F-80/A

As filed with the Securities and Exchange Commission on March 12, 2013

Registration No. 333- 185937

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Amendment No. 3

to

FORM F-80

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

FIRST QUANTUM MINERALS LTD.

(Exact Name of Registrant as specified in its charter)

British Columbia, Canada	1000	N/A
(Province or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number (if applicable))	I.R.S. Employer Identification Number (if applicable)

543 Granville Street, 8th Floor, Vancouver, British Columbia, Canada V6C 1X8, 604-688-6577

(Address and telephone number of Registrant’s principal executive offices)

Puglisi & Associates

850 Library Avenue, Suite 204

Newark, DE 19711

302-738-6680

(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)

Copy to:

P.J. Himelfarb, Esq.	Daniel Batista, Esq.
Weil, Gotshal & Manages LLP	Fasken Martineau DuMoulin LLP
200 Crescent Court, Suite 300	333 Bay Street, Suite 2400
Dallas, TX 75201	Toronto, ON M5H 2T6
(214) 746-7700	(416) 868-3423

Approximate date of commencement or proposed sale of the securities to the public:

As soon as practicable after this Registration Statement becomes effective.

This registration statement and any amendment thereto shall become effective upon filing with the Commission in accordance with Rule 467(a).

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to the home jurisdiction’s shelf prospectus offering procedures, check the following box.  ¨

Explanatory Note

The Registrant hereby amends the Registration Statement on Form F-80 filed with the U.S. Securities and Exchange Commission on January 9, 2013 (the “Registration Statement”), as amended on February 8, 2013 and February 27, 2013, to include the Notice of Variation and Extension and related Letter of Transmittal, dated March 11, 2013, which the Registrant filed in its home jurisdiction as a supplement to the Offer to Purchase and Circular, dated January 9, 2013, including the original Letter of Transmittal and Notice of Guaranteed Delivery, which were previously filed with the Registration Statement.

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PART I

INFORMATION REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS

ITEM 1. HOME JURISDICTION DOCUMENTS

Offer to Purchase and Circular dated as of January 9, 2013, including the original Letter of Transmittal and Notice of Guaranteed Delivery. ⁽¹⁾

Notice of Variation and Extension dated as of February 8, 2013. ⁽²⁾

Notice of Variation and Extension dated as of February 27, 2013. ⁽³⁾

Notice of Variation and Extension dated as of March 11, 2013 including the Letter of Transmittal.

ITEM 2. INFORMATIONAL LEGENDS

See “Notice to Shareholders in the United States” in the Offer to Purchase and Circular dated as of January 9, 2013. ⁽¹⁾

See “Notice to Shareholders in the United States” in the Notice of Variation and Extension dated as of February 8, 2013. ⁽²⁾

See “Notice to Shareholders in the United States” in the Notice of Variation and Extension dated as of February 27, 2013. ⁽³⁾

See “Notice to Shareholders in the United States” in the Notice of Variation and Extension dated as of March 11, 2013.

ITEM 3. INCORPORATION OF CERTAIN INFORMATION BY REFERENCES

See “Documents Incorporated by Reference” in the Offer to Purchase and Circular dated as of January 9, 2013. ⁽¹⁾ As required by this Item, the Offer to Purchase and Circular provides that copies of the documents incorporated by reference may be obtained on request without charge from the Corporate Secretary of First Quantum Minerals Ltd. at 8^th Floor, 543 Granville Street, Vancouver, British Columbia, Canada, V6C 1X8 (telephone: (604) 688-6577).

ITEM 4. LIST OF DOCUMENTS FILED WITH THE COMMISSION

See “Documents Filed With the SEC as Part of the Registration Statement” in the Offer to Purchase and Circular dated as of January 9, 2013. ⁽¹⁾

(1) Previously filed with the Registrant’s Form F-80 (Commission File No. 333- 185937) filed with the U.S. Securities and Exchange Commission on January 9, 2013.

(2) Previously filed with the Registrant’s Amendment Number 1 to Form F-80 (Commission File No. 333- 185937) filed with the U.S. Securities and Exchange Commission on February 8, 2013.

(3) Previously filed with the Registrant’s Amendment Number 2 to Form F-80 (Commission File No. 333- 185937) filed with the U.S. Securities and Exchange Commission on February 27, 2013.

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This document is important and requires your immediate attention. If you have any questions as to how to deal with it, you should consult your investment dealer, broker, bank manager, lawyer or other professional advisor. No securities regulatory authority has expressed an opinion about, or passed upon the fairness or merits of, the offer contained in this document, the securities offered pursuant to such offer or the adequacy of the information contained in this document and it is an offence to claim otherwise.

This document does not constitute an offer or a solicitation to any person in any jurisdiction in which such offer or solicitation is unlawful. The offer is not being made or directed to, nor will deposits of shares be accepted from or on behalf of, shareholders in any jurisdiction in which the making or acceptance of the offer would not be in compliance with the laws of such jurisdiction. However, the Offeror may, in its sole discretion, take such action as it may deem necessary to extend the offer to shareholders in any such jurisdiction.

March 11, 2013

NOTICE OF VARIATION AND EXTENSION

of FQM (Akubra) Inc.’s offer to purchase

all of the outstanding common shares (together with associated rights issued under the shareholder rights plan)

of

INMET MINING CORPORATION

for consideration per common share of Inmet Mining Corporation (“Inmet”) of, at the election of each holder, $72.00 in cash (the “Cash Alternative”)

or

3.2967 common shares of First Quantum (the “Share Alternative”)

or

$36.00 and 1.6484 common shares of First Quantum (the “Cash and Share Alternative”) subject, in each case, to proration as set out in the Original Offer

FQM (Akubra) Inc., a direct wholly-owned subsidiary of First Quantum Minerals Ltd. (“First Quantum”), and First Quantum (together, the “Offeror”) hereby gives notice that it has varied its offer dated January 9, 2013, as previously varied by notices of variation and extension dated February 8, 2013 and February 27, 2013 (together, the “Original Offer”) to purchase, on and subject to the terms and conditions of the Original Offer, all of the outstanding common shares of Inmet, including any common shares of Inmet that may become issued and outstanding after the date of the Offer but before the Expiry Time (as defined herein) upon the exercise, conversion or exchange of any Convertible Securities, together with the SRP Rights issued under the Inmet Shareholder Rights Plan (collectively, the “Inmet Shares”), in order to, among other things: (a) extend the Original Offer to 11:59 p.m. (Eastern Daylight Time) on March 21, 2013, (b) provide additional disclosure with respect to certain matters, and (c) amend the conditions of the Original Offer. The Original Offer, as varied hereby, is referred to herein as the “Offer”.

