Clive Newall - President Hannes Meyer - Chief Financial Officer Juliet Wall - General Manager, Finance Simon MacLean - Group Reporting Controller Zenon Wozniak - Director, Projects

Orest Wowkodaw - Scotiabank Matthew Fields - Bank of America Oscar Cabrera - CIBC Greg Barnes - TD Securities Karl Blunden - Goldman Sachs Ralph Profiti - Eight Capital Paul Cleary - AIG Sean Wondrack - Deutsche Bank John Tumazos - John Tumazos Very Brian Lalli - Barclays

Good morning. My name is Sharon, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quantum Minerals’ Third Quarter of 2018 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. Clive Newall, President and Director of First Quantum Minerals. You may begin.

Thanks, Operator, and everyone, for joining us today. Joining me in London are Hannes Meyer, CFO; Juliet Wall, General Manager, Finance; Simon MacLean, Group Reporting Controller; and Zenon Wozniak, Director of Projects. As usual, before we proceed, I will draw your attention to the fact that over the course of this conference call, we will be making several forward-looking statements, and as such, I encourage you to read the cautionary note that accompanies our third quarter MD&A and the related results news release, as well as the risk factors particular to our company, which are detailed in our most recent annual information form and available on our website www.first-quantum.com and on SEDAR. A reminder that the presentation which accompanies this conference call is available on our website and can be accessed either on the Events section or on the Q3, 2018 Results Conference Call button under the News section of the homepage. So, I will get it started with some opening remarks before Hannes’ review of the financial results. Then we will open the lines to your questions. It was another solid quarter, operationally financially in this important year for First Quantum. We delivered comparative earnings per share of $0.19 for the quarter, exceeding the consensus of $0.17 according to Factset. Copper production in the quarter was consistent with second quarter and slightly better than the comparable quarter in 2017. However, Kansanshi and Sentinel continue to drive production growth compared to the last year and prior quarter, despite a period of reduced power availability during electricity network upgrades. Also, the Kansanshi smelter continued to perform very well, achieving record quarterly copper production and concentrate process. Las Cruces production declined in the quarter, affected by a planned maintenance shutdown and a failure in the grinding thickener, which occurred upon restart, which reduced equipment availability for a total of around 14 days in the quarter. Other smaller operations operated more or less in line with government range showing some improvement, appears only and clearly down slightly on prior year. So as a result of the strong operational performance, our copper production guidance for 2018 has been increased to 595,000 tons. Copper sales were slightly better than the third quarter in 2017 with increased volumes of Kansanshi and Sentinel, somewhat offset by lower volumes at our other operations. Our average all-in sustaining costs were $1.83 a pound of copper, net of byproducts, a slight increase in last quarter and prior year, probably, remain within our guidance range for the year. As I am sure most of you are aware, close to the end of the quarter, the Government of Republic of Zambia announced some proposed changes to royalties and taxes pertaining to the mining industry. Although, the proposed sales tax lacks detail, it is clear that these changes could have significant impact on earnings. So the company has expressed its concerns to the Ministry of Finance and shortly after the changes were made public, the Ministry of Finance announced for the tax policy review committee would be appointed to deal with the technical issues related to the changes and not the Ministry would open to dialogue -- open to dialogue with mining companies on transition to the new regime. Hannes will provide you with more details of these proposed changes later. Before moving on to progress at Cobre Panama in the quarter, I’d like to refer to the Supreme Court ruling in Panama. Near the end of the third quarter, the Supreme Court of Panama made a ruling on the constitutionality of Law 9 of 1997. Law 9 was passed by the Panamanian National Assembly in 1997 and grants the status of national law to the mining concession contract that had been entered into by Minera Panamá S.A. subsidiary of a company in respect of the Cobre Panama project. However, the company understands that the recent ruling relates to the enactment of Law 9 and that not the legality of the mining concession contract, which remains in effect and allows for the continuation of the development and operation of Cobre Panama. We have submitted a number of filings to the Supreme Court seeking clarification with regard to the Supreme Court’s original decision. These have been accepted and will be rule and by the Supreme Court before its original decision in relation to the constitutionality of Law 9 would take effect. Now as the matter is before the Supreme Court, we have very much limited our commentary and we really can’t comment further. Although, I cannot that the Government of Panama, the Chamber of Commerce and industries of Panama the Panamanian mining chamber, as well as other in-country industry chambers that provided support and given this, the company is confident in resolving low lying clarification near- to medium-term. Turning to Cobre Panama itself, all parts of this mega project continue to advance quite rapidly. We have updated project photos on the website on the projects and Cobre Panama, which clearly show the progress made at the site. We see some very important milestones since the beginning of the third quarter. The first of the 250 megawatt generating sets of the power station achieved its names like Pasotti and the second generating set successfully completed the milestone phase of steam blowing, which is one of the final steps before generation. Accordingly, the second 150 megawatt set is expected to begin generating power during the fourth quarter of the year. We are currently performing pre-commissioning and commissioning activities in the process plant, with a number of air and water circuits now live and testing, we will shortly be extended to other major plant areas such as flotation, thickening and milling. Our conveyor belts are being pulled as we prepare for the first ore introduction. Significant training and development of operations personnel is continuing, preparing the workforce for the operating environment and we are advancing well at peak construction levels and now we are also ramping up the commissioning levels. In terms of project completion, the project overall is now 80% complete. Procurement is 100% committed except for minor items that may arise in the final stages. Engineering is essentially complete. The Power Station construction is complete. The commissioning of set to continuing. The port as you know is fully operational. At the mine site, the mine crease strip is almost completed. The tailings management facility embankment is now at 77% complete. Our overall mine and process plant works at 74%, and very importantly, our construction for first ore and concentrate systems is at 83%. So this is a very good progress bodes well for our start and ramp up -- our start up and ramp up plan. So now, with that, I will hand over to Hannes to take you through his review.

