First Quantum Minerals Ltd.
LSE : FQM
TSX : FM

First Quantum Minerals Ltd.

March 14, 2007 03:02 ET

First Quantum Minerals Reports Operational and Financial Results for the Three Months and Twelve Months Ended December 31, 2006

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 14, 2007) -

(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 twelve months ended December 31, 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

- Record net sales of $1,094.5 million in 2006, an increase of 146% compared to 2005

- Record net earnings of $414.4 million ($6.37 per share) in 2006, an increase of 171% compared to 2005

- Net earnings of $70.0 million ($1.04 per share) in the fourth quarter of 2006, an increase of 22% compared to the fourth quarter of 2005

- Record cash flows from operating activities, before working capital movements, of $588.2 million ($9.04 per share) in 2006, an increase of 149% compared to 2005

- Cash flow from operating activities, before working capital movements, of $85.0 million ($1.26 per share) in the fourth quarter of 2006, a decrease of 16% compared to the fourth quarter of 2005

- Copper production for the year of 183,277 tonnes (403.9 million pounds), an increase of 54% compared to 2005

- Copper sales for the year of 172,487 tonnes (380.2 million pounds), an increase of 45% compared to 2005

- Contained copper in concentrate inventory at December 31 of approximately 15,000 tonnes (33.1 million pounds)

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

- Acquired Adastra Minerals Inc. during the year

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

- Dividends of $20.1 million paid to Company shareholders during the year

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

- Commissioning of High pressure leach project at Kansanshi commenced in November 2006

Financial Results (see attached financial statements & summary tables)

Three months

Fourth quarter revenues totalled $216.4 million, which included copper revenues of $212.0 million and gold revenues of $4.4 million. This was an increase of 22% over the same period in 2005. This increase was the result of an increase in the average LME cash copper price of 65% and an increase in the tonnes of copper sold by 3% over the same period in 2005. However, the Company recognized negative sales adjustments of $31.7 million related to prior period's copper sales that were provisionally priced at September 30, 2006.

The realized copper price was $2.32 per pound compared to $1.97 per pound during the same period in 2005. The average LME cash copper price for the fourth quarter was $3.21 per pound as compared to $1.95 per pound during the same period in 2005. The gross copper selling price achieved for the quarter was $2.54 per pound, including a negative provisional pricing adjustment of $0.34 per pound and excluding tolling and refining costs ("TC RCs") and freight parity charges of $0.22 per pound.

The Company received final price determination on its sales of copper based on prices prevailing up to between three and nine months subsequent to the actual month of shipment. Consequently, the final price for sales which have been made during the latter months of the period is not known with certainty at the end of the period. At the end of each period, a positive or negative adjustment is recorded to reflect the difference in the price initially recorded at the time of shipment and the forward LME copper price until final settlement is made.

As at December 31, 2006 there were 43,440 tonnes of contained copper that have been provisionally priced at an average LME copper price of $2.87 per pound. This revenue will be subject to future adjustments as a result of movements in the copper price. Of this amount, 11,124 tonnes had the final price determined in January 2007 at $2.57 per pound, 14,089 tonnes determined in February 2007 at $2.57 per pound, 9,252 tonnes will be determined in March 2007, and 8,975 tonnes thereafter.

As the majority of Kansanshi's copper in concentrate production from January 1, 2007 onwards will be treated at the Mopani's Mufulira smelter rather than having to be exported, provisional pricing earnings volatility may be reduced as shipment periods will be significantly reduced.

Fourth quarter copper production was 46,531 tonnes, of which, 62% was from Kansanshi, 27% was from Bwana, and 11% was from Guelb. Combined copper production increased by 2% over the third quarter of 2006, which was principally due to Guelb achieving commercial production on October 5, 2006. Kansanshi and Bwana fourth quarter copper production decreased from the third quarter of 2006 by 10% and 6%, respectively, due to the processing of lower grade ore.

During the fourth quarter, the Company sold 41,454 tonnes of copper (31,931 tonnes of copper cathode and 9,523 tonnes of copper contained in concentrate) compared to 40,203 tonnes of copper in the same period in 2005.

Gold revenues for the quarter totalled $4.4 million. The average realized gold price for the quarter was $628 per ounce compared to the average market gold price of $614 per ounce.

Fourth quarter group cash costs and total costs were $1.00 per pound and $1.24 per pound, respectively, compared with $0.89 per pound and $0.71 per pound for the same period in 2005.

The operating cash inflow for the fourth quarter, before working capital movements, was $85.0 million or $1.26 per share and after working capital movements was $146.4 million or $2.18 per share.

Net earnings for the fourth quarter were $70.0 million or $1.04 per share (weighted average common shares - 67,286,631) as compared to $57.1 million or $0.93 per share (weighted average common shares - 61,638,650) for 2005. This net income increase of 22% was due to a 65% increase in the average LME cash copper price compared to the same period in 2005, which was in part offset by a loss as a result of provisional pricing due to a decrease in the average LME cash copper price between September 30, 2006 to December 31, 2006.