THE ORIGINAL OFFER HAS BEEN AMENDED AND EXTENDED, AND IS NOW OPEN FOR ACCEPTANCE
UNTIL 11:59 P.M. (EASTERN DAYLIGHT TIME) ON MARCH 21, 2013 (THE “EXPIRY TIME”), UNLESS
FURTHER EXTENDED OR WITHDRAWN.

This Notice of Variation and Extension should be read in conjunction with the Original Offer and the circular that accompanied the offer dated January 9, 2013 (the “Original Circular”, and, together with the Original Offer, the “Original Offer and Circular”). The Original Offer and Circular and this Notice of Variation and Extension together constitute the “Offer and Circular”. Except as otherwise set forth herein, the terms and conditions previously set forth in the Original Offer and Circular, Letter of Transmittal and Notice of Guaranteed Delivery continue to be applicable in all respects. All references to the “Offer” in the Original Offer and Circular, the Letter of Transmittal, the Notice of Guaranteed Delivery and this Notice of Variation and Extension mean the Original Offer as amended hereby, and all references in such documents to the “Circular” or the “Offer and Circular” mean the Original Offer and Circular as amended hereby. Unless the context requires otherwise, capitalized terms used herein but not defined herein that are defined in the Original Offer and Circular have the respective meanings given to them in the Original Offer and Circular.

The Information Agent for the Offer is:

If you have any questions or need any assistance in depositing your Inmet Shares, please call Georgeson at: Toll Free (North America): 1-866-656-4120 Outside North America Call Collect: 1-781-575-2421 Email: askus@georgeson.com

Shareholders who wish to accept the Offer must properly complete and execute the Letter of Transmittal (printed on blue or green paper) or a manually signed facsimile thereof, and deposit it, at or prior to the Expiry Time, together with the certificate(s) representing their Inmet Shares and all other required documents, at the Toronto office of the Depositary in accordance with the instructions in the Letter of Transmittal. Alternatively, Shareholders may (i) accept the Offer by following the procedures for book-entry transfer of Inmet Shares set out in Section 3 of the Original Offer, “Manner for Acceptance – Acceptance by Book-Entry Transfer”, or (ii) follow the procedure for guaranteed delivery set forth in Section 3 of the Original Offer, “Manner for Acceptance – Procedure for Guaranteed Delivery” by using the Notice of Guaranteed Delivery (printed on yellow paper) or a manually signed facsimile thereof. A SHAREHOLDER WHO HAS PREVIOUSLY DEPOSITED A LETTER OF TRANSMITTAL DOES NOT NEED TO DELIVER A NEW ONE UNLESS IT WISHES TO MAKE A TAX ELECTION AS DESCRIBED BELOW.

Shareholders who have previously deposited a Letter of Transmittal (printed on blue paper) who qualify as an Eligible Holder (defined below) and who wish to make a Tax Election, must properly complete and execute the enclosed Letter of Transmittal (printed on green paper) including Block G or a manually signed facsimile thereof, and deposit it, at or prior to the Expiry Time, together with the certificate(s) representing their Inmet Shares (unless such certificate(s) have already been deposited with the Depositary) and all other required documents, at the Toronto office of the Depositary in accordance with the instructions in the green Letter of Transmittal. For greater certainty, if the Letter of Transmittal (printed on green paper) is not properly completed or has not been deposited with the Depositary in accordance with the instructions in the Letter of Transmittal, an Eligible Holder may be deemed, in the sole discretion of the Offeror, to be ineligible to make a Tax Election. Upon a Shareholder depositing a properly completed green Letter of Transmittal with the Depositary in accordance with the instructions in such Letter of Transmittal, any prior Letter of Transmittal submitted by such Shareholder will be disregarded.

Shareholders may continue to use the original Letter of Transmittal (printed on blue paper) or the Notice of Guaranteed Delivery (printed on yellow paper) to accept the Offer if they will not be making a Tax Election, in which case the original Letter of Transmittal or the Notice of Guaranteed Delivery, as the case may be, shall be deemed to be amended to reflect the terms and conditions of the Original Offer, as amended by this Notice of Variation and Extension.

Shareholders whose Inmet Shares are registered in the name of an investment advisor, stockbroker, bank, trust company or other nominee should immediately contact that intermediary for assistance if they wish to accept the Offer in order to take the necessary steps to be able to deposit such Inmet Shares under the Offer. Intermediaries likely have established tendering cut-off times that are up to 48 hours prior to the Expiry Time. Shareholders must instruct their brokers or other intermediaries promptly if they wish to tender.

All payments under the Offer will be made in Canadian dollars. Shareholders will not be required to pay any fee or commission if they accept the Offer by depositing their Inmet Shares directly with the Depositary.

Questions and requests for assistance may be directed to the Depositary or the Information Agent, whose contact details are provided on the back cover of this document. Additional copies of this document, the Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained without charge on request from the Depositary or the Information Agent and are accessible on the Canadian Securities Administrators’ website at www.sedar.com. This website address is provided for informational purposes only and no information contained on, or accessible from, such website is incorporated by reference herein unless expressly incorporated by reference.

No broker, dealer, salesperson or other person has been authorized to give any information or make any representation other than those contained in this document, and, if given or made, such information or representation must not be relied upon as having been authorized by the Offeror, First Quantum, the Information Agent or the Depositary.

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This document does not constitute an offer to sell or a solicitation of an offer to buy to any person in any jurisdiction in which such offer or solicitation is unlawful. The Offer is not being made or directed to, nor will deposits of Inmet Shares be accepted from or on behalf of, Shareholders in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the Laws of such jurisdiction. However, the Offeror may, in its sole discretion, take such action as it may deem necessary to extend the Offer to Shareholders in any such jurisdiction.

This document contains no offer to the public within the meaning of section 102B of the United Kingdom Financial Services and Markets Act 2000, as amended (“FSMA”) or otherwise. This document is not a prospectus for the purposes of section 85(1) of the FSMA. Accordingly, this document has not been nor will it be approved as a prospectus by the United Kingdom Financial Services Authority (the “FSA”) under section 87A of the FSMA and it has not been filed with the FSA pursuant to the United Kingdom Prospectus Rules nor has it been approved by a person authorized under the FSMA or by the LSE.

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NOTICE TO INMET SHAREHOLDERS IN THE UNITED STATES

The Offer is being made for the securities of a Canadian foreign private issuer that does not have securities registered under Section 12 of the U.S. Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”). Accordingly, the Offer is not subject to Section 14(d) of the U.S. Exchange Act, or Regulation 14D promulgated thereunder. The Offer is being conducted in accordance with Section 14(e) of the U.S. Exchange Act and Regulation 14E promulgated thereunder as applicable to a tender offer (i) in which less than 40 percent of the class of securities outstanding that is subject to the tender offer is held by U.S. holders and (ii) that is conducted under applicable U.S. – Canadian multijurisdictional disclosure system and cross-border tender offer rules that permit the Offeror, a Canadian foreign private issuer, to prepare the Offer and Circular in accordance with the disclosure requirements of Canadian provincial and federal law. The Offer is made in the United States with respect to securities of a “foreign private issuer”, as such term is defined in Rule 3b-4 promulgated under the U.S. Exchange Act, in accordance with Canadian provincial and federal corporate and takeover offer rules.

