First Quantum Minerals Ltd.
LSE : FQM
TSX : FM

First Quantum Minerals Ltd.

November 14, 2006 03:01 ET

First Quantum Minerals Reports Operational and Financial Results for the Three Months and Nine Months Ended September 30, 2006

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 14, 2006) -

(All figures expressed in US dollars)

First Quantum Minerals Ltd. (the "Company") (TSX:FM)(LSE:FQM) is pleased to announce its results for the three months and nine months ended September 30, 2006. The complete financial statements and management discussion and analysis are available for review at www.first-quantum.com and should be read in conjunction with this news release.

Highlights - Third Quarter, 2006

- Net earnings of $139.2 million ($2.09 per share), a net earning's increase of 253% compared to the third quarter of 2005

- Cash flow from operating activities, before working capital movements, of $185.5 million ($2.78 per share), an increase of 129% compared to the third quarter of 2005

- Copper production of 44,403 tonnes (97.9 million pounds), an increase of 23% compared to the third quarter of 2005

- The Company's Board of Directors approved the Frontier Copper Project; construction is well advanced; commercial production targeted for third quarter of 2007

- Adastra Minerals Inc. became a wholly-owned subsidiary in August 2006

Subsequent Events

- Guelb Moghrein in Mauritania achieved commercial production on October 5, 2006

- New $400 million corporate credit facility entered into with a syndicate of international banks in October 2006

- High pressure leach project at Kansanshi nearing completion with commencement of commissioning

Financial Results (see attached financial statements)

Three months

Third quarter revenues totaled $328.4 million, which included copper revenues of $323.2 million ($223.9 million at Kansanshi and $99.3 million at Bwana/Lonshi) and gold revenues of $5.1 million. This was an increase of 130% over the same period in 2005, resulting from an increase in both copper production and the realized copper price.

The realized copper price was $3.17 per pound compared to $1.58 per pound during the same period in 2005. The average LME cash copper price for the third quarter was $3.48 per pound as compared to $1.71 per pound during the same period in 2005. The gross copper selling price achieved for the quarter was $3.49 per pound, excluding tolling and refining costs ("TC RCs") and freight parity charges of $0.32

Certain copper sales are subject to provisional pricing with settlement dates that range between October 2006 and May 2007. As at September 30, 2006 there were 42,346 tonnes of contained copper that have been provisionally priced at an average LME copper price of $3.43 per pound, which was equal to $320.3 million worth of gross revenue (before realization charges). This revenue was subject to future adjustments as a result of changes in the copper price. Of this amount, 13,001 tonnes has had the final price determined in October 2006, and 13,631 tonnes will have the final price determined in November 2006, 6,625 tonnes in December 2006, and 9,089 tonnes thereafter. The average LME copper price for October 2006 was $3.40 per pound.

Copper production was 44,403 tonnes in the third quarter. This production comprised 31,101 tonnes from Kansanshi (20,241 tonnes of cathode and 10,860 tonnes of concentrate) and 13,302 tonnes from Bwana/Lonshi. The combined production increased 23% over the same period in 2005, primarily resulting from an increase in the tonnes of ore processed at Kansanshi in the third quarter.

During the third quarter, the Company sold 46,227 tonnes of copper (33,171 tonnes of copper cathode and 13,056 tonnes of copper contained in concentrate) compared to 39,864 tonnes of copper in the same period in 2005, an increase of 16%.

Gold revenues for the quarter totalled $5.1 million. The average realized gold price for the quarter was $581 per ounce compared to the average market gold price of $622 per ounce.

Third quarter 2006 group cash costs and total costs were $0.90 per pound and $1.13 per pound, respectively, compared with $0.64 per pound and $0.87 per pound for the same period in 2005. The increase in cash costs were attributable to increases in TC RCs and freight parity charges of $0.11 per pound and processing costs of $0.15 per pound. Copper in concentrate and cathode production from toll treatment increased over the same period in 2005 resulting in increased TC RCs and freight parity costs. In addition, price participation related to copper in concentrate sales increased due to the increase in the copper price.

The operating cash inflow for the third quarter, before working capital movements, was $185.5 million or $2.78 per share and after working capital movements was $133.5 million or $2.00 per share.

Net earnings for the third quarter were $139.2 million or $2.09 per share (weighted average common shares - 66,615,227) as compared to $39.5 million or $0.64 per share (weighted average common shares - 61,583,432) during the same period in 2005. This increase was a direct result of the higher copper production of the Company and the increased average LME cash copper price.

Nine Months

The nine month's revenues totalled $878.1 million, which included copper revenues of $861.9 million ($596.1 million at Kansanshi and $265.8 million at Bwana/Lonshi) and gold revenues of $15.8 million. This was an increase of 232% over the same period in 2005, resulting from an increase in both copper production and the realized copper price.

The realized copper price was $3.01 per pound as compared to $1.50 per pound during the same period in 2005. The average LME cash copper price for the nine months was $3.00 per pound as compared to $1.58 per pound during the same period in 2005. Excluding TC RCs and freight parity charges of $0.29, the gross copper selling price achieved for the period was $3.30 per pound.

The nine month's copper production was 133,821 tonnes. This production comprised of 95,232 tonnes from Kansanshi (54,724 tonnes of cathode and 40,508 tonnes of concentrate) and 38,589 tonnes from Bwana/Lonshi. The combined production increased 74% over the same period in 2005, which was primarily due to Kansanshi achieving commercial production in April 2005 and an increase in the tonnes of ore processed at Kansanshi in 2006.

The Company sold 129,793 tonnes of copper (92,926 tonnes of copper cathode and 36,867 tonnes of contained copper in concentrate) as compared to 78,399 tonnes of copper in the same period in 2005, resulting from the increase in copper production of 74%.

Gold revenues for the nine months totalled $15.8 million. The average realized gold price for the period was $594 per ounce compared to the average market gold price of $601 per ounce.

Nine month group cash costs and total costs were $0.86 per pound and $1.08 per pound, respectively, compared with $0.62 per pound and $0.83 per pound for the same period in 2005.

Mining costs remained relatively constant over the past eight quarters.

Processing costs increased over the past two quarters due to higher maintenance costs associated with the hardness of the ore at Kansanshi. In addition, increases in costs principally associated with oil based consumables, electricity, sulphur, wages and unfavourable local exchange rate movements all contributed to the increased processing costs over the past five quarters.