Twelve Months

The twelve month's revenues totalled $1,094.5 million, which included copper revenues of $1,073.9 million, gold revenues of $20.1 million and acid revenues of $0.4 million. This was an increase of 146% over the same period in 2005, resulting from an increase in both copper production and the realized copper price.

The realized copper price was $2.82 per pound as compared to $1.66 per pound during the same period in 2005. The average LME cash copper price for the twelve months was $3.05 per pound as compared to $1.67 per pound during the same period in 2005. Excluding TC RCs and freight parity charges of $0.30, and a positive provisional pricing adjustment of $0.08 per pound, the gross copper selling price achieved for the period was $3.12 per pound.

Copper production in 2006 was 183,277 tonnes, of which, 69% was from Kansanshi, 28% was from Bwana, and 3% was from Guelb. Combined copper production increased by 54% over the 2005 year, which was principally due to Kansanshi production increasing 83% compared to the same period of 2005; the 2006 year was Kansanshi's first full twelve month period with commercial production achieved in the second quarter of 2005.

The Company sold 172,487 tonnes of copper (124,857 tonnes of copper cathode and 47,630 tonnes of contained copper in concentrate) as compared to 118,602 tonnes of copper in the same period in 2005.

Gold revenues for the twelve months totalled $20.1 million. The average realized gold price for the period was $601 per ounce compared to the average market gold price of $604 per ounce.

Twelve month group cash costs and total costs were $0.87 per pound and $1.09 per pound, respectively, compared with $0.67 per pound and $0.86 per pound for the same period in 2005.

The operating cash inflow for the twelve month period, before working capital movements, was $588.2 million or $9.04 per share and after working capital movements was $512.0 million or $7.87 per share.

Net earnings for 2006 were $414.4 million or $6.37 per share (weighted average common shares - 65,087,605) as compared to $152.8 million or $2.48 per share (weighted average common shares - 61,498,338) during the 2005 year. This net income increase of 171% was due to an 83% increase in the average LME cash copper price and a 54% increase in copper production.

Kansanshi (see attached production statistics summary table)

Three Months

The total material mined increased 41% over the same period in 2005. This increase was attributable to the arrival of additional drilling units, medium sized excavators and trucks. As well, major haul roads and pit ramps were upgraded which significantly minimized delays by rain. Training was also intensified on operating in slippery conditions, which also had a significant effect on production during the wet season.

Cathode total costs increased 71% per pound compared to the same period in 2005 due to increased ore costs, processing costs and tolling charges. The increase in ore costs was due to the processing of lower grade ore and higher fuel and wage costs. The processing of lower grade ore also led to increased leach costs as the acid consumption increased 46% due to the increase and type of ore processed. In addition, acid prices increased due to a shortage of surplus acid from the Bwana acid plant requiring Kansanshi to purchase acid from other vendors at higher prices. Tolling charges from processing copper in concentrates at the Mufulira smelter returned as cathodes were not incurred in the same period in 2005. The balance of the increase is explained by higher maintenance costs associated with the processing of higher volumes of harder ore. Included within the cathode production were 17,201 tonnes from the SX/EW process and 1,805 tonnes produced from the tolling of copper concentrates at the Mufulira smelter. There was no tolled copper cathode production in the same period of 2005. Production increased 4% over the same period in 2005; however 10% of this production was due to the tolling of copper in concentrates resulting in a production decrease of 6% in the SX/EW process. This decrease in production was due to the processing of lower grade ore as compared to the same period in 2005.

Concentrate production was 11% lower than the same period in 2005 primarily due to the processing of lower grade ore during the quarter. Concentrate total costs increased 50% per pound as compared to the same period in 2005 due, principally, to increased ore costs and processing costs. The increase in ore costs was due to the processing of lower grade ore and higher fuel and wage costs. Maintenance costs also increased due to the increase in the volume of lower grade, harder ore processed. As well, freight charges increased due, principally, to the delay in completion of the Mopani smelter requiring the Company to export the concentrates.

Twelve Months

During the 2005 year, the world shortage of mining truck tires had impaired the availability of the Company's haul trucks at Solwezi. The 34% increase this year compared with 2005 was reflective of the easing of the tire shortages, accompanied by the improved equipment availability and the larger drilling and haul truck fleet.

Cathode total costs increased 33% per pound over 2005 due, principally, to increased ore costs, processing costs and tolling charges, which were incurred for the first time due to the production of cathode from concentrate. The increase in ore costs was due to the processing of lower grade ore and higher fuel and wage costs. The processing of lower grade ore also led to increased leach costs due to increased acid consumption and higher acid prices. Tolling charges resulted from the processing of copper in concentrates at the Mufulira smelter returned as cathodes. The balance of the increase is explained by higher maintenance costs associated with the processing of higher volumes of harder ore.

Included within cathode production were 67,656 tonnes from the SX/EW process and 6,027 tonnes produced from the tolling of copper concentrates at the Mufulira smelter. Production increased by 77% over 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.

