First Quantum Minerals Ltd.
LSE : FQM
TSX : FM

First Quantum Minerals Ltd.

August 09, 2005 14:39 ET

First Quantum Reports Operational and Financial Results for Three Months and Six Months Ended June 30, 2005

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 9, 2005) - First Quantum Minerals Ltd. (TSX:FM)(LSE:FQM) - (All figures expressed in US dollars)

First Quantum Minerals Ltd. is pleased to announce its results for the three months and six months ended June 30, 2005. 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 - Three Months Ended June 30, 2005

- Commercial production at Kansanshi was achieved on April 19, 2005

- Total copper production was 29,909 tonnes

- Net earnings of $29.0 million or $0.47 per share

- Operating cash flow before working capital movements was $43.0 million or $0.70 per share

- Interim dividend declared in August of CA$0.02 per share

- Group cash costs (C1) were $0.60 per pound and total costs (C3) per pound were $0.80

Financial Results (see attached financial statements)

Second quarter revenues were $86.5 million, which included copper revenues of $83.3 million, acid revenues of $2.6 million and gold revenues of $0.6 million. Copper revenues increased due to improvements in both the realized copper price and a 212% increase in copper production with the start of commercial production at Kansanshi.

Copper revenues at Bwana / Lonshi were $38.9 million for the quarter. Copper revenues at Kansanshi were $44.4 million comprised of $30.3 million for copper cathode and $14.1 million for copper in concentrate. Kansanshi revenue figures only include revenues from the commencement of commercial production (April 19, 2005).

The realized copper price per the statement of earnings and deficit was $1.42 per pound for the quarter, which represents a significant increase from last year due to the rising market price for copper and the Company's unhedged copper position. The realized copper price is calculated after deductions for treatment and refining charges (TC/RCs) and freight parity. The unadjusted copper price for the quarter was $1.53 per pound compared with an average LME cash price of $1.54 per pound.

Certain copper sales agreements entered into by the Company call for "provisional pricing" based on the average applicable copper price for a specified future monthly period. Any increase or decrease in copper price could therefore result in the copper revenues for the Quarter being adjusted to reflect the change in the actual future copper price. Included within copper revenue for the quarter was 20,500 tonnes of copper that has been provisionally priced at an average of $1.55 per pound. The average LME cash price for the month of July was $1.64.

Cost of sales for the Quarter was $35.0 million. Cost of sales as a percentage of revenue decreased to 40% in the second quarter of 2005. Although unit costs have risen from 2004, the cost of sales have decreased as a percentage of revenue which is explained by rising copper prices and the company selling copper concentrate for the first time in the second quarter.

As the TC/RC's are recognized as a revenue deduction, they are not included within the cost of sales. Notwithstanding, in calculating the group cash costs, which represent the cost of production, the TC/RC costs are added to the cash and total costs to approximate the cost of producing finished copper.

The cash flow from operating activities before non-cash working capital movements was $43.0 million or $0.70 per share. The cash inflow, after non-cash working capital movements, from operating activities was $2.3 million or $0.04 per share. The difference between operating cash flow and earnings principally arises from timing differences due to the startup of Kansanshi, as inventory increased by $11.1 million and accounts receivable increased by $26.5 million. Both of these movements are consistent with an operation achieving commercial production.

Net earnings for the quarter increased to $29.0 million or $0.47 per share.

Six month revenues were $124.7 million which included copper revenues of $121.5 million, acid revenues of $2.6 million and gold revenues of $0.6 million. Copper revenues increased due to improvements in both the realized copper price and an increase in copper production with the start of commercial production of Kansanshi.

Copper revenues at Bwana/Lonshi were $77.1 million for the six months. Copper revenues at Kansanshi were $44.4 million comprised of $30.3 million for copper cathode and $14.1 million for copper in concentrate. Kansanshi revenue figures only include revenues from the commencement of commercial production (April 19, 2005).

The realized copper price per the statement of earnings and deficit was $1.43 per pound for the six months, which represents a significant increase from last year due to the rising market price for copper and the Company's unhedged copper position. The realized copper price is calculated after deductions for treatment and refining charges (TC/RCs) and freight parity. The unadjusted copper price for the six months was $1.51 per pound compared with an average LME cash price of $1.51 per pound. Included within the six month copper revenues were 20,500 tonnes of copper that has been provisionally priced at $1.55 per pound. The average LME cash price for the month of July was $1.64.

