First Quantum Minerals Ltd Three Year History

By Kalata News

 

The following is a summary of the general development of the Company’s business over the last three financial years:

2020

 

First Quantum Minerals Ltd. (“First Quantum”, “FQM” or the “Company”) was incorporated under the Company Act (British Columbia) on December 21, 1983, under the name of Xenium Resources Ltd. The Company changed its name to Xenium Resources Inc. on January 25, 1984, to Zeal Capital Ltd. on November 29, 1989, and to First Quantum Ventures Ltd. on June 16, 1993. On July 18, 1996, the Company changed its name to its current name, First Quantum Minerals Ltd., and was continued into the Yukon Territory, pursuant to the provisions of the Business Corporations Act (Yukon).

 

The Company is an international mining company which has grown through a combination of exploring, developing, operating, and acquiring mining projects or companies with interests in mining activities. The Company produces copper in concentrate, copper anode, copper cathode, nickel, gold, zinc, silver, cobalt, acid and pyrite. The Company’s principal activities include mineral exploration, mine engineering and construction, and development and mining operations. A summary of its interests in and the locations of, the Company’s operating projects and its development and exploration projects as at December 31, 2022 are set out below.

 

The company has 8 operational projects that include two projects in Zambia namely; Kansanshi Mining with ownership of 80% and Trident Limited at 100% ownership.

It has 4 subsidiaries with 2 in Zambia and one Minera Panamá S.A in Panama and another FQM Trading AG in Switzerland.

 

On January 6, 2020 the Company announced that the board of directors of the Company (the “Board”) had adopted an advance notice policy in order to provide shareholders, Directors and management of the Company with a clear framework with respect to the nomination of persons for election as Directors of the Company. At the same time, the Company implemented a shareholder rights plan agreement between itself and Computershare Investor Services Inc. as the rights agent.

 

The Board determined it was in the best interests of the Company to adopt a shareholder rights plan to ensure, to the extent possible, that all shareholders of the Company were treated fairly in connection with any takeover bid for the Company. The shareholders’ rights plan and advance notice provisions were approved by shareholders on May 7, 2020.

 

On January 9, 2020, the Company announced an initial offering of an additional $300 million principal amount of Senior Notes due 2023 (the “Additional 2023 Notes”). The Additional 2023 Notes were offered under the same indenture as the Company’s $1.1 billion of previously outstanding senior notes (the “Existing 2023 Notes”). The Additional 2023 Notes are senior unsecured obligations of the Company and are guaranteed by certain of the Company’s subsidiaries. Interest on the Additional 2023 Notes accrues from October 1, 2019 and is payable semi-annually.

 

Also, on January 9, 2020, the Company announced that it had successfully completed the pricing of its tap issuance of $500 million aggregate principal amount of 7.25% Senior Notes due 2023 (the “2023 New Notes”) and together with the Additional 2023 Notes and the Existing 2023 Notes (the “2023 Notes”) and an additional tap issuance of $250 million aggregate principal amount of 7.50% Senior Notes due 2025 (the “2025 New Notes”). The original tap offering amount of $300 million was increased to $750 million. The issue price of the 2023 New Notes was 102.50% representing a yield to maturity of 6.373%. The issue price of the 2025 New Notes was 103.00%, representing a yield to maturity of 6.804%.

 

Interest on the 2025 New Notes accrues from October 1, 2019 at a rate of 7.50% per annum and is payable semi-annually. Settlement occurred on January 13, 2020. The Notes are senior unsecured obligations of the Company and guaranteed by certain of the Company’s subsidiaries. The Company used the proceeds from the sale of the 2023 New Notes and the 2025 New Notes to fund the redemption of the remaining $300 million aggregate principal amount of Senior Notes due 2021 and repay (without cancelling) $450 million of amounts outstanding under the Company’s revolving credit facility.

 

On March 30, 2020, the Company published a new NI 43-101 technical report on the Trident Project, comprised of the Sentinel operation and the Enterprise development project in the North West Province of Zambia.

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On September 14, 2020 the Company published a new NI 43-101 technical report on the Kansanshi operations in the North West Province of Zambia. Since the filing of the previous technical report in 2015, the Company expanded drilling coverage across the Kansanshi deposits and had completed over 300 diamond drill holes and over 24,000 reverse circulation holes in four years. This resulted in 1.5 million metres of drilling and assay data providing the basis of a Mineral Resource update that underpins a potential expansion and upgrade to the processing facilities at Kansanshi. Updated Mineral Reserve and Resource estimates show an increase of 70% and 40%, respectively, over Mineral Reserves and Resources reported in the last update in May 2015 and extended the mine life to 24 years.

