MIRA
INFORM REPORT
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Report Date : |
08.06.2007 |
IDENTIFICATION DETAILS
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Name : |
FIRST QUANTUM MINING & OPERATIONS LTD |
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Registered Office : |
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Country : |
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Date of Incorporation : |
1990 |
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Com. Reg. No.: |
36100 |
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Legal Form : |
Private Limited Liability Company |
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Line of Business : |
Mining and exploitation of cooper ore |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
KWACHA 3,000,000,000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
COmpany NAME
FIRST QUANTUM MINING
& OPERATIONS LTD
ADDRESS
Street :
P.O. Box :
230022
Town :
Country :
Telephone :
(260 2) 651 555-9
Fax : (260 2) 651 555 / 651 363
E-Mail : rudi.badenhorst@fqml.com
Shortform Name
FQMO
Trading Styles
Bwana Mkubwa Mine
Formerly Known As
First Quantum Minerals
Zambia Limited
SENIOR COMPANY
PERSONNEL
Name Position
1. Philip K.R
Pascall Chairman and Chief Executive Officer
2. Mathew Pascall Managing
Director
3. A. M. Pascall Director
4. Rudi Badenhorst Project
Director
5. Gavin White Financial Manager
6. Andrew Sharp Financial
Controller
7. Aptone Banda Accountant
Total Employees
1,105
PAYMENTS
No complaints have been
heard regarding payments from local suppliers or banks.
Subject
is a wholly owned subsidiary of First Quantum Minerals Ltd. of
Ownership inspires
confidence and we consider it is acceptable to deal with subject for LARGE
amounts.
Opinion on maximum credit
: KWACHA 3,000,000,000 (higher amount may be considered with assurances of the
parent company)
Trade risk assessment :
It is normal accepted
practice for international suppliers to deal on secured terms with Zambian
importers.
PRINCIPAL BANKERS
NAME :
STANDARD CHARTERED BANK ZAMBIA LIMITED
Branch :
South
PO Box :
31934
Town :
Telephone : (260 2) 239 242
Fax :
(260 2) 232 092
Acc. No. : 8700238123700
Subject also has an
account with:
Stanbic Bank Zambia
Limited
Main Branch
Telephone : (1) 229 285
Fax :
(1) 221 152
FINANCIAL INFORMATION
Balance sheets are not
available. However, the subject interviewed offered the following information :
Sales Turnover : US DLRS 31,000,000 - 2006 - exact *
: US DLRS 48,000,000 - 2006 - exact **
Gross Profit :
US DLRS 3,000,000 - 2006 - exact *
: US DLRS 4,500,000 - 2006
- exact **
Net Profit :
US DLRS 2,200,000 - 2006 - exact *
: US DLRS 3,300,000 - 2006
- exact **
* six month period
(January -June).
** six month period
(July-December) after to unify all subject's mining activities.
The following
consolidated financial information as at 31 December applies to the subject's
parent company, First Quantum Minerals Ltd :
2006 2005
(in thousands of US dollars) ASSETS
Current assets
Cash and cash equivalents 249,544 82,910
Restricted cash 15,000 20,162
Accounts receivable 142,821 62,938
Inventory 147,374 60,854
Current portion of other assets 10,108 7,506
564,847 234,370
Investments 45,171 9,522
Property, plant and equipment 1,068,118 471,294
Other assets 66,287 31,325
1,744,423 746,511
LIABILITIES
Current liabilities
Accounts payable and
accrued liabilities 84,802 63,492
Current taxes payable 110,039 16,055
Current portion of long-term debt 57,713 58,255
Current portion of other liabilities 19,389 20,377
271,943 158,179
Long-term debt 237,203 176,767
Other liabilities 38,211 34,340
Future income tax liabilities 173,319 43,330
720,676 412,616
Minority interests 88,646 22,454
809,322 435,070
Shareholders’ equity
Equity accounts 396,017 166,592
Retained earnings 539,084 144,849
935,101 311,441
1,744,423 746,511
CONSOLIDATED STATEMENT OF INCOME