Cost of sales were $51.2 million, the increase in cost of sales was principally as a result of the increase in copper production associated with the start of commercial production at Kansanshi.

The cash flow from operating activities before non-cash working capital movements was $62.6 million or $1.02 per share. The cash inflow from operating activities after working capital movements was $25.1 million or $0.41 per share. The significant turnaround in cash flow from operations is attributable to the improvement in earnings resulting from increased copper production (including the startup at Kansanshi) and the strong copper prices. The difference between the cash flow before and after working capital movements can be attributed to the build up of both accounts receivable and inventory at Kansanshi.

Net earnings for the six months increased to $56.2 million or $0.92 per share, including the gain on sale from Anvil of $16.1 million or $0.26 per share.

Bwana / Lonshi

Mining

During the second quarter, approximately 319,000 tonnes of ore and approximately 4,025,000 tonnes of waste were mined from Lonshi. The strip ratio for the quarter was 13:1, which was greater than the revised life of mine strip ratio of 12:1. With the end of the wet season, mining rates and costs improved as a majority of the material mined came from the two southern cutbacks, which will continue to provide the ore production in the third quarter. Waste stripping also commenced in the North cutback.

For the six months ended June 30, 2005, approximately 471,000 tonnes of ore and approximately 6,621,000 tonnes of waste were mined from Lonshi. The strip ratio for the first six months was 14:1, which was greater than the revised life of mine strip ratio of 12:1.

At quarter end, the current mine plan at Lonshi was under review and a new mine plan is expected during the third quarter. It is expected that this new mine plan will result in an increased strip ratio at Lonshi. In addition, the mining fleet at Lonshi continues to grow to cope with the ore demands from Bwana, which is resulting in an acceleration of the depletion of the oxide reserves at Lonshi, which will also be considered in the new mine plan.

Processing

During the second quarter, copper production increased to 11,717 tonnes. The 22% increase over 2004 was principally due to the increase in electrical current flow through the tank house at Bwana that began during quarter three 2004.

Cash costs were $0.57 per pound and total costs were $0.79 per pound of copper. The increase in costs can be principally attributed to a $0.10 increase per pound in ore costs and associated transportation costs. The increase in ore costs have resulted from ore that was mined in the first quarter, during the wet season with a higher cost base, working its way through the ore stockpiles. By the end of the quarter the costs were starting to decline as the mining fleet was able to increase production as mining conditions have improved. In addition, Bwana has also started to process lower ore grades during this period of high copper prices which has resulted in higher transportation costs on a unit basis from the Lonshi pit. The acid cost at Bwana is $0.04 per pound higher than the second quarter of 2004 due to the increased copper production and the high gangue acid consumption through the copper circuit. The increased ore and acid cost have however been partially offset by the additional acid credit from the Solwezi Acid Plant of $0.07 per pound. The gangue acid consumption was 2.7:1 in the second quarter.

Acid production increased to 69,218 tonnes, of which 34,309 tonnes were produced at Ndola and 34,909 tonnes at Solwezi. Of the total acid produced, 14,939 tonnes were sold externally and 18,824 tonnes were sold within the group.

For the six months ended June 30, 2005, copper production increased to 23,745 tonnes. The 23% increase over 2004 was principally due to the increased electrical current flow through the tankhouse that began in the third quarter of 2004.

The increase in cash costs from 2004 can be principally attributed to an increase of $0.09 per pound due to ore and transportation costs at Lonshi and a $0.06 per pound increase in acid costs due to the increased gangue acid consumption as a result of processing more dolmitic ore. These increased costs have been offset by the acid credit of $0.04 per pound from the Solwezi Acid Plant.

Acid production was 124,493 tonnes of which 67,245 tonnes were produced at Ndola and 57,248 tonnes at Solwezi. Of the total acid produced, 14,988 tonnes were sold externally and 23,253 tonnes were sold within the group.

