Executives: Clive Newall - President Hannes Meyer - Chief Financial Officer Philip Pascall - Chairman, Chief Executive Officer Zenon Wozniak - Director of Projects John Gregory - Group Consulting Mining Engineer Juliet Wall - General Manager, Finance Simon MacLean - Group Reporting

Controller
Analysts: Orest Wowkodaw - Scotiabank Matt Murphy - Macquarie Arjun Chandar - JP Morgan Matthew Fields - Bank of America Merrill Lynch Ralph Profiti - Eight Capital Karl Blunden - Goldman Sachs Patrick Jones - Deutsche Bank Anita Soni - Credit Suisse Greg Barnes - TD Securities Alex Terentiew - BMO Capital Markets George Topping - Industrial Alliance Lawson Winder - Bank of America Merrill

Lynch
Operator: Good morning. My name is Julie and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quantum conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.

If you would like to ask a question during this time, simply press star then number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Mr. Clive Newall, President and Director of First Quantum, you may begin your conference.

Clive Newall: Thank you, Operator, and thanks everyone for joining us today. On the First Quantum side, in London we have our finance department - Hannes Meyer, CFO; Juliet Wall, General Manager - Finance, and Simon MacLean, Group Reporting Controller. Joining us from all corners of the world are Philip Pascall, Chairman and CEO; Zenon Wozniak, Director of Projects, and John Gregory, our Group Consulting Mining Engineer. As usual, before we proceed I would draw your attention to the fact that over the course of the conference call, we’ll be making several forward-looking statements and as such, I encourage you to read the cautionary note that accompanies our fourth quarter and year MD&A and the related results news release, as well as the risk factors particular to our company which are detailed in our most recent annual information form and available on our website and on SEDAR. Following my opening remarks, Hannes will take us through the financial results, then we’ll open the lines to take your questions.

A reminder that the presentation which accompanies this conference call is available on our website and can be accessed either on the Events section or on the Q4 2017 results conference call button under the News section of the homepage. Let’s get started. It was a strong finish to a successful year for First Quantum. Our copper production for the year marked the sixth consecutive year-over-year growth. It is a record that we are particularly pleased with, especially in light of the challenges faced by our industry and the company over the past few years.

Sentinel’s ramp-up made all the different despite a tough start to the year in extremely wet conditions and restricted power supply for nine months of the year. The transition to a terrace layout and a number of other enhancements have had a really positive effect on operations, so you can see why where they have influenced our thinking on Cobre Panama. Solid performances were also turned in by the Kansanshi mine and smelter and Las Cruces. While our smaller operations are managing the challenges of being in the latter stages of their lives, they do contribute to profitability and in other ways. Our teams are innovative and dedicated and I think among the best in the industry.

Overall, we’ve maintained a low unit cost of production despite a higher royalty rate in Zambia with the benefits of our margin improvement programs and one-time adjustments at Sentinel and Kansanshi. Looking out, we are assuming this will increase slightly over the next year as the cost of process inputs, such as oil and labor, rise. As a reminder, our new three-year collective labor agreements for our Zambian operations came into effect last year. They essentially go out until 2020 and the yearly increases are reflected in our three-year cost guidance. Of course, in the third quarter we made the decision to place Ravensthorpe on care and maintenance.

While disappointing, we are confident the time will come for Ravensthorpe to operate in a much more commercial environment. In the meantime during care and maintenance, we’re pushing ahead with the permitting of Shoemaker Levy. We’re tweaking the process to optimize operations and building new access roads. When the time arises, Ravensthorpe will be ready and well positioned. During the fourth quarter, we entered into a framework agreement with Northern Dynasty to execute an option agreement on the Pebble project.

Since that announcement, the environmental impact study got underway. This is a lengthy and rigorous process, as it should be. We believe it will provide an important objective and scientific validation that Pebble can be developed to meet the rigorous environmental standards enforced in the United States and Alaska. Turning now to our most important Cobre Panama project, which we now own 90% of. As you would have seen, we’ve made the commitment to go ahead with the addition of the eighth mill.

We believe this is an opportune time to undertake it for several reasons. Importantly, all indications suggest that the copper market will remain robust for some time and practically our teams and equipment are already on site and available. This is part of the reason for the relatively low capex to add 11 million tons of capacity. The project’s capital intensity is further improved to $18,000 per installed ton, which is very low by industry standards. We have also committed some capital now to allow a further expansion to 100 million tons of annual throughput beyond the year 2022 without interfering with operations.

Cobre Panama is an extremely large project and it is important to us that we take all steps conceivable to enable a smooth and efficient commissioning. This is why we’re applying the same principles and discipline we did at the Kansanshi smelter. As you may remember, that was our first smelter project and while it may have started commissioning a little later than originally planned, its ramp-up far exceeded anyone’s expectations and indeed our own projections. Furthermore, it continues to operate extremely well, so we are planning an extended quality assurance process with embedded highly skilled technical personnel from our vendors onsite, along with our specialized operational team that will be leading the ramp-up process. We plan to start commissioning later this year, which we expect will lead to reaching the 85 million tons per year throughput run rate by 2020.

