Analyst presentation – October 2015 Sentinel Mine & Enterprise Project 1
Analyst presentation – October 2015 Sentinel Mine & Enterprise Project
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Trident Project location
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Orientation – project layout
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YOU ARE HERE
Sentinel Mine
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Project scope:
55Mtpa target throughput;
3 semi mobile in pit crushers;
100MW SAG/Ball milling;
265,000t of freight = 14,500 truckloads;
2 rivers diverted;
Life of mine TSF;
600km of ZESCO 330kV transmission lines;
930 staff plus 630 resettlement houses;
New town, clinic, 3 schools & airport.
Total Sentinel capex – $2.1billion
Total Sentinel capex = approx $7,500/t of annualised Cu production
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PROJECT ACQUISITION – FEBRUARY 2010
FIRST ROUGH CONCENTRATE – DECEMBER 2014
Sentinel Operations
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Resource statement published March 2012:
Total measured & indicated resource : 1,027Mt @ 0.51% Cu
Mineral reserve: 774 Mt @ 0.50% Cu
Strip ratio 2.2 : 1
Operations:
Up to 55mtpa to achieve economies of scale (overcome low grade);
280,000 – 300,000t Cu production per annum.
Sentinel – mine planning
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Cost efficient production depends on high volume throughput
Status:
Train 1 = crushing, milling + flotation operating (above design throughput for periods);
Train 2 = milling + flotation operating;
Concentrate optimisation = Concentrate deslime operating;
Slow ramp up to date = Transitional ore metallurgy + power transmission limits.
Milestones:
Presidential opening = 28 Aug 2015;
Crusher 2 walked into southern boxcut = 2 Sep 2015;
Lusaka West transmission lines complete = 12 Sep 2015, awaiting energisation.
Production rampup:
Power transmission + crushing for full operations end-Oct 2015;
Recovery optimisation = SAG + Ball frontend deslime operations end-Nov 2015;
Commercial production by end of 2015.
Sentinel – production rampup
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200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
Jun-12 Jun-13 Jun-14 Jun-15
Monthly manhours + Lost Time Incidents
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37.8 million man-hours to date
11 total LTI’s to date
Total 2012 2013 2014 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15
Manhours (million)
37.8 2.3 10.8 15.2 1.1 1.1 1.2 1.3 1.3 1.3 1.1 1.1
LTI Rate 0.058 0.087 0.061 0.049 0.048 0.046 0.057 0.055 0.064 0.062 0.060 0.058
Severity 4.09 5.04 1.51 1.03 0.99 0.96 4.76 4.58 4.51 4.34 4.21 4.09
Sentinel – safety performance
SE Ramp
NE Ramp
Crusher 1a & 2a
Crusher 3a
Temp ramp
Conveyor & Access Ramp
Main Waste Ramp
5 Yr Pit Limit
Current Mining Face
Mine: Staging
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SE Ramp
NE Ramp
Crusher 1a & 2a
Crusher 3a
Temp ramp
Conveyor & Access Ramp
Main Waste Ramp
5 Yr Pit Limit
Current Mining Face
Mine: Staging
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SE Ramp
NE Ramp
Crusher 1a & 2a
Crusher 3a
Temp ramp
Conveyor & Access Ramp
Main Waste Ramp
5 Yr Pit Limit
‘15 Wet Weather Sumps
Mine: Staging
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SE Ramp
NE Ramp
Crusher 1a & 2a
Crusher 3a
Temp ramp
Conveyor & Access Ramp
Main Waste Ramp
5 Yr Pit Limit
SE Boxcut Sump
Mining Horizon as at End 2016
Mine: Staging
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Progressing to 60 million BCM/annum
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Mining – main fleet Units
ThyssenKrupp 63-89 in pit crushers 3
Caterpillar MD6640 drills 7
CAT 7495HR rope shovels 3
Komatsu PC5500 face shovels 2
Komatsu PC5500 excavator 1
Komatsu 960E trucks (330 tonne) 15
Komatsu 860E trucks (250 tonne) 15
Komatsu HD1500 trucks (150 tonne) 10
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1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
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BC
MS
Min
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Mining Production Volumes
Act Ore BCM Act Waste BCM Fcst Ore BCM Fcst Waste BCM
Consistency improvements and production rampup:
Drill = Soft ground to date. Focus on training and consumable trials;
Blast = Fragmentation improved via blast design, product densities + initiation;
Load = Increased bench heights at deeper RLs. Moving to double side loading;
Haul = Operator recruitment resolved. Mine dispatch in place;
Overall = Productivity focus from planning, SIC, training, supervision + maintenance.
Plant: periods above design throughput
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Consistency improvements and production rampup:
Crushing = Conveying improvements, process debottlenecking + fragmentation.
Milling = More consistent power supply, commissioning punch list, upgraded wear components + improved crushing.
Pebble + Secondary crush = now being commissioned.
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Crushing – Daily Volumes Crushing dry t Crushing dry t/h
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Milling – Daily Volumes Milling dry t Milling dry t/h
Concentrate production + feed to smelter
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20
40
60
80
100
0.0 1.0 2.0 3.0
Cu Rec - OSS
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80
100
0.0 1.0 2.0 3.0
Cu Rec - OCC
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100
0.0 1.0 2.0 3.0
Cu Rec - Primary
Consistency improvements and production rampup:
Automation = Smart system focus on floatcams, OSA, PSI, laboratory etc;
Concentrate = Backend deslime operating;
Recovery optimisation = SAG + Ball frontend deslime operations end-Nov 2015;
Overall = Productivity from training, supervision + maintenance.