Kansanshi Copper-Gold Operation

Mining

During the second quarter, 2,051,000 tonnes of ore and 3,185,000 tonnes of waste were mined. The world shortage of tires continues to limit mining capability, although the situation has improved from the first quarter. For the six months ended June 30, 2005, 4,171,000 tonnes of ore and 4,836,000 tonnes of waste had been mined. During the first quarter up to 50% of the 100 tonne trucks had been unavailable due to the tire shortage. This percentage has dropped significantly in the second quarter as truck availability continues to improve. Notwithstanding, the company is continuing to investigate options to reduce its reliance on the 100 tonne trucks.

The tire shortage has not impacted the amount of ore available for processing at Kansanshi; but has resulted in the deferral of some waste stripping which will be caught up once all the equipment is available, which is anticipated will be during the third quarter.

Processing:

For the quarter, contained copper production increased to 18,192 tonnes which comprised 7,963 tonnes of copper in concentrate and 10,229 tonnes of copper cathode. The company commenced commercial production at Kansanshi on April 19th 2005, after the company had achieved between 65 - 70% of design capacity at Kansanshi continuously for at least one week.

Cathode

By the end of the quarter, Kansanshi had produced in excess of 3,600 tonnes of copper cathode for May and June and the oxide circuit was running well. For the quarter, the cash cost for cathode was $0.61 per pound and the total cash cost was $0.80 per pound. With the increase in cathode production and other efficiencies it would be expected that unit costs will fall in the coming quarters.

Concentrate

The sulphide circuit start-up has been successful, however the hardness of a portion of the sulphide ore has restricted ore throughput, the company is currently addressing ways of alleviating this issue with the main focus on blending of the harder ore with softer ore types. The cash costs for copper in concentrates, which includes the TC/RC's, was $0.65 per pound and the total cash cost was $0.81 per pound for the second quarter. Unit costs are expected to fall as throughput and production increases in the coming quarters.

Guelb Moghrein Copper-Gold Deposit

Guelb is located 250 kilometres northeast of the nation's capital, Nouakchott, near the town of Akjoujt, in Mauritania. It consists of an open pit mineable copper/gold deposit. In January 2005, the detailed design and engineering contract was awarded with site establishment commencing in March 2005. The company expects to develop Guelb in 2005 with commercial production start-up expected in the first quarter of 2006. Production will be initially targeted at approximately 30,000 tonnes of copper and 50,000 ounces of gold per year in the form of a copper-gold concentrate which will be trucked to the port of Nouakchott and exported to international smelters.

As at June 30, 2005, the Company had capitalized acquisition and development costs totalling $22.0 million (2004: $10.3m). Of the capitalized amount, $7.6 million relates to the discounted value of two future acquisition payments which are due to be paid in 2005 and 2006 respectively.

Overall the project is approximately 50% complete with detailed design being 96% complete with the only major outstanding item being final details on the Orapa powerhouse. The recent military coup in Mauritania has had no impact on the construction program and the country returned to normal within 24 hours. Civil engineering is currently ongoing with the foundations for the SAG and regrind mills having commenced. The Environmental and Social Impact Assessment report will shortly be submitted to the Ministry of Mines and Industry in Nouakchott for review.

Frontier Copper Deposit

In May 2004, First Quantum announced the results of an independent copper-cobalt resource estimate completed at Frontier Project located in Haut Katanga Province, Democratic Republic of Congo. As at June 30, 2005 a project engineering study was substantially complete and a final report is expected in the third quarter of 2005.

As at June 30, 2005, the company had spent $5.0 million on this project. Geological work is continuing with a further 2000 new soil samples being taken to expand the geochemical database. Work is ongoing on an environmental impact assessment at Frontier as well as considering aspects such as power supply.

Kashime Copper Prospect

In December 2004, the Company announced the results of a reverse circulation drill program completed at the Kashime copper prospect (Kashime). Mineralization at Kashime occurs as disseminated to semi massive bornite and chalcopyrite, oxidized in part, and is hosted by an altered, schistose, carbonaceous sandstone unit overlain by a barren hanging wall dolomitic marble. The mineralized unit dips southwards at 10 - 20 degrees, and depth of oxidation is controlled by proximity to faulting. The 2004 drill program tested the most anomalous 1,000 metre long section of a 2,000 metre long, +300 parts per million copper soil anomaly. Highlights from the 13 hole drill program included 56 metres grading 2.08% copper; 55 metres grading 1.20% copper and 101 meters grading 0.92% copper.