At the moment, the overall project is now 73% complete with specific disciplines well advanced. Site-wide concrete progress is 84% complete, structural steel erection 69%, mechanical installation 58%, tailings management facility 76%, and the pre-strip 80%. The power station, which was a focus for much of the past two years, is about 84% complete. The more advanced generating set is being commissioned with the boiler operational and steam blows in progress. Construction of the second generation set is about 79% complete and recently passed its hydro tests, which is a major milestone.

We expect to start power generation into the Panama grid later this quarter from the first generating set. The second equally sized set is due to follow in middle of the year. The power generation is in advance of our power requirements for commissioning of the process plant. During the last quarter of 2017, we connected to the Panamanian electricity grid which is now providing pre-commissioning power across the site and has reduced our reliance on site generators for construction. At the process plant, overall construction is 60% complete.

All seven mills are now installed and our focus is predominantly on the insulation of the remaining mechanical equipment - conveyers, piping, electrical works. The additional works outlined in our news release for the capacity expansion will be phased in later this year and into 2019. So there is a tremendous amount of work going on onsite at the moment, driven by a work force of around 10,500 people. Our approach is to take our time and make sure that we have done all we can to bring this mega-project into commissioning and ramp-up as smoothly and efficiently as possible. We believe that Cobre Panama will be making a well-timed entry into the market.

This is supported by the four-year high profits posted by the equipment manufacturers, traditionally the forerunner of a robust market condition. The process to put in place project financing against Cobre Panama continues to move along. In November, we launched to the banks and it was well supported. We now have commitment letters, are currently in the documentation phase, and expect completion and draw-down in the second quarter. In summary, after a busy and effective year, First Quantum is today much better positioned than it was a year ago.

Our balance sheet is better structured, our operations performing well, and we’re moving steadily towards the commissioning start-up of Cobre Panama. Our priorities remain the same - bringing Cobre Panama into operation in a manner which Panama and the company can be proud of, to deleverage the balance sheet, and to provide returns to our shareholders who have been patiently supporting our vision and strategy. With that, I’ll ask Hannes to take us through the financial results.

Hannes Meyer: Thanks Clive, and good day to everyone. I’d like to present the slides, starting on Slide 13 that is on the website, and first slide, quarterly production, quarterly and full-year production.

It was a record quarter of copper production for the group due to the strong Sentinel production. Sentinel achieved a record level of production at 57,000 tons of copper during this quarter, 9,000 tons above Q4 2016 and 3,000 tons higher than the previous quarter due to increased recoveries and higher throughput. Kansanshi production of 65,000 tons was slightly below Q4 2016. Lower recovery on the oxide circuit was partially offset by successful recovery improvements on the sulfide and mixed ore circuits. Turning to the next slide, continued optimization, the first chart illustrates the continued improvement in throughput and recoveries at Sentinel through the year.

Recovery has improved due to the addition of the Jamieson cell [ph] combined with the modified use of reagents, the result of then exceeding designed recoveries. Throughput improvements due to Pebble and secondary crushing as well as mill operations assisted in increase in overall milling rates. The second chart shows the smeltering performing consistently above design capacity due to excellent operational efficiencies and acid plant debottlenecking implemented during the August 2017 maintenance shutdown. Turning to the next slide, Q4 2017 overview, comparative EBITDA of $318 million was $100 million higher than Q4 2016 with increased contributions from Kansanshi of $148 million, Sentinel of $64 million, and Las Cruces of $42 million. Copper prices were above the average price of our copper hedges.

This has resulted in a hedge loss of $188 million and reduced realized prices by $0.56 per pound. Gross profit was $65 million above Q4 2016 primarily due to higher EBITDA offset by higher depreciation. Net debt of $5.6 billion was $500 million above the previous quarter, reflecting our planned capital expenditure program, the Pebble option agreement, and the acquisition of an additional 10% interest in Cobre Panama from LS-Nikko and doesn’t reflect certain working capital and Franco Nevada contributions expected in Q1 that would offset some of the increased spend. On the next slide, Slide 16, quarterly unit cash costs, copper C1 of $1.30 per pound in Q4 was $0.08 above Q4 2016, reflecting the impact of higher proportion of Sentinel production. Excluding Sentinel, copper C1 decreased by $0.03 against the same quarter.

Excluding Sentinel, copper all-in sustaining costs decreased by $0.15 against Q4 2016. Full-year C1 of $1.23 per pound and full-year all-in sustaining costs of $1.65 per pound is within and at the lower end of the guidance. On the next slide, strengthening the balance sheet, we continue to manage our balance sheet proactively to ensure stronger liquidity and appropriate covenants. We have completed a number of initiatives since the start of 2017. In March 2017, we completed a $2.2 billion senior note offering to extend the maturity of debt and liquidity.

In October 2017, we entered into a new term and revolving credit facility consisting of a $700 million term loan and $1.5 billion revolver which matures in December 2020 with an option to extend a further two years when certain conditions are met. A week ago on February 5, we entered into a five-year term loan with the Kalumbila subsidiary which owns the Sentinel mine. This is initially a $250 million facility with three banks and an accordion feature to increase to $400 million within six months. We expect that $250 million to be drawn in full later this week on completion of final conditions precedent. We have issued notice to repay the remaining balance of $175 million on the Kansanshi facility, which is already amortizing.

