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Press release from Marketwire

First Quantum Minerals Reports Operational and Financial Results for the Three and Nine Months Ended September 30, 2012

Wednesday, October 31, 2012

First Quantum Minerals Reports Operational and Financial Results for the Three and Nine Months Ended September 30, 201217:00 EDT Wednesday, October 31, 2012VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 31, 2012) -First Quantum Minerals Ltd. (TSX:FM)(LSE:FQM) - (In United States dollars, tabular amounts in millions, except where noted)First Quantum Minerals Ltd. ("First Quantum" or the "Company") today announced its results for the three and nine months ended September 30, 2012. The complete financial statements and management's discussion and analysis are available for review at www.first-quantum.com and should be read in conjunction with this news release.First Quantum's President, Clive Newall, will host a conference call and live webcast to discuss the results on Thursday, November 1, 2012 at 6:00 am (PST); 9:00 am (EST); 1:00 pm (BST). The call and webcast will be available on www.first-quantum.com and by dialing 416-340-8530 or toll free in North America on 877-240-9772.First Quantum's results have been prepared in accordance with International Financial Reporting Standards ("IFRS").SUMMARIZED OPERATING AND FINANCIAL RESULTSThree months ended September 30Nine months ended September 30(USD millions unless otherwise noted)2012201120122011Copper production (tonnes)184,14458,785222,198198,260Copper sales (tonnes)77,39671,443217,896207,619Cash cost of copper production (C1)2 (per lb)$1.44$1.52$1.51$1.37Realized copper price (per lb)$3.45$3.84$3.53$4.04Nickel production (contained tonnes)19,916-26,663-Nickel sales (contained tonnes)7,120-22,298-Cash cost of nickel production (C1)2 (per lb)$6.24-$5.88-Realized nickel price (per lb)$7.69-$8.04-Gold production (ounces)150,78441,468137,559131,701Gold sales (ounces)48,88947,458140,953131,233Sales revenues724.8651.02,175.82,016.2Gross profit261.0322.6806.01,125.3EBITDA2276.2279.22,051.51,051.6Net earnings attributable to shareholders of the Company107.390.91,586.2452.9Earnings per share$0.23$0.20$3.35$1.03Diluted earnings per share$0.23$0.20$3.33$1.03Comparative earnings3107.3139.3368.3501.3Comparative earnings per share3$0.23$0.30$0.78$1.141Includes copper, nickel and gold produced at Kevitsa during pre-commercial production up to August 18, 2012. See "Summary of results" for further information.2 Cash costs (C1) and EBITDA are not recognized under IFRS. See "Regulatory Disclosures" for further information.3 Earnings attributable to shareholders of the Company have been adjusted to remove the effect of unusual items to arrive at comparative earnings. Comparative earnings and comparative earnings per share are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS. The Company has disclosed these measures to assist with the understanding of results and to provide further financial information about the results to investors. See "Regulatory Disclosures" for a reconciliation of comparative earnings.Commercial production achieved at the Kevitsa mineCommercial production achieved on August 18, 2012 following a successful commissioning and rapid ramp-up phase at the nickel and copper operation. This is the second project successfully commissioned by the Company during the past year. Copper production up 43% over Q3 2011 as a result of record quarterly production at KansanshiTotal copper production increased significantly due to higher grade, throughput and recovery at Kansanshi resulting from mine pit developments and plant expansions. Guelb Moghrein increased production despite the loss of 12 production days related to an illegal labour dispute in July. Total nickel production benefitted from a contribution of 1,884 tonnes from Kevitsa and steady operations at Ravensthorpe. Total gold production was 22% higher than Q3 2011 due to the contribution of 2,713 ounces from Kevitsa and higher recovery at Kansanshi. Comparative earnings decreased from Q3 2011 as a result of lower copper prices and higher cost of salesSales revenues increased by $73.8 million to $724.8 million as a result of revenue contributions from Ravensthorpe and Kevitsa, higher copper and gold sales volumes, offset partially by the impact of 13% lower LME copper prices. Cost of sales increased by $135.4 million to $463.8 million due primarily to the addition of operating costs from Ravensthorpe and Kevitsa, a higher Zambian royalty rate and the sale of higher-cost inventory from Q2 2012. Cash costs of copper production decreased to $1.44 per pound as higher overall production and ore grades outweighed increased acid costs related to processing higher acid-consuming ore at Kansanshi. Development projects continue according to planThe fifth Kansanshi acid plant is scheduled to be operational during Q4 2012 which will allow for utilization of the expanded 7.2 million tonne per annum ("Mtpa") oxide circuit capacity. The stage two oxide expansion to 14.5 Mtpa at Kansanshi continues and is scheduled for commissioning in the first half of 2013. Detailed design works on the Kansanshi smelter project are well progressed and all major equipment packages have been ordered. Structural and mechanical installation is expected to commence in early 2013. Significant progress made at the Sentinel project on earth works, civil works and the advancement of detailed design engineering. Strong financial position maintained to finance development projectsCash and available debt facilities amount to $1.6 billion as at September 30, 2012. On October 10, 2012, the Company completed the issuance of $350.0 million of Senior Notes due in 2019. Interest on the senior notes is payable semi-annually at a rate of 7.25% per annum Operational outlook for 2012Expected production increased to approximately; 285,000 to 295,000 tonnes of copper, unchanged at 36,000 to 40,000 tonnes of contained nickel and increased to approximately 175,000 to 190,000 ounces of gold. Expected average C1 cash cost for copper operations reduced to approximately $1.50 per pound of copper. Expected average C1 cash cost for Ravensthorpe reduced to approximately $6.20 per pound of nickel. Expected total capital expenditure of approximately $1.5 billion in 2012.OPERATIONSKansanshi Copper and Gold OperationThree months ended September 30Nine months ended September 302012201120122011Sulphide ore tonnes milled (000's)2,7632,1856,5757,227Sulphide