At the end of July, the Company has completed 40 holes for approximately 5,600 metres of diamond drilling over a strike length of 3,500m. Assays results have been received for one half of the drill holes and a potential resource estimate will be determined once all the assays are available.

During the six months ended June 2005, the Company expensed $2.2 million on other exploration targets that were predominantly located within the DRC and Zambia. Of this amount, $0.6 million was related to the Kashime Prospect. As at June 30, 2005, no costs associated with this exploration property had been deferred.

Interim Dividend

In August, the company declared an interim dividend of CA$0.02 per share which will be paid during the third quarter. The interim dividend is consistent with the Company's dividend policy of declaring an interim dividend of one-third of the prior year's full dividend.

Investments -Carlisa

The Company holds an 18.8% interest in Carlisa Investment Corporation (Carlisa), which holds a 90% interest in Mopani Copper Mines Plc (Mopani). The carrying value of this investment as at June 30, 2004 is $9.5 million. There has been no movement in this investment since 2002.

For the first six months of 2005, Mopani produced approximately 64,000 tonnes of finished copper and 900 tonnes of cobalt. As the majority owner of Mopani is a private company registered in Zambia, only limited public information is available for dissemination.

Investments -Anvil

On February 28, 2005, the Company disposed of all of its 4,029,617 common shares in Anvil at a net price of CA$6.75 per share. In the first quarter of 2005, the Company recognized a gain of approximately $16.1 million on the Anvil Sale. The Company continues to hold 296,631 warrants in Anvil at an exercise price of CA$1.13.

Outlook

With Kansanshi reaching commercial production in mid-April, the second quarter results do not include a full quarter of production from Kansanshi. This coupled with commercial production levels being only 65 - 70% of design capacity should result in an increase in the copper production at Kansanshi in Q3 when the operations achieve at least full design capacity. In July, Kansanshi produced 4,363 tonnes of cathode, which meant that the plant has exceeded 3,600 tonnes of copper cathode for the last three months. Concentrate production for the month of July was 3,207 tonnes. The hardness of a portion of the sulphide ore has reduced throughput through the mill but blending with softer sulphide ores has been initiated to alleviate this problem.

Kansanshi, however still remains on target to achieve its forecast of 91,000 tonnes of copper for the year.

A $29 million capital program in 2005 will expand the sulphide circuit to eight million tonnes of treatment capacity which will result in an average of 145,000 tonnes of finished copper production per year during 2006-2009. An additional expansion of the sulphide circuit is also under consideration to increase the sulphide treatment capacity to 12 million tonnes of sulphide ore to maintain annual copper production of 145,000 tonnes as oxide ore is depleted and sulphide ore grades begin to fall.

First Quantum has also been investigating alternative processing routes for a portion of the increased copper concentrate production. To this end, the Company has purchased a second-hand pressure oxidation facility. The pressure oxidation facility has been dismantled and is enroute to Kansanshi. Once on site, the pressure oxidation facility and ancillary equipment will be reconstructed and commissioned for use. An additional advantage of this technology at Kansanshi is that it will generate much of the acid required for oxide leaching. It will also enable the leach circuit to operate at elevated temperatures and hence, substantially improve copper recovery in mixed ores. A full report of the impact of this process route is being prepared by independent consultants, Bateman Engineering Pty Ltd.

With a strong start to the year, the Bwana / Lonshi operation is currently on track to exceed its initial production estimates of between 40,000 to 45,000 tonnes of copper cathode in 2005 with 23,745 tonnes of copper cathode already produced in the first half of 2005. With initial estimates indicating an increasing strip ratio in the revised mine plan at Lonshi, expected in quarter three, the ore costs are likely to remain higher than initially expected. Full year cash costs are now expected to be between $0.60 per pound and $0.65 per pound. In July, the Bwana / Lonshi operation produced 4,292 tonnes of copper cathode.

At Guelb, the project engineering study is now complete and construction is well underway with the project now 50% complete. Commercial production is expected in the first quarter of 2006. The Company remains unable to release an engineering report as the current resource statement is not compliant with National Instrument 43-101.

At Frontier, the project engineering study is substantially complete. This coupled with an updated resource/reserve statement is expected to be published in the third quarter of 2005. At the Kashime prospect initial diamond drilling has been completed with an initial reserve estimate expected once the final assay results are available.