Cu grade (%) Cu grade (%) Cu grade (%) 0.00
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Concentrate – Daily Volumes Conc ton Conc grade Cu %
Operations workforce
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Focus now on productivity and efficiency.
Current site workforce of 5,698 will reduce with project demobilisation over next 2 months.
STEADY-STATE WORKFORCE Total
Operations staff currently onsite 1,247
In recruitment 541
Approved operations positions 1,788
Ongoing indirect and contractor personnel 1,276
TOTAL 3,064
1,247
184
408
827 1,667
1,365
CURRENT OPERATIONS FOUNDATION & TOWN FQMO (ROADS)
OPERATIONS CONTRACTORS CONSTRUCTION PROJECT PROJECT CONTRACTORS
Total currently onsite = 5,698
$100+ million targeted savings across KMP, KML and FQMO
Strategic contract reviews:
$40m targeted saving – 120 contracts ($800m) identified + renegotiation teams allocated.
Rapid sourcing:
$10m targeted savings – 20 vendors. Procurement of $100k to $2m per annum.
Warehousing and logistics:
$40m targeted savings – inventory management, freight and logistics.
Bottom up cost savings:
$10m targeted savings – usage, optimisation + waste elimination initiatives from the shop floor.
Consolidation of support services between sites:
Centres of excellence and back office functions.
First Quantum Zambia cost reductions
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Enterprise
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Maiden resource published December 2012:
Total measured indicated resource : 40.1Mt @ 1.07% Ni;
Mineral reserve: 32.7 Mt @ 1.10% Ni;
Potential to expand Resources at the Enterprise South West Zone
Operations:
Potential 38,000 – 60,000t Ni production per annum;
Construction approx 50% complete. Plant will commission on copper ore.
Enterprise Ni project - awaiting go ahead
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Project go ahead for Enterprise is contingent on nickel price and concentrate export levy
Power Project
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160MW required for full operations
Softer ore reduces initial requirements
First Quantum has formally offered support to ZESCO for augmenting supply
Power requirements for ramp-up
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Dec
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Average Power Requirement (MW)
600km FQM/ZESCO 330kV powerlines Energising by end-October 2015
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Lumwana – Kalumbila – Mumbwa
Contractor Kalpataru
Distance (km) 68 + 394
Towers 164 + 872
Mumbwa – Lusaka West
Contractor KEC
Distance (km) 134
Towers 298
Substations
Kansanshi, Lumwana, Kalumbila
ABB
Lusaka West, Mumbwa NCC
Current situation:
Kafue (960MW) and Victoria Falls (100MW) turbines not affected;
Overuse of peaking turbines at Kariba (360MW peaking + 720MW baseload);
Delays to new generation projects (300MW Maamba coal + 120MW ITTZ).
Kariba drawdown, if turbines run at full rate:
Oct 2015 = ZESCO water allocation from Zambezi River Authority consumed;
Dec 2015 = 10% live capacity remaining;
Jan 2016 = seasonal recharge begins.
Management of supply + demand:
Makeup Power imports from Mozambique (200MW from Jul + 148MW from Sept);
ZESCO request for mines to use Makeup Power for 30% of load. Tariffs in discussion;
Subsequent announcements of Mopani + Baluba mine closures (200-250MW);
First Quantum has offered ZESCO support for Maamba + ITTZ grid connections.
Zambia power generation
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Town development
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1. Home ownership is a cornerstone of economic empowerment:
Subsidised rent-to-own program – real economic empowerment starts at home:
Improves education;
Improves opportunities to start a business; and
Improves savings for retirement.
2. The town will be a significant multiplier on job creation:
Sentinel will employ 3,064 direct and contractor personnel;
A multiplier of between 4-8 is possible for service industries in the town.
3. Employee attraction and retention:
KML seeks a well-rested workforce who live locally and develop the area in conjunction with the mine.
Why has FQM built a town?
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Potential to move off balance sheet – strong interest from pension funds
4-Bedroom House
3-Bedroom Housing
Affordable Housing Layout
2-Bedroom House
Progress – housing
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Guesthouse Serviced Apartments
Banking Services
Progress – commercial
Fuel Station 29
Kalumbila Industrial Park
Progress – services
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Children’s Playground and Sports Facilities Town Clinic
Supermarket and Market Area Frontier Affordable School
Community
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Education:
5 GRZ schools refurbished in the Trident Project area;
Support with curriculum and textbooks.
Healthcare:
5 GRZ rural health centres refurbished in the Trident Project area;
HIV awareness and VCT programs, plus malaria intervention.
Conservation farming:
Peak program expected over 2015/16 season of approx 1000 farmers.
Sawmill and furniture factory:
Providing skilled employment and producing school and other furniture.
Resettlement 99% complete.
Community development
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2015 : community needs assessment for ongoing Trident Foundation CSR projects
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Healthcare Community Infrastructure
Livelihoods Conservation Farming
Wildlife Conservation Forest Conservation
Education
The Trident Foundation