Good morning ladies and gentlemen and welcome to the First Quantum Minerals Quarterly Result Conference Call. I would now like to turn the meeting over to Lisa Doddridge, Director, Investor Relations. Please go ahead Doddridge.

Thanks, operator, and thank you, everyone, for joining us today to discuss our fourth quarter and full year 2020 results. Before we begin I will draw your attention to the fact that over the course of the call we will be making several forward-looking statements. And as such, I encourage you to read the cautionary note that accompanies our most recent 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 and on SEDAR. A reminder that the presentation which accompanies this conference call is available on our website. On today's call, Tristan Pascall, our Chief Operations Officer will provide some general comments and discuss operations. Then Hannes Meyer, our Chief Financial Officer will review the financial results. After that we will open up the line to take question. So with that I will turn the call over to Tristan.

Thanks Lisa. Hi everyone. Thanks for joining us. 2020 was an unprecedented year to which First Quantum operations responded very well and the company achieved its highest ever annual copper production. Early in the year COVID-19 emerged and shortly thereafter would bring the global pandemic by the World Health Organization. The year was full of challenges, lockdowns, restrictions and some uncertainty. Cobre Panama was shut down for a period in the middle of the year as part of the COVID-19 mitigation efforts in Panama. We had to move quickly to make changes within our organization to protect our workforce and the communities within which we work. These protocols remain in place today as we continue to do with the pandemic. Operations in the wider populations and we’re fortunate to see less of an impact from the pandemic across 2020 but we maintain a high level of preparedness and vigilance in Sentinel and Kansanshi mines. During the fourth quarter we continue to see the resurgence of the virus and in some jurisdictions the level of restrictions tightened further. We have been fortunate with strict protocols we have in place at operations have been effective in keeping up sites mostly unaffected in the quarter. We did see further cases emerge in our workforce across several sites but these were identified and isolated and managing conduction with local health authorities. Despite these challenges across the year, we did achieve record annual production with [FC1] cost at their lowest level in four years. At Sentinel we had another strong quarter in Q4 with continued hype throughput in grades. There was a high proportional softer ore from the eastern cut back and higher grade reporting from the deeper mining areas which contribute to these results. Costs improves for the previous year 2020 benefiting from the depreciation of the kwacha and lower maintenance and fuel costs in Sentinel. Full year C1 unit cost were record for the mine. For the full year 2020 Sentinel exceed throughput of 57 million tonnes, and we expect to continue at these rates in 2021. In the second half of this year 2021 we expect to put the fourth [input] crusher into commission allowing for another step up in throughput when it comes online and then to next year 2022. Kansanshi mines continues to be a consistent producer and continues to demonstrate flexibility and adaptability. Results in the fourth quarter reflect lower fee grades and recoveries as the oxide depletes which is an expected part of the mine plans. Production rights to Kansanshi are expected to be similar across this year 2021. Work will begin this year on upgrading smelter to improve our ability to treat high volumes of our own concentration from both Sentinel and Kansanshi and $40 million has been provided in our CapEx guidance for this work in each of this year ‘21 and next year ‘22. The decision to move ahead with the Brownfield is free expansion of Kansanshi reminds dependent on our balance sheet and reaching agreement with Zambia for greatest stability in the country and we continue the constructive discussions with government in this regard. We do expect the normal seasonality with our Zambian operations and typically Q1 is the weakest quarter as a result of rainy season. This year 2021 has already seen heavier rains from last year which have impacted operations in January and February to some degree. Cobre Panama was back to normal operations in the fourth quarter and performed as expected. There was a planned maintenance in October which resulted in a same day shut down and despite this the operations set new quarterly mills report and production records for the quarter. Mills throughput continues to ramp up to the 2021 target [rates] of 85 million tonnes for full year. Monthly ore mill drive to Cobre Panama with an average of around 6.3 million pounds across November and December 2020 and were about 6.8 million tonnes for the month of January, 20 21 We continue to evolve the Brownfield project for expansion of Cobre Panama to the 100 million tonnes throughput level, which we continue to expect will be achieved sometime in 2023 and is included now in our current production and capital guidance. At Ravensthorpe the ongoing ramp-up continued to satisfactory rate during Q4 last year whilst we continue to take mine [indiscernible] the new conveyor to Shoemaker Levy ore body will be completed in Q2 this year and we've already completed first class from the ore body. Shoemaker Levy is expected to improve grades in the material handling characteristics of the ore phase in the second half of the year. In Q1 of this year we are conducting regular maintenance [indiscernible] units this work is now ready complete and both units have restarted well and are back to full throughput. All of our other operations performed according to expectation during 2020. They all managed to continue their operations well despite various COVID constraints and a number of significant technical factors. A highlight amongst the smaller mines was the contribution from [indiscernible]. This operation was particularly impacted by the varying travel restrictions on its rotational staff. I'm pleased to say that our local workforce and resolute expatriate staff showed remarkable tenacity to deliver record low costs for the year 2020. Looking ahead total production is expected to grow in each of the next three years across the period for which we've provided guidance. Our cost structure is expected to remain consistent with 2020 and although we do see lower costs at Cobre Panama across these years these will be offset as we see some of our lower cost operations come to the end of their lives and in anticipation of some cost inflation. Another highlight included in our Q4 and 2020 results was the formalization and publication of the first quantum approach to climate change which is now on our website. This is an important step forward for our company and part of our broader commitment to improve our ESG reporting and communications across this year and into the future. We understand that mining has a significant impact on the environment including through emission of greenhouse gases and we recognize our obligation to identify and report on our actions to address climate change. The metals we mine are essential components driving the transition to a low-carbon economy and we're committed to find ways to use less energy, improved efficiency, reduced waste and greenhouse gas emissions by continually challenging the status quo leveraging our innovative culture and new technologies as they become commercial. Our intent is to deliver meaningful change in our business based on the implementation of step change improvement projects. The first Quantum approach to climate change in keeping with our results-driven culture is to set tangible targets and focus on the identification and execution of projects which produce real outcomes. Over 2021 and subsequent periods will be setting clear progressive and realistic targets which have an identified pathway to achievements. The full statement including our commitments is now available on our website. Before I hand things on to Hannes I want to on behalf of the entire company thank our people. Many of our personnel particularly on the more isolated sites have been working across the last 10 to 12 months with restricted travel in some cases extended periods away from their family and friends and we certainly appreciate their adaptability, commitment and resilience and without these significant contributions First Quantum would just not be the same company. And with that I'll turn things to Hannes for a continued review of our results.