Concentrate production was up by 91% over 2005 as Kansanshi continued to ramp up after achieving commercial production during April 2005. Concentrate total costs increased 42% per pound as compared to 2005 due to increased ore costs and processing costs, including TC RCs, price participation and higher freight parity charges. The increase in ore costs was due to the processing of lower grade ore and higher fuel and wage costs. Maintenance costs also increased due to the increase in the volume of lower grade, harder ore processed. In addition, TC RCs increased by $0.13 per pound due to price participation and the increased average copper price compared to 2005. As well, freight charges increased by $0.13 per pound due, principally, to the delay in completion of the Mopani smelter requiring the Company to export concentrates.

Bwana/Lonshi (see attached production statistics summary table)

Three months

The strip ratio for the quarter was 51:1. Total material mined decreased 32% over the same period of 2005, principally due to the high water levels and difficult mining conditions typically associated with dolomite rock formations. Ore mined decreased 62%, due to the mining of waste in the North pushback and increased drill and blast in the pit due to dolomite rock. Notwithstanding this, copper production has been maintained as a result of the significant increase in the high grade ore mined from an average of 6.1% to 10.4%. This high grade ore was blended with low grade ore, previously stockpiled at Lonshi, to bring the processed ore grade down to approximately 4.3%.

Production remained comparable with the same period in 2005; however total costs decreased by 14% per pound as compared to the same period in 2005 due to lower ore costs and depreciation charges. Ore costs decreased by 30% due to the processing of higher grade ore in the fourth quarter of 2006. This was offset by an increase in processing costs of 28% due, principally, to increased oil based consumables, sulphur, and electricity costs. In addition, depreciation charges decreased by 32% as the depreciable capital base of Bwana/Lonshi was lower than during the same period in 2005.

Twelve Months

The strip ratio for the year was 36.2:1. The ore grade mined was 10.3% copper. The decrease in ore mined compared to 2005 was due to the increased stripping. Total material mined increased 6% from 2005 despite difficult mining conditions and can principally be attributed to the larger mining fleet utilized during the course of 2006.

Production achieved was 3% more than 2005 as Bwana processed more ore at a higher grade in 2006. Total costs increased by 11% per pound over the 2005 year due to increased processing costs which were impacted by increased oil based consumables, sulphur, and electricity costs.

Guelb Moghrein Copper-Gold Deposit, Mauritania (see attached production statistics summary table)

Twelve 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.

Guelb produced 5,031 tonnes of copper in concentrate in the period from achieving commercial production on October 5, 2006 to year end. Production costs were higher than planned primarily due to initial start up processing costs and the continued ramp up of production.

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. Average life-of-mine cash costs including TC RCs and freight parity charges are expected to be $1.04 per pound of finished copper, based on the most recent engineering study. Construction activities began in April of 2006 and commercial production is forecast to begin in the third quarter of 2007.

As at December 31, 2006, the Company had capitalized $116.4 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.

Kibamba Copper Prospect, DRC

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 December 31, 2006 was $9.5 million, unchanged since 2002. During the 2006 year, Mopani produced approximately 135,000 tonnes of finished copper and 1,400 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 during the first quarter of 2007. The Mufulira smelter will provide smelting offtake for all Kansanshi and Frontier concentrates. As at December 31, 2006, Mopani had total assets of over $1 billion. 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 was a listed 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. The acquisition of Adastra has been accounted for as an asset purchase with the total consideration paid being $273.3 million.

Outlook

Production Forecast

On a group basis, the Company expects to produce approximately 240,000 - 250,000 tonnes of copper in 2007, which is an increase of 32% to 38% over 2006 copper production. This expected production includes approximately 145,000 tonnes from Kansanshi, approximately 45,000 tonnes from Bwana/Lonshi, approximately 30,000 tonnes from Guelb Moghrein, and approximately 30,000 tonnes from Frontier. Group cash costs are expected to be in the range of $0.90 to $0.95 per pound of copper for 2007 before considering the impact of the accounting change for the removal of deferred stripping.

As of December 31, 2006, due to the continued lack of smelter capacity on the Zambian Copperbelt, the Company had stockpiled approximately 9,000 tonnes of contained copper in concentrates. In addition, approximately 6,000 tonnes of contained copper has been stockpiled at Guelb Moghrein. These stockpiles are expected to be fully processed in 2007.

TC and RC terms for the majority of concentrate treatment are based on annual Japanese Smelter Pool benchmarks and for 2007 have been settled at $60 per tonne of concentrate (TC), and 6.0 cents per pound of copper (RC) with no price participation.

Kansanshi

During the first two months of 2007, Kansanshi produced approximately 24,000 tonnes of copper, which included 15,500 tonnes of copper cathode and 8,500 tonnes of copper in concentrate. In 2007, the Mufulira smelter will process the majority of Kansanshi's concentrate. Kansanshi cash costs for 2007 are forecast in the range of $0.90 to $0.95 per pound of copper before considering the impact of the accounting change for the removal of deferred stripping.

Construction of a second sulphide crushing and milling circuit expansion is currently underway. Design work is well progressed and the majority of major equipment and long lead items have been purchased. Site works will begin in the dry season (April). The expansion 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, excluding mining equipment.