First Quantum has filed with the U.S. Securities and Exchange Commission (the “SEC”) a Registration Statement on Form F-80 and other documents and information, and expects to mail this Notice of Variation and Extension to Shareholders concerning the Offer and the proposed combination or acquisition of Inmet. Pursuant to Section V(D) of the Form F-80 instructions, the Offeror is exempt from filing a Tender Offer Statement on Schedule TO. SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND OFFER AND CIRCULAR AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and Shareholders will be able to obtain the documents free of charge at the SEC’s website, www.sec.gov.

The Offer is being made for the securities of a Canadian issuer and by a Canadian issuer that is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare the Offer and Circular in accordance with the disclosure requirements of Canada. Shareholders should be aware that such requirements are different from those of the United States. The financial statements included or incorporated by reference herein have been prepared in accordance with Canadian generally accepted accounting principles, and may be subject to Canadian auditing and auditor independence standards, and thus may not be comparable to financial statements of U.S. companies.

Shareholders in the United States should be aware that the disposition of their Inmet Shares and the acquisition of First Quantum Shares by them as described herein may have tax consequences both in the United States and in Canada. Such consequences may not be fully described herein and such Shareholders are encouraged to consult their tax advisors. See Section 19 of the Original Circular, “Certain Canadian Federal Income Tax Considerations”, and Section 20 of the Original Circular, “Certain U.S. Federal Income Tax Considerations”.

The enforcement by Shareholders of civil liabilities under the U.S. federal securities laws may be affected adversely by the fact that First Quantum is incorporated under the laws of the Province of British Columbia, that Inmet is incorporated under the laws of Canada, and that some or all of their respective officers and directors may be residents of jurisdictions outside the United States, that some or all of the experts named herein may be residents of jurisdictions outside the United States and that all or a substantial portion of the assets of First Quantum and Inmet and said persons may be located outside the United States.

THE SECURITIES OFFERED PURSUANT TO THE OFFER AND CIRCULAR HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY U.S. STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY U.S. STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE OFFER AND CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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The Offer does not constitute an offer to sell or a solicitation of an offer to buy any securities in any state in the United States in which such offer or solicitation is unlawful. The Offer is not being made or directed to, nor is this document being mailed to, nor will deposits of Inmet Shares be accepted from or on behalf of, Shareholders in any state in the United States in which the making or acceptance of the Offer would not be in compliance with the laws of such state. The Offeror may, in its sole discretion, take such action as it may deem desirable to extend the Offer to Shareholders in any such state. Notwithstanding the foregoing, the Offeror may elect not to complete such action in any given instance. Accordingly, the Offeror cannot at this time assure holders of Inmet Shares that otherwise valid tenders can or will be accepted from holders resident in all states in the United States.

Shareholders should be aware that, during the period of the Offer, the Offeror or its affiliates, directly or indirectly, may bid for or make purchases of First Quantum Shares or Inmet Shares, or certain related securities, as permitted by applicable laws or regulations of the United States, Canada or its provinces or territories.

The Offer and Circular and certain of the information incorporated by reference into the Offer and Circular have been prepared in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of United States securities laws. In particular, and without limiting the generality of the foregoing, the terms “mineral reserves”, “probable reserves”, “proven reserves”, “inferred resources”, “indicated resources”, “measured resources” and “mineral resources” used or incorporated by reference in the Offer and Circular are, unless otherwise stated, Canadian mining terms as defined in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resources and Mineral Reserves (“CIM”). CIM standards differ significantly from standards in the United States. While the terms “mineral resource”, “measured resources”, “indicated resources”, and “inferred resources” are recognized and required by Canadian regulations, they are not defined terms under standards in the United States. As such, information regarding mineralization and resources contained or incorporated by reference in the Offer and Circular may not be comparable to similar information made public by United States companies.

NOTICE TO HOLDERS OF CONVERTIBLE SECURITIES

The Offer is made only for the Inmet Shares and not for any Convertible Securities. Any holder of Convertible Securities who wishes to accept the Offer must, to the extent permitted by the terms thereof and applicable Laws, convert, exchange or exercise such Convertible Securities in order to deposit the resulting Inmet Shares in accordance with the terms of the Offer. Any such conversion, exchange or exercise must be completed sufficiently in advance of the Expiry Time to ensure that the holder of such Convertible Securities will be in a position to deposit such Inmet Shares at or prior to the Expiry Time, or in sufficient time to comply with the procedures referred to under “Manner for Acceptance – Procedure for Guaranteed Delivery” in Section 3 of the Original Offer.

The tax consequences to holders of Convertible Securities of converting, exchanging or exercising such Convertible Securities are not described in either Section 19 of the Original Circular, “Certain Canadian Federal Income Tax Considerations”, or in Section 20 of the Original Circular, “Certain U.S. Federal Income Tax Considerations”. Holders of Convertible Securities should consult their tax advisors for advice with respect to potential income tax consequences to them in connection with the decision whether to convert, exchange or exercise such Convertible Securities.

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STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

Certain information contained in the Original Circular under Section 7, “Reasons to Accept the Offer”, Section 8, “Purpose of the Offer and First Quantum’s Plans for Inmet”, Section 10, “Source of Funds” and Section 13, “Acquisition of Inmet Shares Not Deposited”, in addition to certain information contained elsewhere in the Offer and Circular, contain “forward-looking statements” and are prospective. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as “plans”, “expects” or “does not expect”, “is expected”, “is subject to”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. Such statements are qualified in their entirety by assumptions and the inherent risks and uncertainties surrounding future expectations. Such forward-looking statements are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Offeror or First Quantum to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from the expectations of the Offeror or First Quantum include, among other things: the inherent risks and uncertainties involved in mining or the exploration and development of mineral properties; possible variations in ore reserves, grade or recovery rates; fluctuations in metal prices (including copper prices); fluctuations in currency exchange rates; fluctuations in interest rates; the availability of labour, equipment and other infrastructure; changes in project parameters as plans continue to be refined; potential project cost delays and overruns or unanticipated costs and expenses; political instability whether globally or in the countries in which Inmet or First Quantum operate; changes in applicable Laws, including Laws related to mining development, foreign investment, environmental protection, labour and employment and the protection of the health and safety of workers; possible defects to title of properties; failure of plant, equipment or processes to operate as anticipated; uncertainties relating to timing of production and the cash and total costs of production; the possibility of accidents, labour strikes and work stoppages; general business and economic conditions globally; industry trends; the failure to meet certain conditions of the Offer and/or the failure to obtain the required approvals or clearances from government authorities on a timely basis or at all if the Offer is successful, the inability to successfully integrate Inmet’s operations and programs with those of First Quantum, including incurring and/or experiencing unanticipated costs and/or delays or difficulties relating to the integration of Inmet; and disruptions in business operations due to reorganization activities. Such forward-looking statements should therefore be construed in light of such factors. These factors are not intended to represent a complete list of the general or specific factors that could affect the Offeror and First Quantum. Additional factors may be noted elsewhere in the Offer and Circular and in any documents incorporated by reference into the Offer and Circular. Readers are cautioned not to put undue reliance on forward-looking statements. The Offeror and First Quantum disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable Laws.