Thanks Tristan and good day to everyone. I'd like to direct you to a slight title overview with slide 7. So despite the challenges faced in the year the company achieves its highest ever annual copper production with record-breaking production at Sentinel and a strong contribution from Cobre Panama. Total copper production of 779,000 tonnes was 11% higher than 2019 and within the upper quartile of the guidance range. Sentinel had an outstanding year and achieved record copper production of over 251,000 tonnes which exceeded guidance. Cobre Panama's performance was strong at 206,000 tonnes despite being placed on preservation and safe maintenance and operating at reduced levels of activity in the second quarter of the year. Total gold production of 265,000 ounces was 3% higher than 2019 and 5000 pounds ahead of the guidance range for the year. Nickel production for the year was 13,000 tonnes. The plant continued to stabilize both startup with nickel recoveries increasing to 78% in the fourth quarter. Comparative EBITDA of 2.15 billion for 2020 reflects strong operational performance and was 34% higher than 2019 with record sales volumes, higher metal prices and lower cost. Total copper cash costs for the year were the lowest level in four years with almost all operations delivering a reduction, record low NLC one cash cost and all in sustaining costs were achieved at both Sentinel and Guelb Moghrein. Net debt decreased by $266 million to 7.4 billion at the end of the year. Capital expenditure in the year of $610 million was 65 million below our revised guidance. .: Turning to the next slide on quarterly unit cash cost. Full year copper C1 cash cost of $1.21 per pound was at its lowest level in four years and $0.10 per pound lower than 2019. Full year C1 and all in sustaining costs were comparable, were comfortably at the lower end of our guidance ranges. C1 cost for the quarter of $1.28 per pound was $0.04 higher than quarter four 2019. Cobre Panama C1 cost for the quarter was $0.06 higher than the same period in the prior affecting additional cost relating to health and safety protocols in response to COVID-19. Sentinel and Kansanshi saw decreases to see one on the quarter compared to the same quarter last year reflecting favorable impacts of foreign exchange and lower fuel prices. Guelb Moghrein achieved its lowest quarterly C1 in a decade through cost reduction initiatives and higher realized gold prices. All in sustaining costs for the quarter was $0.04 than quarter four 2019 reflecting higher C1 as well as higher Zambian royalties on the back of higher copper prices. These were mitigated by lower sustaining CapEx and [indiscernible]. Turning to the next slide on quarter 4 financial overview. Comparative EBITDA of $725 million in the quarter was $214 million or 42% higher than quarter 4, 2019. EBITDA benefited from increased sales volumes at Sentinel and Cobre Panama, 13% higher realized copper prices, lower operating costs and favorable foreign exchange movements. Comparative earnings for the quarter of $53 million is an increase of 51% compared to comparative earnings of $35 million in quarter four 2019. Net debt reduced by $266 million in the year and by $136 million in a quarter to $7.4 billion. This could have been better but we had two late shipments from Panama that left on around Christmas on the December 30 and we’ve received $130 million inflow early January. Then turning to the next slide, comparative changes to the comparative EBITDA. It just illustrates the detail and comparative EBITDA movements and the main items to highlight the change in price offset by some of the hedge losses. Turning to the next slide on debt and liquidity profile. The company ended the year with $914 million of net unrestricted cash and cash equivalents and was in full compliance with all financial covenants. On October 1, 2020 the company completed the offering of $1.5 billion of senior notes due in 2027. The proceeds of the offering were used towards a partial repayment of the company's existing revolving credit facility and the redemption and full of the company's outstanding senior notes due in 2022. Taking into account forecast, operating cash inflows, capital expenditure outflows and available cash and committed facilities company expects to have sufficient liquidity through the next 12 months to carry out its operating and capital expenditure plans and remain in full compliance with financial covenants. We continue to take action to manage operational risk and price risk and further strengthen the balance sheet. Turning to the copper hedging program outlook in slide 13. Hedging was undertaken when Cobre Panama was being built to ensure consistent and sufficient cash flow. As we look forward to certainty of cash flow and confidence in copper prices we will continue to review the level of hedging and act opportunistically. Over time the level of sales hedged is expected to decline. We would look to increase the color component of these hedges to participate more on the upside and most recently we've done hedges where we've had upside up to $4.11 a pound of copper. Approximately 40% of expected copper sales in the next 12 months are hedged. At February 16, the company had unmargined copper forward sales contracts for 128,000 tonnes at an average price of $2.86 per pound. In addition, the company had zero cost colors and margin sales contracts for 198,000 tonnes at weighted average prices of $2.93 at the floor price and $3.25 at the ceiling. Furthermore, subsequent to December 31 company realized in January 21 and margin forward copper sale contracts of 235000 tonnes and zero cost copper color and margin sale contracts for nearly 16,000 tonnes at an average price of $2.91 per pound. The company also had margin nickel forward sales contracts which are detailed on that page. More detail of the hedges in a quarterly format so you can find on page 31 of our MD&A. Thank you and I will now hand back over to Lisa.