TC RCs and freight parity charges increased over the last eight quarters as they were directly related to the increased copper concentrate sold and cathode production from tolled concentrates. The percentage of copper in concentrate and tolled cathode production, as a percentage of total production, increased by 13%. In addition, the price participation component of the TC RCs increased with the rising LME copper price, which increased 126% since the Company began producing copper in concentrates at Kansanshi.

The operating cash inflow for the nine month period, before working capital movements, was $503.2 million or $7.82 per share and after working capital movements was $365.6 million or $5.68 per share.

Net earnings for the nine month period were $344.4 million or $5.35 per share (weighted average common shares - 64,346,542) as compared to $95.7 million or $1.56 per share (weighted average common shares - 61,451,054) during the same period in 2005. This increase was principally due to the increased copper production of the Company and the increase in the average LME cash copper price.

Kansanshi

Three Months

During the third quarter, approximately 3,220,000 tonnes of ore and approximately 6,683,000 tonnes of waste were mined. The total material mined increased 29% over the same period in 2005. This increase was attributable to the improvement in the availability of haul trucks and excavators, the arrival of additional trucks, and additional artisan workers. Training facilities at the mine have been upgraded and there was also a ramp-up of on-the-job operator training on site. Major haul roads have been upgraded and re-surfaced with suitable material to make them close to all-weather. The affect of rain on production is therefore expected to be less significant this year.

During the third quarter, Kansanshi produced 31,101 tonnes of copper, which consisted of 20,241 tonnes of copper cathode and 10,860 tonnes of copper in concentrate. The combined cash cost for both copper concentrate and cathode was $0.95 per pound with a total cost of $1.17 per pound.

Copper cathode production of 20,241 tonnes had a cash cost of $0.79 per pound and a total cost of $1.00 per pound. Included within the cathode production were 17,205 tonnes from the SX/EW process and 3,036 tonnes produced from the tolling of copper concentrates at the Mufulira smelter. Production increased 41% over the same period in 2005. 21% of this increase was due to tolled concentrate production and the balance was related to an increase in the tonnes of ore processed, as Kansanshi continued to ramp up production through better efficiencies since achieving commercial production in the second quarter of 2005.

Cathode total costs are higher than the same period in 2005 by $0.27 per pound. Ore costs increased by $0.08 per pound due to the processing of lower grade ore and higher fuel and wage costs, which also resulted in higher leach costs of $0.03 per pound. Also, as a result of toll treated copper in concentrates at the Mufulira smelter returned as cathode, toll treatment charges accounted for $0.08 per pound, net of the gold credit associated with copper in concentrates. The balance of the increase is explained by increased processing costs due to higher maintenance costs associated with the processing of higher volumes of harder ore.

Copper in concentrate production of 10,860 tonnes had a cash cost of $1.25 per pound and a total cost of $1.49 per pound. Production was up 60% over the same period in 2005 due to an increase in the tonnes of ore processed, as Kansanshi has continued to ramp up production through better efficiencies since achieving commercial production in the second quarter of 2005.

Concentrate total costs were higher than the same period in 2005 by $0.59 per pound. TC RCs and freight parity charges contributed $0.25 per pound of this increase, which was primarily due to price participation as a result of the increased copper price compared to the same period in 2005. Ore costs increased by $0.10 per pound due to the processing of lower grade ore and higher fuel and wage costs. The balance of the increase is explained by increased processing costs due to higher maintenance costs associated with the processing of higher volumes of harder ore.

Nine Months

For the nine month period, approximately 7,154,000 tonnes of ore and 14,787,000 tonnes of waste were mined. During the nine month period of 2005, the world shortage of mining truck tires had impaired the availability of the Company's haul trucks at Solwezi. The 31% increase this year compared with the same period in 2005 was reflective of the easing of the tire shortages, accompanied by the improved equipment availability and the larger haul truck fleet.

For the nine month period, Kansanshi produced 95,232 tonnes of copper, which consisted of 54,724 tonnes of copper cathode and 40,508 tonnes of copper in concentrate. The combined cash cost for both copper in concentrate and cathode was $0.89 per pound with a total cost of $1.07 per pound.

Copper cathode production of 54,724 tonnes had a cash cost of $0.72 per pound and a total cost of $0.90 per pound. Included within the cathode production were 50,502 tonnes from the SX/EW process and 4,222 tonnes produced from the tolling of copper in concentrate at the Mufulira smelter. Production increased by 136% over the same period in 2005 as Kansanshi continued to ramp up after achieving commercial production during April 2005, as well as, cathode production from the toll treatment of concentrate production commenced in 2006.

Cathode total costs were higher than the same period in 2005 by $0.14 per pound. Ore costs increased by $0.04 per pound due to the processing of lower grade ore and higher fuel and wage costs, which also resulted in higher leach costs of $0.03 per pound. Also, as a result of toll treating copper in concentrates at the Mufulira smelter, toll treatment charges accounted for $0.04 per pound, net of the gold credit associated with copper in concentrates. The balance of the increase is explained by increased processing costs due to higher maintenance costs associated with the processing of higher volumes of harder ore.

Copper in concentrate production of 40,508 tonnes had a cash cost of $1.14 per pound and a total cost of $1.32 per pound. Concentrate production was up 166% over the same period in 2005 due to Kansanshi achieving commercial production in April 2005.

Concentrate total costs are higher than the same period in 2005 by $0.46 per pound. TC RCs and freight parity charges contributed $0.36 per pound of this increase, which was primarily due to price participation as a result of the increased copper price compared to the same period in 2005. Ore costs increased by $0.05 per pound due to the processing of lower grade ore and higher fuel and wage costs. The balance of the increase is explained by increased processing costs due to higher maintenance costs associated with the processing of higher volumes of harder ore.

Bwana/Lonshi

Three months

During the third quarter, approximately 110,000 tonnes of ore and approximately 5,915,000 tonnes of waste were mined from Lonshi. The strip ratio for the quarter was 53:1. Total material mined increased 20% over the same period of 2005, principally due to the larger mining fleet operating at Lonshi. Although the total material mined has increased, the portion of ore decreased 63%, due to the mining of waste in the North pushback and increased drill and blast in the pit. Notwithstanding this, copper production has been maintained as a result of the significant increase in the grade of ore mined from an average of 4.3% to 11.9%. This high grade ore was blended with low grade ore, previously stockpiled at Lonshi, to bring the processed ore grade down to approximately 4.7%.