During the 2006 year, orders were placed for more mining equipment. It was discovered that more ore blending for both the oxide and sulphide ores were needed to accommodate variations in grade, hardness and acid consumption. The intention of the additional mining equipment was to improve the flexibility in the pit by enabling additional ore exposure. Some of this equipment arrived in mid 2006, which has already increased the exposure of additional high grade ore and has offset the continuing impact of lower grade sulphide ore on copper production in January and February of 2007.

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 total HPL capital cost is budgeted at $100 million including an upgrade to the Zesco power supply to Kansanshi and working capital requirements. The new SX/EW facility has been commissioned and is currently in use. This enabled the mine to exploit higher grade oxides in January and February of 2007. Construction of all remaining areas was completed in 2006, and commissioning of the autoclaves commenced in November.

The commissioning of the autoclaves required a very thorough and diligent approach to testing and proving all systems associated with the circuit. Part of the commissioning process includes the need to have a controlled curing of the new brickwork in the autoclave by raising the temperature and pressure in a stepped manner with hold periods of time, followed by an equally careful cooling period, internal visual inspection, and an autoclave pressure test. These activities required approximately 3 weeks, and were successfully completed in January. During process testing of the high pressure circuits and the slurry circuits, some of the high pressure valves on the autoclave exhibited an unsatisfactory amount of pressure leakage. New valves and spares, which had been ordered, have not yet been received as of the date of this report. Consequently, the existing valves have been dispatched for refurbishment by a specialist workshop. Upon receipt of the refurbished valves, process commissioning will continue with the introduction of slurry to the autoclave.

Bwana/Lonshi

During the first two months of 2007, Bwana/Lonshi exhausted its exposed ore, which has impacted the early part of 2007. Hence, during the first two months of 2007, Bwana/Lonshi has produced approximately 3,500 tonnes of copper cathode, well below its average past production. This diminished production results from the need to advance the waste stripping at a time of high rainfall. However, annual production estimates remain unchanged. Cash costs for 2007 are forecast in the range of $0.75 to $0.80 per pound of copper before considering the impact of the accounting change for the removal of deferred stripping. The Company continues to assess the alternative and most beneficial uses for the Bwana processing plant after the Lonshi ore has been exhausted in 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 2006. Management determined that commercial production (i.e. 65% of design capacity) was achieved on October 5, 2006. During the first two months of 2007 Guelb Moghrein produced 4,200 tonnes of copper in concentrate and 9,200 ounces of gold. The process plant is currently producing at a monthly rate of approximately 2,100 tonnes of copper in concentrate per month versus a design output of 2,500 tonnes of copper in concentrate per month. Gold production is approximately 4,600 ounces per month which is approximately 82% of design output. Gold production will increase both with increased copper concentrate volumes and with higher recovery after the final commissioning of the carbon-in-leach (CIL) gold plant is completed. The Company expects to provide unit cost guidance for 2007 in the publication of the first quarter financial results. The Company remains unable to release detailed information on Guelb Moghrein as the historical resource statement is not compliant with National Instrument 43-101; however, the Company is currently awaiting assays from a drilling program, to comply with this instrument.

Frontier

At Frontier, construction is underway in both Zambia and the DRC. Progress at the Frontier site continues with the plant construction on schedule for a July start of commissioning. Excessive rainfall during the wet season has delayed the completion of the Run of Mine (ROM) pad and the 220/33kv substation base. The rains have also put the pre-strip mining behind schedule. The Company continues to forecast a third quarter 2007 start of commissioning at Frontier.

Kolwezi and Other

At the Kolwezi copper-cobalt project in the DRC, the Company has conducted metallurgical test work and piloting program for revised process engineering. The Company is considering the construction of an initial 35,000 tonne per year copper facility and 5,800 tonne per year cobalt facility which would be designed to be expanded to 105,000 tonnes of copper per year and 17,400 tonnes of cobalt per year. A detailed capital estimate is currently being prepared for presentation to the project stakeholders.

A large exploration program was carried out between May and October of 2006 with several drilling programs targeting prospects identified in 2005 including Kashime and Kibamba. Results of this program will be published when they are received.

The Company has adopted the strategy of making investments in public companies. The positions may be increased or decreased at any time. At December 31, 2006, the Company had invested $35.6 million in this program.