Thank you very much Hannes. Operator I think we can open it up for questions.

Thank you. [Operator Instructions] Our first question is from Orest Wowkodaw from Scotiabank. Please go ahead.

Hi good morning a question about Cobre Panama and the three-year guidance that was recently issued. I'm just trying to understand how to reconcile the guidance for 2022 and especially 2023 to the previous technical report? And when I look at the technical report it shows 2022 and 2023 copper production north of 400,000 tonnes including [460,000] in 2023 and I'm just wondering how we should think about the difference with that relative to your guidance of 310 to 340 in ‘22 and 330 to 360? I'm just curious what's changed? Obviously I assume the COVID shutdown during 2020 might have pushed that back a bit but what are the big drivers here?

Yes. Hi Orest I can answer that question. Yes, the 43-101did paint a picture of the reserve resource in terms of our ability to abstract really at those rates by 2023. I think what we see now is we will meet that timetable in terms of delivering 100 million. We're confident in delivering that in 2023 but the levels around 460 in the technical report are more indicative. The guidance is a conservative picture around where we're happy to stake and happy to be judged by those volumes. In terms of change there isn't really much. We are a little bit behind the face positions that we’re in the 43-101 in terms of where we wanted to be in [indiscernible] it doesn't change the overall perspective on grade. It's just the sort of volumes and so on that come out over that next period. So it is on track. It's on course and all of that copper is in front of us that you see there. It actually at the moment in the five-year plan we do see some high yields after 2023 and part of that work between now and then is sort of balancing that out and bringing it forward a little bit otherwise we do see some very high levels of copper after 2023. And we just, we will keep working on balancing that but at the moment that conservative position that we put into the guidance is the view.

Okay. And just so I'm clear so it sounds like you're saying you're assuming a more conservative throughput level and we shouldn't assume any changes to the greater recovery profile. Is that fair?

Yes. Well the 43-101 was on the basis of 100 million as well it was really on that grade profile and at the moment the grade that you see there in in the 460 is reporting into the mine plan in later years and we're working on bringing that forward as much as we can. Does that answer the question?

It does. Thank you very much.

Thank you. Following question is from Jackie Przybylowski from BMO Capital Markets. Please go ahead.

Thanks very much and good morning or afternoon or evenings everyone. I have a question about the Kansanshi expansion. You've given the guidance that you're planning to spend $40 million this year, $40 million next year and I know you talked a little bit on the earlier part of the color about that. Can you tell us how that relates to the technical report? I guess this is similar to Orest’s question but on Kansanshi, the tech report that you published in September, I think you've got for First Quantum's portion about $870 million for the expansion. Is this $80 million that we see in 2021/2022 a part of that or is this in addition to that and does it change sort of the timeline or the scope of the expansion once it is fully sanctioned by the board? Thanks.

Sure. I can answer that Jackie. So yes, I mean the references on page three of the technical report, the smelter is included in that capital. The $40 million that we're spending now is on those expansions. It's around the oxygen plant and then bringing the already existing either convert process which takes us to the higher levels the 1.6 million tonnes per annum throughput at the smelter. The additional capital is all around S3 and that decision has not been made but we can talk about our gross perspective and I'll ask John Gregory to comment on that in a minute but that capital is included. There is no capital being spent on S3 in our guidance prior to 2023 and in that year there's around 270 million that we expect or that we that we've included in the guidance but obviously that's contingent on balance sheet and as you say the fiscal standing in Zambia and in that regard we're working pretty constructively with government at the moment. But in terms of the growth prospects for Kansanshi John maybe if you just want to add a comment there.