Neither the Offeror or First Quantum nor any of their respective directors or officers has verified the accuracy or completeness of information or statements contained herein which are made by or derived from third-party sources (including any projections or estimates made by third-party research analysts). Such third-party sources may have failed to identify events or facts which may have occurred or which may affect the significance or accuracy of any such information or statements. The Offeror and First Quantum have no means of verifying the accuracy or completeness of such information or statements made by or derived from third-party sources or whether there has been any failure by such sources to identify events that may have occurred or may affect the significance or accuracy of any information or statements.

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CURRENCY AND EXCHANGE RATES

In the Offer and Circular, all references to (i) “$” or “dollars” refer to Canadian dollars, (ii) “US$” refer to U.S. dollars and (iii) “£” refer to Great British Pounds.

INFORMATION CONCERNING INMET

Except as otherwise indicated, the information concerning Inmet contained in the Offer and Circular has been taken from and is based solely upon Inmet’s public disclosure on file with the Securities Regulatory Authorities. Inmet has not reviewed this document and has not confirmed the accuracy and completeness of the information in respect of Inmet contained in this document. Although the Offeror and First Quantum have no knowledge that would indicate that any information or statements contained in this document concerning Inmet taken from, or based upon, such public disclosure contain any untrue statement of a material fact or omit to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made, neither the Offeror or First Quantum nor any of their respective directors or officers has verified, nor do they assume any responsibility for, the accuracy or completeness of such information or statements or for any failure by Inmet to disclose events or facts which may have occurred or which may affect the significance or accuracy of any such information or statements but which are unknown to the Offeror or First Quantum. The Offeror and First Quantum have no means of verifying the accuracy or completeness of any of the information contained herein that is derived from Inmet’s publicly available documents or records or whether there has been any failure by Inmet to disclose events that may have occurred or may affect the significance or accuracy of any information. Except as otherwise indicated, information concerning Inmet is given based on information in Inmet’s public disclosure available as of March 11, 2013.

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NOTICE OF VARIATION AND EXTENSION

March 11, 2013

TO: THE HOLDERS OF COMMON SHARES OF INMET

This Notice of Variation and Extension amends and supplements the Original Offer and Circular, pursuant to which the Offeror is offering to purchase, on the terms and subject to the conditions contained therein, all of the issued and outstanding Inmet Shares.

Except as otherwise set forth in this Notice of Variation and Extension, the terms and conditions previously set forth in the Original Offer and Circular, Letter of Transmittal and Notice of Guaranteed Delivery continue to be applicable in all respects. This Notice of Variation and Extension should be read in conjunction with the Original Offer and Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery.

All references to the “Offer” in the Original Offer and Circular, the Letter of Transmittal, the Notice of Guaranteed Delivery and this Notice of Variation and Extension mean the Original Offer as amended hereby and all references in such documents to the “Offer to Purchase” and/or “Circular” mean the Original Offer and Circular as amended hereby. Unless the context otherwise requires, capitalized terms used in this Notice of Variation and Extension but not defined herein that are defined in the Original Offer and Circular have the respective meanings given to them in the Original Offer and Circular.

1.    Extension of the Offer

By written notice to the Depositary on March 11, 2013 and the issuance of a press release promptly thereafter, the Offeror has extended the time for acceptance of the Original Offer from 11:59 p.m. (Eastern Daylight Time) on March 11, 2013 to 11:59 p.m. (Eastern Daylight Time) on March 21, 2013. Accordingly, the definition of “Expiry Date” in the Original Offer and Circular is amended and restated in its entirety to read as follows:

“Expiry Date” means March 21, 2013 or such later date as is set out in a notice of extension of the Offer issued at any time and from time to time extending the period during which Inmet Shares may be deposited to the Offer, provided that, if such day is not a business day, then the Expiry Date shall be the next business day;

In addition, all references to “11:59 p.m. (Eastern Daylight Time) on March 11, 2013” in the Original Offer and Circular are amended to refer to “11:59 p.m. (Eastern Daylight Time) on March 21, 2013”.

2.    Amendments to Definitions

The definitions set out below contained in the Original Offer and Circular are amended and restated in their entirety to be read as follows:

“Letter of Transmittal” means the letter of acceptance and transmittal in the form accompanying this Notice of Variation and Extension (printed on green paper); and

“Offeror” means, collectively, FQM Akubra, a direct wholly-owned subsidiary of First Quantum, and First Quantum.

The following definition is hereby added to the “Glossary” section of the Offer and Circular:

“Eligible Holder” means a beneficial owner of Inmet Shares who is (a) a resident of Canada for the purposes of the Tax Act and any applicable income tax treaty or convention and who is not exempt from tax on income under the Tax Act, or (b) a non-resident of Canada for the purposes of the Tax Act and any

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applicable income tax treaty or convention, whose Inmet Shares constitute “taxable Canadian property” (as defined in the Tax Act) and are not “treaty protected property” (as defined in the Tax Act), or (c) a partnership if one or more members of the partnership are described in (a) or (b).

3.    Amendments to the Offer

Section 1 of the Original Offer is hereby amended to add the following to the end of such section:

A Shareholder who is an Eligible Holder and who elects the Cash and Share Alternative, elects (or is deemed to elect) the Share Alternative or elects the Cash Alternative but the prorating provisions of the Offer apply may, depending on the circumstances, obtain a full or partial tax-deferred “rollover” by making a joint election with First Quantum in prescribed form pursuant to subsection 85(1) or, where the Eligible Holder is a partnership, subsection 85(2) of the Tax Act (and the corresponding provisions of any applicable provincial legislation).

Shareholders who are Eligible Holders and who agree to make the necessary joint tax election(s) with First Quantum to obtain a full or partial tax-deferred disposition for Canadian federal income tax purposes must elect the Rollover Option in the Letter of Transmittal.

First Quantum will only take-up and pay for Deposited Inmet Shares of Eligible Holders who properly elect the Rollover Option in the Letter of Transmittal. FQM Akubra will take up and pay for the Deposited Inmet Shares of all other Shareholders.

