sentinel & enterprise operations

Analyst presentation – October 2015 Sentinel Mine & Enterprise Project

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Trident Project location

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Orientation – project layout

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YOU ARE HERE

Sentinel Mine

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Project scope:

55Mtpa target throughput;

3 semi mobile in pit crushers;

100MW SAG/Ball milling;

265,000t of freight = 14,500 truckloads;

2 rivers diverted;

Life of mine TSF;

600km of ZESCO 330kV transmission lines;

930 staff plus 630 resettlement houses;

New town, clinic, 3 schools & airport.

Total Sentinel capex – $2.1billion

Total Sentinel capex = approx $7,500/t of annualised Cu production

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PROJECT ACQUISITION – FEBRUARY 2010

FIRST ROUGH CONCENTRATE – DECEMBER 2014

Sentinel Operations

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Resource statement published March 2012:

Total measured & indicated resource : 1,027Mt @ 0.51% Cu

Mineral reserve: 774 Mt @ 0.50% Cu

Strip ratio 2.2 : 1

Operations:

Up to 55mtpa to achieve economies of scale (overcome low grade);

280,000 – 300,000t Cu production per annum.

Sentinel – mine planning

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Cost efficient production depends on high volume throughput

Status:

Train 1 = crushing, milling + flotation operating (above design throughput for periods);

Train 2 = milling + flotation operating;

Concentrate optimisation = Concentrate deslime operating;

Slow ramp up to date = Transitional ore metallurgy + power transmission limits.

Milestones:

Presidential opening = 28 Aug 2015;

Crusher 2 walked into southern boxcut = 2 Sep 2015;

Lusaka West transmission lines complete = 12 Sep 2015, awaiting energisation.

Production rampup:

Power transmission + crushing for full operations end-Oct 2015;

Recovery optimisation = SAG + Ball frontend deslime operations end-Nov 2015;

Commercial production by end of 2015.

Sentinel – production rampup

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0

1

2

3

4

5

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

Jun-12 Jun-13 Jun-14 Jun-15

Monthly manhours + Lost Time Incidents

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37.8 million man-hours to date

11 total LTI’s to date

Total 2012 2013 2014 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15

Manhours (million)

37.8 2.3 10.8 15.2 1.1 1.1 1.2 1.3 1.3 1.3 1.1 1.1

LTI Rate 0.058 0.087 0.061 0.049 0.048 0.046 0.057 0.055 0.064 0.062 0.060 0.058

Severity 4.09 5.04 1.51 1.03 0.99 0.96 4.76 4.58 4.51 4.34 4.21 4.09

Sentinel – safety performance

SE Ramp

NE Ramp

Crusher 1a & 2a

Crusher 3a

Temp ramp

Conveyor & Access Ramp

Main Waste Ramp

5 Yr Pit Limit

Current Mining Face

Mine: Staging

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SE Ramp

NE Ramp

Crusher 1a & 2a

Crusher 3a

Temp ramp

Conveyor & Access Ramp

Main Waste Ramp

5 Yr Pit Limit

Current Mining Face

Mine: Staging

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SE Ramp

NE Ramp

Crusher 1a & 2a

Crusher 3a

Temp ramp

Conveyor & Access Ramp

Main Waste Ramp

5 Yr Pit Limit

‘15 Wet Weather Sumps

Mine: Staging

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SE Ramp

NE Ramp

Crusher 1a & 2a

Crusher 3a

Temp ramp

Conveyor & Access Ramp

Main Waste Ramp

5 Yr Pit Limit

SE Boxcut Sump

Mining Horizon as at End 2016

Mine: Staging

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Progressing to 60 million BCM/annum

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Mining – main fleet Units

ThyssenKrupp 63-89 in pit crushers 3

Caterpillar MD6640 drills 7

CAT 7495HR rope shovels 3

Komatsu PC5500 face shovels 2

Komatsu PC5500 excavator 1

Komatsu 960E trucks (330 tonne) 15

Komatsu 860E trucks (250 tonne) 15

Komatsu HD1500 trucks (150 tonne) 10

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1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