The balance will be repaid this week. Following these initiatives, the group has significantly improved the debt maturity profile with $2.2 billion of debt that had been repayable over the next two years pushed out until at least the end of 2020. As Clive mentioned earlier, this project finance progressed well towards completing a $2.25 billion financing with a mix of export credit agency guaranteed finance and uncovered commercial tranche. The transaction was launched to commercial lenders in November 2017 and was well supported. We have received signed commitment letters from an international group of banks and it’s now in the documentation phase.

[Indiscernible] that we announce would probably add another month or so delay in filing this process and therefore we have now moved out the completion and draw-down to an expected date of second quarter of this year. At the end of quarter four, the company was in compliance with all its existing facility covenants and ends the quarter in a strong position with $319 million of undrawn facilities and $702 million of unrestricted cash. Turning to the next slide, hedge program outlook, with the increase in copper price and our improved financial position, we have aligned our strategy to ensure that we capitalize more of the upside. We’ve mainly utilized zero cost collars and put options in recent hedge transactions. The program currently place has an improving price profile and this reflects the improvement in copper price during the course of the year.

Turning to the next slide, Cobre Panama capital expenditures, the slide shows the phasing of the Cobre Panama capital spend. By incorporating the capital expenditure increase, production at Cobre Panama is estimated to be up to 350,000 tons of copper concentrate in 2021. Copper production guidance at Cobre Panama is estimated to be at least 150,000 tons next year, between 270,000 and 300,000 in 2020, and up to 350,000 in 2021. C1 is expected to be at $1.20 per pound and all-in sustaining costs at $1.50 per pound in 2021. The next slide shows production and unit cost guidance for the rest of the group, excluding Cobre Panama.

Group copper production guidance is 590,000 tons in 2018, 595,000 in 2019, and estimated at 610,000 tons in 2020. The guidance range of group C1 unit costs for copper in 2018, excluding Cobre Panama, is $1.20 to $1.40 per pound. As a result of the increase in copper price, there is an increase in the royalty charge in the all-in sustaining cost calculation. This, coupled with the increased sustaining capex phasing has resulted in a small increase in the top end of the 2018 all-in sustaining cost guidance. All-in sustaining cost guidance is forecasted to be $1.65 to $1.85 per pound in 2018 and $1.65 to $1.80 per pound in 2019 and ’20.

Guidance for sustaining capex and other projects include expenditures relating to Cobre Panama and have increased across all three years. 2018 guidance includes some additional small projects at operations as well as an increase in fleet replacement and enhancement. Small projects include Jamieson cell improvements and an ISO converter at Kansanshi. Included in 2019 and ’20 is expenditures relating to other development projects. Underlying sustaining capital expenditure typically averages approximately $200 million per annum over those three years.

Thank you, and I will now hand back over to Clive.

Clive Newall: Okay, thanks Hannes. Can we now open the floor to questions, please?

Operator: [Operator instructions] Your first question comes from Orest Wowkodaw with Scotiabank. Please go ahead, your line is open.

Orest Wowkodaw: Hi, good morning.

I was wondering if we could get some more clarification on some of the assumptions around Cobre Panama. With the capex going up in the near term to bring forward some of the expansions, how does that impact the previously planned spending for the mill expansions that I believe from the technical report was in kind of 2021, ’22? There was, I think, around $9 million for mill expansions. How much of that has been brought toward with today’s update?

Clive Newall: We’ll call on Zenon. Would you like to answer that one, or John?

John Gregory: Zenon, do you remember how much there was in 2021 expectations?

Zenon Wozniak: It was more development--

John Gregory: Because I can’t think of very much that will be required in 2021.

Zenon Wozniak: No, [indiscernible] more development of the future pits and conveyors.

A lot of what’s in the process plant footprint at the moment is covered.

John Gregory: Might have to come back to you on that, Orest. The answer is I don’t think there’s actually very much, other than some sustaining capital required in 2021 for that future pit.

Clive Newall: Fellows, if I might add, in reference to the technical report, there were allowances put in there to expand it up to the full capacity, and that figure was in the order of between $500 million and $600 million.

Orest Wowkodaw: So has that now been brought forward, or do you still expect to spend something in that magnitude?

Zenon Wozniak: The answer to that question is some of that has definitely been brought forward and we would spend less to achieve that additional throughput.

Orest Wowkodaw: Okay, but too early to quantify?

Zenon Wozniak: We just don’t have a figure for you right now.

Orest Wowkodaw: Okay. Has there also been a change to the mine plan at Cobre with respect to grades? I believe the tech report had grades close to just under 0.5% in 2021, ’22, and when I think about your expanded capacity, at 100 million tons a year based on the old grade profile, that would imply copper production would be north of 400,000 tons, at least for a couple of years. Has that grade profile been smoothed out in order to get to your 350 ton number that’s in the update?

John Gregory: John Gregory here.