ore grade processed (%)0.90.41.00.7Sulphide copper recovery (%)92889393Mixed ore tonnes milled (000's)1,9552,0576,6105,391Mixed ore grade processed (%)1.00.91.11.0Mixed copper recovery (%)77616764Oxide ore tonnes milled (000's)1,5001,5944,4724,580Oxide ore grade processed (%)2.62.32.22.3Oxide copper recovery (%)84848586Copper production (tonnes)71,48450,179190,920171,132Copper sales (tonnes)65,83061,102188,125181,796Gold production (ounces)35,24526,67790,64782,706Gold sales (ounces)33,51029,59292,98086,746Cash costs (C1) (per lb)1$1.46$1.56$1.50$1.35Total costs (C3) (per lb)1$1.86$1.90$1.87$1.67Sales revenues507.1521.61,485.61,642.6Gross profit223.8266.7691.41,000.9EBITDA1240.4298.4744.81,060.71 C1 and C3 costs and EBITDA are not recognized under IFRS. See "Regulatory Disclosures" for further information.Copper production increased by 42% from Q3 2011, to a quarterly record, due to higher ore grades, throughput and recoveries in Q3 2012. Ore grades benefited from improved access to mining areas and an increase in availability of sulphuric acid in the period, which allowed for the treatment of some high grade, high acid-consuming ore.Sulphide copper production was significantly higher than Q3 2011 due to increased throughput and ore grades processed in Q3 2012. Q3 2011 ore grades were impacted by a change in the mine plan which temporarily reduced the mining of higher grade sulphide ore in favor of pit development activity. This ongoing mine pit development has now established significantly wider pits and improved access to various ore types at target grades to coincide with the plant expansions underway. Throughput was higher in Q3 2012 due to a circuit reconfiguration in the prior year which temporarily reduced the capacity of the sulphide circuit.The mixed ore circuit benefited from higher recovery and steady throughput in Q3 2012. The improved recovery was driven by a more favorable blend of sulphide and oxide ore processed in Q3 2012. Mixed ore throughput exceeded the 6.5 Mtpa design capacity in Q3 2012 as a result of a focus on reducing process disturbances in conjunction with improving plant availability and utilization.Copper production from the oxide circuit increased from Q3 2011 as reduced throughput was more than offset by improved ore grades processed in Q3 2012. An increase in the availability of sulphuric acid enabled the treatment of higher grade, higher acid consuming oxide ore in Q3 2012.Gold production was 32% higher than Q3 2011 due to higher overall throughput and improved recovery. The continued gold circuit enhancements and improvements have resulted in a higher proportion of gold recovered in dore, which is not subject to the smelter deductions applied to gold recovered from concentrate.Q3 2012 C1 costs decreased by $0.10/lb from Q3 2011. C1 costs benefited from the unit cost effect of producing 42% more copper, as the increased production was driven primarily by higher grades and recoveries. This benefit outweighed higher acid costs related to processing higher acid-consuming ore during Q3 2012.Gross profit was lower than Q3 2011 due primarily to lower realized copper prices and higher royalty rates. The Zambian royalty rate was increased from 3% to 6%, effective April 2012, resulting in an increase of $15.5 million in the royalty expense in Q3 2012. Cost of sales increased in Q3 2012 due to the sale of higher-cost inventory which was produced in the prior period. Outlook The main areas of focus continue to be on sulphuric acid supply and increasing the flexibility of ore sources for the three circuits. Available mining areas continue to increase as planned with several new areas in the Main and North-West pits now providing ore. Further improvements are anticipated with additional plant operational efficiency and flexibility afforded by multiple concurrent mining areas.The benefit of the 7.2 Mtpa oxide circuit upgrade is expected to be realized in Q4 2012, coinciding with the commissioning of the fifth acid plant. The additional leach and CCD capacity in the oxide process circuit is expected to contribute to maximizing output from available ore through improved recovery, as well as providing the capacity to efficiently operate at higher treatment rates.In the medium term, some of Kansanshi's mining areas for oxide ore are characterized as high grade, high acid-consuming ore. Currently the supply of sulphuric acid from acid plants requires the import of sulphur at high costs. Consideration will be given to withholding the high grade, high acid-consuming ore from production until acid is provided at minimal cost from the Kansanshi smelter. In this event, the capacity of the oxide expansions and fifth acid plant may not be fully exploited.Guelb Moghrein Copper and Gold OperationThree months ended September 30Nine months ended September 302012201120122011Sulphide ore tonnes milled (000's)6876682,2362,057Sulphide ore grade processed (%)1.31.41.31.4Sulphide copper recovery (%)94919191Copper production (tonnes)8,6568,60626,63227,126Copper sales (tonnes)8,96210,33227,16724,173Gold production (ounces)12,82714,79143,71848,995Gold sales (ounces)13,63117,86646,22544,487Cash costs (C1) (per lb)1$1.43$1.33$1.63$1.40Total costs (C3) (per lb)1$1.93$1.89$2.20$2.14Sales revenues85.6102.4267.1249.0Gross profit24.352.470.2124.3EBITDA129.658.288.2138.81 C1 and C3 costs and EBITDA are not recognized under IFRS. See "Regulatory Disclosures" for further information.Q3 2012 Copper production was consistent with Q3 2011 despite the loss of 12 days of production following an illegal strike action by some unionized employees in July 2012.Throughput rates during Q3 2012 benefited from mill optimization works and improved blast fragmentation aimed at achieving steady state operations. Copper recovery increased as a result of longer flotation residence time following a circuit reconfiguration during the quarter. Copper grades in 2012 reflect the current ore profile in the pit and are expected to remain at these levels in the future.Gold production was lower than Q3 2011 due to reduced gold grade and recovery.C1 costs were higher in Q3 2012 due to a $0.28/lb lower gold credit resulting from lower gold sales volumes, however cash operating costs were lower than Q3 2011 due to cost reductions in mining and processing related to reduced maintenance costs in Q3 2012.Gross profit was lower than Q3 2011 as a result of lower realized copper prices and lower sales volumes. Outlook Process plant enhancements continue