4.    Amendments to Certain Canadian Federal Income Tax Considerations

Section 19 of the Original Circular is hereby amended to add the following to the end of such section:

Resident Holders – Exchange of Inmet Shares for First Quantum Shares only or a Combination of First Quantum Shares and Cash – Tax Election

The following applies to a Resident Holder who is an Eligible Holder. An Eligible Holder who receives First Quantum Shares only or a combination of cash and First Quantum Shares under the Offer and who elects the Rollover Option in the Letter of Transmittal may obtain a full or partial tax deferral in respect of the disposition of Inmet Shares as a consequence of filing with the CRA (and, where applicable, with a provincial tax authority) a joint election made by the Eligible Holder and First Quantum (the “Tax Election”) under subsection 85(1) of the Tax Act (or, in the case of a partnership, under subsection 85(2) of the Tax Act provided all members of the partnership jointly elect) and the corresponding provisions of any applicable provincial tax legislation.

So long as, at the time of the disposition, the adjusted cost base to an Eligible Holder of the holder’s Inmet Shares equals or exceeds the aggregate of the amount of any cash received as a result of such disposition by such holder and the Canadian dollar equivalent of the Remitted Amount, the Eligible Holder may select an Elected Amount so as to not realize a capital gain for the purposes of the Tax Act on the disposition. The “Elected Amount” means the amount selected by an Eligible Holder, subject to the limitations described below, in the Tax Election to be treated as the Eligible Holder’s proceeds of disposition of the Inmet Shares.

In general, where an election is made, the Elected Amount must comply with the following rules:

(a) the Elected Amount may not be less than the aggregate of the amount of cash received by the Eligible Holder as a result of the disposition and the Canadian dollar equivalent of the Remitted Amount;

(b) the Elected Amount may not be less than the lesser of the adjusted cost base to the Eligible Holder of the Inmet Shares disposed of, determined at the time of the disposition, and the fair market value of the Inmet Shares at that time; and

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(c) the Elected Amount may not exceed the fair market value of the Inmet Shares at the time of the disposition.

An Elected Amount that does not comply with the foregoing limitations will be automatically adjusted pursuant to the provisions of the Tax Act.

Where an Eligible Holder and First Quantum make an election that complies with the rules above, the tax treatment to the Eligible Holder generally will be as follows:

(a) the Inmet Shares will be deemed to have been disposed of by the Eligible Holder for proceeds of disposition equal to the Elected Amount;

(b) if the Elected Amount is equal to the aggregate of the adjusted cost base to the Eligible Holder of the Inmet Shares, determined at the time of the disposition, and any reasonable costs of disposition, no capital gain or capital loss will be realized by the Eligible Holder;

(c) subject to limitations set out in subsections 85(1) and (2) of the Tax Act, to the extent that the Elected Amount exceeds (or is less than) the aggregate of the adjusted cost base of the Inmet Shares to the Eligible Holder and any reasonable costs of disposition, the Eligible Holder will generally realize a capital gain (or capital loss); and

(d) the aggregate cost to the Eligible Holder of the First Quantum Shares acquired as a result of the disposition will be equal to the amount, if any, by which the Elected Amount exceeds the aggregate of the amount of cash received by the Eligible Holder as a result of the disposition and the Canadian dollar equivalent of the Remitted Amount, and such cost will be averaged with the adjusted cost base of all other First Quantum Shares held by the Eligible Holder immediately prior to the disposition for the purpose of determining thereafter the adjusted cost base of each First Quantum Share held by such Eligible Holder.

Consequently, notwithstanding the Tax Election, if the aggregate of the amount of cash received by an Eligible Holder as a result of the disposition and the Canadian dollar equivalent of the Remitted Amount exceeds the aggregate of the adjusted cost base of the Inmet Shares to the Eligible Holder determined at the time of the disposition and any reasonable costs of disposition, such Eligible Holder will realize a capital gain at least equal to the excess. See “Certain Canadian Federal Income Tax Considerations — Holders Resident in Canada — Taxation of Capital Gains and Capital Losses” in Section 19 of the Original Offer.

First Quantum has agreed to make a Tax Election pursuant to subsection 85(1) or subsection 85(2) of the Tax Act (and any similar provision of any provincial tax legislation) with an Eligible Holder at the amount determined by such Eligible Holder, subject to the limitations set out in subsection 85(1) or subsection 85(2) of the Tax Act (or any applicable provincial tax legislation).

A Tax Election Package providing certain instructions on how to complete the Tax Election forms may be obtained from the Depositary by checking the appropriate box on the Letter of Transmittal and delivering the Letter of Transmittal to the Depositary at or before the Expiry Time in accordance with the procedures set out in Section 3 of the Offer, “Manner of Acceptance — Letter of Transmittal”.

To make a Tax Election, an Eligible Holder must provide the necessary information and completed forms in accordance with the procedures set out in the Tax Election Package within 60 days after the Expiry Time. The information will include the number of Inmet Shares transferred, the consideration received and the applicable Elected Amount for the purposes of such election. Subject to the information and completed forms complying with the provisions of the Tax Act (and any applicable provincial income tax law), a copy of the election forms provided will be signed by First Quantum and mailed to the CRA (and the applicable provincial tax authority) with a copy to the Eligible Holder within 90 days of receipt by First Quantum. Each Eligible Holder is solely responsible for ensuring the Tax Election is completed correctly and forwarded to First Quantum by the required deadline.

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First Quantum will make a Tax Election only with an Eligible Holder, and at the amount selected by the Eligible Holder subject to the limitations set out in the Tax Act (and any applicable provincial tax legislation). First Quantum will not be responsible for the proper completion of any election form and the Eligible Holder will be solely responsible for the payment of any late filing penalty. First Quantum agrees only to execute any election form containing information provided by the Eligible Holder which complies with the provisions of the Tax Act (and any applicable provincial tax law) and to mail such election form to the CRA (and any applicable provincial tax authority) with a copy to the Eligible Holder within 90 days of receipt by First Quantum. At its sole discretion, First Quantum may accept and execute an election form that is not received within the 60 day period; however, no assurances can be given that First Quantum will do so. Accordingly, all Eligible Holders who wish to make a joint election with First Quantum should give their immediate attention to this matter. With the exception of execution and mailing of the properly completed election form by First Quantum, compliance with the requirements for a valid Tax Election will be the sole responsibility of the Eligible Holder making the election. Accordingly, neither First Quantum nor the Depositary will be responsible or liable for taxes, interest, penalties, damages or expenses resulting from the failure by anyone to provide information necessary for the election in accordance with the procedures set out in the Tax Election Package, to properly complete any election or to file it within the time prescribed and in the form prescribed under the Tax Act (or the corresponding provisions of any applicable provincial tax legislation).

