is still in the ground, it's in front of us. And it's a matter of getting through remaining set of two to three benches to get into that material. And so we expect to be in that towards the end of Q2 from the middle of the year.

And then we would be in that grade. So I don't know that we would see upside for ’23, ‘24. But we'll address that in our guidance next year. What we do see is the copper that we'd expected is still there. We've just got to get to it.

Operator: Our next question comes from Matt Murphy of Barclays.

Matt Murphy: Hi, I had another inflation question and more around Labor in Zambia. I saw a headline Zambian inflation is actually slowing it appears but what are you seeing on the ground there? And I guess when we see conflict in Ukraine and concerns around food price growth, like what's happening to the real cost of living of your workers there so and how does that affect your outlook on costs?

Tristan Pascall: Yes, thanks, Matthew. Look, it's very important and something we do regularly with the workforce is look at their cost of living. And so in the past during times when inflation has been running away in Zambia, we've adjusted levels half yearly and so for example, that's very appropriate that we look at that at the moment in Turkey, where we're seeing a very high, the currency falling away very quickly at the moment.

At Zambia at the moment, that's not the case. So the currency has improved under the new government, but they have removed a lot of the subsidies that were in place. So for the average Zambian, certainly fuel prices has risen, fertilizer prices have risen, and that will impact food prices in the country. So the basket of goods that our workforce deals with day to day we look closely at with them, and we will adjust if necessary in terms of making sure that their cost of living is [Technical Difficulty] that they are able to meet reasonably. So it's something we keep an eye on closely at this stage, labor in Zambia is not, because of the Kwacha denomination, it's not the same cost that we're seeing, for example, in other economies in Latin America or in Australia, as example.

And so when we look across our business, labor is probably the one area which is not as connected to global inflation at this stage, but we keeping a close eye on it.

Operator: Our next question comes from Jackie Przybylowski of BMO Capital Markets.

Jackie Przybylowski: Thank you very much. I wanted to ask you about the progress to replace Law 9 in Panama, I know in the MD&A, you have some comments on how that's going. It sounds like it's still in the drafting phase, if I'm reading it correctly, and then it would have to go to the broader parliament for ratification.

Can you provide an update on sort of the timing of how long you think it's going to take for that to be fully passed and enacted? Thanks.

Tristan Pascall: Thanks Jackie. Yes, Low 9, we continue to make progress. And as you say, it's in the detailed drafting phase at the moment, the one change in April, we have seen the newspaper reports, and we're yet to have official confirmation. But it does seem the Minister of Commerce, according to those newspaper reports that the Minister of Commerce will be potentially taking assignment in Washington, as the ambassador to Washington.

And that may be an element of, in terms of getting to fruition right now, in April, potentially will have an impact if there's a change in personnel from the Panamanian government side. Again, that's not been confirmed that there was a newspaper report on the 11th of April to that effect. So that's the one area but otherwise, in terms of the process, there's a lot of work going on in the detail drafting. And that continues to progress. We would hope to get to resolution, as we said before, very imminently, and then yes, it will go into the National Assembly for ratification.

The current session of parliament ends at the end of this month. But there has been indication the ministers have mentioned that there's a possibility of having an extraordinary session in order to deal with the legislation.

Jackie Przybylowski: And maybe as a follow up question, I get out something similar in Zambia, it sounds like you continue to have a good and maybe even strengthening relationship with the government in Zambia, which is great. Can you give us any kind of color on how that might impact the board full approval of the S3 and the enterprise projects? And when maybe we could expect to see an announcement on this?

Tristan Pascall: Thanks, Jackie. Look, I would hope it's in the near future.

So I was there last month, and we're in country at the moment, working that through, really around, as I mentioned, the topics of that, but also looking forward, Sandy has made it clear, and this administration has made it clear the level of investment they want to encourage into the country that is to triple copper production. At that level, it's potentially $30 billion that would need to flow into investment in the country to deliver that over the next 10 years beyond exploration and the front end in order to establish those projects, and certainly First Quantum is very keen to be at the front end of that and the business environment that would encourage that level of investment. So those are the discussions we're having with the government in order to get that appear disability in front of us. So I would hope in the near future we, we have an answer on that.