with a focus on consistent operation at steady state to maximize product recovery and concentrate quality. Additional mining equipment, to facilitate higher mine production rates, is planned for commissioning in Q4 2012.Ravensthorpe Nickel OperationThree months ended September 30Nine months ended September 302012201120122011Beneficiated ore tonnes processed (000's)733-2,125-Beneficiated ore grade processed (%)1.4-1.5-Nickel recovery (%)77-77-Nickel production (contained tonnes)8,032-24,658-Nickel sales (contained tonnes)6,272-21,450-Nickel production (payable tonnes)6,188-19,009-Nickel sales (payable tonnes)4,790-16,432-Cash costs (C1) (per lb)1$6.43-$5.94-Cash costs (C3) (per lb)1$7.84-$7.22-Sales revenues81.3-293.4-Gross profit (loss)(1.6)-39.7-EBITDA16.4-67.7-1 C1 and C3 costs and EBITDA are not recognized under IFRS. See "Regulatory Disclosures" for further information.Q3 2012 nickel production was in-line with plan as a result of steady state operation of the complete circuit. Crushing plants and ore beneficiation continue to operate above plan and ore supply from the buffer ponds is allowing for scheduled maintenance to be undertaken without full plant shutdowns. Mining activity increased from prior periods and the majority of ore feed was sourced from the pit for the first time since the start of operations.Nickel cash costs per payable pound have increased from prior periods due to increased mining costs, consumables costs and realization costs. Ore was sourced largely from existing ore stockpiles during the first half of 2012. Ore costs have increased in Q3 2012 as the mining operations moved to the mine pit, resulting in additional costs related to waste stripping and drill and blast activity. Q3 2012 C1 costs were also higher due to the unit cost impact of processing lower grade ore. Outlook Circuit developments and enhancements in the beneficiation area are expected to result in improvements in plant utilization and reduce flocculent consumption in 2013.Various options are also being explored to improve the payable nickel content in order to increase revenue from sales.Kevitsa Nickel and Copper OperationThree months ended September 30, 2012Nine months ended September 30Post-commercial productionPre-commercial production20122011Ore tonnes milled (000's)6877201,725--Nickel ore grade processed (%)0.250.220.22-Nickel recovery (%)605453-Nickel production (tonnes)1,0418432,005-Nickel sales (tonnes)848-848---Copper ore grade processed (%)0.330.340.33-Copper recovery (%)848782-Copper production (tonnes)1,8742,1304,646-Copper sales (tonnes)2,6041,0403,644---Gold production (ounces)1,4311,2823,194-Platinum production (ounces)3,9263,1747,685-Palladium production (ounces)3,3732,8276,764---Nickel cash costs (C1) (per lb)1$3.79-$3.79-Nickel cash costs (C3) (per lb)1$5.35-$5.35-Copper cash costs (C1) (per lb)1$0.11-$0.11-Copper cash costs (C3) (per lb)1$1.49-$1.49-Sales revenues35.6-35.6-Gross profit17.5-17.5-EBITDA123.6-23.6-1 C1 and C3 costs and EBITDA are not recognized under IFRS. See "Regulatory Disclosures" for further information.The expected ramp up of Kevitsa progressed as planned during Q3 2012 and commercial production was achieved on August 18, 2012 following a successful and rapid commissioning period. The plant is running well and production is continuing to ramp up.Throughput rates have exceeded plan due to continuous operation of the autogenous mills. Recoveries have increased consistently during the commissioning phase, however they are temporarily below life-of-mine targets due to the weathered nature of ore currently available in the mine pit. Recoveries are expected to increase as mining progresses deeper into the ore body in early 2013.During the first month of commercial operations, the cash costs for nickel and copper were temporarily lower than normal operating levels as a result of higher by-product credits, reduced consumable spares costs and maintenance costs. The higher by-product credits resulted from the sale of production from the commissioning phase. Nickel C1 costs of $3.79/lb are net of by-product credits of $2.50/lb and Copper C1 costs of $0.11/lb are net of by-product credit of $1.41/lb.At the current approved throughput rate of 5.5 Mtpa, Kevitsa is expected to produce approximately 11,000 tonnes of nickel and 20,000 tonnes of copper annually. The Company has submitted an environmental assessment and application to increase the plant throughput rate up to a maximum of 10 Mtpa. Liaison with the relevant authorities is in progress and approval is expected in the first half of 2013. With the current estimated measured and indicated resource, the increased throughput rate is expected to increase annual production to approximately 15,000 tonnes of nickel and 28,000 to 30,000 tonnes of copper while retaining a mine life in excess of 20 years.DEVELOPMENT ACTIVITIESKansanshi expansions, ZambiaThe multi-stage Kansanshi plant upgrade to an annual production capacity of 400,000 tonnes of copper continued in Q3 2012. The stage one oxide circuit expansion to 7.2 Mtpa was completed in Q2 and optimized during Q3 2012. The benefit of this expansion is expected during Q4 2012 once acid supply is increased with the operation of the fifth acid plant.Progress on the stage two oxide capacity expansion to 14.5 Mtpa continued with civil works nearing completion and structural installation underway. Completion remains on target for the first half of 2013. Acid supply will dictate the rate of oxide treatment until the smelter is commissioned in mid-2014, however the output of the five acid plants as well as the current volume of acid that can be externally sourced will allow for interim treatment rates of approximately 10 Mtpa.In the medium term, some of Kansanshi's mining areas for oxide ore are characterized as high grade, high acid-consuming ore. Currently the supply of sulphuric acid from the acid plants requires the import of sulphur at high costs. Consideration will be given to withholding the high grade, high acid-consuming ore from production until acid is available at minimal cost from the Kansanshi smelter. In this event, the capacity of the oxide expansions and fifth acid plant may not be fully exploited.The second phase of the 400,000 tonne annual production capacity expansion project is a proposed expansion of the sulphide treatment facilities by construction of a new section of plant capable of treating up to 16 Mtpa of sulphide ore. Initial board approval has been granted to allow design