Yes. Sure Tristan. The guidance is in line with the technical report that we issued last year and the capital has shown that 270 million in 23 aligns with the technical report and the completion of the project is shown at the end of 2024 coming online in 2025 as you'll see from the technical report. Now as I've been said on a couple of occasions that's to do with the timing of that in the technical report is to do with the government and balance sheet aspects. We don't need from here on until ‘25 to actually finalize the design and construct S3 should things change. There are possibilities that we could change the timing of the S3 expansion.

Thanks very much. If I could just ask follow-up question, Tristan at the beginning of the call you mentioned two kind of conditions for approving the project were, I guess including your balance sheet being ready for it and in an agreement with Zambia. Can you give us a little more color on what you mean with the stability in Zambia? I think it's the first I've heard you talking about that. Are you looking for a formal agreement? Are you looking for some sort of outcome of the upcoming elections in Zambia or what exactly would give First Quantum confidence in the country's stability?

Sure. The answer is yes as we've said before and within the release when we put out the Kansanshi 43-101, yes we're looking for a fiscal stability and we envisage that that would be an agreement and we've spoken about that before. I think what it really boils down to is the deductibility of royalties and that's the central question in that stability but what we really looking for is a period of confidence in and around that and in that regards in terms of progress we've been having those conversations. Yes, there's an election coming. We expect around August this year and so it will need to move forward quite quickly in terms of those discussions because the election will mean that the politicians are otherwise engaged but those are the clear provisos that we have in place and what we do see in Zambia is a lot more discipline, a lot more stability in any event engagement with the IMF we've seen clearly and that takes us back to the previous situation that they've had in the country when there has been a default that there came a period of good financial standing and discipline in the aftermath of that as part of the work out with bondholders and the IMF.

Thank you and yes, I do know you have talked about the deductibility of royalties in the past. I apologize. I just hadn't connected the dots but thanks very much for that. That's it for me. Thanks.

Thank you. The following question is from Matthew Fields from Bank of America. Please go ahead.

Hey everyone, just thinking looking at your stock that sort of run up so much so quickly kind of seven year high or I guess as high as it's been in seven years and pretty close to its all-time high, what are the thoughts about issuing a little bit of equity to kind of speed up this deleveraging maybe brings you an ability to kind of bring forward some of these expansion projects like S3 or Taca Taca or at least take the balance sheet part of the equation kind of off the table with a little more surety of capital? Thanks.

Thanks Matthew. Hannes do you want to answer that question?

Sure. Matt, yes one's always got that option available with current high prices we see deleveraging happening pretty rapidly in any event. I think the company is probably in the best position, it's been, I would guess in the last seven eight years in terms of we've got a lot of the capital projects behind us. Copper prices are good so the cash flow generation is good. So we are focusing on debt reduction. So that's absolutely key. We mentioned processes in the past that we're running in terms of trying to get minority stake sales in Zambia, [indiscernible] and Raven Salt. So that's continuing so those are sort of part of the alternatives we're evaluating and just accelerating that deleveraging but yes, I mean that option is available. But it's yes, I mean we're in a pretty good spot at the moment.

Okay. Fair enough and then on the flip side you've got a couple of near-term maturities that are callable at that pretty cheap call premiums at this point in a very-very favorable high yield market. What's the thought on sort of clearing out maybe those 23s and 24s and sort of bringing your pushing out maturity even further in this very favorable credit market?

Yes. We've got the 23s are stepping down on the April 1. So and I mean if you look at where the most recent issue is trading that's trading it's up 5% on a yield to worst basis. So it would indicate that it would be an accretive to sort of refinance the 23s but we'll probably also have a look and see where we get into in terms of these other processes that we're running. So if we've got some cash flow coming in from that that might be well used to call some of those bonds but it yes it is something on the radar and something we're looking at as well just to proactively manage like we have done in the past.

Okay. Great. Thanks a lot Hannes. I appreciate it. Good luck this year.

Thank you. A following question is from Ioannis Masvoulas from Morgan Stanley. Please go ahead.

Good morning and thanks for the presentation and Tristan congratulations on the new role. I had three questions and I'll take them one at a time if that's okay. The first on CapEx. If we take into account the $500 million of combined stripping and sustaining CapEx in 2022 and 2023 there's still a remaining growth CapEx element of 415 in ‘22 and 550 in 2023. And then if I take into account the larger items around Cobre Panama to 100 million tonnes the smelter expansion and the first phase of the S3 spending, there's still a residual CapEx that I cannot explain in the range of $200 million to $250 million per annum. Could you perhaps elaborate on some of the other projects? Thank you.

Sure. Shall I take that one?

Yes. Thanks Juliet.

Yes. So you're absolutely right. So there's about 540 in stripping and sustaining in 2021 because we do note that sustaining CapEx is expected to be a bit higher in 2021 because of the smelter maintenance during that year. And then with the remaining 410 million on projects that as you say includes the smelter expansion at Kansanshi, it also includes the fourth crusher at Sentinel of about 50 million and then it also includes some projects at Cobre Panama of about 150 million which would include the TMF construction and some initial spend on Colina and the [indiscernible] mill and other associated projects. There is an allowance in there for some spend if necessary in South America of up to 35 million to 40 million and then there's obviously the Shoemaker Levy project at Ravensthorpe, so with sort of project spend of about 40 million at Ravensthorpe and then just moving into the outer years, yes again we have 40 million of Kansanshi on the smelter. We have some expansionary mining equipment at Sentinel of about 50 million and further projects expansionary at Panama including mining equipment and some further construction work on the TMF and again we do allow for some discretionary spend in South America as well. And the big step up in the third year is obviously as you said S3 with again some projects at Panama and allowing some discretionary spend in South America.