Jackie Przybylowski: And I apologize because I know we're only supposed to ask two questions.

But if I can maybe just follow up on what you just mentioned, Tristan, would that suggest if you're keen to be on the front end of a larger push to grow copper production in country, would that suggest that you might look at future Greenfield sites or something sort of outside of the assets you already own?

Tristan Pascall: So, Jackie, Zambia's very prospective, I think we were very much focused on Kansanshi and Sentinel at this time on the commitment building towards a decision to commit $1 billion at Kansanshi would certainly be our focus. I think we haven't been actively exploring in Zambia for some time. But certainly exploration we would consider in terms of a broader remit, but at this stage, as we said, we wouldn't be looking to go into other operations at this time at [Technical Difficulty] at Napanee or KCM, or some of the other that’s there. I think we're very much focused on our own portfolio. Beyond that, in terms of prospectively and front end, that's potentially an area we could look at on exploration.

Operator: Our next question comes from Ioannis Masvoulas of Morgan Stanley.

Ioannis Masvoulas: I guess hello, thanks for the presentation. The first question is on the cash cost at Cobre Panama. So the collar structure for coal purchases keeps the costs contained to some extent, what would be the impact do you see on cash costs in Q1, if a collar was not in place?

Tristan Pascall: Thanks Ioannis. Yes, so electricity at Panama is about 7% of our cost structure at the current time.

And so exposure to the full coal price, we've moved that pretty significantly, we seem to -- coal price collars kicked in at around $88 -$89. And we would have exposure beyond that to way we see the current price.

Ioannis Masvoulas: I see. Okay, that's very helpful. Thank you.

And then the second question, going back to the fiscal talks in Panama, you mentioned potential or chance that the Minister of Commerce could move on from his current role. Do you foresee any risks around the principle items that you have already agreed i.e. $375 million if he gets replaced by someone else? Or do you think that from today's point of view, that's completely divest?

Tristan Pascall: No, I don't think, it's been pretty consistent of the group, overall, the Panamanian administration, in terms of their approach on these discussions. So no, I think it's more just the mechanics and the logistics of getting through the process more than the fundamentals or the principles that are agreed.

Operator: Our next question comes from Dalton Baretto of Canaccord Genuity.

Dalton Baretto: Okay, most of my questions have been answered. But Tristan, maybe I can ask you some of the finer details, I guess, on Panama. So you mentioned that you guys are into detailed drafting now. And then most the primary items have been covered, does that mean that you have an agreement in principle around downside protection and the sustainability of the agreement and you're just working through mechanics, or is that still yet to be determined?

Tristan Pascall: Yes, Dalton, I wouldn't get too dragged into specifics of what we're working on day to day. But yes, those principles were agreed and the protections and so on a part of the effort now in terms of the drafting to get that in place.

So that will cover things, the broad level that Law 9 addressed, including those protections, including tax holidays, including all those details, that the drafting effort that's going on, and yes, I wouldn't get too much into which elements we are after far and which elements or not, but broadly, all of that is a piece of work that's ongoing.

Dalton Baretto: Okay, great. And then once this agreement has been ratified by Parliament, what is the effective date? Will it be backdated to January 1, or will it be on a go forward basis?

Tristan Pascall: Yes, Dalton, I expected to be on a go forward basis. So we've paid the Q4 royalties to, if I recall correctly, 60 days after the period end on a quarterly basis. And so our quarterly royalty for the end for 30 December, has just gone through and being paid.

The next one that would be due would be 30 March, but it's only due at the end of May. So that would be the next date to consider. And at that time, we would submit on the basis of what's currently in place. And we would have to deal with that if there's any change in the meantime. But no, we -- a clear indication that there wouldn't be any retrospectivity.

There wouldn't be any look backwards say every quarter that goes through, is resolved and wouldn't -- there wouldn't be any look back to that.

Operator: Our next question comes from Farooq Hamed of Raymond James.

