First Quantum Minerals : 2019 Annual Report

RELIABLE

GROWTH

COBRE PANAMA | Colón Province, PANAMA

		Ownership		90%
		Primary		Copper
		Secondary		Gold, molybdenum, silver
		2019 Production	Copper 147kt, Gold 60koz
		PYHÄSALMI |	Pyhäjärvi, FINLAND
		Ownership	100%
		Primary		Copper
		Secondary		Pyrite, Zinc
		2019 Production		Copper 8kt, Zinc 12kt

GUELB MOGHREIN | Akjoujt, MAURITANIA

Ownership	100%
Primary	Copper
Secondary	Gold
2019 Production	Copper 30kt, Gold 45koz

HAQUIRA | Apurimac Region, PERU

TACA TACA | Salta Province, ARGENTINA

CONTENTS
Our Properties	IFC
Letter to Shareholders	2
Financial Report	5
Board of Directors	114
Corporate Information	116

Cu Production Growth in 2019

16%

LAS CRUCES | Sevilla Province, SPAIN

Ownership	100%
Primary	Copper
2019 Production	Copper 48kt

ÇAYELI | Rize Province, TURKEY

Ownership	100%
Primary	Copper
Secondary	Zinc
2019 Production	Copper 17kt, Zinc 5kt

SENTINEL | North-Western Province, ZAMBIA

Ownership	100%
Primary	Copper
2019 Production	Copper 220kt

KANSANSHI | North-Western Province, ZAMBIA

Ownership	80%
Primary	Copper
Secondary	Gold
2019 Production	Copper 232kt, Gold 145koz

RAVENSTHORPE | Western Australia, AUSTRALIA

Ownership	100%
Primary	Nickel
Secondary	Cobalt

Care and maintenance

First Quantum is a global mining company primarily producing copper, with secondary production of gold and zinc and inventories of nickel and cobalt. We operate long life mines in several countries and employ approximately 20,000 people worldwide.

We are well known for our "can do" attitude and specialist technical, engineering, construction and operational skills, which allow us to develop and successfully run complex mines and processingplants.

After 25 years of operations we are now one of the world's top 10 copper producers,exporting millions of tonnes

of concentrate from multiple countries to customers worldwide. We are focused

on providing a tangible benefit from

everything we do for investors, employees and the many communities that surround our operations.

LETTER TO SHAREHOLDERS

PHILIP PASCALL

Chairman of the Board and Chief Executive Officer

2019 was an important year for First Quantum. The Company's largest development project to date, Cobre Panama, achieved commercial production in September, less than seven months after the introduction of first ore into the milling circuit. In the early years

of First Quantum we set a goal of becoming a leading copper-focused mining and metals company and the success at Cobre Panama is a significant step toward that objective. This allowed us to deliver record production and to set a new annual record for copper production.

First Quantum was born out of a belief in the enduring value of copper. After 20 years we remain even more convinced of copper's importance to the modern world. In 2019, we produced over 702,000 tonnes of copper and we expect growth in copper production to continue in 2020 as Cobre Panama continues its ramp-up. In 2020,

we expect total copper production to be between

830,000 and 880,000 tonnes, an increase of at least 18%.

We have certainly had our share of ups and downs, but importantly we have learned from every development and continue to improve our operations. We are now running some of the finest copper mines in the world. After we bring Ravensthorpe (our nickel and cobalt mine in Australia), back into production in the first quarter of 2020, First Quantum will have eight operating mines in seven countries. We also have two significant development projects in our project pipeline.

We are determined that each of our mines and projects should be a valued partner to the community where it operates. This is part of an overall sustainability strategy, built on four key pillars: economically viable investments,

In the early years of First Quantum we set a goal of becoming a leading copper-focused mining and metals company and the success at Cobre Panama is a significant step toward that objective. This allowed us to deliver record production and to set a new annual record for copper production.

technically innovative operations, environmentally sound practices, and socially responsible actions. At each project, we prioritize local community engagement as we strive to minimize our impact on the environment, and to find practical ways to improve the lives of the people we work amongst and alongside. Our environmental and social programs are developed to meet the unique requirements at every site.