During the third quarter, Bwana produced 13,302 tonnes of copper cathode at a cash cost of $0.74 per pound and total cost of $1.00 per pound of copper. Production remained comparable with the same period in 2005. In addition, total costs and cash costs remained comparable. However, ore costs decreased in the third quarter of 2006 by $0.11 per pound compared to the same period in 2005 as Bwana processed higher grade ore during the third quarter of 2006. This has been offset by an increase in processing costs principally due to increased oil based consumables, sulphur, and electricity costs.

Nine Months

For the nine month period, approximately 440,000 tonnes of ore and approximately 14,762,000 tonnes of waste were mined from Lonshi. The strip ratio for the nine months was 33:1. The mined ore grade was 10.3% copper. The decrease in ore mined from the same period in 2005 was due to the increased stripping. The increase in total material mined from 2005 is principally attributable to the larger mining fleet that was established during the course of 2005.

For the nine month period, Bwana produced 38,589 tonnes of copper cathode at a cash cost of $0.77 per pound and total cost of $1.05 per pound. Production increased 5% over the same period in 2005 as Bwana processed more ore at a higher grade in 2006.

Cash costs were higher than the comparable period of 2005 by $0.14 per pound. Ore costs contributed $0.06 per pound of this increase as they have been impacted by increased fuel costs, and the higher strip ratio at Lonshi. Processing costs increased $0.05 per pound, also, as a result of increased oil based consumables and sulphur costs. Other administrative costs account for the balance of the increase, including increased royalty charges related to the increased copper price.

Guelb Moghrein Copper-Gold Deposit, Mauritania

Three Months

Concentrate production commenced during the third quarter and commercial production was achieved on October 5, 2006. The Company remains unable to release detailed information on Guelb Moghrein as the historical resource statement is not compliant with National Instrument 43-101.

During the third quarter, approximately 179,000 tonnes of sulphide ore and 1,649,000 tonnes of waste were mined. Guelb Moghrein produced 2,514 tonnes of copper in concentrate during the third quarter, which has been inventoried as at September 30, 2006.

Nine Months

For the nine month period, approximately 364,000 tonnes of sulphide ore and 4,526,000 tonnes of waste were mined. Since the commencement of copper production, Guelb Moghrein produced 2,514 tonnes of copper in concentrate during the nine month period, which has been inventoried as at September 30, 2006.

Frontier Copper Deposit, DRC

In May 2004, the Company announced the results of an independent copper-cobalt resource estimate completed at the Frontier project located in Haut Katanga Province, DRC. In January 2006, the Frontier Environmental Impact Assessment and Environmental Management Plan were formally approved by the Congolese Ministry of Mines and the Exploitation Permit was granted in February 2006.

In November 2006, the Company announced details of the construction of a $226 million facility producing an average of 73,000 tonnes of copper in concentrate per year over a mine life of 19 years and an updated resource estimate. Total costs including TC RCs and freight parity charges are expected to be $1.04 per pound of finished copper. Construction activities began in April of 2006 and commercial production is forecast to begin in the third quarter of 2007.

As at September 30, 2006, the Company had capitalized $62.2 million (2005: $9.9m) in development costs, civil construction and plant construction and design for Frontier.

Kashime Copper Prospect, Zambia

A preliminary inferred oxide resource has been completed by independent consultants and in February 2006, a program of combined reverse circulation and diamond drilling was initiated to improve definition. Oxide resource drilling comprising totals of 9,100 metres of core drilling and 6,500 metres of reverse circulation was completed in July and assay results for acid soluble copper are still being received. A re-run of the oxide resource estimation will commence as soon as all assay data has been received and validated to determine the economics of this project.

During the nine months ended September 30, 2006, the Company expensed $2.0 million related to the Kashime Copper Prospect. As at September 30, 2006, no costs associated with this exploration property have been deferred.

Kibamba Copper Prospect, Zambia

On March 27, 2006, the Company announced a new discovery at its Kibamba copper prospect in the DRC. Drilling is ongoing and the results will be released in due course.

Investments -Carlisa

The Company holds an 18.8% interest in Carlisa Investment Corp. ("Carlisa"), which holds a 90% interest in Mopani. The carrying value of this investment as at September 30, 2006 was $9.5 million, unchanged since 2002. For the first nine months of 2006, Mopani produced approximately 110,700 tonnes of finished copper and 1,100 tonnes of cobalt. Mopani is currently carrying out important capital upgrades at the mine including the construction of a new smelter at Mufulira, which will increase its handling capacity from 420,000 tonnes to initially 720,000 tonnes of copper concentrate per year and eventually 850,000 tonnes of copper concentrate per year. The smelter began commissioning in September and is expected be fully operational in December 2006. The Mufulira smelter will provide smelting offtake for all Kansanshi and Frontier concentrates. As at December 31, 2005, Mopani had total assets of over $700.0 million. As the majority owner of Mopani is a private company not registered in Zambia, only limited public information is available.

Adastra Acquisition

The Company acquired 100% of Adastra in a two step transaction. Adastra is an international mining company with its principal asset being the Kolwezi Copper-Cobalt Tailings Project in the DRC. On May 1, 2006, the Company acquired 75% of the outstanding shares of Adastra and has therefore consolidated Adastra's operating results since May 1, 2006. On August 11, 2006, the Company was deemed to have acquired the remaining 25% of the outstanding shares of Adastra.