Thanks, Clive, and good day to everyone. I’d like to take you through the presentation that’s loaded on the website and its slide 13 called quarterly production. So copper production was 4% or 6,000 tonnes above Q3 2017, reflecting higher output from Kansanshi and Sentinel. Kansanshi and Sentinel copper production of 64,000 tonnes and 56,000 tonnes, respectively, were 8% and 5% higher than the comparable period in 2017, driven by higher throughput and recoveries. The Kansanshi smelter achieved record quarterly production of 90,000 tonnes of copper anode and treated a record 355,000 dry metric tonnes of concentrate in the quarter. Clive also mentioned that our copper production guidance has been increased in this quarter for the year to 595,000 tonnes and we have lowered our goal forecast reflect grades related to Kansanshi and Guelb Moghrein. Turning to the next slide, Q3 2018 comparative EBITDA of $427 million was $123 million higher and gross profit of $246 million was $163 million above Q3 2017, reflecting higher realized copper prices as the underlying market rate increased and the price profile of the sales hedge program improve. The copper sales hedge program resulted in a hedge gain of $31 million in the quarter and increased realized prices by $0.09 per pound. Net debt of $6.1 billion was $251 million higher than the previous quarter due to the planned capital expenditure program. Turning to the next slide, quarterly unit cash cost. Copper C1 cash cost for the third quarter of 2017 benefited from the impact of a review of operational provisions and subsequent release at Kansanshi, which reduced the C1 cost by $0.06 per pound. Excluding this impact, copper C1 cash cost was higher by $0.07 per pound for the quarter, compared to the same quarter in the prior year. C1 was impacted by the increased fuel prices and saving of maintenance. All-in sustaining cost of $1.83 per pound for the quarter, increased $0.08 against the same period in the previous year. The increase in underlying all-in sustaining cost reflects higher Zambian royalties and the change in the C1 cost. Copper C1 and all-in sustaining cost guidance for the year remains unchanged at $1.20 per pund to $1.40 per pound for C1 and the $1.65 per pound to $1.85 per pound for all-in sustaining cost. Turning to the next slide, on the balance sheet, outlines our debt maturity profile and our current liquidity profile. We continue to proactively manage our balance sheet to ensure we have strong liquidity and appropriate covenants. We have no significant debt maturities until end of December 2020 and the senior notes maturing in ‘21 and ‘22. These are all callable at the company’s option. At Q3 2018, the company was in compliance with all its existing facility covenants and entered the quarter in a strong position with $1.12 billion of committed undrawn facilities and $753 million of unrestricted cash. Turing to the next slide on the hedge program, the chart shows the improving price profile of our hedge book with relatively low volumes. No new hedges have been placed since June due to the lower copper prices and the hedge levels are approximately 25% in the current quarter and 10% in the first half of 2019. The hedge prices are well above current prices with zero cost collars at an average protection price of $3.07 per pound and average capital of $3.47 per pound and the small number of 7,500 tonne will full it at $3.28 per pound. We continue with the hedge program to ensure stability of cash flow in the development and ramp up size of the Cobre Panama project, but do not intend to add further hedges at the current process. We will look to continue to use zero cost collars alongside forward contracts and purchase options as appropriate. Moving to the next slide on capital expenditure, expenditure on Cobre Panama for the nine months of the year was $1.12 billion or $784 million on a net basis. Guidance on phasing of capital expenditure on Cobre Panama between 2018 and 2019 has been updated, but with no increase to the total Cobre Panama project capital expenditure, guidance on some other capital expenditure remain unchanged. Turning to the next slide on Zambia proposed tax changes. If you will be aware on 28th of September proposed changes to the Zambia’s tax laws were announced. It is currently expected the proposed royalties and tax changes would be effective from 1st of January, 2019. Any sales tax which we understand to be introduce from 1st of April, 2019, although details of this remains and available. The proposed changes to copper royalties we see 1.5% increase to current price. There is also the additional introduction of a 10% right wing copper prices go above $7,500 per tonne and royalties would no longer be tax deductible. There’s also a new precious metals levy of 15% on gold exports. Details on the abolishment of that and the introduction of non-refundable sales tax are yet to be announced. Conversations are ongoing between ourselves, the Minister of Finance and the Chamber of Mines. The total amount of debt accrued by the company’s Zambian operations at the end of the quarter was $392 million, of which $262 million relate to Kansanshi. Management of the company continues to engage regular discussions with the relevant government authorities. Thank you. Now, I will hand back over to Clive.