Clive Newall: John, I don’t think we mentioned--sorry to interrupt, but we don’t get at 200,000 tons, do we in ’21 with this guidance?

John Gregory: [Indiscernible]

Clive Newall: [Indiscernible] 300 million tons.

[Indiscernible]

Philip Pascall: If I can just clarify, the mining areas at Cobre Panama remain much the same. There has been far more detailed planning undertaken which is having a certain effect of smoothing grade but nothing significant. Our main focus now is moving up to the 85 million tons per annum in the first instance, and we are considering the 100,000 beyond the 2022 year, so at some point, and the driver for that will be as the grades begin to reduce, as per the profile in the technical report, we will then look at increasing throughout to the 100 million ton throughput.

Orest Wowkodaw: Okay. Then just finally on Cobre, can you give us an idea of what we could assume with respect to commercial production for Cobre in 2019? Have you defined what will trigger commercial production from an accounting perspective?

Hannes Meyer: It’s typically quite a few measures that we consider.

It’s throughput rates, it’s recovery, and it’s also a number of days that we do achieve consistent performance. On a big operation like this, you probably would expect a bit longer continuous running of the operation, so I think it’s probably too early to share now, but we do expect to be in commercial production next year.

Orest Wowkodaw: Right, but not--it would be premature to assume beginning of 2019? I assume that would be sometime midyear or beyond, or--?

Hannes Meyer: Probably.

Orest Wowkodaw: Yes, okay. Okay, I’ll pass it on.

Thank you.

Operator: Your next question comes from Matt Murphy with Macquarie. Please go ahead, your line is open.

Matt Murphy: Hi, similar question, just on clarity on the Cobre Panama guidance, in particular the 2020 numbers. Can you take me through the variables you’re assuming that drive that range of 270,000 to 300,000 tons, just in terms of throughput, grade, recovery?

Clive Newall: Zenon, do you want to take that, or John?

John Gregory: I’ll take that one, Clive.

Basically we’ve allowed for a steady ramp-up of increasing the production throughput. We have been conservative--the grade profile remains much the same, and we have taken a slightly conservative view on the recoveries, and the reason for that is to make allowance to allow the processing facility to settle down and enter steady state. That’s basically the background to the production figures in ’19 and ’20.

Matt Murphy: Okay, so when you say--I was trying to square the numbers with an 85 million ton throughput in 2020, so if I assume 85 million tons and around 0.47% copper, then my other variable to back into your production guidance would just be the recovery that I assume?

John Gregory: Basically, yes.

Matt Murphy: Okay, great.

Does that recovery assumption have anything to do with the level of mining ahead of sending that throughput, so is there still the same sort of stockpile strategy and you’re still getting at the ore you want, you’re just being a little more conservative on how well that ore recovers, or is it a function of maybe sending slightly more oxidized or less optimal ore to the mill in the early years? Thanks.

John Gregory: The objective of the pre-strip is to ensure that we open a full footprint and we identify our optimal feed material quality. In the very first instance, the material near surface is of slightly lower grade. We’ve commenced obviously grade control drilling which is confirming what we anticipated in the geological model. There will be a period when during 2019, we don’t have stockpiles as such in the main profile of the operation, but we will be feeding some material that has been stockpiled as part of the pre-strip process and there’s a small amount of material that gets re-handled; but otherwise our stockpiles are on the benches as broken material in the ground.

Matt Murphy: Got you, thank you.

Operator: Again if you would like to ask a question, press star, one on your telephone keypad, and please limit yourself to one question and one follow-up question. Your next question comes from Arjun Chandar with JP Morgan. Please go ahead, your line is open.

Arjun Chandar: Hi, good morning.

Can you talk about the shareholder loan agreement with KPMC? How should we think about the liability as it relates to your senior debt, and did the number increase sequentially as a result of your additional 10% stake purchase? And I just wanted to clarify that that transaction has closed, thanks.

Hannes Meyer: Right. At the moment - Juliet, just help me on the accounting side here, because we’ve got the 100%--I mean, we account for that now as an equity investment, the additional 10% that we acquired, because we acquired 50% of that company. We are in process or will probably in the next year reorganize that, that will effectively mean that only half of that loan will be to external parties. We’ll consolidate the other half of that loan.

Arjun Chandar: Thank you.

Operator: Your next question comes from Matthew Fields with Bank of America Merrill Lynch. Please go ahead, your line is open.

Matthew Fields: Hey everyone. I wanted to ask a couple as well.

It had been previously put out by you that when the project financing is finalized, that you might take some of the cash from that, send it up to the corporate balance sheet and pay down some bank debt with it. Looking at that in conjunction with the fact that a couple of your front-end bonds are currently callable, is that still your objective, and do you consider at this stage terming out some of those front-end bonds?

Hannes Meyer: Matt, always a good question, to which you probably don’t expect an answer on terming out these next near-term bonds. But just to get back to the front part of that question, is that under our corporate debt facility, there is a requirement that once we put the project finance in place, as we draw down, we’ll reduce the term debt of that facility, so that is still the objective, so we have been, and once we draw down a project finance, absolutely we look at reducing the corporate debt within the term side of the corporate facility.