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 of the information contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, 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. Such factors include, among others, the actual prices of gold, copper, 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, Ontario and Quebec Securities Commission and 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 audited consolidated financial statements for the period ended December 31, 2004. The following discussion and analysis of the Company's results of operations should also be read in conjunction with the unaudited consolidated financial statements and related notes.



First Quantum Minerals Ltd.
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Summary of Quarterly Results (unaudited)
Table 19
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Statement of Operations and 2005 2005 2004 2004
Deficit Q2 Q1 Q4 Q3
(millions, except where
indicated)
Total Revenues $ 86.5 $ 38.2 $ 30.7 $ 31.2
Cost of Sales 35.0 16.2 14.5 14.1
Net Earnings (Loss) 29.0 27.2 9.3 7.9
Basic Earnings per share $ 0.47 $ 0.44 $ 0.16 $ 0.13
Diluted Earnings per share $ 0.46 $ 0.43 $ 0.15 $ 0.13

Realized copper price $ 1.42 $ 1.44 $ 1.20 $ 1.16
Cash Costs (C1) (per lb) (1) $ 0.60 $ 0.58 $ 0.48 $ 0.45
Total Costs (C3) (per lb) (1) $ 0.80 $ 0.75 $ 0.59 $ 0.68

Financial Position (millions)
Working Capital $ 47.1 $ 61.4 $ 33.9 $ 51.8
Total Assets $561.9 $523.1 $473.1 $385.0
Weighted Average # Shares
(000's) 61,499 61,267 60,942 60,668

Bwana/LonshiProduction
Statistics
Mining:
Waste Mined (000's) 4,025 2,596 2,926 4,213
Ore Mined (000's) 319 152 261 257
Ore Grade % 5.5 5.3 6.4 4.7

Processing:
Ore Processed (000's) 328 264 256 278
Contained Copper (tonnes) 13,354 13,804 12,824 12,908
Grade % 4.1 5.2 5.0 4.6
Recovery % 88 87 85 88
Copper Produced (tonnes) 11,717 12,028 10,942 11,330
Acid Produced (tonnes) 69,218 55,275 35,671 35,920
Surplus Acid (tonnes) 14,939 49 9,664 16,884

Cash Costs (per lb) (1) $ 0.57 $ 0.58 $ 0.48 $ 0.45
Total Costs (per lb) (1) $ 0.79 $ 0.75 $ 0.59 $ 0.68

Kansanshi Production
Statistics
Mining:
Waste Mine (000's) 3,185 1,651 2,857 1,175
Ore Mined (000's) 2,051 2,120 1,346 -
Ore Grade % 2.0 1.7 2.4 -

Processing:
Ore Processed (000's) 1,129 688 - -
Contained Copper (tonnes) 21,145 11,541 - -
Recovery % 86 65 - -
Copper Produced (tonnes) 18,192 7,497 - -

Combined Cash Costs:
Cash Costs (per lb) (1) $ 0.63 - - -
Total Costs (per lb) (1) $ 0.80 - - -

Cathode Cash Costs:
Cash Costs (per lb) (1) $ 0.61 - - -
Total Costs (per lb) (1) $ 0.80 - - -

Concentrate Cash Costs:
Cash Costs (per lb) (1) $ 0.65 - - -
Total Costs (per lb) (1) $ 0.81 - - -


Statement of Operations and 2004 2004 2003 2003
Deficit Q2 Q1 Q4 Q3
(millions, except where
indicated)
Total Revenues $ 26.3 $ 25.3 $ 19.9 $ 17.7
Cost of Sales 13.1 12.1 13.0 11.5
Net Earnings (Loss) 4.1 6.7 1.4 3.3
Basic Earnings per share $ 0.07 $ 0.11 $ 0.02 $ 0.06
Diluted Earnings per share $ 0.07 $ 0.11 $ 0.02 $ 0.06

Realized copper price $ 1.11 $ 1.03 $ 0.84 $ 0.75
Cash Costs (C1) (per lb) (1) $ 0.48 $ 0.39 $ 0.47 $ 0.42
Total Costs (C3) (per lb) (1) $ 0.67 $ 0.53 $ 0.66 $ 0.47