For the CRA (and where applicable the provincial revenue authorities) to accept a Tax Election without a late filing penalty being paid by an Eligible Holder, the election form must be received by such revenue authorities on or before the day that is the earliest of the days on or before which either First Quantum or the Eligible Holder (or any partner thereof where the Eligible Holder is a partnership) is required to file an income tax return for the taxation year in which the disposition occurs. First Quantum’s 2013 taxation year is scheduled to end on December 31, 2013 and its tax return is required to be filed within six months from the end of the taxation year. Eligible Holders are urged to consult their own advisors as soon as possible respecting the deadlines applicable to their own particular circumstances. However, regardless of such deadlines, information and completed forms necessary for an Eligible Holder to make a Tax Election must be received by First Quantum in accordance with the procedures set out in the Tax Election Package no later than 60 days after the Expiry Time.

Any Eligible Holder who does not ensure that information and completed elect forms necessary to make an election have been received in accordance with the procedures set out in the Tax Election Package within 60 days after the Expiry Time will not be able to benefit from the tax deferral provisions in subsections 85(1) and 85(2) of the Tax Act (or the corresponding provisions of any applicable provincial tax legislation). Accordingly, all Eligible Holders who wish to make a Tax Election with First Quantum should give their immediate attention to this matter.

The instructions for requesting a Tax Election Package are set out in the Letter of Transmittal. Eligible Holders are referred to Information Circular IC 76-19R3 and Interpretation Bulletin IT-291R3 issued by the CRA for further information respecting the Tax Election. Eligible Holders wishing to make the Tax Election should consult their own tax advisors. The comments herein with respect to the Tax Election are provided for general assistance only. The law in this area is complex and contains numerous technical requirements.

Non-Resident Holders — Exchange of Inmet Shares for First Quantum Shares only or a Combination of First Quantum Shares and Cash — Tax Election

In the event that Inmet Shares constitute taxable Canadian property and are not treaty-protected property to a particular Non-Resident Holder, and such Non-Resident Holder receives First Quantum Shares only or a combination of cash and First Quantum Shares, then the Non-Resident Holder will be an Eligible Holder and may require First Quantum to jointly execute for filing with the CRA a Tax Election for the

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purpose of allowing the Eligible Holder to achieve a full or partial income tax deferral for Canadian federal income tax purposes. First Quantum will be required to execute the form and mail it to the CRA (with a copy to the Eligible Holder) only if the Eligible Holder complies with the requirements set forth above under “Resident Holders — Exchange of Common Shares for First Quantum Shares only or a Combination of First Quantum Shares and Cash — Tax Election” on the same basis as if the Non-Resident Holder were a Resident Holder thereunder. If the Eligible Holder complies with those requirements, generally the exchange may occur on a fully or partially income tax-deferred basis as described above under “Resident Holders — Disposition of Common Shares Pursuant to the Offer — Exchange of Common Shares for First Quantum Shares only or a Combination of First Quantum Shares and Cash — Tax Election” on the same basis as if the Non-Resident Holder were a Resident Holder thereunder.

The First Quantum Shares that such Eligible Holders receive for the Inmet Shares will generally be deemed to be taxable Canadian property. Non-Resident Holders who are Eligible Holders should consult their own tax advisors in this regard.

5.    Revised Conditions of the Offer

The Offeror has varied Subsection (a) of Section 4 of the Original Offer entitled “Conditions of the Offer” to read as follows:

(a) there shall have been validly deposited under the Offer and not withdrawn, at or prior to the Expiry Time, such number of Inmet Shares as constitutes more than 50 percent of the outstanding Inmet Shares (on a fully diluted basis).

In addition, all references to “The Offer is conditional upon, among other things, there having been validly deposited under the Offer and not withdrawn, at or prior to the Expiry Time, such number of Inmet Shares that constitutes at least 66 2/3 percent of the outstanding Inmet Shares (on a fully diluted basis)” in the Original Offer and Circular are amended to state “The Offer is conditional upon, among other things, there having been validly deposited under the Offer and not withdrawn, at or prior to the Expiry Time, such number of Inmet Shares as constitutes more than 50 percent of the outstanding Inmet Shares (on a fully diluted basis)”.

6.    Time for Acceptance

The Offer is now open for acceptance until 11:59 p.m. (Eastern Daylight Time) on March 21, 2013 unless further extended or withdrawn. Shareholders who have validly deposited and not withdrawn their Inmet Shares need take no further action to accept the Offer, other than Shareholders who qualify as an Eligible Holder and who wish to make a Tax Election.

7.    Manner for Acceptance

Inmet Shares may be deposited to the Offer in accordance with the provisions of Section 3 of the Original Offer, “Manner for Acceptance”.

8.    Take-Up of and Payment for Deposited Inmet Shares

If all of the conditions of the Offer described in Section 4 of the Original Offer, “Conditions of the Offer”, as amended by this Notice of Variation and Extension, have been satisfied or, where permitted, waived by the Offeror (at its sole discretion) at or prior to the Expiry Time, the Offeror will take up and pay for Deposited Inmet Shares that have not been properly withdrawn from the Offer not later than 10 days after the Expiry Date. Any Inmet Shares taken up will be paid for as soon as possible, and in any event not later than the earlier of (i) three business days after they are taken up and (ii) ten days after the Expiry Time. Any Inmet Shares

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deposited under the Offer after the first date on which Inmet Shares have been taken up by the Offeror will be taken up and paid for by the Offeror not later than 10 days after such deposit. See Section 6 of the Original Offer, “Take Up of and Payment for Deposited Inmet Shares”.

9.    Withdrawal of Deposited Inmet Shares

Deposited Inmet Shares may be withdrawn by or on behalf of the depositing Shareholder at any time before the Inmet Shares have been taken up by the Offeror under the Offer and in the other circumstances described in Section 7 of the Original Offer, “Withdrawal of Deposited Inmet Shares”. Except as so indicated or as otherwise required by applicable Laws, deposits of Inmet Shares are irrevocable.

10.    Recent Developments

On March 5, 2013, First Quantum reported its operational and financial results for the three months and year ended December 31, 2012.

On March 8, 2013, First Quantum received ICA Approval, satisfying a condition of the Offer.

11.    Consequential Amendments to the Original Offer and Circular

The Original Offer and Circular is hereby amended to the extent necessary to reflect the amendments contemplated by, and the information contained in, this Notice of Variation and Extension.

12.    Statutory Rights

Securities legislation in the provinces and territories of Canada provides security holders of the offeree issuer with, in addition to any other rights they may have at law, one or more rights of rescission, price revision or to damages, if there is a misrepresentation in a circular or notice that is required to be delivered to those security holders. However, such rights must be exercised within prescribed time limits. Security holders should refer to the applicable provisions of the securities legislation of their province or territory for particulars of those rights or consult a lawyer.

13.    Directors’ Approval

The contents of this Notice of Variation and Extension have been approved, and the sending thereof to the Shareholders has been authorized, by each of the First Quantum Board and the board of directors of the Offeror.