Matthew Fields: Okay, great. Then just a quick housekeeping question.

I saw that your net gold realization was $1,055 per ounce, but the average price in the quarter was about $1,275. Can you just sort of explain what happened there?

Hannes Meyer: I’m looking at Juliet here. We’d probably have to get back to you on that one.

Juliet Wall: Yes, we’ll get back to you.

Matthew Fields: Okay, thanks very much.

Zenon Wozniak: I think one of the reasons for that is that the payables on copper--or in gold and concentrate varies with some of the offtakes, depending on where it goes to. The standard convention is that they will take one gram and if a grade is low, obviously that can be a recoverable at 75%. It doesn’t apply to [indiscernible]. It will be in that aspect.

Hannes Meyer: Matt, typically the gold is only recognized when she’s sold, you know, not when it’s produced, so [indiscernible] so there might be a slight mismatch as well.

But we will get back to you on that.

Matthew Fields: Okay, thanks very much, everyone.

Operator: Your next question comes from Ralph Profiti with Eight Capital. Ralph, your line is open.

Ralph Profiti: Thanks Operator, good day everyone.

Clive, can you help me put in context the benefits of a more efficient ramp-up at Cobre Panama, perhaps in terms of how long you think it will take to get down to that $1.20 a pound cash cost target?

Clive Newall: Yes, maybe John, you have a view on that?

John Gregory: In terms of ramp-up, we are--as previously mentioned, we are investing certainly in a lot of technical people, both from our side and the vendor side to ensure that we can ramp up, and we continuously optimize our mining and processing scenario. We believe that we will achieve 2019 and 2020, this will be the continuous aspect, and we’re now considering up to the 85 million ton per annum throughput rate, and we anticipate that the operating costs will initially--obviously to start with, there will be some higher unit costs, those are to be expected, but then the unit costs will come down as we put--and within the range that we are looking at within the guidance basically.

Ralph Profiti: Okay, all right. If I can switch gears a little bit, can you discuss some of the recent experience operating the high pressure leach plant at Kansanshi? We’re seeing copper production guidance down a little bit versus previous, and as well as now this 70-day planned shutdown, it does seem like one of the longer shutdowns but I could be mistaken.

Clive Newall: Zenon or Philip?

Philip Pascall: Can you ask that again? [Indiscernible] Kansanshi?

Ralph Profiti: Yes, and I believe that you started up the plant last quarter, and now we’re seeing production guidance at Kansanshi down a little bit versus previous, and now this longer 70-day planned shutdown.

Is that sort of according to plan, or are shutdowns that long? Just maybe talk a little bit about some of the incremental production that you have coming out of the pressure leach plant, perhaps in the next one to two years.

Juliet Wall: Just on guidance, a lot of that is grade-related, so lower assumed grade around the next [indiscernible], so that’s what really drives a slight reduction at Kansanshi.

Ralph Profiti: I see.

Hannes Meyer: One comment also from my--

Philip Pascall: What the pressure leach is used for is to handle material that, for one reason or another, is less useful in a smelter, and that does mean it gets some of the mix concentrate. Its capacity is constrained largely by the [indiscernible] availability and there’s a limit to around about 100,000 tons a year of concentrate feed, but if the grade’s off, you’ll see less of it, and that grade will be a function of the fact that it’s floatation material rather than mix circuit.

Clive Newall: And the shutdown, Philip? That’s presumably one of the major--

Philip Pascall: Yes, [indiscernible] about that, there was a shut--because we had a problem with one of the pressurizing compressors, but that came back up online and hasn’t shut again. I’ll--on the details of that, we can follow up here--

Zenon Wozniak: I think there’s actually some re-bricking planned for the autoclaves, so the original bricks, which they’re Stebbins bricks, which were in the lower section of the autoclave have been in there since [indiscernible] time, and when we installed the autoclaves back in about 2008 or whenever it was, we replaced a number of bricks up in the upper section in the gas phase, so I think there’s a reasonable re-rigging to be done in the autoclaves, which is probably the shutdown that you’re talking about.

Ralph Profiti: Got it, okay.

Philip Pascall: [Indiscernible] just comment that it’s not critical to the production and performance of Kansanshi, and if you look over time, Kansanshi, as you’re probably aware, has seen slightly declining grades but increasing recovery, which is unusual and is a function of the various innovative ideas that are exploited generally at Kansanshi. The pressure leach fits into that, but it’s not a--it doesn’t have a huge impact.

Ralph Profiti: Thanks Philip.

Operator: Your next question comes from Karl Blunden with Goldman Sachs. Your line is open.

Karl Blunden: Hi, good morning guys. Thanks for taking all the questions.

Just on the project financing, I know there was a comment there that understandably adding the eighth mill leads to a little bit of extra documentation, and a one-month pushback, so should we assume then that the project financing draw-down would be in April, so one month after the prior target? Is there any change to the size of this incrementally that allows you to do a bit more than the initial plan?

Clive Newall: In terms of the pushback, it’s more to evaluate the full effects of that, so there’s a little bit of a pushback which will push it into the second quarter. We’re not anticipating an increase in size as a result of that.