Jan

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Mar

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May

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Jul-

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Sep

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v-1

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Jan

-16

Mar

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May

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Jul-

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Sep

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No

v-1

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BC

MS

Min

ed

Mining Production Volumes

Act Ore BCM Act Waste BCM Fcst Ore BCM Fcst Waste BCM

Consistency improvements and production rampup:

Drill = Soft ground to date. Focus on training and consumable trials;

Blast = Fragmentation improved via blast design, product densities + initiation;

Load = Increased bench heights at deeper RLs. Moving to double side loading;

Haul = Operator recruitment resolved. Mine dispatch in place;

Overall = Productivity focus from planning, SIC, training, supervision + maintenance.

Plant: periods above design throughput

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Consistency improvements and production rampup:

Crushing = Conveying improvements, process debottlenecking + fragmentation.

Milling = More consistent power supply, commissioning punch list, upgraded wear components + improved crushing.

Pebble + Secondary crush = now being commissioned.

0

1000

2000

3000

4000

5000

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20000

40000

60000

80000

100000

1-J

an-1

5

14

-Jan

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27

-Jan

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9-F

eb

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22

-Fe

b-1

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7-M

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n-1

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2-J

ul-

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15

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28

-Ju

l-1

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g-1

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23

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g-1

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5-S

ep

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18

-Se

p-1

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ton

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/ h

ou

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Ton

ne

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Crushing – Daily Volumes Crushing dry t Crushing dry t/h

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40000

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1-J

an-1

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27

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9-F

eb

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22

-Fe

b-1

5

7-M

ar-1

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l-1

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28

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l-1

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10

-Au

g-1

5

23

-Au

g-1

5

5-S

ep

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18

-Se

p-1

5

ton

es

/ h

ou

r

Ton

ne

s

Milling – Daily Volumes Milling dry t Milling dry t/h

Concentrate production + feed to smelter

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20

40

60

80

100

0.0 1.0 2.0 3.0

Cu Rec - OSS

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40

60

80

100

0.0 1.0 2.0 3.0

Cu Rec - OCC

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60

80

100

0.0 1.0 2.0 3.0

Cu Rec - Primary

Consistency improvements and production rampup:

Automation = Smart system focus on floatcams, OSA, PSI, laboratory etc;

Concentrate = Backend deslime operating;

Recovery optimisation = SAG + Ball frontend deslime operations end-Nov 2015;

Overall = Productivity from training, supervision + maintenance.

Cu grade (%) Cu grade (%) Cu grade (%) 0.00

5.00

10.00

15.00

20.00

25.00

30.00

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1-J

an-1

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-Jan

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-Jan

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9-F

eb

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22

-Fe

b-1

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7-M

ar-1

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-Mar

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2-A

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-Ap

r-1

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-Ap

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-May

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-May

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Concentrate – Daily Volumes Conc ton Conc grade Cu %

Operations workforce

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Focus now on productivity and efficiency.

Current site workforce of 5,698 will reduce with project demobilisation over next 2 months.

STEADY-STATE WORKFORCE Total

Operations staff currently onsite 1,247

In recruitment 541

Approved operations positions 1,788

Ongoing indirect and contractor personnel 1,276

TOTAL 3,064

1,247

184

408

827 1,667

1,365

CURRENT OPERATIONS FOUNDATION & TOWN FQMO (ROADS)

OPERATIONS CONTRACTORS CONSTRUCTION PROJECT PROJECT CONTRACTORS

Total currently onsite = 5,698

$100+ million targeted savings across KMP, KML and FQMO

Strategic contract reviews:

$40m targeted saving – 120 contracts ($800m) identified + renegotiation teams allocated.

Rapid sourcing:

$10m targeted savings – 20 vendors. Procurement of $100k to $2m per annum.

Warehousing and logistics:

$40m targeted savings – inventory management, freight and logistics.

