First Quantum Minerals (FM) investor relations material

Acquisition overview

• Announced $1 billion life-of-mine gold stream acquisition from Kansanshi mine in Zambia, operated by First Quantum, establishing a new streaming relationship with a first-tier counterparty.

• Kansanshi is a large-scale, long-life copper producer with significant gold byproduct, undergoing a major processing plant expansion.

• Zambia is highlighted as a mining-friendly jurisdiction with strong government support and recent sector-promoting strategies.

• Partnership with Royal Gold is seen as an endorsement of Kansanshi's operations and Zambia's mining jurisdiction.

Gold stream structure and terms

• $1 billion upfront cash payment for a stream tied to copper production, with tiered gold delivery rates decreasing as cumulative deliveries increase.

• Gold delivery schedule: 75 oz per million lbs copper until 425,000 oz, 55 oz for next 225,000 oz, then 45 oz thereafter.

• Stream covers the entire mining lease and life of mine, with expected deliveries of 12,500 ounces in 2024 and 35,000–40,000 ounces annually over the next decade.

• Ongoing production payments set at 20% of spot gold price per ounce, increasing to 35% if acceleration conditions are met; no cash price for accelerated deliveries.

• Stream is unsecured but guaranteed by the company and certain subsidiaries.

Acceleration options and flexibility

• Acceleration options allow reduction of gold stream by up to 30% if certain leverage or credit rating milestones are achieved, with up to $300 million in accelerated deliveries.

• First option: up to $200 million in gold if BB credit rating or net debt/EBITDA ≤2.25x for three quarters; second option: up to $100 million if investment grade or net debt/EBITDA ≤1.25x for four quarters.

• Acceleration options are not tied to gold price and are triggered by meeting specified financial conditions, with a one-year exercise window.