Understood. That's clear. Thank you very much. The second question just on S3. I'm just trying to figure out the milestone you're trying to achieve in terms of the negotiations with the government. Are you looking for some sort of fiscal stability when it comes to that project specifically or do we need a wholesale change in the tax deductibility of royalties for you to have the confidence to proceed with the project?

Yes, hi Ionnis. I can answer that question. I don't know about a wholesale structural change in Zambia. I think what we're looking for is a reasonable perspective around that project and Kansanshi going forward if that we would envisage that would extend to the industry as a whole but really the key as I said is the deductibility of royalties that came in as SI statutory instrument some time ago, a year and a half ago or so and that's the key element. Beyond that, yes there would be a broader sort of wish list of items but I think that's the key in terms of the discussions that we have and we would want to ensure that continued in time and I think that's a very reasonable position that's pretty standard in most mining jurisdictions that royalties which are taxation are deductible from your costs for the purposes of corporations tax. So that's the discussion and yes we'll obviously have to navigate the election coming this year but we envisage that it's constructive for Zambia in the context now that Zambia is a major mining entity as well [indiscernible] they'll be interested in that themselves.

Okay. Thanks for that and the last question is around hedging. You talked about the reduction in the hedging proportion to 40% of expected copper sales for the next 12 months and I guess it's even lower for nickel. Is that reduced hedging proportion a reflection of your more bullish price outlook or more reflection of your view that the balance sheet is in a better shape and can withstand more volatility and within that should we expect to see us further step down later in the year or is it sort of a 2022 store in terms of a meaningful reduction beyond the 40%? Thank you.

Yes. Ioannis I'll ask Hannes to answer. I mean the key for us is we're not natural hedges in the long term in any event and the reason for the hedge book to be in place was around protecting the balance sheet and that means it continues to be the core elements and determine of the hedging strategy but yes in terms of where we are at the moment we have the existing strategy but we do as I said in the long term we're not natural hedges but we do need to make sure that we're protected as Hannes said we have, we're putting more and more of the colors in place which gives us up exposure to the upside up to above $4 as Hannes said but does continue to limit the downside for us and as we see debt repayment accelerating that's what's changing the dynamic for us. Hannes would you add anything to that?

Yes. I mean probably not much more to it but I mean a while ago when we did the hedges it was sort of protecting covenants. I think it's progress now from there. The focus now is on debt reduction. So in time the percentages overall hedge will decrease but the focus is on sort of reducing debt but using wider colors and participating on the upside, I think that's probably enough on that for me.

Understood. Thank you very much.

Thank you. The following question is from Ian Rossouw from Barclays. Please go ahead.

Hi guys. Just one question on capital allocation. With balance sheet the gearing happening probably a bit faster than what you previously anticipated in your budgets. What is the flexibility in your capital spending in bringing projects forward? I mean it seems like you've been able to do that already with some of the spending in Kansanshi on the smelter. So just getting a sense of if markets remain strong do you have the ability to bring forward more projects or are you constrained by other sort of timing stage gates?

Yes. Thanks Ian. Look at Cobre Panama there's not too much in the way in flexibility in terms of that the timetable of S3 of the 100 million is pretty much set by the ore body and by the tailings down. We want to put a good two years into the existing tailing down before we can cope with the level of inundation at 100 million tonnes and that really sets the pace there. We would otherwise just be spending money to accelerate without having the capacity to store those tailings. At S3 however on the theoretical basis that we could do it earlier John you might comment there but there is possibly potential there on a theoretical basis. John?

Well, yes Tristan. We've identified the preliminary activities that we need to undertake to accommodate S3 which is why we're focused on the smelter upgrades which in terms of capital are relatively modest and various other infrastructural enhancements so that we have the ability to move our engineering and bring the time frame forward for S3, the parameters of that we've already identified should they become more favorable. So there is a degree of flexibility at Kansanshi and that coupled with the expansions of the fourth crusher at Sentinel is on track and that'll come online for next year and at Cobre Panama as Tristan has identified we are on a course on the track and we are committing to the infrastructure that will support the 100 million tonnes per annum case and we're looking at bringing that online in our current planning in the [2004/2005] era. So basically it's coming online in 2024. So that in terms will give us the upside production and the upside production profile of those projects for the 2024 and in 2025 we can see that our forward estimates in our planning that we can start to look at the one million tonnes of copper production profile from our 43-101 technical reports that's basically fixed in 2025. Could we bring that forward? Potentially we could but that is predicated primarily on S3 timing.

Okay. And then just maybe to follow on what about the South American projects? Is there ability much in the timelines there to flex that?

