First Quantum Minerals Ltd "Integral Audit: progress update encouraging" (Buy)

Research evidence excerpt

First Quantum Minerals Ltd "Integral Audit: progress update encouraging" (Buy)

n June after

12/26E

receiving formal approval on 7-Apr. This in part is to reduce the risk of acid rain. We UBS Cons.

expect formal discussions with the Panamanian govt on the new licence structure to Q1E (0.24) (0.18)

start shortly after the final integral audit report is published in mid-June; it remains Q2E (0.13) 0.05

unclear how the economics of Cobre Panama will change though, based on feedback Q3E 0.03 0.21

from expert calls, we see the potential that the govt could assume an equity stake in the Q4E 0.01 0.25

mine and lift the effective tax rate to the level of other LatAm countries (eg Chile 40- 12/26E (0.32) 0.38

45%). In our opinion, the restart of CP is likely as important to the Panamanian govt 12/27E 1.70 1.90

(~5% GDP, ~38k jobs) as it is to FM; importantly, public opinion appears to have 12/28E 2.55 2.67

improved with a recent Gallup poll suggesting 55% of Panamanians support the

Myles Allsop

reopening of CP so long as it is transparent & there is a tangible benefit for the country. Analyst

myles.allsop@ubs.com

Key takeaways from #6 monthly update of the Integral Audit of CP +44-20-7568 1693

1. Scope of the audit: Daniel Major

Analyst

The audit is a full ESG + operational + legal due diligence (not just environmental); it daniel.major@ubs.com

+44-20-7568 3472covers four main pillars:

Alex Stansbury, CFA

Legal, labour, and tax compliance: compliance with concessions, contracts, Analyst

royalties, labour obligations; cross-checking production vs government reporting alex.stansbury@ubs.com

+1-212-882 0097

Environmental compliance, focused on 370 environmental commitments from

the approved Environmental Impact Assessment (EIA): covers water, biodiversity,

waste, emissions