Our Health & Safety systems and our Environmental Management Systems are now both well developed in the group and undergo regular external compliance audits. Since 2015, we have recorded and reported site level environmental incidents according to a proprietary five-level classification system. From 2015 to 2019 we have seen a steady and continuous reduction in environmental incidents and improvement of overall environmental compliance across the group. We have reviewed the risks and management of our tailings storage facilities and these are subjected to regular inspection and reporting by independent experts. The group safety performance also continued to show improvement in 2019, with a

0.05 rolling 12-month Lost Time Injury Frequency Rate. This is an improvement from 0.06 in 2018 and 0.11 in 2017. There were no workplace fatalities in 2019. We continue to do all we can to ensure that every employee gets home safely after every shift.

We prioritize biodiversity protection and we recognize that a focussed approach is required to meet the needs of each site. Our community enhancement, agricultural, health, education, infrastructure and other projects are undertaken to assist each community, and to help them

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become healthier, safer and more prosperous long

after mining operations have stopped. Disclosure of these programs and the results of our safety, environmental and sustainability efforts are covered by our latest report, the 2019 Environmental, Safety and Social Data Report. This was issued during 2019 and can be found on our website.

By working together, I believe First Quantum has made a tangible, long-term difference to people in many countries around the world. I am very proud of the lives that have been improved through health, education and training delivered as a consequence of our operations; especially to the communities within which we live.

We also recognize that the composition of the Board needs to be refreshed as long-standing directors move on. In 2019, we welcomed Joanne Warner as our newest board member. She brings significant experience and a valuable skill set. Paul Brunner has indicated he will not be standing for re-election at the 2020 Annual and Special Meeting of Shareholders. We thank Paul for his huge contribution and his practical insight over a long period to the Board and its committees. We will continue to seek suitable opportunities to enhance and diversify our Board of Directors.

As urbanisation in developing countries continues to gather pace, copper use will continue to increase. As developed countries move to an increasingly connected, networked and new energy future, copper will remain in demand because of its fundamental importance to networks, electronics and energy storage and delivery.

As urbanisation in developing countries continues to gather pace, copper use will continue to increase. As developed countries move to an increasingly connected, networked and new energy future, copper will remain in demand because of its fundamental importance to networks, electronics and energy storage and delivery.

There are not many known new projects that might help meet that demand in the future. First Quantum is well positioned with its large operating mines, and a pipeline of new potential.

The commodity markets for copper were very volatile throughout 2019 hitting a low of $2.51 per pound and a high of $2.98 per pound on the London Metal Exchange (LME). The LME average copper price for the year was $2.72 per pound, 8% lower than the average in 2018.

We achieved record production in 2019 with over 702,000 tonnes of copper marking an eighth consecutive year of growth in copper output. This represents a 16% increase over 2018. The increase from Cobre Panama offset lower production from Kansanshi and Las Cruces. The group's 2019 unit costs remained at the low end of the industry cost curve and we expect this to continue through 2020.

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We achieved record production in 2019 with over 702,000 tonnes of copper marking an eighth consecutive year of growth in copper output. This represents a 16% increase over 2018.

Gold production for the year increased by 39% over 2018 to almost 257,000 ounces. This is largely attributed to Cobre Panama, which produced just over 60,000 ounces.

Gold production for the year increased by 39% over 2018 to almost 257,000 ounces. This is largely attributed to Cobre Panama which produced just over 60,000 ounces.

Our Las Cruces mine recovered during the year (after the January 2019 land slippage) to return to normal operations by July. The development of a proprietary process for the recovery of copper, zinc, silver, and lead from primary chalcopyrite ore remains a valued technology. The performance of this technology is now well established, and the initial underground mining has confirmed continuation of the resource. We are now working to determine the practical and commercial feasibility of a long-term underground mine.

