Record Q2 earnings for First Quantum (August 28, 2006)

Vancouver — A continued robust copper market propelled First Quantum Minerals (FM-T, FQVLF-O, FQM-L) to record 2006 second-quarter profits of US$150.5 million (US$2.33 per share), up 419% over the corresponding quarter of last year.

A realized copper price of US$3.44 per lb. over the quarter on production of 48,153 tonnes (106.1 million lbs.) copper buoyed the company’s net earnings for the latest quarter — which almost matched that posted in all of 2005 (US$152.8 million). Total copper production costs from its African mines came in at US$1.07 per lb.

Ramp-up of production from the Kansanshi mine, located in north-central Zambia, led to the 68% increase in quarterly output over last year’s second quarter. The operation, owned 80% by First Quantum and 20% by Zambian Consolidated Copper Mines, produced 34,584 tonnes (76.2 million lbs.) of copper in its latest second quarter in both cathode and concentrate, more than double that of last year’s corresponding period. The average grade of the 2.55 million tonnes of ore mined was 1.4% copper. A major sulphide circuit expansion contributed to the boost in output from the company’s flagship mine.

Operations at Bwana-Lonshi, in the Copperbelt province of Zambia, processed 314,000 tonnes of ore averaging 5% copper in the quarter to produce 13,569 tonnes (30 million lbs.) of the metal at total cash costs of US98 per lb. Acid production from Ndola and Solwezi totalled 71,421 tonnes for the period and was predominantly consumed in leaching operations at Kansanshi and Bwana-Lonshi.

Delays in commissioning its 80%-owned Guelb Moghrein copper-gold project in Mauritania have pushed back the start of commercial production to the third quarter of 2006, although mining has begun. The mine is targeted to produce 30,000 tonnes (66 million lbs.) of copper in concentrate and 70,000 oz. gold annually.

The company’s Frontier Copper project, in the Democratic Republic of the Congo (DRC), received government environmental approvals in early 2006 and has been issued an exploitation permit. A scoping study on the copper-cobalt deposit envisions average annual production of 80,000 tonnes (176 million lbs.) of contained copper.

In the second quarter, First Quantum also acquired a 75% interest in Adastra Minerals (AAA-T, AMZIF-O) through a hostile takeover offer. Adastra is developing the Kolwezi copper-cobalt tailings project and the Kipushi copper-zinc mine in the DRC. The remaining 25% of Adastra was to be tendered to the company in mid-August.

Shares of First Quantum rose $1.88 apiece on the earnings statement to close at $54.18. With its 62.1 million shares outstanding, the company posts a $3.36-billion market capitalization.