work to commence along with ordering of long-lead equipment. Construction of this new plant is planned to commence in 2013. Full project commitment is expected in Q4 2012 following completion of the resource definition drilling program, which is necessary for detailed mine planning.Copper smelter project, ZambiaKansanshi's concentrate is currently treated at smelters in Zambia, however, existing domestic smelting capacity will be insufficient to process the substantial increase in production resulting from the Kansanshi expansion and the Sentinel project. The new copper smelter is designed to process 1.2 million tonnes of concentrate to produce over 300,000 tonnes of copper metal annually. The smelter is expected to also produce 1.0 million tonnes of sulphuric acid as a by-product at a low cost which will benefit Kansanshi by allowing the treatment of high acid-consuming oxide ores and the leaching of some mixed ores. The additional acid is also expected to optimize the expansion of the oxide leach facilities and allow improved recoveries of leachable minerals in material now classified and treated as mixed ore.Detailed design works on the smelter are well progressed and all major equipment packages have been ordered. On site, earthworks construction is approximately 65% complete and concrete pouring is underway. Structural and mechanical installation will be commencing in early 2013. The project is scheduled for construction completion in mid-2014 followed by commissioning and ramp up.Sentinel project, ZambiaA mineral resource and reserve estimate for the Sentinel copper project was released in March 2012. An estimated measured and indicated resource of 1,027 Mt at 0.51% copper grade, containing 5.2 Mt of copper has been delineated, inclusive of an estimated recoverable proven and probable mineral reserve of 774 Mt at 0.50% copper grade, containing 3.9 Mt of copper. The life of mine strip ratio is anticipated to be 2.2:1 and the estimated mine life is in excess of 15 years.The project is expected to produce up to 280,000 to 300,000 tonnes of copper in concentrate annually.Project construction activities ramped up in early Q2 2012 following approval from the Company's Board of Directors. Significant progress has been made to date including; advancement of detailed design engineering, completion of process plant earthworks, construction of a concrete batch plant with over 7,800 cubic metres of concrete poured and 1,250 tonnes of structural steel fabrication completed.The key construction activities for the remainder of 2012 and into 2013 include; arrival of structural and mechanical packages at site, construction of the tailings storage facility, commencement of tender packages for the 330kV transmission line and substation, delivery of first mining fleet and commencement of pre-operating mining works including the installation of in-pit crushing and completion of housing for over 200 staff. The Company will continue project development with an ongoing commitment to social responsibility within the complete license area.Project capital costs are estimated at approximately $1.7 billion with project completion expected during 2014.ExplorationExploration programs continued at a high level in most districts with major drilling campaigns active at Trident and Kansanshi. The Company has recently entered into two new joint ventures in Peru and Turkey which are both focused on early stage copper and gold porphyry opportunities. Trident Exploration At Trident 10 drill rigs are active split between Enterprise resource drilling and regional target testing within the Trident license area. The resource definition drilling over the main Enterprise deposit was completed during Q3 2012 and geological modelling and resource estimation on the main Enterprise resource should be finalized in Q4 2012. Resource drilling has now moved on to the adjacent Enterprise Southwest prospect which has now been broadly delineated but requires better definition for resource classification.Several regional targets were drill tested during the quarter. The best target to date is at 'Bream', approximately 20 kilometres ("km") northeast of Enterprise, where low grade copper mineralization has been intersected in several holes. Kansanshi At Kansanshi 14 core rigs continued operating on the project divided between incremental resource and reserve additions immediately around the existing pits and the district exploration program. These programs are designed to provide enhanced definition of longer term oxide and sulphide resource potential as well as to test the ultimate extents of the mineral system.Several exploration drill rigs are focused on the final phase of resource drilling on the Southeast Dome which is nearing completion with the final resource estimation in process. Further rigs are working on completing large scale regional cross sections and new targets northwest and southeast of the current pits.A large scale magneto-telurics ("AMT") geophysical survey has been completed over much of Kansanshi during the period. The majority of the survey has been very successful in effectively mapping the broad architecture of the 'Greater Kansanshi Dome'. In combination with the regional drill transects this AMT survey will allow the delineation of smaller scale structural domes that are now known to focus mineralization into the presently defined deposits at Kansanshi. Several new targets are already apparent that will be drill tested.Five rigs are active on resource development drilling around the Kansanshi pits and continue to report vein intercepts beyond the current reserve area, particularly around the North-West pit. These areas continue to add incremental additions to the significantly increased Kansanshi resource and reserve position. Finland Approximately 6,500 metres of near mine exploration drilling has been completed over the last few months. The drilling largely focused on the Satovaara intrusion which is thought to be a southerly extension of the Kevitsa intrusive complex.Extensive programs of scout drilling and prospect mapping have been completed over targets on the Kevitsa North and Moykelma projects during the summer. Although many targets remain inaccessible due to new government access permitting rules, several areas have been highlighted for follow up. Diamond drilling is in progress on a prospect north of Kevitsa where previous drilling has intersected narrow zones of massive nickel-copper sulphide. A downhole electro-magnetic