Financial Position (millions)
Working Capital $ 28.0 $ 40.2 $ 13.5 $ 9.6
Total Assets $276.4 $241.8 $162.1 $132.3
Weighted Average # Shares
(000's) 59,434 58,568 55,984 54,707

Bwana/LonshiProduction
Statistics
Mining:
Waste Mined (000's) 2,854 1,036 885 1,833
Ore Mined (000's) 85 66 439 260
Ore Grade % 5.2 5.4 5.5 4.8

Processing:
Ore Processed (000's) 237 209 197 233
Contained Copper (tonnes) 10,813 10,904 10,790 11,188
Grade % 4.6 5.2 5.5 4.1
Recovery % 89 89 89 79
Copper Produced (tonnes) 9,585 9,689 9,558 8,862
Acid Produced (tonnes) 34,265 34,344 33,035 36,245
Surplus Acid (tonnes) 19,149 20,763 15,689 20,275

Cash Costs (per lb) (1) $ 0.48 $ 0.39 $ 0.47 $ 0.42
Total Costs (per lb) (1) $ 0.67 $ 0.53 $ 0.66 $ 0.47

Kansanshi Production
Statistics
Mining:
Waste Mine (000's) - - - -
Ore Mined (000's) - - - -
Ore Grade % - - - -

Processing:
Ore Processed (000's) - - - -
Contained Copper (tonnes) - - - -
Recovery % - - - -
Copper Produced (tonnes) - - - -

Combined Cash Costs:
Cash Costs (per lb) (1) - - - -
Total Costs (per lb) (1) - - - -

Cathode Cash Costs:
Cash Costs (per lb) (1) - - - -
Total Costs (per lb) (1) - - - -

Concentrate Cash Costs:
Cash Costs (per lb) (1) - - - -
Total Costs (per lb) (1) - - - -

(1) For the definition of cash and total costs, reference should be
made to section 8. of the MD&A
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First Quantum Minerals Ltd.
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Consolidated Balance Sheets
As at June 30, 2005 and December 31, 2004
(expressed in thousands of US dollars)
(unaudited)

2005 2004
$ $
Assets
Current assets
Cash and cash equivalents 56,464 50,356
Restricted cash (note 8) 4,297 1,931
Accounts receivable and
prepaid expenses 41,613 21,927
Inventory (note 4) 50,779 31,674
------- -------
153,153 105,888
Investments (note 5) 9,522 15,340
Exploration properties 444 444
Property, plant and equipment
(note 6) 367,225 319,222
Other assets and deferred
charges (note 7) 31,589 32,167
------- -------
561,933 473,061
------- -------
------- -------
Liabilities
Current liabilities
Accounts payable and accrued
liabilities 43,970 33,884
Current taxes payable 9,005 3,248
Current portion of long-term
debt (note 8) 40,319 22,865
Current portion of other
liabilities (note 10) 12,737 12,012
------- -------
106,031 72,009
Long-term debt (note 8) 183,462 191,661
Asset retirement obligations 4,162 3,762
Future income tax liability
(note 9) 15,280 12,313
Other liabilities (note 10) 33,770 33,286
------- -------
342,705 313,031
Minority interests 5,505 2,190
------- -------
348,210 315,221
------- -------
Shareholders' Equity
Equity accounts (note 11) 164,434 161,776
Retained earnings (deficit) 49,289 (3,936)
------- -------
213,723 157,840
------- -------
561,933 473,061
------- -------
------- -------
Commitments (note 14)


First Quantum Minerals Ltd.
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Consolidated Statements of Operations and Deficit
For three and six months ended June 30, 2005 and 2004
(expressed in thousands of US dollars)
(unaudited)

Three months ended Six months ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
$ $ $ $
Revenues
Copper 83,373 23,398 121,545 45,480
Acid 2,557 2,927 2,567 6,097
Gold 585 - 585 -
----------------- ----------------
86,515 26,325 124,697 51,577
----------------- ----------------
Costs and expenses
Cost of sales 35,070 13,079 51,236 25,170
Depletion and amortization 6,940 3,046 10,845 5,378
Exploration 1,140 589 2,152 966
Foreign exchange (gain) loss (4,231) 1,403 (5,048) 1,532
General and administrative 2,173 1,480 4,279 2,625
Interest and financing fees
on long-term debt 3,383 927 4,233 1,514
Other 2,490 (780) 2,663 (1,036)
Gain on disposal of
investment - - (16,127) -
----------------- ----------------
46,965 19,744 54,233 36,149
----------------- ----------------
----------------- ----------------