Farooq Hamed: Thanks, operator. Tristan, earlier in the call you made a comment that the world has changed. And that you're looking at your cost structure, and you're trying to figure out if it's transitory or structural, as you're having your negotiations with various governments and drafting fiscal agreements, what positions can you kind of say that the governments are taking in terms of the cost pressures you're seeing? And the margin pressures you're seeing? Are governments sympathetic to the cost pressures? Do they see it more as transitory? Or are they factoring it into the negotiations in terms of expected outcomes in terms of revenue sharing or profit sharing?

Tristan Pascall: Yes, Farooq, that's a very good question.

I think what we're seeing so far is dawning still on governments as to the pressures, certainly some of that's come through already directly to consumers. So fuel impacts people directly, I don't think you've seen the full impact from food prices in some countries as yet because it takes time for those crops to come through to be grown. And then obviously, there's a lot of storage and logistics in the interim. So I don't think there's a full impact of that yet. And that's reflected in the conversations that some of it starting to awaken, but not sort of full exposure some of the broader impacts.

And I guess, uncertainty about what those -- where those impacts could go. So for example, if there's a further sanction on oil or other areas coming out of Russia, beyond what's currently in place. But in terms of our conversations, we're very much focused to make sure that as we go up and down through the cycle, that there's the protections in place, we are a cyclical industry. And so we need to be thinking of ups as well as down. And so it's part of our conversation to make sure that those level of protections are in place, and that there's a viable business sustainable over a long period of time, in order to invest a $1 billion dollars Zambia, or to continue forward in Panama for another 40 years or so.

Farooq Hamed: Okay, so maybe we see some change in their stances related to that. My follow up question is just related to the intensifying cost pressures we've seen in the last month or two months post the Russia Ukraine conflict. Can you talk to what options you have available to you in the very current environment in terms of locking in costs? Are suppliers willing to enter short term supply agreements to lock in costs? O are you really at this point or are you kind of at the whim of the market in terms of supply demand and availability of input supplies?

Tristan Pascall: Yes, Farooq, we have been able, prior to the Ukraine crisis, to put somehow we were starting to see inflation, for example, on sulfur, and we were able to put some elements in place for protection. I think then things have changed since in the February, beginning of March, and we're in a state of flux at the moment. So at the moment, I think that's a harder discussion.

So I don't think the same would be achievable right now on coal or on sulfur, for example. The way I think, a lot of that flux come through is not just on pricing, it’s on lead times and so the kind of congestion that you see in the Chinese ports means that it's not just the cost. It's also when will there be a challenge on to make sure that we have that area covered. And it's in all areas. So for example, at the moment, we hear from our suppliers, that filter material, which is a high moving item, but the components that go into making air cleaners, air filters are harder to come by.

Because all the automotive industry, including our end on the truck side of things is competing for the same filter cloth. And the orders weren't in before during COVID. And now, actually, they've got quite extensive plus, there's the logistics, the shipping is going out in terms of duration. So it's a combination of factors. And I think needs cool heads, and working through the criticality to make sure that we don't get stuck out on those key items.

Operator: Our next question comes from Lawson Winder of Bank of America.

Lawson Winder: Hello. Thank you for the presentation. And I hope you're all well. Just, yes, I guess just two questions for me.

So I like to follow up the Kansanshi question. And hopefully not to overdo this point. But you made one comment, actually, John Gregory, I think it was you that made that that you said it's more of an issue of how the mineralization presents itself in certain areas. And I just wanted to follow up on that in the context of sort of how the grades, that content you perform in 2021, where they were quite materially below the technical report, and also in 2022, they're now, where your guiding is now quite a bit below the technical report. And I'm just curious, when you make that statement, do you mean that where you expect to get oxide material, you're actually getting either mixed or sulphide.

Tristan Pascall: John, do you want to take that?

John Gregory: Hi, yes, sure. What are the comment relates to we're mining in different areas than the actual plan, anticipated with the plan, but present that we work in certain cutback zones due to weather and other access issues, you can't work in that area. So you have to resort to another area of the mine. And that has a different style of mineralization. So the ratio of oxide mix sulphide that we have anticipated in the current budget was not necessarily fulfilled during quarter one.