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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2005 2005 2005 2005 2006 2006 2006 2006
Statement Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
of Operations
and Retained
Earnings
(millions, except
where indicated)
Total
reven-
ues $ 38.2 $ 86.5 $143.0 $176.9 $187.2 $362.5 $328.4 $216.4
Cost of
sales 16.2 35.0 53.8 46.9 54.5 63.5 72.5 74.1
Net
earnings 27.2 29.0 39.5 57.1 54.8 150.5 139.2 70.0
Basic
earnings
per
share $ 0.44 $ 0.47 $ 0.64 $ 0.93 $ 0.89 $ 2.33 $ 2.09 $ 1.04
Diluted
earnings
per
share $ 0.43 $ 0.46 $ 0.63 $ 0.90 $ 0.86 $ 2.28 $ 2.05 $ 1.02
Gross
copper
selling
price
(per
lb) $ 1.47 $ 1.53 $ 1.77 $ 2.09 $ 2.53 $ 3.71 $ 3.48 $ 2.54
Realized
copper
price
(per
lb) $ 1.44 $ 1.42 $ 1.58 $ 1.97 $ 2.26 $ 3.36 $ 3.17 $ 2.32
Average
LME cash
copper
price
(per
lb) $ 1.44 $ 1.54 $ 1.71 $ 1.95 $ 2.24 $ 3.29 $ 3.48 $ 3.21
Realized
gold
price
(per oz) - $ 427 $ 482 $ 467 $ 563 $ 631 $ 581 $ 628
Average
gold
price
(per
oz) $ 427 $ 427 $ 440 $ 485 $ 554 $ 627 $ 622 $ 614
Total
copper
sold
(tonnes)
(2) 12,000 26,535 39,864 40,203 36,635 46,930 46,227 41,454
Total
copper
produced
(tonnes)
(3) 12,028 28,673 36,196 42,220 42,086 49,180 45,480 46,531
Total
gold
sold
(ounces) - 1,370 7,130 5,766 8,079 9,611 8,864 6,944
Cash
Costs
(C1)
(per
lb)
(1) $ 0.58 $ 0.60 $ 0.64 $ 0.71 $ 0.81 $ 0.87 $ 0.90 $ 1.00
Total
Costs
(C3)
(per
lb)
(1) $ 0.75 $ 0.80 $ 0.87 $ 0.89 $ 1.01 $ 1.07 $ 1.13 $ 1.24
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Financial
Position
(millions)
Working
capi-
tal $ 61.4 $ 47.1 $ 32.2 $ 76.2 $102.0 $ 234.6 $ 290.9 $ 292.9
Total
assets $523.1 $561.9 $641.5 $746.5 $842.4 $1,401.2 $1,584.5 $1,744.4
Weighted
average
#
shares
(000's) 61,267 61,499 61,583 61,639 61,808 64,564 66,615 67,287
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Cash Flows
from (millions)
Operating
activities
Before
working
capital
move-
ments $ 19.7 $ 43.0 $ 81.1 $101.0 $105.7 $ 215.2 $ 185.5 $ 85.0
After
working
capital
move-
ments 22.9 2.3 69.8 115.5 84.6 150.6 133.5 146.4
Financing
activi-
ties 24.8 (22.8) (5.1) (1.6) (17.7) 27.1 (41.7) 50.9
Investing
activi-
ties (19.0) (2.3) (57.8) (94.4) (42.4) (94.6) (92.4) (137.5)
Cash Flows
from
Operating
activities
per
share(3)
Before
working
capital
move-
ments 0.32 0.70 1.32 1.64 1.71 3.33 2.78 1.26
After
working
capital
move-
ments 0.37 0.04 1.13 1.87 1.37 2.33 2.00 2.18
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Kansanshi
Production
Statistics
Mining:
Waste mined
(000's
tonnes) 1,651 3,185 6,064 5,240 2,588 5,516 6,683 7,123
Ore mined
(000's
tonnes) 2,119 2,050 1,621 1,499 1,382 2,552 3,220 2,380
Ore grade
(%) 1.7 2.0 2.0 1.9 1.7 1.4 1.4 1.4
Processing:
Sulphide
Ore
processed
(000's
tonnes)
(3) - 434 507 580 782 1,140 1,277 1,212
Oxide Ore
processed
(000's
tonnes)
(3) - 696 955 1,039 1,044 1,246 1,401 1,080
Contained
copper
(tonnes)
(3) - 19,917 27,510 30,934 32,213 36,981 32,882 31,545
Sulphide
ore
grade
processed
(%) - 2.0 2.0 2.0 1.9 1.6 1.2 0.9
Oxide ore
grade
processed
(%) - 1.8 1.8 1.9 1.7 1.5 1.2 1.6
Recovery
(3) (%) - 86 84 96 92 94 95 92
Copper
cathode
produced
(tonnes)
(3) - 8,802 14,395 18,324 15,796 18,687 20,194 19,006
Copper in
concentrate
produced
(tonnes)
(3) - 8,154 8,670 11,234 14,572 16,924 11,984 10,015
Concentrate
grade (%) - 28.9 29.5 28.7 29.3 25.8 26.4 26.9
Combined
Costs
(per
lb)(1)
Mining - $ 0.09 $ 0.08 $ 0.06 $ 0.10 $ 0.12 $ 0.17 $ 0.14
Processing - $ 0.33 $ 0.36 $ 0.38 $ 0.41 $ 0.44 $ 0.50 $ 0.62
Site
Administ-
ration - $ 0.04 $ 0.04 $ 0.04 $ 0.03 $ 0.04 $ 0.04 $ 0.04
TC RCs - $ 0.18 $ 0.18 $ 0.21 $ 0.31 $ 0.42 $ 0.31 $ 0.27
Gold /
Acid
credit - $(0.01) $(0.07) $(0.04) $(0.07)$ (0.08)$ (0.07)$ (0.05)
Combined
Total
Cash
Costs - $ 0.63 $ 0.59 $ 0.65 $ 0.78 $ 0.94 $ 0.95 $ 1.02
Combined
Total
Costs - $ 0.80 $ 0.80 $ 0.76 $ 0.93 $ 1.11 $ 1.17 $ 1.21
Cathode
Costs
(per
lb)(1)
Mining - $ 0.11 $ 0.08 $ 0.06 $ 0.10 $ 0.13 $ 0.16 $ 0.12
Processing - $ 0.46 $ 0.40 $ 0.42 $ 0.51 $ 0.51 $ 0.51 $ 0.68
Site
Adminis-
tration - $ 0.04 $ 0.04 $ 0.04 $ 0.03 $ 0.04 $ 0.04 $ 0.04
TC RCs - - - - - $ 0.03 $ 0.10 $ 0.08
Gold /
Acid
credit - - - - $ (0.01)$ (0.02)$ (0.02)
Cathode
Total
Cash
Costs - $ 0.61 $ 0.52 $ 0.52 $ 0.64 $ 0.70 $ 0.79 $ 0.90
Cathode
Total
Costs - $ 0.80 $ 0.73 $ 0.63 $ 0.80 $ 0.87 $ 1.00 $ 1.08
Concentrate
Costs
(per
lb)(1)
Mining - $ 0.07 $ 0.08 $ 0.06 $ 0.09 $ 0.12 $ 0.18 $ 0.18
Processing - $ 0.19 $ 0.29 $ 0.30 $ 0.28 $ 0.35 $ 0.46 $ 0.51
Site
Administ-
ration - $ 0.04 $ 0.05 $ 0.05 $ 0.04 $ 0.04 $ 0.04 $ 0.04
TC RCs - $ 0.38 $ 0.48 $ 0.57 $ 0.68 $ 0.89 $ 0.73 $ 0.63
Gold /
Acid
credit - $(0.03) $(0.19) $(0.11) $(0.16)$ (0.17)$ (0.16)$ (0.11)
Concentrate
Total
Cash
Costs - $ 0.65 $ 0.71 $ 0.87 $ 0.93 $ 1.23 $ 1.25 $ 1.25
Concentrate
Total
Costs - $ 0.81 $ 0.90 $ 0.98 $ 1.08 $ 1.40 $ 1.49 $ 1.47
Revenue
($000's)
Copper
cathodes - 29,165 54,116 87,624 84,745 142,301 158,563 110,902
Copper in
concent-
rates - 15,309 34,668 31,850 35,611 109,517 65,331 22,256
Gold - 585 3,438 2,692 4,545 6,068 5,152 2,761
Total
revenues - 45,059 92,222 122,166 124,901 257,887 229,046 135,919
Copper
cathode
sold
(tonnes) - 8,919 14,227 18,505 15,556 18,754 20,217 19,165
Copper in
concentrate
sold
(tonnes) - 6,024 12,243 9,260 9,282 15,692 13,131 8,215
Gold sold
(ounces) - 1,370 7,130 5,766 8,079 9,611 8,864 4,427
--------------------------------------------------------------------------