Karl Blunden: Got you, so not necessarily April, not necessarily a one-month pushback?

Clive Newall: Yes, I wouldn’t be that precise as to say.

Karl Blunden: Got you, that’s helpful. I think Matt had touched on this earlier on the use of proceeds there and term loan versus bonds and ability to refi the bonds.

Understand you can’t give answers to all of these, but I think one of the conditions on the term loan extending was getting the project financing in place. Does that change the way you think about allocating a lot of capital to paying down the term loan and you’ll be able to extend a good portion of it?

Simon MacLean: That’s not one of the conditions of extending the term loan, which is to do with the bonds not maturing before where it’s extended to. Those are the main conditions of that, and the current revolver term loan extends to December 2020, so there’s plenty of time for us to manage that.

Karl Blunden: Got you, fantastic. Thanks guys.

Operator: Your next question comes from Patrick Jones with Deutsche Bank. Please go ahead, your line is open.

Patrick Jones: Hi, good morning. I just had a quick question on Sentinel and also on the power availability side. On Sentinel, obviously you’ve now gone through the transition to terrace mining and that’s ongoing over the next little while or so, and now you’re guiding to about 255 for 2020.

I think the initial plan at Sentinel was to get something close to the 270 to 300. What kind of are the limitations now to getting to that level? You’ve mentioned that the Kansanshi smelter is obviously running ahead of what the design capacity was. Do you think there’s any point in time at which you can be confident you can actually take that up with that spare debottleneck capacity at the smelter? Thank you.

Philip Pascall: If I just understand your question, it’s what will be the ultimate capacity and when for Sentinel, or--?

Patrick Jones: Effectively what would be the effective eventual capacity, and are there any limitations to that given the smelting capacity, and are you in a position to have the Kansanshi smelter take on what would be the incremental concentrate coming from Sentinel?

Philip Pascall: Right. It’s a good question on the concentrate, and certainly we look always at the concentrate offtake capacity of our own smelters and other smelters in Zambia.

We don’t see that providing a definable constraint. There will be times, of course, when it does simply because one of them is down. As for the tonnage that we’ll get out of it, John can probably answer the question in more detail; but in these early years, we’ve seen in the area that we are at the moment a slightly lower delivered grade. There’s more ore, but it’s slightly lower grade, and the expectation is that in about three years’ time, that grade will improve in the area that we’re going to, and that’s just a function of where are in the ore body. With the limits on the capacity of the plant, you’ll see a variation in output.

John, you might elaborate?

John Gregory: Yes Philip, from the detailed mine plans that we are producing, we do see that the grades remain much as per previously reported. We are--as part of the terrace mining, we are undertaking a great deal more drill and blast capability, reconciliation, and ore dilution minimization, all those programs that are underway, so that will have - and we’ve already seen it - an improvement grade quality. The other aspect is basically throughput from the mining, through the crushers, conveyors, and up to the process plan itself, and we are seeing a steady increase in performance and what we’re able to treat. There’s a whole series of debottlenecking and small projects that will allow us to get to the target, which is 55 million tons per annum through that facility, and we anticipate that we will do that with--it will continue to improve this year and next year as well. That in the throughput and the grade will allow us to get to the approximately 270,000 tons that we had indicated previously, but that again is very much grade dependent on whichever year we mine that material in.

Patrick Jones: Okay, great. Thank you. Just related to that, obviously if one constraint is smelter capacity at one smelter, the other capacity constraint would be potentially on the power side. One that’s been recently reported was that there’s been a risk that [indiscernible] would have to bring down its production rate if the rains, even through January that’s been quite dry, continues. Obviously I appreciate there’s lot more power generation capacity that’s been brought on since the 2015 crisis, but one thing you negotiated with the higher power rates in July or so was around the ability to import power from South Africa.

Could you maybe just discuss a little bit of what those arrangements would be if you did, in a worst case scenario, have to fall back on that?

Philip Pascall: In fact, what we negotiated was that we were entitled to arrange for power from South Africa, and those negotiations are ongoing, and they are around willing and how it’s handled by Zesco. At the moment, they do provide us the power that we need and generally pretty stable for this time of year. This is the high rainy season, and we’re not seeing constraints that come from power. I think it’s true to say that with that additional power that we would leverage out of South Africa, we don’t see power as being a constraint on that capacity, and what I mean by that is we can see as we operate that there are other factors now that contribute. We get the odd disruption from power but it’s not of any great consequence.

Patrick Jones: Okay, great. Thank you.

Operator: Your next question comes from Anita Soni with Credit Suisse. Please go ahead, your line is open.

Anita Soni: Morning gentlemen.

My first question is with respect to the mining rates. What are you currently mining in tons per day?

Clive Newall: Overall? Are you asking for all operations, or one in particular?

Anita Soni: Only at Cobre Panama.

Clive Newall: Oh, okay.

Philip Pascall: All right, what was that about mining?

Anita Soni: Ton per day mining rate.

Juliet Wall: At Panama, Cobre Panama.