Thank you, Hannes. Operator, Can you now open the lines for questions.

[Operator Instructions] And your first question comes from Orest Wowkodaw with Scotiabank. Your line is open.

Hi. Good morning. I was wondering if we could get an update on startup expectations for Cobre Panama with respect to first production. And also I mean with the project I guess 81% complete, you don’t need to get, I assume you don’t need to get 100% completion for startup. Just curious what the target might be on that completion rate around the time of startup?

Would you take that Hannes please, sorry, would take that Zenon, please.

Yeah. Sure no problem. I think…

He is the finance guy.

In terms of startup, I think, it’s unchanged from what we have said in the past which is, we plan to introduce first ore in quarter one of the next year and we are on schedule for that. The commissioning is doing quite well at the moment. There is quite a few circas active and live and we are pumping motor around. We have got water to clean up floatations so that it could get down to the mills. In terms of the percentages, you are right. We don’t need to achieve 100%. The percentages reflect the larger project of 185 million tonne per annum, which includes the extra mill, Mill 8 and include some extra float cells et cetera. So in terms of getting to start up, we would start on the first three mills. There are seven in store at the moment, seven mills, there is an eighth mill that will be going in. We will start in the first step with one SAG and two gold mills. To achieve that, we probably have to be in the high 80%, possibly 90%. But again it’s quite specific so these areas that would be completed next year, such as Mill 8 and the Moly Plant. The other areas milling flotation concentrate well-advanced at the moment.

Okay. And then, just finally on the capital as well, I mean, looking at your presentation, it looks like the budget is unchanged a $6.3 billion for Cobra. But you have only got $440 million left to spend on 100% level. Should we be concerned at all given the project is only 80% done but you have spent 90%, I guess about 94% of the capital to-date or is that just more of a timing thing with prepayments?

I wouldn’t think that there’s a need to be concerned, a lot of the CapEx gets driven by equipment and materials purchasing. What’s left more than anything at the moment is site man hours simply to erect and commission, which comparatively is, I won’t say cheap but it is not as expensive as buying equipment and materials and the procurement effort is essentially a 100% complete. I think about 85% from memory incurred so it’s just a balance of 85% in for procurement as outstanding and the balance is site construction man hours.

Great. Thank you very much.

Your next question comes from Matthew Fields with Bank of America. Your line is open.

Hey, everyone. Just on the new Zambian proposals. Do you import copper concentrate for your smelter at Kansanshi?

No.

So that part of it is just not at all applicable to you?

There’s a very, very tiny amount of concentrate from [inaudible] but it’s not significant.

