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Production
Copper production 20% higher than Q1 2012
-- Copper production of 79,308 tonnes increased by 13,439 tonnes over Q1 2012 primarily due to increased throughput at Kansanshi. Included in this increase are 3,181 tonnes being the contribution from Kevitsa and 3,305 tonnes contributed by the addition of Las Cruces, Cayeli and Pyhasalmi after the successful acquisition of Inmet Mining Corporation ("Inmet").Nickel production of 11,072 tonnes after record quarterly production from Ravensthorpe
-- Ravensthorpe production benefited from higher grades and Kevitsa saw improved recovery and throughput.
Gold production 32% higher than Q1 2012
-- Gold circuit enhancements at Kansanshi and Guelb continue to yield results with higher recoveries.
Copper production cash costs decreased by 4% from Q1 2012
-- Average copper production cash cost of $1.52 per lb is lower than Q1 2012 reflecting lower processing costs and higher by-product credits, slightly offset by an increase in mining costs.
Sales revenues 24% higher than Q1 2012
-- Sales revenues rose to $901.2 million, an increase of $172.5 million over Q1 2012. This is primarily due to increased copper and nickel sales volumes, partially offset by lower average realized prices. This increase includes $39.8 million from Kevitsa and $29.8 million from Las Cruces, Cayeli and Pyhasalmi in the 10 days since the date of acquisition.
Gross profit 15% higher than Q1 2012
-- Gross profit of $310.2 million was $39.9 million higher than the prior year quarter with higher sales volumes and by-product credits more than offsetting the impact of lower average copper and nickel prices and higher depreciation. There was also $3.4 million contribution for the 10 days post-acquisition results of the newly acquired operations.-- Net earnings attributable to shareholders of the Company include $41.4 million of non-recurring acquisition and other costs.-- The effective tax rate of 41.6% for the quarter is in line with guidance.
Acquisition of Inmet Mining Corporation
-- On March 22, 2013, the Company acquired 85.5% of the diluted shares of Inmet for total cash and share consideration totalling $4.3 billion. Subsequent to the end of the period, a further 7.2% of the outstanding shares were acquired by the Company on April 2, 2013, and the remaining 7.3% on April 30, 2013.-- As a result of the transaction, shares in First Quantum immediately following the initial acquisition are owned approximately 83% by previous First Quantum shareholders, and approximately 17% by previous Inmet shareholders. Share options, performance share units, long-term incentive plan units and deferred share units in Inmet have been extinguished and not replaced.-- The acquisition was funded through a $2.5 billion new debt facility. On March 20, 2013, a wholly owned subsidiary of the Company entered into a syndicated debt facility arrangement for $2.5 billion incurring interest at LIBOR plus 2.75%.-- Through the acquisition, First Quantum has acquired 100% ownership of three operating mines and 80% ownership in a development project. The Las Cruces mine in Spain is an open pit mine producing copper cathode, the Cayeli mine in Turkey and the Pyhasalmi mine in Finland are underground mines producing copper and zinc concentrates. The Cobre Panama development project is located in Panama and on successful commissioning will produce copper and molybdenum concentrates. Following the acquisition, operating guidance has been updated to include production results from Cayeli, Las Cruces, Pyhasalmi, as well as expected capital expenditures at these sites for March 22 to December 31, 2013.-- The financial position of Inmet as at March 31, 2013 has been consolidated with the results of the Company. The financial performance of Inmet for the 10-day period ending March 31, 2013 has been included with the results of the Company for the three months ended March 31, 2013.