Bwana/Lonshi
Production
Statistics
Mining:
Waste mined
(000's
tonnes) 2,596 4,025 4,707 5,918 3,241 5,607 5,915 4,081
Ore mined
(000's
tonnes) 152 319 300 209 147 183 110 80
Ore grade
(%) 5.3 5.5 3.9 6.1 8.4 10.7 11.9 10.4
Processing:
Oxide Ore
processed
(000's
tonnes) 264 328 363 397 335 314 322 294
Contained
copper
(ton-
nes) 13,804 13,354 15,003 14,262 13,401 15,625 15,011 13,037
Oxide ore
grade
processed
(%) 5.2 4.1 4.1 3.6 4.0 5.0 4.7 4.3
Recovery
(%) 87 88 88 89 87 87 89 96
Copper
cathode
produced
(ton-
nes) 12,028 11,717 13,131 12,662 11,718 13,569 13,302 12,479
Acid
produced
(ton-
nes) 55,275 69,218 64,263 72,040 68,195 71,421 63,830 73,901
Surplus
acid
(tonnes) 49 14,939 7,120 219 937 910 508 8
Cathode
Costs
(per
lb)(1)
Mining $ 0.23 $ 0.29 $ 0.43 $ 0.49 $ 0.51 $ 0.32 $ 0.32 $ 0.34
Process-
ing $ 0.31 $ 0.31 $ 0.30 $ 0.34 $ 0.38 $ 0.35 $ 0.38 $ 0.43
Site
Administr-
ation $ 0.06 $ 0.06 $ 0.06 $ 0.09 $ 0.10 $ 0.10 $ 0.10 $ 0.07
TC RCs - - - - - - -
Gold /
Acid
cred-
it $(0.02) $(0.09) $(0.05) $(0.08) $(0.09)$ (0.08)$ (0.06)$ (0.09)
Cathode
Total
Cash
Costs $ 0.58 $ 0.57 $ 0.74 $ 0.84 $ 0.90 $ 0.69 $ 0.74 $ 0.75
Cathode
Total
Costs $ 0.75 $ 0.79 $ 1.01 $ 1.16 $ 1.20 $ 0.98 $ 1.00 $ 1.00
Revenues
($000's)
Copper
cath-
odes 38,172 38,899 49,602 54,694 62,085 104,455 99,283 75,407
Copper
cathodes
sold
(ton-
nes) 12,000 11,592 13,394 12,438 11,797 13,648 12,954 12,766
--------------------------------------------------------------------------