Yes. The South American projects we released the 43-101 at Taca Taca and as was -- so it's a very good project a life of 30 odd years, 32 years and very good in the first 27 years. Taca Taca really so the assets in goods we think is a good asset. The decision is all around the investment case into Argentina and in that regards we have more work to do there. So again our priority remains the balance sheet and clearing the balance sheet down to the levels we've been speaking about and I think the investment case around Argentina will take longer. That's the reason for the focus on the Brownfields at Cobre Panama and at S3. Beyond that [indiscernible] we think at the moment sits behind Taca Taca because of the community issues ongoing there and we do have exploration projects in the region and further afield that are very interesting but by their nature those are a longer lead. It is the challenge of mining now and in most jurisdictions is to bring these projects online. First Quantum has got a good reputation in that regard certainly the last project we've done Cobre Panama and delivering that in a timely fashion but those new Greenfield projects are challenging. John would you add anything more to that?

I think in terms of Taca Taca we have a very clear indication of the actual time frame from once we take the business case decision to proceed in terms of initial pre-strip requirements for the mine, construction of major infrastructure and construction of the fixed plants. So that is identified clearly in the technical report and as we said in the technical report or when we announced the technical report the business decision we're looking at sometime 2023/ 2024.

Okay. Thanks john. Thanks Tristan. That's clear. Thank you.

Thank you. A following question is from Lawson Winder from Bank of America Securities. Please go ahead.

Thank you operator and hello everybody. Just a question on the dividend from me. When you think about that dividend, so two questions here really on the dividend. In the past you've indicated debt repayment of approximately $2 billion would be the right quantum before you think about a higher dividend, I just wanted to see if that's still where your thinking is at? And then secondly on the dividend with the hedges. Do you think about hedging as a tool to help enable you to pay a dividend or would you expect that the need for hedging will be gone by the time that you start considering a higher dividend? Thanks.

Thanks Lawson. Hannes could you take that question?

Sure. Look, maybe let me get to the second one first. So the hedges is part of the strategy now and sort of deleveraging and the balance sheet repaying some of the debt and that also enables them. The first aspect of it is the dividend question. So I mean, we've previously stated the sort of $2 billion debt reduction that was a target that we wanted to achieve. So we've paid down some of the debt in the last year. So we are on track for that and then in this year we'll generate pretty decent cash. So I don't think we precluded from increasing dividends prior to repaying $2 billion. So I think what we are stating is that in the past we used to have a dividend policy and prior to the nominal dividend that we paid, we paid about 15% of net earnings as a dividend. So I think what we've now said is that we'll look at returning a bit more cash to shareholders once we see date reduction. So I think that will come through in this year and later and we said in the next two years we'll certainly look at increasing that dividend.

Okay. Thank you and then –

Then to the hedge pool. Yes [indiscernible] one first yes.

Yes. Thank you very much for that Hannes. Now in your prepared remarks you mentioned that the lower cost going forward cash cost going forward at Cobre Panama would effectively be offsetting some of the smaller low cost mines coming off but also offsetting some inflation. I just I think it'd be really helpful to get your thoughts on where you're expecting inflation to come? I mean is it labor or are you looking for input costs or just what's your thinking on that comment? Thanks.

Yes Lawson. Certainly labor and we are seeing higher shipping costs at the moment. Certainly we've seen that for bulk freight and particularly coming out of Asia so some of the project elements that's certainly been apparent and is starting to come through. I think it's some of the reason for the uplift in commodity prices is that inflationary outlook. Certainly we're starting to see some of that and I would point also to Kansanshi where the ongoing lower grades, it does mean that the cost per unit will rise because you have the overhead there with labor and the cost of the business but S3 changes that as we get into a higher volume operation and we're able to continue to produce at the current levels and you see in the guidance each year coming off a little bit of Kansanshi you will be that trend reverses and we're able to keep running at these levels and as soon as you're at those units of production then your unit cost looks a lot better out of Kansanshi but yes, the main element on inflation is around labor and freight at the moment.

Excellent. And maybe just one more from me on [indiscernible] which you touched on briefly in prior questions. You commented that the focus still remains on resettlement and community engagement and I'd be curious to know whether or not any resettlement has actually started or is it still at the discussion phase? Thanks and that's it for me.

No, there has been no resettlement as yet in terms of actual movement of people dealing with the various community groups in different areas and their different locations. Obviously being next to [indiscernible] it's broader than that and into the infrastructure routes and the transit corridors as well and just how to navigate those in the future. So that's the situation at [indiscernible].

I appreciate that. Thank you all.

Thank you. A following question is from Emily Chieng from Goldman Sachs. Please go ahead.

Hi everyone. My first question is just around the capital allocation. It was exciting to hear that there might be a little bit of movement on the dividend there but when you think about your deleveraging targets certainly in a higher copper price environment that certainly looks favorable. Can you remind us about the balance between accelerating some of the growth projects that you talked about S3 and then balancing that with potential for higher capital returns there?