Earnings before income taxes,
minority interests and
equity earnings 39,550 6,581 70,464 15,428
Income taxes (note 9) 7,186 2,638 10,924 5,252
Minority interests 3,315 - 3,315 -
Equity earnings - 170 - 604
----------------- ----------------
Net earnings for the period 29,049 4,113 56,225 10,780
Retained earnings (deficit)
- Beginning of period 20,240 (25,279) (3,936) (31,946)
Dividends - - (3,000) -
----------------- ----------------
Retained earnings (deficit)
- End of period 49,289 (21,166) 49,289 (21,166)
----------------- ----------------

Earnings per common share
Basic $0.47 $0.07 $0.92 $0.18
Diluted $0.46 $0.07 $0.90 $0.18
Weighted average number of
shares outstanding (000's) 61,499 60,300 61,384 59,434

For a copy of the notes visit our website at www.first-quantum.com


First Quantum Minerals Ltd.
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Consolidated Statements of Cash Flows
For three and six months ended June 30, 2005 and 2004
(expressed in thousands of US dollars)
(unaudited)

Three months ended Six months ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
$ $ $ $
Cash flows from operating
activities
Net earnings for the period 29,049 4,113 56,225 10,780
Items not affecting cash
Depletion and amortization 6,940 3,046 10,845 5,378
Minority interest 3,315 - 3,315 -
Provision for deferred
stripping 481 - 4,384 -
Unrealized foreign exchange
(gain) loss (4,296) 1,331 (4,859) 1,721
Future income tax expense 3,150 2,638 2,967 5,252
Stock-based compensation
expense 716 281 1,369 467
Unrealized derivative
instruments (gain) loss 3,189 - 3,626 -
Other 449 171 852 517
Gain on disposal of
investment - - (16,127) -
----------------- ----------------
42,993 11,410 62,597 23,511
----------------- ----------------
----------------- ----------------
Change in non-cash operating
working capital
Decrease (increase) in
accounts receivable and
prepaid expenses (26,528) (64) (17,938) (2,835)
(Increase) decrease in
inventory (11,150) 482 (18,880) 837
Increase (decrease) in
accounts payable and
accrued liabilities (3,021) (1,050) (691) (4,109)
----------------- ----------------
2,294 10,778 25,088 17,404
----------------- ----------------
----------------- ----------------
Cash flows from financing
activities
Movement in restricted cash (2,542) (3,868) (2,365) (3,868)
Proceeds from long-term debt - 23,496 31,523 41,372
Repayments of principal on
long-term debt (10,126) (2,524) (15,434) (5,026)
Proceeds from issue of common
shares and warrants 439 232 1,288 43,557
Payments of dividends (3,000) - (3,000) -
Payments for deferred premium
obligation and finance fees (7,582) (879) (9,982) (2,209)
----------------- ----------------
(22,811) 16,457 2,030 73,826
----------------- ----------------
----------------- ----------------
Cash flows from investing
activities
Net payments to acquire
capital assets and
investments (1,256) (45,397) (39,987) (80,346)
Payments for deferred
exploration and stripping
costs (1,026) (2,305) (3,130) (3,469)
Proceeds on disposal of
investment - - 21,944 -
----------------- ----------------
(2,282) (47,702) (21,173) (83,815)
----------------- ----------------
----------------- ----------------

Effect of exchange rate
changes on cash 274 (1,079) 163 (1,573)
Increase (decrease) in cash
and cash equivalents (22,799) (20,467) 5,945 7,415
Cash and cash equivalents
- beginning of period 78,989 52,980 50,356 25,592
----------------- ----------------
Cash and cash equivalents
- end of period 56,464 31,434 56,464 31,434
----------------- ----------------
----------------- ----------------


First Quantum Minerals Ltd.
--------------------------------------------------------------------
Segmented Information
For three months ended June 30, 2005 and 2004
(expressed in thousands of US dollars)
(unaudited)