Philip Pascall: Sorry, my line isn’t loud enough, so I can’t actually get that--

John Gregory: Okay. The current mining rates at Cobre Panama is the question, Philip. We’re currently undertaking our pre-strip and we’ve got various material types, separate rock and now areas of fresh rock, and we are--our mining capacity is in the order of 1.5 to 1.6 million BCMs per month. That’s the metric we are using at the moment, and that can be equated back to a tons per day.

Anita Soni: Sure, okay.

Then second question, can you just answer for me, because it’s not clear to me the ramp-up at Cobre Panama, are you doing two staggered lines, and when will you be introducing ore to each line?

Zenon Wozniak: I can probably answer part of that. It won’t all turn on at once like a light switch. It’s not necessarily two staggered lines. We would start with the first mills - there’s seven mills in total, so we’ll work through that. Essentially there’s a sag mill and two [indiscernible] and that’s repeated, so we would bring the mills on in pairs or one at a time, working our way through the seven, and it is intended to introduce ore by the end of the year.

Anita Soni: By the end of 2018?

Zenon Wozniak: Look - it depends how far it goes as well.

Anita Soni: I’m sorry - when you said by the end of the year, I just wanted to clarify which year you were talking about, by the end of 2018 or 2019?

Zenon Wozniak: No, by the end of 2018.

Anita Soni: Okay. All right, and then last question, when you were giving your guidance here for Cobre Panama for 150 tons in 2019, 270 to 300, etc., is that on one hundred basis or attributable to First Quantum?

Philip Pascall: That’s 100%.

Juliet Wall: One hundred percent.

Anita Soni: All right, and last one if I can, the cash cost guidance of $1.20 for C1, when do you expect to reach that? By 2021 would be my assumption.

Hannes Meyer: Yes, I think we said by 2021.

Juliet Wall: Yes.

Anita Soni: Okay, thank you very much.

Operator: Your next question comes from Greg Barnes with TD Securities.

Please go ahead, your line is open.

Greg Barnes: Thank you. I’ll direct this to Philip. Philip, can you give us some idea of what your longer term view now is on Kansanshi?

Philip Pascall: Well, as John will tell you, we don’t need in the current assessment of the mine plan to have--to make any decision that results in a change in capacity inside five years. In other words, within about five years, we’ll start to see a decline if we don’t do anything, and that rate of decline is gradual as we process more sulfide ore, whose grade is lower.

So if we want to maintain its capacity, then we have to make an investment to increase our capability to handle basically the mill and processed sulfide ore, which was what was inherent in S3, and as the original--as the earlier question raised, then we have to look at the capacity of smelters around the place to take that additional sulfide concentrate. So those are questions that we currently have and are looking at, and will involve a significant capital expenditure because of the need for additional smelting capability. The economics of that, of course, are a function of a number of factors, including what the copper price is and expectation in that time frame. But we don’t have to make decisions on that for at least two to three years.

Greg Barnes: Okay.

Currently in Zambia, are you restricted by smelter capacity or not? I’m still not clear on where that stands. When you incorporate [indiscernible]--

Philip Pascall: We’re not, but we think we will be once we push the [indiscernible] on our current production. We will be exploiting all of the capacity within the cover belt, and you know, it’s not absolutely definitive because there are--there’s a current user at the moment that we hear is probably going to stop producing within the next year or so anyway, so you see those kinds of variations. The smelting capacity goes on and will remain the same [indiscernible].

Greg Barnes: So if you’re running 270,000 tons at Sentinel and 250, 260 at Kansanshi, then you’re at the limit of smelting capacity in Zambia?

Philip Pascall: Yes, with the current ratio at Kansanshi of sulfide.

Obviously if we’re trying to do 250 and it’s all sulfide, which is what we would be talking about in the longer term, then we would run out of capacity.

Greg Barnes: Okay, got you. Thank you.

Operator: Your next question comes from Alex Terentiew with BMO Capital Markets. Alex, your line is open.

Alex Terentiew: Hi guys. I just wanted to circle back to the expansion at Cobre Panama, your comments on getting to 100 million tons. How much of the $600 million increase we’re seeing today is towards infrastructure and other equipment for that - you know, additional conveying, crushing, floatation capacity that is being installed today? In the previous 2015 tech report, the expansion talked about there going from 74 to about 90 million tons, I think Orest mentioned in the beginning it was about $915 million in capex, but in that number there was an assumption that there would be an expansion to the power plant. Is your current power plant now going to be sufficient to run the 85, and if you were to take it to 100, would you need to expand that?

Clive Newall: Philip, would you like to answer?

Philip Pascall: Yes, we don’t expect to have to expand the power station to be able to get to 100 million tons a year. Apart from combination capacity, and we’re talking about really the milling, everything else out of this exercise will be in [indiscernible] of 100 million tons a year.

That’s all the conveyors, the floatation, piping, pumping, etc. So the answer to that question is to take it up to 100 million tons a year requires two things. One is obviously more mining capacity, and for that we need--we will need to see a longer history of the mining itself to appreciate what that might entail, but I would expect a bit more mining equipment; and the other is that the grind or actual capacity of the grinding circuits will depend on grind size and various other criteria which tend to vary with depth as well. We need to look at that exactly. The room was made there to add more mills - that’s all that we expect to really need, we might end up with a ninth mill, and we’ll know that within the next year or two.