Yes. Hi Emily. Look, the priority of the business remains deleveraging and that's where as Hannes says with the rising copper price we are generating cash and at the upfront that will go into reducing debt. Beyond that I think growth profile is becoming more interesting but we have a disciplined focus in that regard that we will reduce debt and so the guidance that we've provided is on pretty much in line with what we said last year certainly for 2020, ‘21 and ’22. We're on the same track as we said last year in terms of capital outlay for the business and in that we added because we deferred some capital from last year, we've also added the smelter at Kansanshi into that capital guidance without changing the overall number for these two years. So that's a discipline focus beyond that and as we get the benefit of deleveraging and the benefit of higher copper prices then yes we would look at balancing capital outlay for things like S3 and indeed to Taca Taca as John said in the future but also with the dividend coming out as well.

Okay.

Can I just talk to Emily's question because it's a very pertinent one. It's a balancing act. So what's happening is we pay significant amounts in interest to lenders which we'd far rather be able to disperse as dividends to our shareholders but if we do, if we don't reduce those debts then obviously the Quantum that we have or disbursing us as dividends would be reduced and there's always the other demand which is for capital expenditure. So it's a very practical arrangement to focus on debt reduction and then get to dividend payment once those debt levels are modest and that really is a strong guidance and obviously with the higher commodity prices we can achieve that much more quickly and we will be very pleased to do so because then we can return something to our shareholders rather than paying so much interest.

Great. That makes a ton of sense and one follow-up is just not on the divestment process. I know you mentioned in your prepared remarks that you might be accelerating some work there but is there any timeline that you're looking at or is it simply a search for value here. And then when we're seeing what's happening in Zambia with some of the other mines. Is there any read across there for the Sentinel and Kansanshi for your inquiry? Thank you.

Sorry Emily I just missed the last part of your question there. What was it?

Just in that it seems like Zambia, the government is looking at some other mines or taking ownership of some of the other mines there is any read across that we should be thinking about?

Okay. Yes. Those asset sale processes are continuing. This obviously the challenge last year with COVID was really around getting people to sites and some of that's easing a little bit now. So but certainly the Ravensthorpe process and Zambia process is continuing and as you said the challenge for us there is on value. What we see is that the near-term and mid-term copper price outlook looks pretty reasonable when we compare that with Kansanshi which has been lagging is catching up now I think in terms of Kansanshi price forecasts and that gives an indication as to where people's minds are in terms of long-term copper price and we really see the off-take in terms of short and medium-term cash flow those businesses is very significant and that's what we have to trade off in looking at the minority stakes are in Zambia and at Ravensthorpe as well. In terms of the processes in Zambia the government's been very clear that they're not a nationalization process. I realize that word has been abandoned around a little bit but it goes back to the decisions that were made last year in a low-cost, low-price environment which was [indiscernible] Glencore made a decision to put [indiscernible] on care and maintenance which at that time as a high-cost operation is a reasonable decision to look at. Obviously that had implications in terms of employment for the government and so the government's position there is understandable. They've had very constructive discussions I think come to agreement there which makes it clear that the mine will continue operating and the government through ZCCM has decided to take that on but the construct around that was reasonable and so on so. No, we don't see any contagion or any element or risk in that more broadly in Zambia. In fact our relationship in Zambia has been fairly strong over the last 18 months two years around as the government's been in the debt crisis that they're in and the debt default situation a greater level of discipline and focus on stability and that we've been there a long time and have worked with government through that time and that continues in a constructive manner.

Great. That's really helpful. Thank you.

Thank you. A following question is from Karl Blunden from Goldman Sachs. Please go ahead.

Hi good morning. Thanks for the time. Just had a follow-up on the balance sheet and I think Hannes has spoken to this sometimes in prior quarters but when you take a look at the trade-offs between the cost of the debt and the bond market which is a little bit higher than bank but it gives you more flexibility, unfortunately is pre-payable a lot of it is pre-payable. How does that influence your view on what the balance of bank versus higher bond debt that should be going forward as you get cash flow in now as you potentially look at a RFI potentially use JV proceeds?

Yes. Karl, I mean markets are important to me. I mean obviously with a bond market it's only incurrence a test and you don't have maintenance covenant. So that makes it comfortable to live throughout the life of the bond but you do have quite a bit of period where it's in an encore period and you do carry that higher interest burden. With the banks and yes we do have covenants in that but as we delever you'll see those ratios becoming less of a concern and we well within any covenant at the moment and forecasting to be anyway but what you would have seen over the last 7/8 years through sort of two downturns in the cycle is the banks actually support us and they come to the party. So when we requested amendments we obtained that from the banks. So with great support from them and refinancing those facilities. So it is a check in the process so you do have those maintenance covenants but we've got a very supportive banking group. So and it kind of it comes at a lower cost and it's also pre-payable. So I'll probably want to be in both markets and we've had a long-standing and supportive banking group. So probably continue with that.

That's helpful. If I could just squeeze one more and it's related to the JV sales process even and you've given some good information on that on this call. Kind of a bigger picture question, have you felt like private market valuations have kept pace with the public market recently in other words because it's so attractive to pursue those options and I understand here that there are other considerations too other than price as well but just some kind of comment on that would be helpful. Thank you.