survey has identified 'off-hole conductors' that may represent thicker massive sulphide mineralization. These are the target of current holes.Reconnaissance mapping and prospecting has been completed over several districts in Scandinavia where conceptual studies have indicated the potential for copper mineralization in sediments. Some prospective stratigraphy was identified by the Company during the mapping and geochemical results are awaited. Peru Exploration drilling at Haquira has been suspended since January. Planned recommencement of drilling after the wet season has not been possible due to delays in granting of drilling and environmental permits. Although permits for drilling from the Environmental and Mines departments have been received, a new layer of permitting for 'permission to commence exploration' requiring identification and permission from local stakeholders has stalled any further drilling. Soil sampling and general reconnaissance has continued and several high priority new targets await follow up.Several new regional prospects are under evaluation in southern Peru. Access to a large land package 40 kilometres east of Haquira was secured via an agreement with Zincore Metals Inc. ("Zincore"). First Quantum has acquired 19.9% of Zincore, and 60% of the invested proceeds will be used for regional exploration. In addition, First Quantum has taken an option to earn 75% of Zincore's early stage Dolores copper porphyry prospect. The Company is now assisting in operating the Dolores exploration program where approximately 7,500 meters of diamond core drilling has recently commenced. Geological mapping plus airborne and ground geophysical surveys will be used to focus the drilling on the extensive area of outcropping porphyry. Turkey The company has agreed to terms to enter into a placement and option-joint venture agreement with Empire Mining Corporation ("Empire") who hold rights to a porphyry/skarn copper project at Bursa in western Turkey. Company staff are currently working with Empire to define a drilling and geophysics program over the project which is expected to commence in Q4 2012. Mauritania & West Africa Two drill rigs are active on targets near Guelb Moghrein. A diamond core drill programme is in progress on the Oriental Hill prospect adjacent to the current open pit where historically defined oxide copper-gold mineralization is being assessed for metallurgical processing characteristics.Permit applications are still pending for new exploration projects identified in Cote d'Ivoire and Burkina Faso.SALES REVENUESSales revenues (after realization charges)Three months ended September 30Nine months ended September 302012201120122011Kansanshi- copper462.3485.91,359.41,540.9- gold44.835.7126.2101.7Guelb Moghrein- copper64.172.3194.2178.2- gold21.530.172.970.8Ravensthorpe- nickel79.6-287.8-- cobalt1.7-5.6-Kevitsa- nickel8.8-8.8-- copper18.7-18.7-- gold, PGE and cobalt8.1-8.1-Corporate and other15.227.094.1124.6Sales revenues724.8651.02,175.82,016.2Q3 2012 total sales revenues from continuing operations were 11% higher than the prior year period due to the contribution of $81.3 million of revenues from Ravensthorpe and $35.6 million from Kevitsa, offset by a 13% lower average copper price and lower corporate revenues.The Company's revenues are recognized at provisional prices when title passes to the customer. Subsequent adjustments for final pricing are materially offset by derivative adjustments and shown on a net basis in cost of sales (see "Hedging Program" for further discussion).Copper selling price (per lb)Three months ended September 30Nine months ended September 302012201120122011Average LME cash price3.504.023.604.12Realized copper price3.453.843.534.04Treatment/refining charges ("TC/RC") and freight charges(0.26)(0.30)(0.26)(0.26)Net realized copper price3.193.543.273.78The LME copper price averaged $3.50/lb for the quarter, a decrease of $0.52/lb from the average for Q3 2011. Copper traded flat during July and August ranging from $3.32/lb to $3.53/lb before appreciating in early September achieving a high of $3.83/lb before closing at $3.75/lb end of September prompted by the European Central Bank bond purchase program and China infrastructure spending announcements.Nickel selling price (per lb)Three months ended September 30Nine months ended September 302012201120122011Average LME cash price7.4110.018.0411.10Realized nickel price per payable pound7.69-8.04-TC/RC charges(0.44)-(0.22)-Net realized nickel price per payable pound7.25-7.83-The LME nickel price averaged $7.41/lb for the quarter, a decrease of $2.60/lb from the average for Q3 2011. Nickel prices traded downwards during the first half of the quarter before rebounding mid-August and September to close at a high of $8.40/lb stimulated by the European Central Banks and US Federal Reserve's bond purchase program announcements.SUMMARY FINANCIAL RESULTSThree months ended September 30Nine months ended September 302012201120122011Gross profitKansanshi223.8266.7691.41,000.9Guelb Moghrein24.352.470.2124.3Ravensthorpe(1.6)-39.7-Kevitsa17.5-17.5-Other(3.0)3.5(12.8)0.1Total gross profit261.0322.6806.01,125.3Exploration(6.3)(18.5)(36.3)(53.3)General and administrative(22.5)(24.8)(55.6)(58.0)Other income(1.0)18.10.711.1Net finance income (costs)1.2(1.4)7.3(4.5)Gain on disposal of residual claim and assets--1,217.9-Bond inducement costs-(48.4)-(48.4)Income taxes(99.7)(127.1)(277.3)(411.2)Net earnings for the period132.7120.51,662.7561.0Net earnings for the period attributable to:Non-controlling interests25.429.676.5108.1Shareholders of the Company107.390.91,586.2452.9Comparative earnings107.3139.3368.3501.3Earnings per sharebasic$0.23$0.20$3.35$1.03diluted$0.23$0.20$3.33$1.03Comparative earnings per share$0.23$0.30$0.78$1.14Exploration costs decreased due to the capitalization of exploration development costs at Enterprise from Q1, Q2 and Q3 2012 in the current quarter, resulting in a recovery of $10.1 million in Q3 2012. Other exploration costs in the period comprises primarily of;$6.8 million in Peru $2.2 million in Finland $2.4 million at Guelb Moghrein $2.4 million at Kansanshi General and administrative costs decreased from Q3 2011 as a reduction in legal costs related to 2011 République démocratique du Congo ("RDC") matters were partially offset by an increase in personnel costs driven by an increased complement of employees to develop and manage the Company's expanded pipeline of projects.On January 5, 2012, the Company reached an