Outlook

Production Forecast

On a group basis, based on production volumes achieved during the first nine month period of 2006, as well as, the current challenging ore characteristics at Kansanshi and the status of production ramp up at Guelb Moghrein, the Company expects to produce approximately 180,000 tonnes of copper in 2006, which is an increase of 51% over 2005 financial year's copper production. This expected production includes 125,000 tonnes from Kansanshi, 50,000 tonnes from Bwana/Lonshi, and 5,000 tonnes from Guelb Moghrein. Group cash costs are expected to be in the range of $0.85 to $0.90 per pound for 2006

Kansanshi

During October, Kansanshi produced approximately 11,000 tonnes of copper, which included 6,000 tonnes of copper cathode and 5,000 tonnes of copper in concentrate. Name plate treatment capacity at Kansanshi currently stands at eight million tonnes of sulphide ore per year, with oxide treatment capacity at four million tonnes per year. A combination of ore hardness and lower grade ore will likely restrict copper output at Kansanshi for the remainder of 2006. Additional mining equipment has arrived at Kansanshi over recent months to accelerate stripping and open additional working faces in the open pit. This will result in greater capacity and flexibility to deliver ore to the plant. Until the plant begins to receive more amenable, higher grade ore, copper output is expected to be an average of approximately 9,000 tonnes of copper per month, which includes 5,000 tonnes of copper cathode and 4,000 tonnes of copper in concentrate. In September, the Board of Directors committed to bring forward the 2011 four million tonne sulphide circuit expansion. This will increase sulphide throughput to 12 million tonnes per year beginning in 2008 and assist in treating the harder ore expected over the next few years. The expansion will result in increases in copper production from 2008 onwards. The total capital cost for the throughput expansion is expected to be approximately $60 million.

During the third quarter, cash costs at Kansanshi were higher than forecast. Cash costs for copper in concentrate have been impacted by smelter price participation for both copper sold in the third quarter, as well as, copper provisionally priced in previous periods. Cash costs are expected to improve when the Mufulira smelter begins processing all Kansanshi's concentrate as TC RC terms are based on annual benchmarks and the freight charges will be substantially reduced. The expanded Mufulira smelter is expected to be producing at design capacity by the end of 2006.

Price participation on refining costs only impacts the cash costs for concentrate. For 2006, every dollar increase in the copper price above $0.90 per pound, $0.10 per pound will be added to the cash cost, or approximately $0.05 per pound to the combined cash costs at Kansanshi (assuming a 50/50 split between cathode and concentrate production).

Kansanshi cash costs for 2006 are forecast in the range of $0.90 to $0.95 per pound of copper.

As of September 30, 2006, due to the continued lack of smelter capacity on the Zambian Copperbelt, the Company had stockpiled approximately 7,000 tonnes of contained copper in concentrates. The stockpile will be reduced once Mopani's Mufulira smelter expansion reaches full capacity.

At Kansanshi, the Company is investing in a high pressure leach ("HPL") facility to treat a portion of the increased copper concentrate production. The main components of the HPL facility are two autoclaves, an oxygen plant and an additional 35,000 tonne per annum solvent extraction and electrowinning ("SX/EW") facility. The HPL facility is in various stages of commissioning. The new SX/EW facility has been commissioned and is currently in use. The cooling towers have been water commissioned and are ready to be put into operation. The oxygen plant is at an advanced stage of commissioning, with pressure testing completed. The upgrade works associated with the autoclaves has been completed, and the final piping connections to the autoclaves are currently in progress. The autoclaves are currently undergoing water testing, and commissioning of the many instrumentation processes is in progress. Commissioning of the autoclaves is expected to commence by early December. The total HPL capital cost is budgeted at $100 million including an upgrade to the Zesco power supply to Kansanshi and working capital requirements.

Bwana/Lonshi

During October 2006, Bwana/Lonshi produced approximately 4,500 tonnes of copper cathode. Cash costs for 2006 are forecast in the range of $0.75 to $0.80 per pound of copper. The Company continues to assess the alternative and most beneficial uses for the Bwana processing plant after the Lonshi ore has been exhausted in late 2008. The Company has and will continue to process external ore purchased from third parties, to exploit the full production capacity at Bwana.

Guelb Moghrein

At Guelb Moghrein, the first copper in concentrate was produced in July. Management has determined that commercial production (i.e. 65% of design capacity) was achieved on October 5, 2006. The process plant is currently producing at a rate of approximately 1,650 tonnes of copper in concentrate per month versus a design output of 2,500 tonnes of copper in concentrate per month. Copper production has not yet reached design output due to the delay in the commissioning of the No. 1 SAG mill. Current gold production is approximately 2,800 ounces per month which is 52% of design output. Gold production will increase in step with increased copper concentrate volumes and gold recovery will increase with the final commissioning of the carbon-in-leach (CIL) gold plant. The Company remains unable to release detailed information on Guelb Moghrein as the historical resource statement is not compliant with National Instrument 43-101.

Frontier

At Frontier, construction is underway in both Zambia and the DRC after Board approval. Progress at the Frontier site continues with the plant and infrastructural earthworks substantially complete on both sides of the border. Civil construction is at an advanced stage prior to the wet season, which will allow construction to continue unimpeded during the rains. Significant progress has been made on buildings and workshops as well as the construction camp which is complete and operational as is the border infrastructure which has been handed over to government authorities. The contract for the installation of the 220kV power line and substation in Zambia has been awarded. The contractors are mobilizing to move on site. The mining pre-strip fleet is partially delivered and commissioned which has allowed the pre-strip to start on schedule in September. Currently, the majority of the overburden is good quality laterite, which is being used in the plant construction obviating the need for additional laterite mining for construction and road building. The pre-strip is on target to expose enough ore by July 2007 to allow full capacity at the mill. The oxide material, although it is to be mined as waste, will be stockpiled separately for potential future treatment or sale.

Kolwezi and Other

At the Kolwezi copper-cobalt project in the DRC, the Company conducted a metallurgical test work and piloting program for revised process engineering. The Company is considering when to commence construction of a copper-cobalt facility at Kolwezi in 2007.

A large exploration program was carried out between May and October this year with several drilling programs targeting prospects identified in 2005 including Kashime and Kibamba. Results of this program will be published when they are received.

In October 2006, the Company executed final documentation for a $400 million corporate revolving term credit facility that will be used to restructure the Company's existing project based debt, provide financing for the Frontier project and provide a revolving facility to be used for general purposes. Subsequent to September 30, 2006, the Company drew down the first $225.0 million of the new corporate facility and repaid all of the Company's credit facilities, except for the subordinated Kansanshi EIB and Glencore International AG facilities.

On Behalf of the Board of Directors of First Quantum Minerals Ltd.