In terms of the technical report, we are working again in zones that have not necessarily aligned to the cutback sequence that was contained in the technical report. And we're in the process of reassessing the mine plan as we have this, as I mentioned previously, and we were looking at reducing, sorry, increasing our waste stripping so that we can ensure that we deliver on the plans for later on in this year in ‘23 and ‘24.

Lawson Winder: Okay, thank you. I know, and it was a subtle difference, but that does help. And then finally, maybe, could I just get your thoughts on M&A in the copper space? I know, you guys are always looking.

How would you describe the current opportunity set?

Tristan Pascall: Sure, Lawson, I think, yes, I think to answer is we're focused on our portfolio. We think that the Brownfields opportunity within the business is meaningful, and with the surge in inflation and so on that's the right focus more broadly, yes, as you say, we – with opportunities to come across the desk, and certainly, I think at the moment copper continues to outperform in terms of price all as we save on costs all boats arising on our input costs. But copper is outstripping them. And I think you saw that in Q1 results that despite the level of cost rise, we did reach record profits for the quarter. Yes, in terms of opportunities then does make it a challenging environment in order to put a peg on margin and how each assets line up.

But I don't think you'll see First Quantum out there front of line bidding in direct competition on big assets, where we try to look at things is where we can apply our capabilities to add value for shareholders to add value that others have found challenging or that we can work through bring in different approach bring a different way of doing things. But as I said, our real focus at the moment is on the existing portfolio and the important work that we're doing in Argentina on Taca Taca, for example, and also and Haquira on the ground in order to bring those projects to a level where we could make a decision in the next couple of years, as to whether to proceed.

Bonita To: And operator, we're coming on up to the hour. So this will be our last question, please. Thank you.

Operator: Our next question comes from Ed Brucker of Barclays.

Ed Brucker: Hi, thanks for taking the question at the end here. So just two quick ones, I think. Just want to get your thought process around continuing to reduce debt at this point versus something like more share buybacks or more dividends, especially in the context of net leverage levels well below that 2x target currently.

Tristan Pascall: Yes, Hannes, do you want to take that one?

Hannes Meyer: Sure.

Look, we came out on the Capital Markets Day, the third week of January. And I mean, the maximum level, the limit would be two times net debt to EBITDA but that is through the cycle price. So when current prices if we look at our longer term processes, this is an excess of that. So we still got some work to do in terms of that. And if you ask that's the key is the debt reduction.

And we've laid out the new dividend policy at this stage. Tristan?

Tristan Pascall: On the dividend policy. And so yes, we focused on that as means to capital returns in the near term, buybacks and so on. The board would have that discretion in the future. But at this stage, as Hannes says the focus is to continue the debt reduction and to cautiously commence on dividend returns.

Ed Brucker: Great, thanks. And then just the cadence of the debt reduction in this year and then into early next, it looks like you did close to $200 million taken out this quarter, which I think will leave about $800 million left for to get to kind of your additional $1 billion reduction. That coincidentally is the same amount is the term debt left outstanding in 2022. And then the rest of the $500 million in the 2023 maturities, just wanted to get your sense on where you'd look to take reduce that debt.

Hannes Meyer: Look, our bonds at 23 are callable at par on the 24 step down in September to callable F par level as well.

I mean, the bonds carry a coupon of 7% or around 7%, some of them just below that. So that's our most expensive data. And that would be key to reduce that the term debt today is the amortization schedule attached to that. So, we will pay that down in accordance with the amortization as and when it becomes due. So I think the first focus would be on reducing the bonds, which in our portfolio is the most expensive data.

This concludes the question-and-answer session. I would like to turn the conference back over to Tristan Pascall for any closing remarks. A -

Tristan Pascall: Thank you to everyone for your continued support and for joining today's call. First Quantum will be hosting our first in person event in Toronto next week. And we certainly hope to see many of you there.

As well we look forward to hosting our Cobre Panama tour later this year in September. Enjoy the rest of your day and we look forward to speaking to you again at our next quarterly update. Thank you.

Operator: This concludes today's conference call. You may disconnect your lines.

Thank you for participating and have a pleasant day.