We have an attractive pipeline of advanced exploration projects in South America. The most advanced is Taca Taca located in the Puna region of the Salta province in Argentina. Work on the Environmental Impact Assessment and other studies, along with stakeholder engagement, continues to advance the project towards a construction decision. Next is Haquira, located in Apurimac in southern Peru, adjacent to the Las Bambas operation. Our current focus is to relocate some small local communities, with whom we have recently made good progress towards obtaining agreements. Our aim is then to complete

an evaluation of the deposit and advance towards a production decision.

Meanwhile our Exploration Division continues to focus on a number of very promising higher grade deposits. The objective is to develop projects without the enormous capital demands of low-grade mines.

Overall these projects provide First Quantum with great long-term potential. However, we emphasise that our priority in the short-to-medium-term is to deleverage our balance sheet so that we can provide a reliable return to shareholders.

Our focus in 2020 will primarily be on managing our commodity risk and to establish cash flow stability amid the continuing commodity price uncertainty and volatility. We will consolidate our operations and we will continue to explore options available to us to bring in partners in some aspects that would accelerate the deleveraging. In summary, I am very positive about our outlook over the next few years.

Finally, 2019 was a year of extraordinary achievements in First Quantum. I would like, once again, to thank all our employees who made this possible. I would also like to express my appreciation to our shareholders for their continued support, particularly those who have been long-term supporters. They have believed not only in our vision, but also in our ability to deliver projects where others have struggled and to overcome challenges that others have balked at. We believe First Quantum is a strong company that is positioned well to cope with the current global uncertainties and it will thrive when economic conditions improve.

Philip Pascall

Chairman and Chief Executive Officer

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Financial REPORT

Management's Discussion and Analysis	6
Management's Responsibility for Financial Reporting	64
Independent Auditor's Report	65
Consolidated Financial Statements	68
Notes to the Consolidated Financial Statements	73

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 include estimates, forecasts and statements as to the Company's expectations of production and sales volumes, and expected timing of completion of project development at Enterprise and post completion of construction activity at Cobre Panama and are subject to the impact of ore grades on future production, the potential of production disruptions (including at Cobre Las Cruces as a result of the land slippage in January 2019), capital expenditure and mine production costs, the outcome of mine permitting, other required permitting, the outcome of legal proceedings which involve the Company, information with respect to the future price of copper, gold, silver, nickel, zinc, pyrite, cobalt, iron 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 continuing production at all operating facilities, the price of copper, gold, silver, nickel, zinc, pyrite, cobalt, iron 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, the temporary or permanent closure of uneconomic operations, 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, Mauritania and Panama, labour disruptions, potential social and environmental challenges (including the impact of climate change), power supply, mechanical failures, water supply, procurement and delivery of parts and supplies to the operations, the production of off-spec material and events generally impacting global economic, political and social stability.

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.

Management's Discussion and Analysis

For the year ended December 31, 2019

in United States dollars, with tabular amounts in millions, except where noted

This Management's Discussion and Analysis ("MD&A") should be read in conjunction with the audited consolidated financial statements of First Quantum Minerals Ltd. ("First Quantum" or "the Company") for the year ended December 31, 2019. The Company's results have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and are presented in United States dollars, tabular amounts in millions, except where noted.

For further information on First Quantum, reference should be made to its public filings (including its most recently filed AIF) which are available on SEDAR at www.sedar.com. Information is also available on the Company's website at www.first-quantum.com.

This MD&A contains forward-looking information that is subject to risk factors, see "Cautionary statement on forward-lookinginformation" for further discussion. Information on risks associated with investing in the Company's securities and technical and scientific information under National Instrument 43-101 concerning the Company's material properties, including information about mineral resources and reserves, are contained in its most recently filed AIF. This MD&A has been prepared as of February 13, 2020.