G. Clive Newall

12g3-2b-82-4461

Listed in Standard and Poor's

Sedar Profile #00006237

Certain information contained in this news release "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and forward-looking information under applicable Canadian securities legislation. Such forward-looking statements or information, including but not limited to those with respect to the prices of gold, copper, cobalt and sulphuric acid, estimated future production, estimated costs of future production, the Company's hedging policy and permitting time lines, involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Such factors include, among others, the actual prices of copper, gold, cobalt and sulphuric acid, the factual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company's documents filed from time to time with the Alberta, British Columbia, and Ontario Securities Commissions, the Autorite des marches financiers in Quebec, the United States Securities and Exchange Commission and the Alternative Investment Market operated by the London Stock Exchange.

The preceding discussion and analysis and financial review should be read in conjunction with management's discussion of critical accounting policies, risk factors and comments regarding forward looking statements contained in the unaudited consolidated financial statements for the period ended September 30, 2006. The discussion and analysis of the Company's results of operations should also be read in conjunction with the audited consolidated financial statements and related notes.



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Summary of Quarterly Results (unaudited)
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Statement of
Operations
and
Retained 2004 2005 2005 2005 2005 2006 2006 2006
Earnings Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
(millions,
except
where
indicated)
Total
revenues $30.7 $38.2 $86.5 $143.0 $176.9 $187.2 $362.5 $328.4
Cost of
sales 14.5 16.2 35.0 53.8 46.9 54.5 63.5 72.5
Net
earnings 9.3 27.2 29.0 39.5 57.1 54.8 150.5 139.2
Basic
earnings
per
share $0.16 $0.44 $0.47 $0.64 $0.93 $0.89 $2.33 $2.09
Diluted
earnings
per
share $0.15 $0.43 $0.46 $0.63 $0.90 $0.86 $2.28 $2.05

Gross
copper
selling
price
(per lb) $1.23 $1.47 $1.53 $1.77 $2.09 $2.50 $3.77 $3.49
Realized
copper
price
(per lb) $1.20 $1.44 $1.42 $1.58 $1.97 $2.26 $3.44 $3.17
Average
LME
cash
copper
price
(per lb) $1.40 $1.44 $1.54 $1.71 $1.95 $2.24 $3.29 $3.48
Realized
gold
price
(per oz) - - $427 $482 $467 $563 $631 $581
Average gold
price
(per oz) $434 $427 $427 $440 $485 $554 $627 $622

Total copper
sold
(tonnes)
(2) 10,872 12,000 26,535 39,864 40,203 36,635 46,930 46,227
Total
copper
produced
(tonnes)
(3) 10,942 12,028 28,673 36,196 42,220 41,265 48,153 44,403
Total gold
sold
(ounces) - - 1,370 7,130 5,766 8,079 9,611 8,864

Cash Costs
(C1)
(per
lb)(1) $0.48 $0.58 $0.60 $0.64 $0.71 $0.81 $0.87 $0.90
Total Costs
(C3)
(per
lb)(1) $0.59 $0.75 $0.80 $0.87 $0.89 $1.01 $1.07 $1.13
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Financial
Position
(millions)
Working
capital $33.9 $61.4 $47.1 $32.2 $76.2 $102.0 $234.6 $290.9
Total
assets $473.1 $523.1 $561.9 $641.5 $746.5 $842.4 $1,401.2 $1,584.5
Weighted
average
# shares
(000's) 60,942 61,267 61,499 61,583 61,639 61,808 64,564 66,615
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Cash Flows from
(millions)
Operating
activities
Before
working
capital
movements $9.8 $19.7 $43.0 $81.1 $101.0 $105.7 $215.2 $185.5
After
working
capital
movements 2.9 22.9 2.3 69.8 115.5 84.6 150.6 133.5
Financing
activ
-ities 49.0 24.8 (22.8) (5.1) (1.6) (17.7) 27.1 (41.7)
Investing
activ
-ities (52.5) (19.0) (2.3) (57.8) (94.4) (42.4) (94.6) (92.4)
Cash Flows
from
Operating
activities
per share(3)
Before
working
capital
movements 0.16 0.32 0.70 1.32 1.64 1.71 3.33 2.78
After
working
capital
movements 0.05 0.37 0.04 1.13 1.87 1.37 2.33 2.00
--------------------------------------------------------------------------
Kansanshi
Production
Statistics
Mining:
Waste mined
(000's
tonnes) 2,857 1,651 3,185 6,064 5,240 2,588 5,516 6,683
Ore mined
(000's
tonnes) 1,346 2,119 2,050 1,621 1,499 1,382 2,552 3,220
Ore grade
(%) 2.4 1.7 2.0 2.0 1.9 1.7 1.4 1.4
Processing:
Sulphide Ore
processed
(000's
tonnes)(3) - - 434 507 580 782 1,140 1,277
Oxide Ore
processed
(000's
tonnes)(3) - - 696 955 1,039 1,044 1,246 1,401
Contained
copper
(tonnes)(3) - - 19,917 27,510 30,934 32,213 36,981 32,882
Sulphide ore
grade
processed
(%) - - 2.0 2.0 2.0 1.9 1.6 1.2
Oxide ore
grade
processed
(%) - - 1.8 1.8 1.9 1.7 1.5 1.2
Recovery
(3) (%) - - 86 84 96 92 94 95
Copper cathode
produced
(tonnes)(3) - - 8,802 14,395 18,324 15,796 18,687 20,241
Copper in
concentrate
produced
(tonnes)(3) - - 8,154 8,670 11,234 13,751 15,897 10,860
Concentrate
grade (%) - - 28.9 29.5 28.7 29.3 25.8 26.4
Combined Costs
(per lb)(1)
Mining - - $0.09 $0.08 $0.06 $0.10 $0.12 $0.17
Processing - - $0.33 $0.36 $0.37 $0.40 $0.44 $0.50
Site
Adminis
-tration - - $0.04 $0.04 $0.04 $0.03 $0.04 $0.04
TC RCs - - $0.18 $0.18 $0.22 $0.32 $0.42 $0.31
Gold / Acid
credit - - $(0.01)$(0.07) $(0.04) $(0.07) $(0.08) $(0.07)
Combined Total
Cash Costs - - $0.63 $0.59 $0.65 $0.78 $0.94 $0.95
Combined
Total Costs - - $0.80 $0.80 $0.76 $0.93 $1.11 $1.17
Cathode Costs
(per lb)(1)
Mining - - $0.11 $0.08 $0.06 $0.10 $0.13 $0.16
Processing - - $0.46 $0.40 $0.42 $0.51 $0.51 $0.51
Site
Adminis
-tration - - $0.04 $0.04 $0.04 $0.03 $0.04 $0.04
TC RCs - - - - - - $0.03 $0.10
Gold / Acid
credit - - - - - - $(0.01) $(0.02)
Cathode Total
Cash Costs - - $0.61 $0.52 $0.52 $0.64 $0.70 $0.79
Cathode
Total Costs - - $0.80 $0.73 $0.63 $0.80 $0.87 $1.00
Concentrate
Costs
(per lb)(1)
Mining - - $0.07 $0.08 $0.06 $0.09 $0.12 $0.18
Processing - - $0.19 $0.29 $0.30 $0.28 $0.35 $0.46
Site
Adminis
-tration - - $0.04 $0.05 $0.05 $0.04 $0.04 $0.04
TC RCs - - $0.38 $0.48 $0.57 $0.68 $0.89 $0.73
Gold / Acid
credit - - $(0.03)$(0.19) $(0.11) $(0.16) $(0.17) $(0.16)
Concentrate
Total Cash
Costs - - $0.65 $0.71 $0.87 $0.93 $1.23 $1.25
Concentrate
Total Costs - - $0.81 $0.90 $0.98 $1.08 $1.40 $1.49
Revenue ($000's)
Copper
cathodes - - 29,165 54,116 87,624 84,745 142,301 158,563
Copper in
concentrates - - 15,309 34,668 31,850 35,611 109,517 65,331
Gold - - 585 3,438 2,692 4,545 6,068 5,152
Total
revenues - - 45,059 92,222 122,166 124,901 257,887 229,046