Sales revenues
Copper 1,073,943 434,100
Gold 20,128 6,715
Acid 412 3,799
1,094,483 444,614
Cost of sales (264,600) (151,904)
Depletion and amortization (56,067) (36,545)
Operating profit 773,816 256,165
Other expenses/income
Exploration (18,889) (7,493)
General and administrative (19,182) (9,724)
Interest and financing fees
on long-term debt (32,729) (19,385)
Other expenses/income (57,416) (16,996)
Gain on disposal of investment 1,805 16,127
(126,411) (37,471)
Earnings before income taxes
and minority interests 647,405 218,694
Income taxes (166,845) (45,612)
Minority interests (66,174) (20,264)
Net earnings for the year 414,386 152,818
Retained earnings (deficit)
beginning of year 144,849 (3,936)
Dividends (20,151) (4,033)
Retained earnings end of year 539,084 144,849
Earnings per common share
Revenues :
US DLRS 51,342,000 - 2002 - exact
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US DLRS 60,454,000 - 2003 - exact
: US DLRS 113,523,000 - 2004
- exact
: US DLRS 444,614,000 - 2005
- exact
: US DLRS 1,073,943,000 - 2006 - exact
Loss for the period : US DLRS
(3,791,000)- 2002 - exact
: US DLRS (31,479,000)- 2003
- exact
Profits :
US DLRS 28,010,000 - 2004 - exact
: US DLRS 152,818,000 - 2005
- exact
: US DLRS 539,084,000 - 2006
- exact
Financial year ends 31
December.
LEGAL STATUS AND
HISTORY
Date Started : 1990
History : Subject was
established in 1990 as First Quantum Minerals Zambia Limited. In July 2006 the subject
adopted the present style, when all the subject's mining operations where
unified.
C.R. No. : 36100
Capital : KWACHA
5,000,000
Private Limited Liability
Company with the following shareholders :
1. First Quantum Minerals
Ltd 80%
Tel: (1 604) 688 6577
Fax: (1 604) 688 3818
Email: andrew.hancharyk@fqml.com
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Mill House
Tel : (44) 140 327 3484
Fax : (44) 140 327 3494
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Tel : (61 9) 893 460 100
Fax : (61 9) 892 262 522
2. Undisclosed local
minority investors 20%
Parent Company
First
Quantum Minerals Ltd. is a mining and metals company whose principal activities
include mineral exploration, development and mining. The Company produces LME
grade "A" copper cathode and sulphuric acid. Its operations in
First
Quantum also holds strategic investments in the Nkana underground copper mine
and cobalt refinery (16.9% interest) and the Mufulira underground copper mine,
smelter and copper refinery (16.9% interest) in
Affiliated companies of
First Quantum Mining & Operations Ltd :
Associates
1. Compagnie Minera De
Sakania SPRL (COMISA)
Democratic
Tel: (243) 814 000 051 / 9703 1133
Fax: (243) 234 2212
2. Mauritanian Copper
Mines SARL (Guelb Moghrein)
Northeast of Akjoujt
3. Mopani Copper Mines
Plc
Nkana & Mufulira Mines
Central Avenue
Tele: (260 2) 247 000
4. Bwana Mkubwa Mining
Ltd
Tel: (260 2) 655 433 / 655 050
Fax: (260 2) 655 399
5. Frontier SPRL
Industrial Area
Telephone: (260 2) 650 993
Fax
: (269 2) 651 363
6. Kansanshi Mining PLC
(Kansanshi)
Kansanshi Mines
Solwezi
North Western
Telephone: (260 2) 658 000
Fax
: (260 2) 658 000
7. Adastra Minerals Inc
(Adastra)
ACTIVITIES
The Company is involved
in the following activities :
Mining and exploitation of
cooper ore at an open pit Kansanshi copper-gold deposit.
Subject sells its copper
ore to its affiliated company Kansanshi Mining Plc which is engaged in copper
processing.
Production Statistics :
Waste Mined :
4,032,000 of tonnes in 2004 (September-December)
2006 production : 127,179 tonnes
Imports equipment from
FACILITIES
The Company has the
following facilities :
Administrative offices
are located in a commercial area of
The
Kansanshi copper-gold mine is located in the North Western Province of Zambia,
approximately ten kilometres north of Solwezi and 180 kilometres to the
northwest of the Copperbelt town of
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)