- 6 -

APPROVAL AND CERTIFICATE OF FIRST QUANTUM MINERALS LTD.

The foregoing, together with the Original Offer and Circular, contains no untrue statement of a material fact and does not omit to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances in which it was made.

Dated: March 11, 2013.

(Signed) PHILIP K.R. PASCALL Chairman and Chief Executive Officer	(Signed) HANNES MEYER Chief Financial Officer
On behalf of the Board of Directors
(Signed) MARTIN R. ROWLEY Director	(Signed) ANDREW ADAMS Director

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APPROVAL AND CERTIFICATE OF FQM (AKUBRA) INC.

The foregoing, together with the Original Offer and Circular, contains no untrue statement of a material fact and does not omit to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances in which it was made.

Dated: March 11, 2013.

(Signed) PHILIP K.R. PASCALL Chief Executive Officer	(Signed) MARTIN R. ROWLEY President
On behalf of the Board of Directors
(Signed) CHRISTOPHER LEMON Director	(Signed) SHARON LOUNG Director

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The Depositary for the Offer is:

By Mail	By Registered Mail, Hand or Courier
P.O. Box 7021 31 Adelaide Street East Toronto, ON M5C 3H2 Attention: Corporate Actions	100 University Avenue 9th Floor Toronto, ON M5J 2Y1 Attention: Corporate Actions

Toll Free (North America): 1-800-564-6253 Toll Free (Overseas): 1-514-982-7555 Email: corporateactions@computershare.com

The Information Agent for the Offer is:

Toll Free (North America): 1-866-656-4120 Outside North America Call Collect: 1-781-575-2421 Email: askus@georgeson.com

Any questions or requests for assistance or additional copies of the Notices of Variation and Extension, Offer and Circular, Letter of Transmittal or Notice of Guaranteed Delivery may be directed by Shareholders to the Depositary or the Information Agent at their respective telephone numbers and locations set out above.

THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. THIS LETTER OF TRANSMITTAL IS FOR USE IN ACCEPTING THE OFFER BY FQM (AKUBRA) INC. AND FIRST QUANTUM MINERALS LTD. TO PURCHASE ALL THE OUTSTANDING INMET SHARES.

LETTER OF TRANSMITTAL

for Deposit of Inmet Shares and SRP Rights of

INMET MINING CORPORATION

pursuant to the Offer dated January 9, 2013, as amended by the Notices of Variation and Extension dated

February 8, 2013, February 27, 2013 and March 11, 2013

made by

FQM (Akubra) Inc.,

a direct wholly-owned subsidiary of First Quantum Minerals Ltd.

and

THE ORIGINAL OFFER HAS BEEN AMENDED AND EXTENDED, AND IS NOW OPEN FOR

ACCEPTANCE UNTIL 11:59 P.M. (EASTERN DAYLIGHT TIME) ON MARCH 21, 2013 (THE “EXPIRY

TIME”), UNLESS FURTHER EXTENDED OR WITHDRAWN.

	USE THIS LETTER OF TRANSMITTAL IF:
(1)    YOU WISH TO ACCEPT THE OFFER AND ARE DEPOSITING CERTIFICATE(S) REPRESENTING INMET SHARES;
(2)    YOU ARE ACCEPTING THE OFFER USING THE PROCEDURES FOR BOOK-ENTRY TRANSFER WITH DTC AND DO NOT HAVE AN AGENT’S MESSAGE; OR
(3)    YOU PREVIOUSLY DELIVERED A NOTICE OF GUARANTEED DELIVERY.

SHAREHOLDERS WHO ACCEPT THE OFFER THROUGH A BOOK-ENTRY TRANSFER WILL

BE DEEMED TO HAVE COMPLETED AND SUBMITTED A LETTER OF TRANSMITTAL AND

BE BOUND BY THE TERMS HEREOF.

This Letter of Transmittal, or a manually executed facsimile hereof, properly completed and executed, together with all other required documents, is to be used to deposit common shares of Inmet Mining Corporation (“Inmet”), including any common shares of Inmet that may become issued and outstanding after the date of the Offer but before the Expiry Time upon the exercise, conversion or exchange of any Convertible Securities (as defined in the Offer and Circular), together with the associated rights (the “SRP Rights”) issued under the shareholder rights plan of Inmet dated November 28, 2012 (the “Shareholders Rights Plan”) (collectively, the “Inmet Shares”), under the offer dated January 9, 2013, as amended by the Notices of Variation and Extension dated February 8, 2013, February 27, 2013 and March 11, 2013 (the “Offer”) made by FQM (Akubra) Inc., a direct wholly-owned subsidiary of First Quantum Minerals Ltd. (“First Quantum”), and First Quantum (together, the “Offeror”) to purchase, on the terms and subject to the conditions of the Offer, all of the issued and outstanding Inmet Shares and must be received by Computershare Investor Services Inc. (the “Depositary”) at or prior to the Expiry Time at the office specified below.

Holders of Inmet Shares (the “Shareholders”) can also accept the Offer by following the procedures for book-entry transfer set forth in Section 3 of the Offer, “Manner for Acceptance – Acceptance by Book-Entry Transfer”. A Shareholder accepting the Offer by following the procedures for book-entry transfer does not need to use this Letter of Transmittal unless such Shareholder is following the procedures for book-entry transfer with DTC and does not have an accompanying Agent’s Message. Shareholders who accept the Offer through a book-entry transfer will be deemed to have completed and submitted a Letter of Transmittal and be bound by the terms hereof. Accordingly, where Inmet Shares are deposited by book-entry transfer without delivery of an executed Letter of Transmittal, unless the context otherwise requires, references herein to the “undersigned” are to the person on whose behalf that book-entry transfer is made (notwithstanding that such person has not executed a Letter of Transmittal).

Shareholders wishing to accept the Offer but whose certificates are not immediately available or who cannot deliver their certificates and all other required documents to the Depositary at or prior to the Expiry Time must deposit their Inmet Shares according to the guaranteed delivery procedure set out in Section 3 of the Offer, “Manner for Acceptance – Procedure for Guaranteed Delivery” by using the previously mailed Notice of Guaranteed Delivery (printed on yellow paper) or a manually executed facsimile thereof. See Instruction 2 herein, “Procedure for Guaranteed Delivery”.

Shareholders who have previously deposited a Letter of Transmittal (printed on blue paper) who qualify as an Eligible Holder (defined below) and who wish to make a Tax Election, must properly complete and execute this Letter of Transmittal (printed on green paper) including Block G or a manually signed facsimile thereof, and deposit it, at or prior to the Expiry Time, together with the certificate(s) representing their Inmet Shares (unless such certificate(s) have already been deposited with the Depositary) and all other required documents, at the Toronto office of the Depositary in accordance with the instructions herein. For greater certainty, if this Letter of Transmittal is not properly completed or has not been deposited with the Depositary in accordance with the instructions herein, an Eligible Holder may be deemed, in the sole discretion of the Offeror, to be ineligible to make a Tax Election. Upon a Shareholder depositing this properly completed green Letter of Transmittal with the Depositary in accordance with the instructions herein, any prior Letter of Transmittal submitted by such Shareholder will be disregarded.