But other than that, everything else is installed.

Alex Terentiew: Okay, great. Just want one follow-up, if I may. Capex as a standing other, just for your other projects, last year the numbers you guys gave were about $150 million per year, and now it’s $400 million. Is this more some catch-up spending, things that just kind of weren’t spend over the past few years and now you need to spend it now, or some new projects, and is any of that directed towards your earlier stage projects, like Taca Taca or Haquira?

Juliet Wall: Yes, I think we say in the notes just below the guidance that our underlying sustaining capex is more on average $200 million a year, so in addition to that within ’19 and ’20, there is an amount earmarked for future development projects within that.

For example, in 2018 again we say in the note, one of the reasons is just the phasing on new vehicles and plant component replacement at Sentinel, but the underlying core sustaining is around about on average $200 million, and as Hannes--

Alex Terentiew: Yes, and--sorry, go ahead?

Juliet Wall: As Hannes said also in his speech, there are some other projects as well, so things like the ISO converter and the Jamieson cell and things like that.

Alex Terentiew: Would the Pebble partnership $37 million be included in that number?

Juliet Wall: No, that’s shown as an investment within our account, so it doesn’t feature in the capital expenditure number.

Alex Terentiew: Okay, great. Thank you.

Operator: Your next question comes from George Topping with Industrial Alliance.

Please go ahead, your line is open.

George Topping: Great, thank you. Hello everyone. A question for Hannes on the net debt to EBITDA covenants. Where do you see that going at the end of Q1, and if the project gets delayed beyond Q2, are you comfortable that you won’t breach those net debt to EBITDA covenants?

Hannes Meyer: Hi George.

I mean, our statements are prepared on a going concern basis, and that does require us to assess covenants and look forward and test downside scenarios, so if you look at Q1 last year, we were quite heavily hedged and quite a lot lower copper prices, although quite a bit proportion of this quarter’s copper hedge is at higher prices and we’ve got more production, so our EBITDA should improve compared to last year, and our ratio overall should improve as well.

George Topping: To the extent that even if the project is unsigned by the end of Q2, that it’d be less than the 4.75?

Hannes Meyer: The project debt doesn’t change our covenant testing, so the covenant testing is in place without the--whether we’ve got project debt or not, so we measure ourselves against that. With our forecasts and with the pricing that we see, there is no breach of that, that we foresee.

George Topping: Good. Then just secondly, I think it was touched on earlier but I didn’t catch the answer.

ZCCM dispute over in Zambia, what is its stake financially there? Is it material or can we just ignore it?

Philip Pascall: It’s probably best that we don’t respond to that, because it is a subject obviously of some legal activity. I don’t think it’d be appropriate to comment.

George Topping: Okay, understood. All right, thank you.

Operator: Your next question comes from Lawson Winder with Bank of America Merrill Lynch.

Please go ahead, your line is open.

Lawson Winder: Hello, thank you for taking the questions. First off, just on Cobre Panama, could you actually break out exactly what your sustaining capex assumption is for Cobre for 2020 and if you’ve assumed any sustaining capex for 2019, what that number is that you’ve assumed?

Juliet Wall: Yes, we have assumed some sustaining capex for 2020 for Panama, circa $50 million in there, and a lower amount for 2019, circa up to $30 million.

Lawson Winder: Understood. Then just on nickel, with Enterprise you discussed the potential of expanding the capacity to 60,000 tons per annum.

I was just curious if maybe you could share what the capex would be for your base case, which would be the 38,000 tons, and then what it would be for 60,000 tons, and if not the exact numbers, maybe the incremental amount versus the base versus that expanded case. Thank you.

Philip Pascall: Clive, did you mention an expansion? I don’t recall that.

Clive Newall: No. Go on, John.

John Gregory: Okay Clive. I think what’s being referred to here with Enterprise, the capital is already invested with the nickel plant. The variance in nickel metal production revolves around grade, feed grade. We will have plenty of opportunity to either smooth an average grade or to be actually able to feed higher grade as and if required, depending on metal price conditions at that time.

Lawson Winder: Okay, so the difference in investment between those two cases is nothing, so it’s just--

John Gregory: It’s basically--yeah, it’s basically grade driven.

Lawson Winder: Okay. There must be some sort of initial mining or pre-strip, or is this--

Philip Pascall: [Indiscernible] open up that mine to be able to mine it at the rates that the plant is capable of, and that’s about $100 million.

Lawson Winder: Got you.

Philip Pascall: Yes, and what we produce out of that, as John says, is just a function of whether we mine a more average grade or higher grade, particularly for what we encounter initially.

Lawson Winder: Okay, that’s great, that’s very helpful.

Thank you, that’s my two questions. Thank you.

Operator: We have now reached the end of our question and answer session. I will turn the call back over to Clive Newall for closing remarks.

Clive Newall: Thank you everybody for joining us today, and we look forward to talking to you again in three months’ time, so goodbye from all of us here.

Operator: This concludes today’s conference call. You may now disconnect.