Yeah. We had a small sample that we imported recently as, I mean, it’s not on an ongoing basis so it’s not part of our normal operating plan.

Okay. Great. And then just sort of a bigger picture question as we complete Cobre Panama in the coming quarters and that starts to ramp up and produce. How do you feel about your overall kind of dollar value debt load, do you maybe intend to pay some down with cash or do you want to sort of keep that cash available to sort of focus on the next items up to bad weather, that’s S3 or Kansanshi or Taca Taca?

Matt, we have previously stated and maintained that post Cobre Panama ramping up, we want to reduce our delever first of all. Now that will actually happen with the additional contribution from Cobre Panama, but we also want to reduce our absolute debt levels and that still remains the objective of the company.

Is there a target on that reduction?

Well, we will definitely reduce the absolute amount. So, I mean, I would probably target around $2 billion. So an absolute reduction in our deleveraging sort of numbers probably closer to two terms net debt to EBITDA in the longer run, that you should consider sort of a target for the company.

All right. Thanks, Hannes. It’s very helpful.

Your next question comes from Oscar Cabrera with CIBC. Your line is open.

Thank you, Operator. Good morning, everyone. I know you have mentioned that you can’t comment on the procedural issues in Panama. But I just wonder if you -- but just put it into context, so that we can understand how the process is being approached. One of the things that is clear is that the issue is not the concession, but when a judge rules on articles within Law 9, what does that really mean and what are you looking at clarification?

I do have a handy lawyer. He might be able to explain that.

Sure. Thank you.

I mean, the parts of it -- that’s ongoing at the moment, but we can’t really comment on is consultation process around the ruling has been issued. In terms of its consequences as to how that ends up, I don’t think that would be prudent or even necessary to comment on at this time. As Clive has mentioned, we have a concession contract that remains in effect and our counter parties contract has been vocal and clear, they can see the provisions of that contract to remain in effect with their current status.

I can appreciate that but that counter party couldn’t be -- maybe they are not in office next year. So I guess the question is with the concession would you be able to produce and get the cash flow from the project next year, if there’s no conclusion to the proceedings?

Yes. I would currently advise that there is absolutely no reason why we can’t proceed with construction and operation as currently into which.

Okay. Thank you. That’s helpful. Then in terms of the reduction for gold production this year in Kansanshi, I have noticed that the expectations for gold production for ‘19 and ‘20 around change? Is there, like a mine sequencing or reason why gold production was lower this year and then nothing happened over the next couple years?

We essentially typically will fully update our RC’s guidance when the whole planning process is complete in -- towards the end of next year. So we give full update to guidance in January, February. I mean as you will see there are some actions being taken around gold in terms of new products and some potential expectations of some increase, but we will get the full updates as when we cover that.

Oscar, as you know, because the goal is very low grade, it’s very -- it’s hard to get reliable reconciliation of production to -- of resource grade and we always we tend historically to produce a lot more gold than that is in the reserves. The recoveries have suffered a bit, but so has spending time on improving the gold circuits, but also understanding the changes through the nature of the gold as well. So there is a lot -- quite a bit of work going on there, so more about that maybe well with the guidance early next year.

Okay. Appreciate that. Thank you. And then lastly if I may, getting back to Cobre Panama, the -- can you just remind me, I think, there was some commentary last quarter about the conclusion of the tailings dam and if that has an impact on the first order or not. I see that you are at 77% and we are fast approaching rainy season, is there any issues with tailings that we should be concerned with for the construction?

I can take that one, Clive. Oscar, no. The tailings facility is made up of the Eastern wall and the Northern wall, the remaining work is on three sectors of the Northern wall, it’s actually one of the photo shows that Northern wall section adjacent to completed sections. So you will see it actually had a decent elevation. And we would simply commence depositing tailings in other parts of the tailings management facility rather than adjacent to the second that’s too being completed. So weren’t impact on the start-up in first ore.

Okay. Thank you, Zenon. Thank you, everyone.

Okay. Your next question comes from Greg Barnes with TD Securities. Your line is open.

Thank you. Hi Zenon. Just wanted to revisit Sentinel, obviously, you had a great quarter. I don’t think the mill was effectively at designed capacity, but cost per ton remains certainly highs. Is there a way to bring those down, now you have got to plan more stabilized on a production basis?