Guelb
Production
Statistics
Mining:
Waste mined
(000's
tonnes) - - - - 1,156 1,721 1,660 1,719
Ore mined
(000's
tonnes) - - - - 41 144 179 400
Ore grade
(%) - - - - 1.9 1.9 1.8 1.5
--------------------------------------------------------------------------
Processing:
Sulphide
Ore
processed
(000's
tonnes)
(3) - - - - - - - 334
Contained
copper
(tonnes)
(3) - - - - - - - 6,552
Sulphide
ore grade
processed
(%) - - - - - - - 2.0
Recovery
(3) (%) - - - - - - - 78
Copper
concentrate
produced
(tonnes)
(3) - - - - - - - 5,031

Concentrate
Costs
(per
lb)(1)
Mining - - - - - - - $ 0.13
Processing - - - - - - - $ 0.77
Site
Adminis-
tration - - - - - - - $ 0.08
TC RCs - - - - - - - $ 0.86
Gold /
Acid
credit - - - - - - - $ (0.15)
Concentrate
Total
Cash
Costs - - - - - - - $ 1.69
Concentrate
Total
Costs - - - - - - - $ 2.18
Revenues
($000's)
Copper
in
concen-
trates - - - - - - - 6,807
Gold - - - - - - - 1,477
Total
revenues - - - - - - - 8,284
Copper
concentrates
sold
(tonnes) - - - - - - - 1,308
Gold
sold
(ounces) - - - - - - - 2,516
--------------------------------------------------------------------------


--------------------------------------------------------------------------
--------------------------------------------------------------------------
(1) For the definition of cash and total costs, reference should be made
to section 10.
(2) Copper sold does not include tonnes
(3) Copper produced does not include tonnes produced prior to
pre-commercial production.
--------------------------------------------------------------------------
--------------------------------------------------------------------------


Consolidated Balance Sheet
As at December 31, 2006 and, 2005
(expressed in thousands of US dollars, except where indicated)

2006 2005
$ $
Assets
Current assets
Cash and cash equivalents (note 17) 249,544 82,910
Restricted cash (note 8) 15,000 20,162
Accounts receivable 142,821 62,938
Inventory (note 4) 147,374 60,854
Current portion of other assets (note 7) 10,108 7,506
-------------------
564,847 234,370
Investments (note 5) 45,171 9,522
Property, plant and equipment (note 6) 1,068,118 471,294
Other assets (note 7) 66,287 31,325
-------------------
1,744,423 746,511
-------------------
-------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 84,802 63,492
Current taxes payable 110,039 16,055
Current portion of long-term debt (note 8) 57,713 58,255
Current portion of other liabilities (note 9) 19,389 20,377
-------------------
271,943 158,179
Long-term debt (note 8) 237,203 176,767
Other liabilities (note 9) 38,211 34,340
Future income tax liabilities (note 11) 173,319 43,330
-------------------
720,676 412,616
Minority interests 88,646 22,454
-------------------
809,322 435,070
-------------------
Shareholders' equity
Equity accounts (note 12) 396,017 166,592
Retained earnings 539,084 144,849
-------------------
935,101 311,441
-------------------
1,744,423 746,511
-------------------
-------------------
Commitments (note 18)

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 a
www.first-quantum.com.


Consolidated Statements of Earnings and Retained Earnings
For the years ended December 31, 2006 and 2005
(expressed in thousands of US dollars, except where indicated)

2006 2005
$ $
Sales revenues
Copper 1,073,943 434,100
Gold 20,128 6,715
Acid 412 3,799
-------------------
1,094,483 444,614
Cost of sales (264,600) (151,904)
Depletion and amortization (56,067) (36,545)
-------------------
Operating profit 773,816 256,165
Other expenses/income
Exploration (18,889) (7,493)
General and administrative (19,182) (9,724)
Interest and financing fees on long-term debt (32,729) (19,385)
Other expenses/income (note 14) (57,416) (16,996)
Gain on disposal of investment 1,805 16,127
-------------------
(126,411) (37,471)
-------------------
Earnings before income taxes and minority interests 647,405 218,694
Income taxes (note 11) (166,845) (45,612)
Minority interests (66,174) (20,264)
-------------------
Net earnings for the year 414,386 152,818
Retained earnings (deficit) - beginning of year 144,849 (3,936)
Dividends (20,151) (4,033)
-------------------
Retained earnings - end of year 539,084 144,849
-------------------
-------------------

Earnings per common share
Basic $ 6.37 $ 2.48
Diluted $ 6.24 $ 2.43
Weighted average shares outstanding (000's) 65,088 61,498

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 the years ended December 31, 2006 and 2005
(expressed in thousands of US dollars, except where indicated)