agreement with ENRC to dispose of its residual claims and assets in respect of the Kolwezi Tailings project, and the Frontier and Lonshi mines and related exploration interests, all located in the Katanga Province of the RDC and to settle all current legal matters relating to these interests for a total consideration of $1.25 billion. The transaction was completed on March 2, 2012. The total consideration was comprised of $750.0 million, paid on March 2, 2012, together with a deferred consideration of $500.0 million in the form of a 3-year Promissory Note with an interest coupon of 3% payable annually in arrears. Under the terms of the acquisition, ENRC acquired, with certain limited exceptions, all of First Quantum's assets and property either physically located within the RDC or relating to the operations formerly carried out by First Quantum and its subsidiaries in the RDC. In connection with the transaction, First Quantum, ENRC, the RDC Government, International Finance Corporation and Industrial Development Corporation have also settled all disputes relating to the companies being sold and their assets and operations in the RDC and each of First Quantum, ENRC, the RDC Government, International Finance Corporation and Industrial Development Corporation have released one another in respect of all claims and judgments relating to the foregoing or to any other matter arising in the RDC on or before the date of closing.The $1,217.9 million gain recognized on the disposal includes the fair value of proceeds received, net of transaction costs and the underlying net liabilities of subsidiaries disposed of.The Q3 2012 effective income tax rate was 43% of earnings before taxes. Following the completion of its tax holiday in Mauritania on February 19, 2012, Guelb Moghrein is now subject to Mauritanian income taxes at a rate of 25%.LIQUIDITY AND CAPITAL RESOURCESThree months ended September 30Nine months ended September 302012201120122011Cash flows from operating activities- before changes in working capital282.5327.0846.11,116.0- after changes in working capital(99.1)97.8272.3417.5Cash flows from investing activitiesPayments for property, plant and equipment(365.8)(380.9)(953.3)(814.3)Proceeds from settlement of RDC claims and sale of assets--736.5-Other investing activities(0.1)-(13.7)9.9Cash flows from financing activities(16.8)(61.7)(119.0)(203.5)Net cash flows(481.8)(344.8)(77.2)(590.4)Cash balance374.9754.5374.9754.5Cash flows from operating activities per share1before working capital (per share)$0.60$0.55$1.79$1.68after working capital (per share)$(0.21)$0.21$0.57$0.951 Cash flows per share is not recognized under IFRS. See "Regulatory Disclosures" for further information.Operating cash flows before changes in working capital decreased from the comparative quarter due to higher non-cash expenses in Q3 2011. Changes in working capital during Q3 2012 resulted in a reduction of cash of $481.8 million. The Company paid $183.7 million in Zambian taxes during the period. Increases in accounts receivable and inventory totaled $176.5 million during Q3 2012, resulting in part, from the commencement of operations at Kevitsa.Cash flows from financing activities comprise primarily of dividend payments made to shareholders of the Company of $29.6 million in Q3 2012. Cash flows from financing activities in Q3 2011 include dividend payments of $25.8 million and bond inducement costs of $48.4 million.Capital expenditure increased significantly during Q3 2012 to $365.8 million as activity at the Company's key development projects increased according to plan. Q3 2012 capital expenditure comprises primarily of;$213.2 million at Kansanshi for the oxide circuit expansions, smelter project and mine pit development costs $104.1 million at Sentinel, including deposits, for site development and long-lead plant and mine equipment $15.8 million at Kevitsa for project completion and development costs incurred during the commissioning phase Proceeds from settlement of RDC claims and sale of assets represents the net cash proceeds received during Q1 2012. The $500.0 million promissory note is payable by ENRC on March 2, 2015.As at September 30, 2012, the Company had the following contractual obligations outstanding:Total< 1 year1 - 2 years2 - 3 years3 - 4 years4 - 5 yearsThereafterDebt55.440.75.14.84.8--Accounts payable and current taxes441.6441.6-----Deferred payments4.00.40.2---3.4Finance leases27.62.12.22.42.52.715.8Commitments965.1965.1-----Restoration provisions258.51.31.31.31.31.3252.0Total commitments of $965.1 million comprise primarily of capital expenditure for property, plant and equipment related to the development of Sentinel, upgrades at Kansanshi and other projects.The significant capital expansion and development program is expected to be funded using available cash, future cash flows from operations and debt facilities. Currently the $250.0 million Kevitsa debt facility and $1.0 billion Kansanshi senior term and revolving facility are undrawn and available for drawdown.On October 10, 2012, the Company completed a senior notes offering for gross proceeds of $350.0 million due 2019. Interest on the senior notes will accrue at 7.25% per annum. The notes are senior obligations of the Company, guaranteed on a subordinated basis by Ravensthorpe and Kevitsa.Hedging programAs at September 30, 2012, the following derivative positions were outstanding:Maturity 2012September 30, 2012December 31, 2011AssetLiabilityAssetLiabilityForeign currencyUSD/EUR extendible collarPrincipal----(0.2)Strike price-Copper (a)Futures sales contracts over quotation period (tonnes)52,8881.1(30.7)1.9(5.1)Average contract price ($/tonne)$7,853Embedded derivative hedged by future sales contracts (tonnes)51,975----Average market price ($/tonne)$8,268Net provisional copper exposure (tonnes)(913)Gold (a)Futures sales contracts over quotation period (ounces)16,950-(1.9)3.2-Average contract price ($/ounce)$1,702Embedded derivative hedged by future sales contracts (ounces)16,812----Average market price ($/tonne)$1,779Net provisional gold exposure (ounces)(138)Nickel (a)Futures sales contracts over quotation period (tonnes)2,565-(2.6)-(0.7)Average contract price ($/tonne)$17,228Embedded derivative hedged by future sales contracts (tonnes)1,664----Average market price ($/tonne)$18,520Net provisional nickel exposure (tonnes)(901)OtherEmbedded derivative-(0.1)-(2.4)1.1(35.3)5.1(8.4)a) Provisional pricing and derivative contractsA portion of the Company's metal sales is