Look, there was a lot of -- we brought forward a lot of maintenance, which increased the maintenance cost during the period, while there was power restriction. So, but it’s really volume driven. It will only really get down to the target, sort of C1 costs. When it’s running -- it’s full capacity which in for a couple of years, so when we get into the high grade ore, Matthew. So the answer is no in the short term. It will stay stubbornly relatively high.

And what is the…

It’s most -- okay, well, the sort of long -- originally the longer run one was about a $1.50, but where we are anticipating when we get into the high grade ore, that it will go down to sort of a $1.20 to $1.30.

And that is a couple of years away, so we are talking 2021, 2022-ish?

Yeah.

Yeah. I think obviously this is all close to the full impact of the sales tax as well…

Yeah.

…that comes through. So that would have an impact on Sentinel of around about $0.09 or so. So any numbers currently can potentially be impacted by that. I think obviously high fuel cost is something that we are seeing maybe having $0.05 impact on our C1, so it’s impacted by higher fuel cost. Before impact of sales tax you would expect hopefully a bit lower of next year of about $0.10 to $0.15, but so more around about $1.40 and $1.45 and in the later years, 2020, 2021. But obviously, it’s before impact on the sales tax and so.

So 2019, you are looking at $0.10 to $0.15 lower before the impact of the sales tax.

Yes. Ideally so nothing the amount about that approximately level. So little bit of effect that come, but that’s before sales tax -- the sales tax wasn’t take our cost of care.

Okay. So just we haven’t seen a technical reports or a mine no for some time and obviously a lot has changed there. I don’t really have a sense of what the great profile looks like, what the tonnage throughput profile looks like. Is there something we can get on that?

I don’t think there’s any plans to do a technical report in the immediate future. Is there anything being worked on, Zenon? I don’t think so.

No. Not at the moment. I think there some specific information we could put something together, but there’s nothing being worked on at the moment though.

Greg, I will have a chat with John Gregory and I will get back to you.

Okay. Fantastic. Thank you, Clive.

Your next question comes from Karl Blunden with Goldman Sachs. Your line is open.

Good morning, guys. Thanks for taking my questions. Just on the ZRA investigation. I notice that the statement in your financials was quite similar to last quarter. Is there anything that you could give us in terms of what progress has been made in the last three months since you last spoke to us?

We have submitted the documents last July and we have had subsequent meetings as recently as last week, ahead of tax meeting up in Zambia as well. So we are making progress, but not much more to have taken once we sit in the quarterly.

Okay. Got it. And then, Hannes, you discussed a little bit the debt profile on one of the earlier questions mentioning that using cash to pay down debt is an option. Are there other options available to you, if you look at your bonds, particularly the longer dated, the cost of refinancing those in today’s market would be quite high, given where they trade. What other options do you have if you don’t have the required amount of cash available to pay down that debt, is there any project level that you can consider just interested in the potential parts you could pursue?

Yeah. I think, if you look at our profile, we were targeting the Project Finance a year or two ago, and that would have probably balanced sort of bank date and bond date 50-50. We currently got about $6 billion of bonds and roughly $2 billion of bank loans available. So it probably would make sense to add some more bank date again and just balance the portfolio, so that city and avenue that is available to add more liquidity.

Thanks very much.

Your next question comes from Ralph Profiti with Eight Capital. Your line is open.

Hey. Good morning, Clive. Just wondering if you can help me get around potential sales tax in Zambia. And I understand that you don’t have any details, but I am thinking about potential scenarios. Is there any precedence you can help us out with? And I guess, my second question is, is this sales tax going to be part of this tax policy review committee because I would find it hard to argue that you can sort of look to reduce it if you don’t know the details.

Yeah. I don’t think we have -- I mean we don’t have any detail on that and it’s also still very early stage with government, as this tax review committee is pretty much focused on the immediate and the tax changes that will come into effect in January. And I think the other data is sort of the 1st of April is probably quite an ambitious data, so I mean, that’s still much further off.

Okay. Got it. That’s it for me, Operator. Thank you.

Your next question comes from Paul Cleary with AIG. Your line is open.

Hi. Clive, yes, just on the production around the completion of Cobre, so you guys are at 80% now spend is over $90 million. What is the likelihood and I know you are talking about, obviously, labor cost being lower than equipment and facility cost, but what is the likelihood that you guys went over on those pattern? And how material could that be?