2006 2005
$ $
Cash flows from operating activities
Net earnings for the year 414,386 152,818
Items not affecting cash
Depletion and amortization 56,067 36,545
Minority interests 66,174 20,264
Unrealized foreign exchange loss (gain) 4,567 (7,744)
Future income tax expense 22,381 26,632
Stock-based compensation expense 6,660 2,656
Unrealized derivative instruments loss 5,577 14,890
Amortization of deferred finance fees 12,381 2,290
Other 1,797 3,903
Gain on disposal of investment (1,805) (16,127)
-------------------
588,185 236,127

Change in non-cash operating working capital
Increase in accounts receivable (81,791) (44,518)
Increase in inventory (85,339) (25,218)
Increase in accounts payable and accrued liabilities 12,535 22,645
Increase in current taxes payable 93,984 12,806
Long term incentive plan contribution (note 12) (15,563) -
-------------------
512,011 201,842
-------------------

Cash flows from financing activities
Proceeds from long-term debt 307,000 68,023
Repayments of long-term debt (251,507) (39,819)
Proceeds on issuance of common shares 3,461 2,159
Dividends paid (20,151) (4,033)
Deferred premium obligation, finance fees (25,443) (12,763)
-------------------
13,360 13,567
-------------------

Cash flows from investing activities
Restricted cash 5,162 (18,231)
Acquisition of Adastra Minerals Inc., net of
cash acquired (note 3) (27,829) -
Property, plant and equipment (264,256) (180,195)
Deferred exploration and stripping costs (37,806) (6,545)
Net investments (33,843) 21,944
-------------------
(358,572) (183,027)
-------------------

Effect of exchange rate changes on cash (165) 172
Increase in cash and cash equivalents 166,634 32,554
Cash and cash equivalents - beginning of year 82,910 50,356
-------------------
Cash and cash equivalents - end of year 249,544 82,910
-------------------
-------------------

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 years ended December 31, 2006 and 2005
(expressed in thousands of US dollars, except where indicated)

For the year ended December 31, 2006, segmented information is presented as
follows:

--------------------------------------------------------------------------
2006
--------------------------------------------------------------------------
Bwana/ Guelb
Kansanshi Lonshi Moghrein Frontier Corporate Total
$ $ $ $ $ $
--------------------------------------------------------------------------
Segmented
revenues 745,688 374,474 7,152 - 14,712 1,142,026
Less
inter-
segment
revenues - (32,831) - - (14,712) (47,543)
--------------------------------------------------------------------------
Revenues 745,688 341,643 7,152 - - 1,094,483
Cost of
sales (161,549) (102,208) (843) - - (264,600)
Depletion
and
amortization (31,079) (23,440) (1,097) - (451) (56,067)
--------------------------------------------------------------------------
Operating
profit
(loss) 553,060 215,995 5,212 - (451) 773,816
Interest
on
long-term
debt (30,663) (724) (612) - (730) (32,729)
Other (62,967) (13,339) (1,328) - (16,048) (93,682)
--------------------------------------------------------------------------
Segmented
profit
(loss)
before
undernoted
items 459,430 201,932 3,272 - (17,229) 647,405
Income
taxes (117,952) (52,177) - - 3,284 (166,845)
Minority
interests (65,697) - (477) - - (66,174)
--------------------------------------------------------------------------
Segmented
profit 275,781 149,755 2,795 - (13,945) 414,386
--------------------------------------------------------------------------
Property,
plant and
equipment 411,327 49,123 106,045 116,368 381,709 1,064,572
Total
assets 645,483 164,835 148,223 122,780 663,102 1,744,423
Capital
expenditures 110,969 2,384 44,938 106,500 381,062 645,853
--------------------------------------------------------------------------


For the year ended December 31, 2005, segmented information is presented as
follows:

--------------------------------------------------------------------------
2005
--------------------------------------------------------------------------
Bwana/ Guelb
Kansanshi Lonshi Moghrein Frontier Corporate Total
$ $ $ $ $ $
--------------------------------------------------------------------------
Segmented
revenues 259,448 198,777 - - 11,986 470,211
Less
inter-
segment
revenues - (13,611) - - (11,986) (25,597)
--------------------------------------------------------------------------
Revenues 259,448 185,166 - - - 444,614
Cost of
sales (67,467) (84,437) - - - (151,904)
Depletion
and
amortization (14,987) (21,443) - - (115) (36,545)
--------------------------------------------------------------------------
Operating
profit
(loss) 176,994 79,286 - - (115) 256,165
Interest
on
long-term
debt (16,140) (2,865) - - (380) (19,385)
Gain on
disposal
of
investment - - - - 16,127 16,127
Other (19,159) (6,468) - - (8,586) (34,213)
--------------------------------------------------------------------------
Segmented
profit
before
undernoted
items 141,695 69,953 - - 7,046 218,694
Income
taxes (31,497) (18,842) - - 4,727 (45,612)
Minority
interests (20,264) - - - - (20,264)
--------------------------------------------------------------------------
Segmented
profit 89,934 51,111 - - 11,773 152,818
--------------------------------------------------------------------------
Property,
plant and
equipment 323,194 71,488 65,991 9,868 753 471,294
Total
assets 488,342 117,064 66,600 9,868 64,637 746,511
Capital
expenditures 93,099 35,073 55,719 6,177 (12) 190,056
--------------------------------------------------------------------------


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