sold on a provisional pricing basis whereby sales are recognized at prevailing metal prices when title transfers to the customer and final pricing is not determined until a subsequent date, typically two months later. The difference between final price and provisional invoice price is recognized in net earnings. In order to mitigate the impact of these adjustments on net earnings, the Company enters into derivative contracts to directly offset the pricing exposure on the provisionally priced contracts. The provisional pricing gains or losses and offsetting derivative gains or losses are both recognized as a component of cost of sales. Derivative assets are presented in other assets and derivative liabilities are presented in other liabilities with the exception of copper, gold and nickel embedded derivatives which are included within accounts receivable.As at September 30, 2012, substantially all of the Company's metal sales contracts subject to pricing adjustments were hedged by offsetting derivative contracts.EQUITYAt the date of this report, the Company has 476,310,282 shares outstanding. There were no changes in common shares outstanding during Q3 2012.OTHER ITEMSZambian taxationThe Government of the Republic of Zambia ("GRZ") announced in January 2008 a number of proposed changes to the tax regime in the country in relation to mining companies. The Company, through its Zambian subsidiaries, is party to Development Agreements with the GRZ for its existing operations which provide an express right to full and fair compensation for any loss, damages or costs (including interest) incurred by the Company by reason of the government's failure to comply with the tax stability guarantees set out in the Development Agreements and rights of international arbitration in the event of any dispute. The Company's Zambian subsidiaries have complied with the GRZ's new tax regime without prejudice to its rights under the Development Agreement.Following the change of government in 2011, the first Budget of the new government introduced a further increase in the mineral royalty tax from 3% to 6%, effective April 2012, in breach of the Development Agreements.In the 2013 Budget, delivered October 2012, the GRZ has decreased the rate of Capital Allowances from 100% per annum to 25% per annum. This will impact the timing of the tax benefit from the Company's significant capital programs at Kansanshi and Sentinel.Until resolved differently with the GRZ, the Company is recognizing and paying taxes in excess of the Development Agreement, resulting in an effective tax rate of approximately 43% at Kansanshi.On Behalf of the Board of Directors of First Quantum Minerals Ltd.G. Clive Newall, President12g3-2b-82-4461Listed in Standard and Poor'sForward-Looking StatementsCertain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. These forward-looking statements are principally included in the Development activities section and are also disclosed in other sections of the document. The forward looking statements include estimates, forecasts and statements as to the Company's expectations of production and sales volumes, expected timing of completion of project development at Kansanshi, Kevitsa and Sentinel, the impact of ore grades on future production, the potential of production disruptions, capital expenditure and mine production costs, the outcome of mine permitting, the outcome of legal proceedings which involve the Company, information with respect to the future price of copper, gold, cobalt, nickel, PGE, and sulphuric acid, estimated mineral reserves and mineral resources, our exploration and development program, estimated future expenses, exploration and development capital requirements, the Company's hedging policy, and our goals and strategies. Often, but not always, forward-looking statements or information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate" or "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.With respect to forward-looking statements and information contained herein, we have made numerous assumptions including among other things, assumptions about the price of copper, gold, nickel, PGE, cobalt and sulphuric acid, anticipated costs and expenditures and our ability to achieve our goals. Although our management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that a forward-looking statement or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to, future production volumes and costs, costs for inputs such as oil, power and sulphur, political stability in Zambia, Peru, Mauritania, Finland and Australia, adverse weather conditions in Zambia, Finland and Mauritania, labour disruptions, mechanical failures, water supply, procurement and delivery of parts and supplies to the operations, the production of off-spec material.See our Annual Information Form for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information. Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actual results, performances, achievements or events not to be anticipated, estimated or intended. Also, many of these factors are beyond our control. Accordingly, readers should not place undue reliance on forward-looking statements or information. We undertake no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements and information made herein are qualified by this cautionary statement.First Quantum Minerals Ltd. Consolidated Statements of EarningsUnaudited (expressed in millions of U.S. dollars, except where indicated and share and per share amounts)Three months ended September 30Nine months ended September 30Note2012201120122011Sales revenues9724.8651.02,175.82,016.2Cost of sales10(463.8)(328.4)(1,369.8)(890.9)Gross profit261.0322.6806.01,125.3Exploration(6.3)(18.5)(36.3)(53.3)General and administrative(22.5)(24.8)(55.6)(58.0)Settlement of RDC claims and sale of assets11--1,217.9-Bond inducement costs8d-(48.4)-(48.4)Other income (expense)(1.0)18.10.711.1Operating profit231.2249.01,932.7976.7Finance income6.50.517.24.0Finance costs12(5.3)(1.9)(9.9)(8.5)Earnings before income taxes232.4247.61,940.0972.2Income taxes(99.7)(127.1)(277.3)(411.2)Net earnings for the period132.7120.51,662.7561.0Net earnings for the period attributable to:Non-controlling interests25.429.676.5108.1Shareholders of the Company107.390.91,586.2452.9Earnings per shareBasic8b0.230.203.351.03Diluted8b0.230.203.331.03Weighted average shares outstanding (000's)Basic8b473,776456,865473,960438,145Diluted8b476,310456,865476,310438,145Total shares issued and outstanding (000's)8a476,310476,301476,310476,301The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit the Company's website at www.first-quantum.com.First Quantum Minerals Ltd. Consolidated Statements of Comprehensive IncomeUnaudited (expressed in millions of U.S. dollars)Three months ended September 30Nine months ended September 302012201120122011Net earnings for the period132.7120.51,662.7561.0Other comprehensive income (loss)Unrealized gain (loss) on available-for-sale investments0.3(0.5)(5.1)(0.8)Tax on unrealized (gain) loss on available-for-sale investments(0.1)0.11.00.2Comprehensive income for the period132.9120.11,658.6560.4Total comprehensive income for the period attributable to:Non-controlling interests25.429.676.5108.1Shareholders of the Company107.590.51,582.1452.3132.9120.11,658.6560.4The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit the Company's website at www.first-quantum.com.First Quantum Minerals Ltd. Consolidated Statements of Cash FlowsUnaudited (expressed in millions of U.S. dollars)Three months ended September 30Nine months ended September 302012201120122011Cash flows from operating activitiesNet earnings for the period132.7120.51,662.7561.0Items not affecting cashDepletion and amortization45.030.2118.874.9Unrealized foreign exchange (income) loss1.0(3.7)1.8(0.8)Deferred income tax42.851.653.531.8Income tax expense56.875.5223.6380.1Share-based compensation expense4.92.59.96.4Bond inducement costs-48.4-48.4Net finance (income) costs(1.2)1.9(7.3)8.5Settlement of RDC claims and sale of assets--(1,217.9)-Other0.50.11.05.7282.5327.0846.11,116.0Taxes paid(183.7)(224.6)(373.7)(504.1)Change in non-cash operating working capital(Increase) decrease in trade, other receivables and derivatives(100.8)1.6(125.3)67.2Increase in inventories(75.7)(19.7)(134.8)(144.8)Increase (decrease) in trade and other payables14.334.395.7(96.0)Long term incentive plan contributions(35.7)(20.8)(35.7)(20.8)(99.1)97.8272.3417.5Cash flows from investing activitiesPurchase of property, plant and equipment(363.7)(321.4)(894.2)(754.8)Deposits on property, plant and equipment(2.1)(59.5)(59.1)(59.5)Proceeds from sale of property, plant and equipment1.0-1.0-Acquisition of investments(1.5)-(17.5)-Interest received0.4-2.89.9Proceeds from settlement of RDC claims and sale of assets--736.5-(365.9)(380.9)(230.5)(804.4)Cash flows from financing activitiesNet movement in trading facility15.2(17.1)(7.5)(99.4)Proceeds on issuance of common shares-15.9-16.1Cash paid on bond inducement-(48.4)-(48.4)Restricted cash-20.2-40.3Dividends paid(29.6)(25.8)(91.0)(79.3)Dividends paid to non-controlling interests-(3.3)(15.8)(10.8)Finance lease payments(0.9)(0.9)(2.8)(2.8)Interest paid (1.5)(2.3)(1.9)(19.2)(16.8)(61.7)(119.0)(203.5)Decrease in cash and cash equivalents(481.8)(344.8)(77.2)(590.4)Cash and cash equivalents - beginning of period856.71,099.3452.11,344.9Cash and cash equivalents - end of period374.9754.5374.9754.5The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit the Company's website at www.first-quantum.com.First Quantum Minerals Ltd. Consolidated Balance SheetsUnaudited (expressed in millions of U.S. dollars)NoteSeptember 30, 2012December 31, 2011AssetsCurrent assetsCash and cash equivalents374.9452.1Trade and other receivables373.3238.1Inventories3789.1649.9Current portion of other assets552.734.01,590.01,374.1Non-current assetsInvestments29.918.0Property, plant and equipment44,508.13,824.4Promissory note receivable11479.8-Other assets5151.281.5Total assets6,759.05,298.0LiabilitiesCurrent liabilitiesTrade and other payables302.3273.4Current taxes payable139.3289.4Current portion of debt640.748.1Current portion of provisions and other liabilities38.611.0520.9621.9Non-current liabilitiesDebt614.714.8Provisions and other liabilities288.2286.4Deferred income tax liabilities263.8206.4Total liabilities1,087.61,129.5EquityShare capital1,924.81,950.6Retained earnings3,219.01,723.8Accumulated other comprehensive income (loss)(2.9)1.2Total equity attributable to shareholders of the Company5,140.93,675.6Non-controlling interests530.5492.9Total equity5,671.44,168.5Total liabilities and equity6,759.05,298.0Commitments15The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit the Company's website at www.first-quantum.com.First Quantum Minerals Ltd. Consolidated Statements of Changes in Shareholders' EquityUnaudited (expressed in millions of U.S. dollars)Three months ended September 30Nine months ended September 30Note2012201120122011Share capitalCommon sharesBalance - beginning of period2,003.81,479.52,003.81,479.3Shares issued and share options exercised-15.9-16.1Conversion of convertible bonds8d-508.3-508.3Balance - end of period2,003.82,003.72,003.82,003.7Equity portion of convertible bondsBalance - beginning of period-48.3-48.3Conversion of convertible bonds8d-(48.3)-(48.3)Balance - end of period----Treasury sharesBalance - beginning of period(67.6)(56.8)(68.0)(57.1)Restricted and performance stock units vested5.99.06.39.3Shares purchased(35.7)(20.8)(35.7)(20.8)Balance - end of period(97.4)(68.6)(97.4)(68.6)Contributed surplusBalance - beginning of period19.419.514.815.9Share-based compensation expense for the period4.92.59.96.4Restricted and performance stock units vested(5.9)(9.0)(6.3)(9.3)Balance - end of period18.413.018.413.0Total share capital1,924.81,948.11,924.81,948.1Retained earningsBalance - beginning of period3,141.31,600.61,723.81,292.1Earnings for the period attributable to shareholders of the Company107.390.91,586.2452.9Dividends8c(29.6)(25.8)(91.0)(79.3)Balance - end of period3,219.01,665.73,219.01,665.7Accumulated other comprehensive incomeBalance - beginning of period(3.1)0.81.21.0Other comprehensive income (loss) for the period0.2(0.4)(4.1)(0.6)Balance - end of period(2.9)0.4(2.9)0.4Non-controlling interestsBalance - beginning of period528.3448.8492.9377.8Earnings attributable to non-controlling interests25.429.676.5108.1Disposal of subsidiaries--0.1-Dividends(23.2)(3.3)(39.0)(10.8)Balance - end of period530.5475.1530.5475.1The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit the Company's website at www.first-quantum.com.FOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: First Quantum Minerals Ltd. - North American contactSharon LoungDirector, Investor Relations(647) 346-3934 or Toll Free: 1 (888) 688-6577(604) 688-3818 (FAX)sharon.loung@fqml.comFirst Quantum Minerals Ltd. - United Kingdom contactClive NewallPresident+44 140 327 3484+44 140 327 3494 (FAX)clive.newall@fqml.comwww.first-quantum.com