Zenon, do you want to take that?

Sure. Yeah. Look in terms of the label being a cheaper component, if there wasn’t, that would be relatively small in terms of percentage terms and what will really drive it at the moment is how quickly it commissions and ramps up. From the work that we have done, we have certainly got a lot of positive enthusiasm that the commissioning and the ramp up will be smooth and quite rapid much like our smelter project was. If it’s a protracted commissioning, then it tracks things out, but at the moment, all indications are that of commissioning and ramp up should actually be quite smooth and quite rapid and I think that would make a significant difference in alleviating the concern.

Okay. And then just on the actual commissioning and testing of the facility ahead of commercial production in Q1. Can you just talk a bit like what you guys do, what confidence you have in -- in the testing to make sure that there is no issues that happened when you actually start to ramp up commercial production and try hit your production targets for next year. As you guys have completed other projects before you know what’s the -- how often you guys run into issues when you know despite the testing that was on beforehand when you actually ramp up commercial production?

Right. Okay. Well, look the two most recent examples were the smelter project in Sentinel and essentially we have been able to take learnings from both. And what we have incorporated into Cobre Panama is we have had a separate quality assurance, quality control group, quite a large group, let’s check the quality of the construction all the way through. And also there is a very rigorous testing regime in pre-commissioning which is essentially check sheets and test sheet that force people to go and check what’s been sold and whether it’s been aligned properly and whether the work is being completed fully. And those check sheets are -- there’s quite a few of them. They may get done through the whole plant. So that’s actually quite rigorous before you actually then starts cleaning motors or pumping water cetera. There’s been a lot of checks beforehand that have occurred so that when you get to that stage of actually earning drives, there has been a lot of work already takes place and it’s not in chances whether it’s going to be good, bad, or indifferent, you actually go into it feeling quite confident because of these checks that have occurred before and that’s a very rigorous process, and that’s essentially a lot of what we are doing at the moment.

Okay. Thank you.

Your next question comes from Sean Wondrack with Deutsche Bank. Your line is open.

Hello. Good morning, good afternoon. Just a couple of quick ones, so clearly, when you look at the values in Zambian kwacha, it’s come down a bit in terms of depreciating. Is there any kind of sensitivity to provide to the kind of changes in Zambian kwacha given that a lot of your operating expenses are in Zambia?

Our operating expenses tend to be largely in dollars in Zambia. So for instance, our power cost is in dollars, a lot of the reagents are dollar-driven costs. So I think it’s probably around 15% to 20%.

Yeah. About a 10% movement would have between $15 million and $20 million impact. So, $15 million probably on local -- $20 million is a 10% of movement.

Yeah. So it’s a largely local favorable cost than some local expenditure. You are looking at probably 15% of the total cost and as Juliet given you those numbers.

Okay. I am sorry just to be clear you said a 10% movement is $15 million or $20 million?

Well, so if you look at sort of total cost of about 10% is about $20 million, $20 million to $22 million and just looking specifically through more local favorable cost, it’s around about $15 million, you do find that the loan payroll sometimes catches up.

Okay. Thank you. And then when you think about -- when you look at CapEx it looks like you may have pulled forward CapEx a little this quarter. Should we expect the CapEx comes down a little bit in 4Q or do you think it’s going to stay at these elevated levels?

Well, we have given the full year guidance for CapEx -- so the delta between year-to-date and the full year. So it’s about $210 million, I think left on Cobre Panama averaged $70 million a month, and the others are relatively small full sustaining and now this is relative to income similar based on the one can expect.

Great. Okay. So it’s too come down a bit. And then just last one do you have any restrictions on repurchasing your debt in the open market at current prices and should you decide you know if should you generate cash and you decide to pick away your longer dated, do you have any capacity available right now?

Yeah. I do have the capacity, I think and my bank facility there is a limitation of, I think, about $500 million. So something like that, yeah, just got also its $500 million is the restriction in using cash to purchase back bonds in the open market.

Yeah. And when you think about your you know your position if you were to see bonds kind of trading around these prices, and Cobre here were to start up, and you were generating cash and the big period of investment was behind you would that be something you would consider?

It’s something, I have always considered. So it’s something…

Okay.

… it’s certainly attractive at this rates, yeah.

That’s great. Thank you, Hannes, and good luck moving forward.