 

On November 27, 2020, the Company partially repaid the unsecured term loan facility (the “FQM Trident Facility”). FQM Trident Limited (“FQM Trident”) (formerly Kalumbila Minerals Limited), the owner of the Sentinel copper mine, signed the FQM Trident Facility on February 5, 2018, with an initial termination date of December 31, 2020 (with the right of FQM Trident to request an extension of one or two years subject to lender consent).

 

The Trident Facility was upsized to $400 million in March 2018 in accordance with the accordion feature of the facility agreement. Repayments on the Trident Facility of $57 million were made in each of December 2019 and June 2020. The Trident Facility was partly repaid on November 27, 2020 and a reduced commitment of $111 million was agreed to, with consent from the remaining lenders to extend the loan for one year, to December 31, 2021. FQM Trident had the right to request an extension of one further year, subject to lender consent.

 

In December 21, 2020, the Company announced changes to its senior management team; as of January 1, 2021, Mr Tristan Pascall was appointed Chief Operating Officer (“COO”) and Mr. Clive Newall, co-founder of the Company, transitioned from executive director to director.

2021.

 

On November 15, 2021, the Company announced that the Board would appoint Tristan Pascall, the Company’s COO, to the role of Chief Executive Officer (“CEO”). The appointment took effect at the conclusion of the Annual General Meeting of shareholders held on May 5, 2022, (the “2022 AGM”) at which time Philip Pascall, the Company’s previous Chairman and CEO, retired from the CEO role but continued to serve as Chairman of the Board. Tristan Pascall was nominated for and elected as a director at the 2022 AGM.

 

On November 30, 2021, the Company announced that it had issued a notice of partial redemption for $600 million of its outstanding 7.250% Senior Notes due April 2023 (the “2023 Notes”) for December 7, 2021 (the “Redemption Date”). On December 7, 2021 the Company redeemed $600 million aggregate principal amount of the 2023 Notes. The portion of the outstanding 2023 Notes redeemed on December 7, 2021 was allocated on a lottery drawing basis at a redemption price (the “Redemption Price”) of 101.813% of the principal amount thereof, plus accrued and unpaid interest.

On December 15, 2021, FQM Trident requested, and the lenders under the FQM Trident Facility consented to, an extension of the due date of the FQM Trident Facility to December 31, 2022. The full amount of the principal amount outstanding under the FQM Trident Facility was due by December 31, 2022 and was repaid in two tranches, in June 2022 and in December 2022.

 

On May 5, 2022, the Company announced that the Board of Directors had appointed Tristan Pascall to the role of CEO. The appointment came into effect at the conclusion of the 2022 AGM following his election as a Director of the Company. On the same date, the Company also announced the election of Alison Beckett as an independent director and that Mr. Clive Newall had retired from the Board.

On May 8, 2022, the Company announced that the Board of Directors had approved the S3 Expansion at the Kansanshi mine and the Enterprise nickel project. Work on both projects started immediately. The Company re-commenced detailed engineering works for the S3 Expansion to determine purchase orders for key long-lead items, including the semi-autogeneous (“SAG”) mill, ball mill and in-pit crushing station. A mining contractor was mobilized for the Enterprise nickel project in order to commence pre-stripping of the pit in June 2022. The development timeline and capital commitments of both projects remained consistent with the three-year guidance provided by the Company on January 17, 2022. Furthermore, First Quantum and the Government of Zambia successfully resolved all points of contention which had prevented progress on the S3 Expansion and Enterprise nickel project. This includes reaching agreement in respect to the outstanding value-added tax receivable sum and an approach for repayment based on offsets against future mining taxes and royalties.

The agreement reached with the Government of the Republic of Zambia (“GRZ”) for repayment of the outstanding VAT claims is based on offsets against future corporate income tax and mineral royalty tax payments commencing July 1, 2022. The agreement effectively settled a dispute between the Zambia Revenue Authority (“ZRA”) and the Company in respect of VAT refunds related to periods up to February 2015. VAT refunds had been withheld in Zambia as a result of the application of discretionary VAT rules established and applied by the Commissioner General relating to exports from Zambia. On May 27, 2022, the Company announced that it had issued a further notice of redemption for its 2023 Notes which was completed on June 7, 2022.