--------------------------------------------------------------------
For the three months ended June 30, 2005, segmented information is
presented as follows:
--------------------------------------------------------------------
Inter-
BLO KCO GMP CDA segment Total
$ $ $ $ $ $

External
revenues 44,423 45,063 - 2,212 (5,183) 86,515
----------------------------------------------------
Segment profit
(loss) 15,170 16,709 - (2,830) - 29,049
----------------------------------------------------

Property, plant
and equipment
additions 6,874 18,449 8,282 5 - 33,610
----------------------------------------------------
Total assets 192,566 373,949 22,213 212,127 - 800,855
Inter-company
balances
included in
total assets (83,886) - - (155,036) - (238,922)
----------------------------------------------------
Total
consolidated
assets 108,680 373,949 22,213 57,091 - 561,933
--------------------------------------------------------------------
--------------------------------------------------------------------


--------------------------------------------------------------------
For the three months ended June 30, 2004, segmented information is
presented as follows:
--------------------------------------------------------------------
Inter-
BLO KCO GMP CDA segment Total
$ $ $ $ $ $

External
revenues 26,554 - - 1,331 (1,560) 26,325
----------------------------------------------------
Segment profit
(loss) 6,773 - - (2,660) - 4,113
----------------------------------------------------

Property, Plant
and equipment
additions 7,721 35,380 - 5,333 - 48,434
----------------------------------------------------
Total assets 92,837 139,209 - 44,381 - 276,427
Inter-company
balances
included in
total assets 30,743 - - 131,377 - 162,120
----------------------------------------------------
Total
consolidated
assets 123,580 139,209 - 175,758 - 438,547
--------------------------------------------------------------------
--------------------------------------------------------------------

Bwana / Lonshi Operation (BLO), Kansanshi Copper / Gold Operation
(KCO), Guelb Moghrein Project (GMP), Corporate Development and
Administration and Other (CDA)


First Quantum Minerals Ltd.
--------------------------------------------------------------------
Segmented Information
For six months ended June 30, 2005 and 2004
(expressed in thousands of US dollars)
(unaudited)

--------------------------------------------------------------------
For the six months ended June 30, 2005, segmented information is
presented as follows:
--------------------------------------------------------------------
Inter-
BLO KCO GMP CDA segment Total
$ $ $ $ $ $

Revenues 83,282 45,063 - 3,875 (7,523) 124,697
----------------------------------------------------
Segment profit
(loss) 28,660 16,709 - 10,856 - 56,225
----------------------------------------------------

Property, plant
and equipment
additions 9,523 43,112 11,771 12 - 64,418
----------------------------------------------------
Total assets 192,566 373,949 22,213 212,127 - 800,855
Inter-company
balances
included in
total assets (83,886) - - (155,036) - (238,922)
----------------------------------------------------
Total
consolidated
assets 108,680 373,949 22,213 57,091 - 561,933
--------------------------------------------------------------------
--------------------------------------------------------------------


--------------------------------------------------------------------
For the six months ended June 30, 2004 segmented information is
presented as follows:
--------------------------------------------------------------------
Inter-
BLO KCO GMP CDA segment Total
$ $ $ $ $ $

Revenues 51,805 - - 2,010 (2,238) 51,577
----------------------------------------------------
Segment profit
(loss) 14,506 - - (3,726) - 10,780
----------------------------------------------------

Property, plant
and equipment
additions 11,945 70,077 - 7,646 - 89,668
----------------------------------------------------
Total assets 92,837 139,209 - 44,381 - 276,427
Inter-company
balances
included in
total assets 30,743 - - 131,377 - 162,120
----------------------------------------------------
Total
consolidated
assets 123,580 139,209 - 175,758 - 438,547
--------------------------------------------------------------------
--------------------------------------------------------------------

Bwana / Lonshi Operation (BLO), Kansanshi Copper / Gold Operation
(KCO), Guelb Moghrein Project (GMP), Corporate Development and
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
    (604) 688-6577 or Toll Free: 1-888-688-6577
    or
    First Quantum Minerals Ltd.
    Bill Iversen
    (604) 688-6577 or Toll Free: 1-888-688-6577
    (604) 688-3818 (FAX)
    info@fqml.com
    www.first-quantum.com