First Quantum Minerals (FM) Status Update summary

Strategic rationale and transaction overview

• Announced $1 billion acquisition of a life-of-mine gold stream from Kansanshi mine in Zambia, operated by First Quantum, a first-tier counterparty with a strong operational record.

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

• Zambia is a mining-friendly jurisdiction, with government strategies to support and promote the sector.

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

• Transaction provides long-term, unsecured, non-debt capital to bolster liquidity and support deleveraging efforts.

Gold stream structure and terms

• $1 billion cash consideration for a gold stream tied to copper production, with stream rates starting at 75 ounces per million pounds of copper and declining at set thresholds.

• Stream covers the entire mining lease and is life-of-mine, with options for First Quantum to accelerate deliveries and reduce stream rates by up to 30% if certain financial conditions are met.

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

• Cash payment per ounce is 20% of spot price, 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.

Kansanshi mine outlook

• Kansanshi has operated since 2005, with copper production expected to ramp from 160,000–190,000 tons in 2024 to 275,000 tons by decade's end.

• Technical reports indicate steady copper and gold output through the 2030s, with mining to continue through 2046 and processing through 2049.

• Expected gold deliveries are about 12,500 ounces in the first year, averaging 35,000–40,000 ounces annually over the next decade.

• Maintains exposure to copper production and majority of gold production at Kansanshi, supporting ongoing operational and financial resilience.

• Maintains significant exposure to spot gold prices and potential upside from new gold zones at Kansanshi.