Copper cathode
sold
(tonnes) - - 8,919 14,227 18,505 15,556 18,754 20,217
Copper in
concentrate
sold (tonnes) - - 6,024 12,243 9,260 9,282 14,528 13,056
Gold sold
(ounces) - - 1,370 7,130 5,766 8,079 9,611 8,864
--------------------------------------------------------------------------
Bwana/Lonshi
Production
Statistics
Mining:
Waste mined
(000's
tonnes) 2,926 2,596 4,025 4,707 5,918 3,241 5,607 5,915
Ore mined
(000's
tonnes) 261 152 319 300 209 147 183 110
Ore grade
(%) 6.4 5.3 5.5 3.9 6.1 8.4 10.7 11.9
Processing:
Ore
processed
(000's
tonnes) 256 264 328 363 397 335 314 322
Contained
copper
(tonnes) 12,824 13,804 13,354 15,003 14,262 13,401 15,625 15,011
Grade (%) 5.0 5.2 4.1 4.1 3.6 4.0 5.0 4.7
Recovery (%) 85 87 88 88 89 87 87 89
Copper
cathode
produced
(tonnes) 10,942 12,028 11,717 13,131 12,662 11,718 13,569 13,302
Acid
produced
(tonnes) 35,671 55,275 69,218 64,263 72,040 68,195 71,421 63,830
Surplus
acid
(tonnes) 9,664 49 14,939 7,120 219 937 910 508
Cathode
Costs
(per lb)(1)
Mining $0.21 $0.23 $0.29 $0.43 $0.49 $0.51 $0.32 $0.32
Process
-ing $0.26 $0.31 $0.31 $0.30 $0.34 $0.38 $0.35 $0.38
Site
Adminis
-tration $0.04 $0.06 $0.06 $0.06 $0.09 $0.10 $0.10 $0.10
TC RCs - - - - - - - -
Gold /
Acid
credit $(0.03)$(0.02) $(0.09)$(0.05) $(0.08) $(0.09) $(0.08) $(0.06)
Cathode
Total
Cash
Costs $0.48 $0.58 $0.57 $0.74 $0.84 $0.90 $0.69 $0.74
Cathode
Total
Costs $0.59 $0.75 $0.79 $1.01 $1.16 $1.20 $0.98 $1.00
Revenues
($000's)
Copper
Cathodes 29,249 38,172 38,899 49,602 54,694 62,085 104,455 99,283
Copper
cathodes
sold
(tonnes)11,060 12,000 11,592 13,394 12,438 11,797 13,648 12,954
--------------------------------------------------------------------------
Guelb
Production
Statistics
Mining:
Waste
mined
(000's
tonnes) - - - - - 1,156 1,721 1,649
Ore
mined
(000's
tonnes) - - - - - 41 144 179
Ore grade
(%) - - - - - 1.9 1.9 1.8
--------------------------------------------------------------------------
(1) For the definition of cash and total costs, reference should be made
to section 10 of the September 30, 2006 MD&A. (2) Copper sold does not
include tonnes sold prior to pre-commercial production.
(3) Copper produced does not include tonnes produced prior to
pre-commercial production.



Consolidated Balance Sheet
As at September 30, 2006 and December 31, 2005
(expressed in thousands of US dollars, except where indicated)
2006 2005
$ $
Assets
Current assets
Cash and cash equivalents 189,928 82,910
Restricted cash 12,754 20,162
Accounts receivable 206,382 62,938
Inventory (note 4) 114,743 60,854
Current portion of other assets and
deferred charges (note 6) 17,118 7,506
---------- --------
540,925 234,370
Investments 9,939 9,522
Property, plant and equipment (note 5) 993,313 471,294
Other assets and deferred charges (note 6) 40,284 31,325
---------- --------
1,584,461 746,511
---------- --------
---------- --------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 80,669 63,492
Current taxes payable 89,034 16,055
Current portion of long-term debt (note 7) 50,652 58,255
Current portion of other liabilities (note 8) 29,678 20,377
---------- --------
250,033 158,179
Long-term debt (note 7) 173,673 176,767
Future income tax liability 190,024 43,330
Other liabilities (note 8) 32,716 34,340
---------- --------
646,446 412,616
Minority interests 75,258 22,454
---------- --------
721,704 435,070
---------- --------
Shareholders' Equity
Equity accounts (note 9) 393,631 166,592
Retained earnings 469,127 144,849
---------- --------
862,758 311,441
---------- --------
1,584,461 746,511
---------- --------
---------- --------
Commitments and Subsequent event (note 14 and 15)

Approved by the Board of Directors

Peter St George Andrew Adams
Director Director


The accompanying notes are an integral part of these consolidated
financial statements.