Yes Karl, look there are other considerations. Diversification was one of the key elements of what we looked at in the asset sale processes that we embarked on and that remains relevant but I think the challenge as I said is the near-term earnings that we otherwise earn from Kansanshi are very significant and yes private market valuations as to how they differ from public market, yes I think the copper prices run in public market valuations and we have to take that into account and the rise in the share price we have to take that into account. And so yes that's the challenge for copper producers looking to embark in M&A is to look at those levels of valuations and certainly I think that the perspective we had in sort of March, April last year has moved on to where we are now. The assets themselves are very compelling. They are a very strong proposition and at these price levels as you said does come down to price and with the copper price and so on where there are and the assets are producing very well. Sentinel in particular at the moment producing record production that's a compelling story and we know that best of all as the owner.

Thanks very much.

Thank you. A following question is from [Abby] from Deutsche Bank. Please go ahead.

Yes, good morning guys. Thanks for taking my question. Just a quick one on Cobre Panama cost. So how much of the 134 cent costs we saw this quarter were related to COVID and maintenance cost which you won't be seeing forward? Thank you.

Thanks [Abby], I think we did have in line in the statement that talked about the COVID-19 costs at Cobre Panama they were in about in the order of around $10 million across the quarter. The costs at Cobre Panama were in line with our expectations. The C1s were at $1.34 and that was well within the guidance that we put around Cobre Panama for the year. It is true to say that Q3 was lower cost and really that was off the back of the ramp up and really a focus in Q2. We can't forget that we got down to 800 people on site and so we were running trucks in a very in order to keep things ticking over. There was some, we were focusing on grade to keep that operation running and you see that the lower volumes and higher grade that comes through in Q3 of the results from Cobre Panama. So I think Q4s are rebalancing. Those cost levels now in Q4 the big impact that we have on those going forward is on units of production. We do see inflation in the market but Cobre Panama as it gets to the 85 million tonnes per annum and producing a guidance 300,000 to 330,000 tonnes of copper per year those units on the denominator, I really pull down the costs quite significantly and we see that and we see its ability to really head to a lower cost position and then as we go to the 100 million that it will head towards a dollar on it on a C1 basis. And so those are the dynamics at Cobre Panama.

Got it. Thank you.

Thank you. Our following question is from Jatinder Goel from BNP Paribas. Please go ahead.

Thanks operator. Good morning and good afternoon. I've got two questions. First question has got three parts related to Zambia. Just to understand, is the minority stake sale and S3 decision do they have any interdependence or are they fully independent decisions? And secondly when do you need to get the stability agreement in place not to impact Kansanshi production profile or to keep the volume profile that you currently envisage, what's the latest timeline for that? And the third element is the stability agreement, would apply to the whole of Kansanshi but not to Sentinel what you're currently looking at? Just to be clear.

Sure Jatinder. Yes, the first part of the question the minority stake sale is independent from S3. There is no reason that we would link them together. The only what we previously spoken there is if we hedge, if the minority stake sale did go through and that cash became available in terms of de-leveraging out the balance sheet we would obviously be in a better position in terms of debt and total debt in order to go ahead with S3 with a partner. So that would be the dynamic but otherwise it's independent decision. In terms of the stability agreement and the timing around that as we said in the 43-101 there's no need immediately to go on with S3. We do see good levels of production continue at Kansanshi as we put into the guidance for the next three years and as we said in the 43-101 it was really around 2024/2025 that we needed to see the S3 expansion come down or because that's when we see the grades drop off at Kansanshi or decline and it's really on the oxide side more than anything else. And then the third element of the question was whether the stability agreement would just apply to Kansanshi or to Sentinel as well and that is in discussion with the government. I think a particular concern is around S3 and that project which is Kansanshi but obviously we're looking at the broader geopolitical situation in Zambia as well but certainly the focus is on Kansanshi. Does that help?

Sure. So when you say S3 will it just be for the incremental volumes at the very early stage or for whole of Kansanshi because you can still split volumes theoretically based on I think 43-101.

No. No. We'd be looking at the asset in total consumption.

Yes. That's clear. Sure and just a question on hedging. You've obviously done copper and nickel but why not do gold hedging which is more common and more of a secondary product? Understandably you've got your streaming agreement but you still have significant exposure of your own. Is there any intention or has there been thought to hedge gold previously or is there any intention to do it on forward basis?

I mean, well, we've had proposals in the past. I mean the answer is that, although we produce quite a bit of gold, the gold is not that material in terms of our total revenue profile and it does also then consume credit lines. So you've got to choose you use those credit clients and by not hedging the gold we've actually benefited also on the upside so but yes so you've got limited credit lines and we rather choose to use it on the copper side than the gold.

Understood. Very clear. Thank you so much. All the best.

Thank you. That's all the time we have for questions. I would not like to turn the meeting back over to Miss Doddridge.

Thank you very much. I'd like to just thank everybody for joining us on the call today. Apologize that we've run out of some time. If you do have any follow-up questions, you need anything else please don't hesitate to contact me and with that thank you very much and I think you can disconnect your line. Thanks guys.

Thank you. The conference has now ended. Please disconnect your lines at this time and we thank you for your participation.