Bottom up cost savings:

$10m targeted savings – usage, optimisation + waste elimination initiatives from the shop floor.

Consolidation of support services between sites:

Centres of excellence and back office functions.

First Quantum Zambia cost reductions

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Enterprise

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Maiden resource published December 2012:

Total measured indicated resource : 40.1Mt @ 1.07% Ni;

Mineral reserve: 32.7 Mt @ 1.10% Ni;

Potential to expand Resources at the Enterprise South West Zone

Operations:

Potential 38,000 – 60,000t Ni production per annum;

Construction approx 50% complete. Plant will commission on copper ore.

Enterprise Ni project - awaiting go ahead

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Project go ahead for Enterprise is contingent on nickel price and concentrate export levy

Power Project

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160MW required for full operations

Softer ore reduces initial requirements

First Quantum has formally offered support to ZESCO for augmenting supply

Power requirements for ramp-up

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40

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120

140

160

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v-1

5

Dec

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Jan

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Feb

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Mar

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Average Power Requirement (MW)

600km FQM/ZESCO 330kV powerlines Energising by end-October 2015

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Lumwana – Kalumbila – Mumbwa

Contractor Kalpataru

Distance (km) 68 + 394

Towers 164 + 872

Mumbwa – Lusaka West

Contractor KEC

Distance (km) 134

Towers 298

Substations

Kansanshi, Lumwana, Kalumbila

ABB

Lusaka West, Mumbwa NCC

Current situation:

Kafue (960MW) and Victoria Falls (100MW) turbines not affected;

Overuse of peaking turbines at Kariba (360MW peaking + 720MW baseload);

Delays to new generation projects (300MW Maamba coal + 120MW ITTZ).

Kariba drawdown, if turbines run at full rate:

Oct 2015 = ZESCO water allocation from Zambezi River Authority consumed;

Dec 2015 = 10% live capacity remaining;

Jan 2016 = seasonal recharge begins.

Management of supply + demand:

Makeup Power imports from Mozambique (200MW from Jul + 148MW from Sept);

ZESCO request for mines to use Makeup Power for 30% of load. Tariffs in discussion;

Subsequent announcements of Mopani + Baluba mine closures (200-250MW);

First Quantum has offered ZESCO support for Maamba + ITTZ grid connections.

Zambia power generation

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Town development

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1. Home ownership is a cornerstone of economic empowerment:

Subsidised rent-to-own program – real economic empowerment starts at home:

Improves education;

Improves opportunities to start a business; and

Improves savings for retirement.

2. The town will be a significant multiplier on job creation:

Sentinel will employ 3,064 direct and contractor personnel;

A multiplier of between 4-8 is possible for service industries in the town.

3. Employee attraction and retention:

KML seeks a well-rested workforce who live locally and develop the area in conjunction with the mine.

Why has FQM built a town?

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Potential to move off balance sheet – strong interest from pension funds

4-Bedroom House

3-Bedroom Housing

Affordable Housing Layout

2-Bedroom House

Progress – housing

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Guesthouse Serviced Apartments

Banking Services

Progress – commercial

Fuel Station 29

Kalumbila Industrial Park

Progress – services

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Children’s Playground and Sports Facilities Town Clinic

Supermarket and Market Area Frontier Affordable School

Community

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Education:

5 GRZ schools refurbished in the Trident Project area;

Support with curriculum and textbooks.

Healthcare:

5 GRZ rural health centres refurbished in the Trident Project area;

HIV awareness and VCT programs, plus malaria intervention.

Conservation farming:

Peak program expected over 2015/16 season of approx 1000 farmers.

Sawmill and furniture factory:

Providing skilled employment and producing school and other furniture.

Resettlement 99% complete.

Community development

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2015 : community needs assessment for ongoing Trident Foundation CSR projects

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Healthcare Community Infrastructure

Livelihoods Conservation Farming

Wildlife Conservation Forest Conservation

Education

The Trident Foundation