For a copy of the notes visit the Company's website at
www.first-quantum.com.



Consolidated Statements of Earnings and Retained Earnings
For the three months and nine months ended September 30, 2006 and 2005
(expressed in thousands of US dollars, except where indicated)

Three months ended Nine months ended
September 30, September 30, September 30, September 30,
2006 2005 2006 2005
$ $ $ $

Revenues 328,409 143,022 878,068 267,719
Cost of sales 72,538 53,792 190,472 105,028
Depletion and
amortization 13,700 12,519 40,066 23,364
---------------------- ----------------------
Operating profit 242,171 76,711 647,530 139,327
Other expenses
Exploration 5,170 1,497 12,159 3,649
General and
administrative 7,031 2,498 14,408 6,777
Interest and
financing fees on
long-term debt 7,119 5,821 19,056 10,054
Other expenses
(note 11) 4,502 5,868 57,994 3,483
Gain on disposal
of investment (1,643) - (1,643) (16,127)
---------------------- ----------------------
22,179 15,684 101,974 7,836
---------------------- ----------------------
Earnings before
income taxes and
minority interest 219,992 61,027 545,556 131,491
Income taxes 59,219 14,784 148,341 25,708
Minority interest 21,597 6,770 52,786 10,085
---------------------- ----------------------
Net earnings for
the period 139,176 39,473 344,429 95,698
Retained earnings
(deficit) - beginning
of period 335,715 49,289 144,849 (3,936)
Dividends 5,764 1,033 20,151 4,033
---------------------- ----------------------
Retained earnings
- end of period 469,127 87,729 469,127 87,729
---------------------- ----------------------

Earnings per common share
Basic $2.09 $0.64 $5.35 $1.56
Diluted $2.05 $0.63 $5.25 $1.52
Weighted average
shares outstanding
(000's) 66,615 61,583 64,346 61,451

The accompanying notes are an integral part of these consolidated
financial statements.

For a copy of the notes visit the Company's website at
www.first-quantum.com.



Consolidated Statements of Cash Flows
For three months and nine months ended September 30, 2006 and 2005
(expressed in thousands of US dollars, except where indicated)

Three months ended Nine months ended
September 30, September 30, September 30, September 30,
2006 2005 2006 2005
$ $ $ $
Cash flows from
operating activities

Net earnings for
the period 139,176 39,473 344,429 95,698

Items not affecting cash
Depletion and
amortization 13,700 12,519 40,066 23,364
Minority interest 21,597 6,771 52,786 10,086
Provision for
deferred stripping - 5,901 - 2,772
Unrealized foreign
exchange loss (gain) 351 (475) 2,858 (5,334)
Future income
tax expense 12,769 9,681 41,879 12,648
Stock-based
compensation expense 2,643 672 4,700 2,041
Unrealized derivative
instruments
(gain) loss (3,804) 4,935 15,025 8,561
Other 666 1,658 3,101 2,505
Gain on disposal
of investment (1,643) - (1,643) (16,127)
---------------------- ----------------------
185,455 81,135 503,201 136,214
---------------------- ----------------------

Change in non-cash
operating working
capital
Increase in accounts
receivable and
prepaid expenses (19,240) (25,998) (143,743) (43,932)
Increase in
inventory (17,144) (2,617) (53,141) (21,497)
Increase in accounts
payable and accrued
liabilities 34 17,314 74,809 16,623
Long term incentive
plan contribution
(note 10) (15,563) - (15,563) -
---------------------- ----------------------
133,542 69,834 365,563 87,408
---------------------- ----------------------
Cash flows from
financing activities

Restricted cash 16,911 827 7,408 (1,538)
Proceeds from
long-term debt - 11,500 82,000 43,023
Repayments of
long-term debt (50,523) (15,260) (95,986) (30,694)
Issuance of
common shares 476 235 3,460 1,523
Dividends paid (5,764) (1,033) (20,151) (4,033)
Deferred premium
obligation and
finance fees (2,801) (1,390) (9,062) (11,372)
---------------------- ----------------------
(41,701) (5,121) (32,331) (3,091)
---------------------- ----------------------

Cash flows from
investing activities

Property, plant
and equipment (78,872) (52,168) (206,832) (92,155)
Deferred exploration
and stripping costs (15,368) (5,665) (20,780) (1,281)
Other 1,886 - 1,389 21,944
---------------------- ----------------------
(92,354) (57,833) (226,223) (71,492)
---------------------- ----------------------

Effect of exchange
rate changes on cash 114 279 9 442
(Decrease) increase
in cash and
cash equivalents (513) 6,880 107,009 12,825
Cash and cash
equivalents -
beginning of period 190,327 56,464 82,910 50,356
---------------------- ----------------------
Cash and cash
equivalents -
end of period 189,928 63,623 189,928 63,623
---------------------- ----------------------

The accompanying notes are an integral part of these consolidated
financial statements.

For a copy of the notes visit the Company's website at
www.first-quantum.com.



Segmented Information
For three months ended September 30, 2006 and 2005
(expressed in thousands of US dollars, except where indicated)
For the three months ended September 30, 2006, segmented information is
presented as follows:

--------------------------------------------------------------------------
2006
--------------------------------------------------------------------------
KCO BLD GMP FRO CDA Total
$ $ $ $ $ $
--------------------------------------------------------------------------
Segmented revenues 229,046 108,100 - - 4,836 341,982
Less inter-segment
revenues - 8,737 - - 4,836 13,573
--------------------------------------------------------------------------
Revenues 229,046 99,363 - - - 328,409
Cost of sales 48,846 23,692 - - - 72,538
Depletion and
amortization 8,082 5,592 - - 26 13,700
--------------------------------------------------------------------------
Operating profit
(loss) 172,118 70,079 - - (26) 242,171
Interest on
long-term debt 6,104 750 - - 265 7,119
Other 7,133 2,320 - - 5,607 15,060
--------------------------------------------------------------------------
Segmented profit
before undernoted
items 158,881 67,009 - - (5,898) 219,992
Income taxes 40,924 19,414 - - (1,119) 59,219
Minority interest 21,597 - - - - 21,597
--------------------------------------------------------------------------
Segmented profit 96,360 47,595 - - (4,779) 139,176
--------------------------------------------------------------------------
Property, plant
and equipment 396,201 53,948 103,245 65,199 374,720 993,313
Total assets 768,106 180,866 120,413 67,586 447,490 1,584,461
Capital expenditures 25,974 452 10,978 30,057 90,515 157,976
--------------------------------------------------------------------------
--------------------------------------------------------------------------


