First Quantum and Rio Tinto Announce Completion of the La Granja Agreement

TORONTO, Aug. 27, 2023 (GLOBE NEWSWIRE) — First Quantum Minerals Ltd. (“First Quantum” or “the Company”) (TSX: FM) and Rio Tinto have completed the previously announced transaction to progress the next phase of the La Granja project in Peru, one of the largest undeveloped copper deposits in the world.

“La Granja has the potential to be a large, long-life operation and supply the copper that will be needed as the world transitions to the greener economy and where responsible mining will be the only acceptable way to produce metals. Adding this major project to our portfolio will give First Quantum future optionality in the Company’s project pipeline while we focus on strengthening the balance sheet in the interim. As operator, we will leverage our core strengths in mine design, project development and community engagement and look forward to developing our partnership with Rio Tinto,” said Tristan Pascall, Chief Executive Officer of First Quantum. “We appreciate the support from the Government of Peru for the completion of this transaction.”

“Developing La Granja would provide a significant new supply of copper and further strengthen Rio Tinto’s portfolio of materials needed for the energy transition. Our partnership with First Quantum will bring our combined development capabilities and deep knowledge of La Granja to progress the project.” said Bold Baatar, Rio Tinto Copper Chief Executive.

Following the completion of conditions including regulatory approvals from the Government of Peru, First Quantum has acquired a 55% stake in the project for $105 million and becomes the operator of La Granja. The Company will invest up to a further $546 million (the “initial funding”) in the Project. Part of the initial funding will be used to complete a feasibility study over the next two to three years, after which the remaining balance of the initial funding is to be spent on construction of the Project contingent on a positive investment decision. Upon completion of the initial funding amount, all subsequent expenditures will be applied on a pro-rata basis according to the share ownership of the Project.

Work over the initial years will continue to progress community engagement and the feasibility study. The feasibility study will focus on developing an updated geological resource and reserve model, which will require additional infill drilling to upgrade Inferred resources to Measured and Indicated categories. Additional metallurgical studies to establish optimal processing configurations are expected to be carried out in parallel, together with a high-level project layout and configuration of associated infrastructure requirements and logistical routes.

With work on La Granja focused mainly at the studies level, there is no change to the Company’s three-year guidance provided in January 2023 on capital expenditures.

About La Granja

La Granja is one of the largest undeveloped copper resources in the world with a published Inferred Mineral Resource of 4.32 billion tonnes at 0.51% copper, and has potential for substantial expansion. La Granja is located in the district of Querocoto in the northern region of Cajamarca, Peru, approximately 90 kilometres northeast of Chiclayo, at an altitude of between 2,000 and 2,800 metres.

For further information, visit our website at www.first-quantum.com or contact:

Bonita To, Director, Investor Relations
(416) 361-6400 Toll-free: 1 (888) 688-6577
E-Mail: info@fqml.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. The forward-looking statements in this news release include statements regarding the work, including feasibility and metallurgical studies, to be completed to progress the Project; the funding of expenditures related to the Project; the impact and expected benefits of the Acquisition and the Company’s partnership with Rio Tinto on the Company’s business and operations; and expectations regarding the future demand for copper. With respect to forward-looking statements and information contained herein, the Company has made numerous assumptions, including as to Rio Tinto and the Company maintaining strong local support for the Project; the successful completion of the feasibility and metallurgical studies required to progress the Project; and the ability of the Company to fund the first $546 million in study and development work and subsequent expenditures related to the Project. 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 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, political stability in Peru, joint venture risks, potential social and environmental challenges, and events generally impacting global economic, political and social stability. There may also be other factors that cause actual results, performance, achievements or events not as anticipated, estimated or intended, including the risks, uncertainties and other factors discussed in the Company’s Annual Information Form. 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.