Overview

2019 has been a transformative year for the Company as its largest development project to date, Cobre Panama, reached commercial production in September, less than seven months after first introduction of ore to the milling circuit. Following the first ore to the Cobre Panama processing plant in the first quarter, operations ramped up with the commissioning of three milling trains, comprising seven mills, and an eighth mill introduced in December. In June, the first shipment of concentrate was dispatched from the operation's port. For the full year, Cobre Panama contributed 147,480 tonnes of copper, of which 79,776 tonnes were commercial production, and 60,074 ounces of gold, of which 35,954 ounces was commercial production, and post-commercial production revenues of $524 million.

The start of commercial operations at Cobre Panama has accelerated several of First Quantum's strategic objectives.

The Company's vision to be a leading copper-focused metals and mining company is greatly advanced. Copper production in 2019 was the highest in its history, with 702,148 contained tonnes of copper produced. This is expected to increase to between 830,000 and 880,000 tonnes next year. In 2020, the Company's geographic production base will begin to shift, with a third

of the Company's expected copper production to come from Panama in the next two years reflecting the addition and scale of Cobre Panama.

The Company continuously manages its capital structure and assesses its liquidity and financing sources regularly. Pricing, covenant flexibility and prevailing market conditions are all among considerations that are analyzed when assessing the Company's funding sources. Consistent with these efforts, in February 2019, the Company signed a new $2.7 billion Term Loan and Revolving Credit Facility, replacing the previous $1.5 billion Revolving Credit Facility. The new Facility was used to repay $821 million of the 7.00% Senior Notes due February 2021 with the remainder used for general corporate purposes. More recently, in January 2020, the Company issued $750 million in Senior Notes, using the proceeds to repay and cancel the remaining $300 million 7.00% Senior Notes due February 2021, and to repay but not cancel $450 million due under the senior Revolving Credit Facility. Additionally, with its forecasted reduction in capital expenditures, compared to the previous seven years, the Company expects that it will be in a position to begin executing on its stated commitment of deleveraging its balance sheet.

The Company utilizes a hedge program to manage operational and commodity price risk and ensure stability of cash flows while maintaining financial covenant compliance. The market price for copper fluctuated during the year from a low of $2.51 per lb to a high of $2.98 per lb on the London Metal Exchange ("LME"). The average copper price for the year was $2.72 per lb, 8% lower than 2018.

In the first quarter of 2020, the Company's Ravensthorpe nickel mine is planned to restart operations. Production of between 15,000 to 20,000 tonnes of nickel is expected for the full year 2020 increasing to between 25,000 to 28,000 for the following two years.

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Management's Discussion and Analysis (continued)

Effective January 1, 2019, a new Zambian fiscal regime was introduced which included increased mineral royalties, removal of their associated tax deductibility and imposed export levies on precious metals. Two other elements of the 2019 National Budget, the abolition of the value-added ("VAT") and implementation of a goods and services tax were not enacted during the year and later abandoned in the 2020 National Budget in favour of amending the existing VAT regime.

An amicable settlement agreement was reached with the Zambian Revenue Authority ("ZRA") in July 2019, with respect to the assessment claim on Kalumbila duties, in line with the Company's expectations.