For the three months ended September 30, 2005, segmented information is
presented as follows:
--------------------------------------------------------------------------
2005
--------------------------------------------------------------------------
KCO BLD GMP FRO CDA Total
$ $ $ $ $ $
--------------------------------------------------------------------------
Segmented revenues 92,217 55,032 - - 2,907 150,156
Less inter-segment
revenues - 4,227 - - 2,907 7,134
--------------------------------------------------------------------------
Revenues 92,217 50,805 - - - 143,022
Cost of sales 31,905 21,887 - - - 53,792
Depletion and
amortization 6,462 6,027 - - 30 12,519
--------------------------------------------------------------------------
Operating profit
(loss) 53,850 22,891 - - (30) 76,711
Interest on
long-term debt 4,080 1,617 - - 124 5,821
Other 7,041 2,144 - - 678 9,863
--------------------------------------------------------------------------
Segmented profit
before undernoted
items 42,729 19,130 - - (832) 61,027
Income taxes 11,657 3,127 - - - 14,784
Minority interest 6,770 - - - - 6,770
--------------------------------------------------------------------------
Segmented profit 24,302 16,003 - - (832) 39,473
--------------------------------------------------------------------------
Property, plant
and equipment 283,571 87,713 41,917 3,691 924 417,816
Total assets 409,616 132,730 42,622 3,691 52,858 641,517
Capital expenditures 6,767 34,835 19,484 - - 61,086
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Kansanshi copper / gold operation ("KCO") Bwana / Lonshi division ("BLD")
Guelb Moghrein project ("GMP") Frontier project ("FRO") Corporate
development, administration and other ("CDA")



Segmented Information
For nine months ended September 30, 2006 and 2005
(expressed in thousands of US dollars, except where indicated)

For the nine months ended September 30, 2006, segmented information is
presented as follows:
--------------------------------------------------------------------------
2006
--------------------------------------------------------------------------
KCO BLD GMP FRO CDA Total
$ $ $ $ $ $
--------------------------------------------------------------------------
Segmented revenues 611,833 288,604 - - 10,852 911,289
Less inter-segment
revenues - 22,369 - - 10,852 33,221
--------------------------------------------------------------------------
Revenues 611,833 266,235 - - - 878,068
Cost of sales 115,697 74,775 - - - 190,472
Depletion and
amortization 21,919 18,084 - - 63 40,066
--------------------------------------------------------------------------
Operating profit
(loss) 474,217 173,376 - - (63) 647,530
Interest on
long-term debt 17,269 998 - - 789 19,056
Other 61,845 8,759 - - 12,314 82,918
--------------------------------------------------------------------------
Segmented profit
before undernoted
items 395,103 163,619 - - (13,166) 545,556
Income taxes 103,657 46,831 - - (2,147) 148,341
Minority interest 52,786 - - - - 52,786
--------------------------------------------------------------------------
Segmented profit 238,660 116,788 - - (11,019) 344,429
--------------------------------------------------------------------------
Property, plant
and equipment 396,201 53,948 103,245 65,199 374,720 993,313
Total assets 768,106 180,866 120,413 67,586 447,490 1,584,461
Capital expenditures 87,231 1,527 38,499 55,331 374,028 556,616
--------------------------------------------------------------------------
--------------------------------------------------------------------------


For nine months ended September 30, 2005, segmented information is
presented as follows:
--------------------------------------------------------------------------
2005
--------------------------------------------------------------------------
KCO BLD GMP FRO CDA Total
$ $ $ $ $ $
--------------------------------------------------------------------------
Segmented revenues 137,280 138,314 - - 6,782 282,376
Less inter-segment
revenues - 7,875 - - 6,782 14,657
--------------------------------------------------------------------------
Revenues 137,280 130,439 - - - 267,719
Cost of sales 50,443 54,585 - - - 105,028
Depletion and
amortization 9,389 13,888 - - 87 23,364
--------------------------------------------------------------------------
Operating profit
(loss) 77,448 61,966 - - (87) 139,327
Interest on
long-term debt 6,719 3,211 - - 124 10,054
Other 5,247 2,772 - - (10,237) (2,218)
--------------------------------------------------------------------------
Segmented profit
before undernoted
items 65,482 55,983 - - 10,026 131,491
Income taxes 14,386 11,322 - - - 25,708
Minority interest 10,085 - - - - 10,085
--------------------------------------------------------------------------
Segmented profit 41,011 44,661 - - 10,026 95,698
--------------------------------------------------------------------------
Property, plant
and equipment 283,571 87,713 41,917 3,691 924 417,816
Total assets 409,616 132,730 42,622 3,691 52,858 641,517
Capital expenditures 49,879 44,358 31,255 - - 125,492
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Kansanshi copper / gold operation ("KCO") Bwana / Lonshi division ("BLD")
Guelb Moghrein project ("GMP") Frontier project ("FRO")Corporate
development, administration and other ("CDA")



The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • First Quantum Minerals Ltd.
    Geoff Chater
    North American Contact
    (604) 688-6577 or Toll Free: 1-888-688-6577
    or
    First Quantum Minerals Ltd.
    Bill Iversen
    North American Contact
    (604) 688-6577 or Toll Free: 1-888-688-6577
    (604) 688-3818 (FAX)
    Email: info@fqml.com
    or
    First Quantum Minerals Ltd.
    Clive Newall, President
    United Kingdom Contact
    +44 140 327 3484
    +44 140 327 3494 (FAX)
    Email: clive.newall@fqml.com
    or
    First Quantum Minerals Ltd.
    Carina Corbett
    United Kingdom Contact
    + 44 20 7907 4761
    Website: www.first-quantum.com