[Operator Instructions] Your next question comes from John Tumazos with John Tumazos Very. Your line is open.

Thank you very much. In terms of the algebra of 150,000 tonnes next year at Cobre Panama, how might it break up, would there be possibly 10,000 tonnes in the first quarter, 30,000 tonnes in the second quarter, 50,000 tonnes in the third quarter, 60,000 tonnes in the fourth quarter. What might the sequence be?

Just because anything I mean our -- the original way we arrived at under 150,000 tonnes is the year we start at zero and ended up at about 300 in the average. Then on -- can be -- yet we won’t be in a position to do that until we have going, are we.

That is probably correct. I think what will happen is we are expecting something quite similar to the South in terms of ramp-up, which is that it would ramp-up quite quickly has the facilities come online. So it does get influenced by the exact start date of each of the mills. So we start with the first three on site to those that will then follow with the next three mills and I guess that timing of how quickly all of those mills come on will determine that ramp-up profile because we are quite confident that from when we do start each of those sections that the ramp up should be pretty quick. But there will be a time period before starting or between starting the first three mills and the next three mills because you can’t simply turn it all on at once, there’s just too much. It’s not like turning on a light switch. So we could but probably best from when it was starting next year.

Should we expect any commercial shipments in the March quarter?

It’s unlikely because the concentrate ship that we have as I think about a 140,000 tons of capacity from memory. So we would probably buildup capacity in the shed for a while before calling on a ship unless it was a smaller sized vessel.

So it’s possible in the first quarter, there is production without shipments?

Yeah. Both are possible. That would be possible. And if there were smaller shipments, that would be possible as well. I think it’d a case of looking at what ships are available and where the product might be sold to against the production in the first quarter.

Thank you.

Your next question comes from Orest Wowkodaw with Scotiabank. Your line is open.

Hi. Thanks for taking the follow up. Just curious if we could anticipate some give and take on the Zambian changes to the royalties and taxes. I mean especially the -- on the deductability or non-deductability of the royalties. Do you -- can you give us a sense of whether you think these proposed changes are set in stone or whether there is still going to be a potential negotiation period here with the Zambians?

Orest, we certainly are in discussion and we go back with our proposals and counterproposals in terms of both in the past, I mean what you have seen as well once it’s announced pretty much is an [inaudible] like this, we will see where we can get to in terms of any relaxation of those proposals.

But do you think, the current structure, I mean, am I incorrect in assuming some of the other higher cost mines in the country could be put under water with these changes?

I don’t think we have a higher cost margins, will be paying taxes anyway. So the non-deductibility doesn’t really affect them that much.

Okay. But the increase royalty does.

The increase in royalty significant does.

Great. Okay. Thank you.

[Operator Instructions] And we have a question from Brian Lalli with Barclays. Your line is open.

Hi. Good morning everyone. Just a real quick for me and most of my questions have been asked, but I guess as we sit here and as the investment community continues to monitor what’s going on in Panama, what -- and I apologize if I missed this earlier. But what’s the next step or our next step so we would look to see whether reported publicly as you can imagine not the easiest region to follow in terms of news flow?

No. I agree. Yeah. Constitutional law is none of our strengths. I think, it’s fair to say, so understanding exactly how it all works is complicated. But we -- as I said earlier, we can’t really comment on what we are doing and where it’s going at this point because we are, at least, before the supreme court as we speak.

Okay. And just we will keep our eyes out for it. And then lastly just a housekeeping item around the busy CCM status, it sounds like there’s elements of that in the middle of October were rejected, you mentioned something about full or case being heard in kind of March of 2019. If you don’t mind could we just get an update on where that stands and if there is any expectation of cash outflows relative to that? Thanks.

Zenon ?

Look, I think, the case was heard early this year and found that there was no case. It was an appeal in subsequent and I think that’s what’s to be heard in early next year. And yeah, I mean, based on that I mean, we don’t expect cash outflows.

Understood. Okay. Thanks so much.

At this time I will turn the call over to the presenters.

Thank you very much, Operator, and thanks everybody for listening. If anybody has any follow up questions please call myself or Lisa Doddridge. And Lisa has joined as Director of IR and we welcome her on Board. So please call her or myself and we will endeavor to at least to get the answers to you or point you in the right direction and I look forward to talking to you again at the end of the next quarter.

This concludes today’s conference call. You may now disconnect.