TORONTO, ONTARIO--(Marketwired - Oct. 5, 2015) -

(In United States dollars, except where noted otherwise)

First Quantum Minerals Ltd. ('First Quantum' or the 'Company') (TSX:FM)(LSE:FQM) today provided an update on key developments and actions in response to the low commodity prices and market volatility.

In outlining the actions completed or underway, Philip Pascall, Chairman and CEO, said 'We have taken clear and decisive actions to protect First Quantum in the current market conditions. Our focus has been clear. It is first to ensure that profitability and cash flow from our mining operations are maximized and protected in these volatile market conditions and sustained lower commodity prices and second, that cash outflows are limited to essential and economically attractive projects so that our balance sheet integrity is maintained.

'Additional initiatives to further strengthen the balance sheet are being prioritized and are under active review. We will report further on these as appropriate.'

KEY DEVELOPMENTS AND INITIATIVES:

Terms of a replacement Cobre Panama precious metals stream agreement finalized; capital costs estimate lowered

• A revised precious metal stream agreement has been agreed with Franco-Nevada Corporation ('Franco-Nevada'). Under the revised agreement, it is expected that Franco-Nevada's initial contribution of between $330 million to $340 million will be paid to First Quantum during October. Additional details are contained in a separate joint news release.
• The estimated capital cost of the Company's flagship project, Cobre Panama, has been reviewed in detail and reappraised. It is now estimated the total project cost will be $5.95 billion, approximately 7% below previous estimates with potential for further improvements.
• Capital costs have been reduced due to better construction efficiency, continued optimization of detailed design and lower costs for equipment and bulk materials such as rebar and structural steel.
• Overall the project is approximately 35% complete and experience to date allows greater confidence in forecasting total project costs. The project remains on track for process commissioning and first concentrate production in late 2017.
• The port is now a fully operational and has received direct international shipments.
• Early priority is being given to the completion of the power station taking advantage of virtually all required materials being available on-site. Mechanical installation works are progressing well.
• Project costs incurred to date amount to $2.621 billion of which First Quantum's partner in the project, KPMC, has contributed $524 million. The remaining estimated costs to completion will be met by an additional contribution from KPMC of $666 million, $1 billion payable by Franco-Nevada under the precious metal streaming agreement and $1.663 billion by First Quantum.

Zambian power stabilizing; Sentinel anticipates commercial-level production by end of 2015

• The Zambian power situation is stabilizing. Full power of 153MW is currently being provided to the Kansanshi mine and smelter and 55MW to the one power line currently connected to the Sentinel mine.
• Sentinel's ramp-up to date has been affected by the limited power supply. Despite this, good progress has been made. Construction of the second power line connecting Sentinel to Lusaka West is complete and scheduled to be energized shortly. Once the second power line is connected and energized, Sentinel will be entitled to its full power requirement of 160MW. This will allow for the mine to ramp-up towards commercial-level production expected by the end of 2015.
• ZESCO, the state-run power company, has requested the mining industry to use supplementary power for 30% of their requirements. Discussions are currently underway regarding the related tariffs for this supplementary power. The Company expects full production at both Kansanshi and Sentinel through the purchase and sharing of this power.
• It is expected that the country's generating capacity will improve following the rainy season starting in November. In addition, approximately 400MW of new power generation capacity is expected online in Zambia in 2016 from projects nearing completion (300MW thermal and 100MW hydro).

Production and cost guidance for 2015 revised

• Copper production for 2015 is now expected to be between 385,000 and 410,000 tonnes excluding Sentinel pre-commercial commissioning production of between 30,000 and 50,000 tonnes.
• The C1 cost estimate is lowered to between $1.20 and $1.35 per pound.

Management is employing a number of measures to enhance the Company's capital position and maintain financial stability

• With borrowings at elevated levels during a period of development project expenditure, the maintenance of available project funding, the strengthening of the Company's balance sheet and further cost reductions remain key priorities.
• Initiatives to strengthen and protect cash flow include:
  • in addition to the reduction in capital for Cobre Panama, other planned capital programs across the Company have been reduced or re-phased by approximately $700 million,
  • hedged approximately170,000 tonnes of copper production at an average price of $2.411 per pound ($5,316 per tonne) over the balance of 2015 and well into 2016,
  • reduced the work force by 644 and lowered salaries by up to 20% which, when combined with a detailed review of all other operating costs, has led to annual savings of approximately $420 million, and
  • realized $215 million from the settlement of the ENRC Promissory Note with a further $85 million to be received in October.

• A commitment to reduce net debt by over $1 billion through a combination of asset sales and other strategic initiatives by the end of Q1 2016.
• With Sentinel moving towards commercial production, Cobre Panama will be the only significant development project. Even at current commodity prices, Cobre Panama remains economically highly attractive. The initiatives now being undertaken are aimed at protecting against disruption to the planned timetable to completion for Cobre Panama and importantly, the current strong support of the Company's lenders is maintained. Progress and more details on these specific initiatives will be announced at the appropriate time.

For further information visit our website at www.first-quantum.com

Cautionary statement on forward-looking information

Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. These forward-looking statements are principally included in the Development activities section and are also disclosed in other sections of the document. The forward looking statements include estimates, forecasts and statements as to the Company's expectations of production and sales volumes, expected timing of completion of project development at Kansanshi, Sentinel, Enterprise and Cobre Panama, the impact of ore grades on future production, the potential of production disruptions, capital expenditure and mine production costs, the outcome of mine permitting, the outcome of legal proceedings which involve the Company, information with respect to the future price of copper, gold, cobalt, nickel, zinc, pyrite, PGE, and sulphuric acid, estimated mineral reserves and mineral resources, First Quantum's exploration and development program, estimated future expenses, exploration and development capital requirements, the Company's hedging policy, and goals and strategies. Often, but not always, forward-looking statements or information can be identified by the use of words such as 'plans', 'expects' or 'does not expect', 'is expected', 'budget', 'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates' or 'does not anticipate' or 'believes' or variations of such words and phrases or statements that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved.

With respect to forward-looking statements and information contained herein, the Company has made numerous assumptions including among other things, assumptions about the price of copper, gold, nickel, zinc, pyrite, PGE, cobalt and sulphuric acid, anticipated costs and expenditures and the ability to achieve the Company's goals. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to, future production volumes and costs, costs for inputs such as oil, power and sulphur, political stability in Zambia, Peru, Mauritania, Finland, Spain, Turkey, Panama, Argentina and Australia, adverse weather conditions in Zambia, Finland, Spain, Turkey and Mauritania, labour disruptions, mechanical failures, water supply, procurement and delivery of parts and supplies to the operations, and the production of off-spec material.

See the Company's Annual Information Form for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information. Although the Company has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actual results, performances, achievements or events not to be anticipated, estimated or intended. Also, many of these factors are beyond First Quantum's control. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements and information made herein are qualified by this cautionary statement.