Full Year Highlights

OPERATIONAL AND FINANCIAL

• Copper production for the year was a record 702,148 tonnes, an increase of 16% or 96,295 tonnes from 2018, and within guidance range, reflecting a contribution of 147,480 tonnes from Cobre Panama, of which 79,776 tonnes were commercial.
• Cobre Panama achieved a successful ramp-up in the year, including the declaration of commercial production from September 1, 2019 and the eighth mill coming on line in mid-December, which will increase annualized milling capacity to approximately 85 million tonnes.
• Copper production at Las Cruces and Kansanshi was lower in the year compared with 2018. At Las Cruces, production was impacted by an interruption to mining activity until July from a land slippage in January 2019 and a ball mill failure in September. Lower Kansanshi copper production was attributable to lower oxide ore grades and recoveries.
• The Kansanshi smelter processed 1,317,826 dry metric tonnes ("DMT") of copper concentrate, produced 324,281 tonnes of copper anode and 1,236,000 tonnes of sulphuric acid and maintained a 97% recovery rate for the year, which included a planned two-week maintenance shutdown of the smelter acid plant in the third quarter.
• Total gold production of 256,913 ounces was 39% higher than in 2018, reflecting Cobre Panama's contribution of 60,074 ounces and higher gold production at Kansanshi following operational enhancements.
• Gross profit of $790 million and comparative EBITDA7 of $1,609 million for the full year 2019 include the contribution of $92 million and $203 million, respectively, from Cobre Panama subsequent to the declaration of commercial production. Also reflected are
  a 5% decrease in the realized copper price compared with 2018 and a $44 million gain realized by the corporate copper sales hedge program.
• Following finalization of the Las Cruces post-land slippage mine plan, 2020 is expected to be the final year of production for the open-pit operation. As a result, and with the volatility in the short-term copper price, an impairment charge of $97 million has been recognized.
• Financial results include comparative earnings of $2497 million ($0.36 per share7) , net loss attributable to shareholders of the Company of $57 million ($0.08 per share), and cash flows from operating activities of $889 million ($1.29 per share). Comparative earnings include net interest expense of $250 million, of which a significant proportion would previously have been eligible for capitalization but is now expensed following declaration of commercial production at Cobre Panama on September 1, 2019. Net loss attributable to shareholders includes a $182 million charge for the discounting of Zambian VAT balances as well as the $97 million impairment charge recognized on Las Cruces.
• Copper all-in sustaining cost ("AISC") was $1.78 per lb and cash cost of copper production ("C1") was $1.31 per lb for the year, a $0.04 per lb and $0.03 per lb increase, respectively, compared to 2018. The AISC and C1 cash cost reflects four months of commercial production at Cobre Panama as well as the impact of lower production at Las Cruces and Kansanshi.

First Quantum Minerals Ltd. | 2019 ANNUAL REPORT 7

Management's Discussion and Analysis (continued)

Consolidated Operational Information

		Q4 2019		Q3 2019		Q4 2018		2019		2018
Copper production (tonnes) 1,2		204,270		192,510		158,304		702,148		605,853
Copper sales (tonnes) 2,4		205,964		203,827		156,212		689,386		596,513
Cash cost of copper production	$	1.24	$	1.36	$	1.23	$	1.31	$	1.28
(C1)(per lb) 5,6
Total cost of copper production	$	2.07	$	2.20	$	2.04	$	2.16	$	2.11
(C3)(per lb) 5,6
All-in sustaining cost (AISC)(per lb) 5,6	$	1.73	$	1.86	$	1.68	$	1.78	$	1.74
Realized copper price (per lb) 2	$	2.62	$	2.62	$	2.83	$	2.70	$	2.84
Gold production (ounces) 2		77,789		70,120		48,039		256,913		185,414
Gold sales (ounces) 2,3		79,409		71,664		53,221		254,785		193,072
		Q4 2019		Q3 2019		Q4 2018		2019		2018
Copper production (tonnes) -		204,270		155,727		158,304		634,444		605,853
commercial
Copper production (tonnes) -		-		36,783		-		67,704		-
pre-commercial
Copper production (tonnes)		204,270		192,510		158,304		702,148		605,853
Gold production (ounces) -		77,789		56,550		48,039		232,793		185,414
commercial
Gold production (ounces) -		-		13,570		-		24,120		-
pre-commercial
Gold production (ounces)		77,789		70,120		48,039		256,913		185,414
Consolidated Financial Information
		Q4 2019		Q3 2019		Q4 2018		2019		2018
Sales revenues		1,284		987		1,054		4,067		3,966
Gross profit		259		150		280		790		978
Net earnings (loss) attributable to		(115)		(73)		198		(57)		441
shareholders of the Company
Basic and diluted earnings (loss)	$	(0.17)	$	(0.11)	$	0.29	$	(0.08)	$	0.64
per share
Comparative EBITDA 7, 8		511		354		481		1,609		1,737
Comparative earnings 7		35		32		182		249		487
Comparative earnings per share 7	$	0.05	$	0.05	$	0.26	$	0.36	$	0.71

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