The terms and conditions of the Offer are incorporated by reference in this Letter of Transmittal. The Offer and the circular that accompanied the offer dated January 9, 2013, as amended by the Notices of Variation and Extension dated February 8, 2013, February 27, 2013 and March 11, 2013 (the “Offer and Circular”) contain important information and Shareholders are urged to read the Offer and Circular in its entirety. Capitalized terms used but not defined in this Letter of Transmittal which are defined in the Offer and Circular have the respective meanings ascribed thereto in the Offer and Circular.

All dollar references in this Letter of Transmittal refer to Canadian dollars, except where otherwise indicated.

The disposition of Inmet Shares under the Offer will be immediately taxable to a Shareholder who is resident in Canada for the purposes of the Income Tax Act (Canada) (the “Tax Act”) or a Shareholder who is not resident in Canada for the purposes of the Tax Act and whose Inmet Shares are “taxable Canadian property” and not “treaty-protected property” (as each term is defined in the Tax Act), unless such Shareholder receives First Quantum Shares pursuant to the Offer and such Shareholder properly completes a Tax Election form (duly executed with First Quantum) that is filed with the Canada Revenue Agency and any applicable provincial tax authority by the applicable deadline, in which case a full or partial tax deferral may be obtained. If you are a Shareholder who qualifies as an Eligible Holder (defined below) and wish to make a Tax Election (the “Rollover Option”), you may request a Tax Election Package by completing Block G in this Letter of Transmittal.

As described in detail in the Notice of Variation and Extension forming part of the Offer and Circular, the Offeror will not be responsible for the proper completion or filing of any Tax Election and an Eligible Holder electing the Rollover Option will be solely responsible for the payment of any taxes, interest, expenses, damages or late filing penalties resulting from the failure to properly complete or file a Tax Election in the form or manner and within the time prescribed by applicable tax legislation. First Quantum agrees only to execute any properly completed Tax Election and to mail such election by the 90^th day after the receipt thereof by First Quantum to the Canada Revenue Agency (and any applicable provincial tax authority) with a copy to the Eligible Holder provided that any such Tax Election is received by First Quantum within 60 days following the Expiry Date. See “Amendments to Certain Canadian Federal Income Tax Considerations” in Section 4 of the Notice of Variation and Extension dated March 11, 2013.

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A Tax Election Package, consisting of the relevant federal and provincial tax election forms, may be obtained from the Depositary by checking the appropriate box in Block G in this Letter of Transmittal.

The completion of a Tax Election is complicated and Eligible Holders should consult their own legal and tax advisors in order to properly complete a Tax Election in the appropriate circumstances.

Questions or requests for assistance in accepting the Offer, completing this Letter of Transmittal and depositing Inmet Shares with the Depositary may be directed to the Information Agent and/or the Depositary. Their contact details are provided at the end of this document.

Shareholders whose Inmet Shares are registered in the name of an investment advisor, stockbroker, bank, trust company or other nominee should immediately contact that intermediary for assistance if they wish to accept the Offer in order to take the necessary steps to be able to deposit such Inmet Shares under the Offer.

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN THE ADDRESS OF THE DEPOSITARY SET FORTH BELOW WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.

YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED BELOW AND, IF YOU ARE A U.S. SHAREHOLDER, YOU MUST ALSO COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW (SEE INSTRUCTION 8, “SUBSTITUTE FORM W-9 FOR U.S. SHAREHOLDERS ONLY”). IF YOU HAVE A U.S. ADDRESS, BUT ARE NOT A U.S. SHAREHOLDER, PLEASE SEE INSTRUCTION 8.

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Please read carefully the Instructions set forth below before completing this Letter of Transmittal.

TO:             FQM (AKUBRA) INC.

AND TO:   FIRST QUANTUM MINERALS INC.

AND TO:   COMPUTERSHARE INVESTOR SERVICES INC., as Depositary

Upon the terms (including the right of withdrawal) and subject to the conditions of the Offer and in this Letter of Transmittal, the undersigned or the person on whose behalf the book-entry transfer is made, hereby irrevocably accepts the Offer and deposits under the Offer the Deposited Inmet Shares and, effective immediately following the time when the Offeror takes up the Deposited Inmet Shares (the “Effective Time”), irrevocably sells, assigns and transfers to the Offeror all of the right, title and interest of the undersigned in and to the Deposited Inmet Shares. The term “Deposited Inmet Shares” refers to the Inmet Shares identified below as being deposited under the Offer and benefits arising from such Deposited Inmet Shares including, without limitation, any and all distributions, dividends, payments, securities, property or other interests that may be declared, paid, accrued, issued, distributed, made or transferred on or in respect of the Deposited Inmet Shares or any of them on and after the date of the Offer, including, without limitation, any distributions, dividends or payments on such distributions, dividends, payments, securities, property or other interests (collectively, “Distributions”). The undersigned understands that by depositing Inmet Shares to the Offer, the undersigned will be deemed to have deposited the SRP Rights associated with the Inmet Shares. The undersigned understands that, unless waived by the Offeror, Shareholders are required to deposit one SRP Right for each Inmet Share deposited under the Offer in order to effect a valid deposit of such Inmet Share or, if available, a Book-Entry Confirmation must be received by the Depositary with respect thereto. No additional payment will be made for the SRP Rights and no amount of the consideration to be paid by the Offeror for the Inmet Shares will be allocated to the SRP Rights.

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BOX 1
DESCRIPTION OF INMET SHARES DEPOSITED UNDER THE OFFER (Please print or type. If space is insufficient, please attach a list to this Letter of Transmittal in the form below.)
Certificate Number(s) (if available)*	Name(s) in Which Certificate(s) is (are) Registered (please print and fill in exactly as name(s) appear(s) on certificate(s))*	Number of Inmet Shares Represented by Certificate(s)*	Number of Inmet Shares Deposited**
	TOTAL:

BOX 2
DESCRIPTION OF THE SRP RIGHTS DEPOSITED UNDER THE OFFER*** (Please print or type. If space is insufficient, please attach a list to this Letter of Transmittal in the form below.) (To be completed if necessary.)
Certificate Number(s) (if available)*	Name(s) in Which Certificate(s) is (are) Registered (please print and fill in exactly as name(s) appear(s) on certificate(s))*	Number of SRP Rights Represented by Certificate(s)*	Number of SRP Rights Deposited**
	TOTAL:

* You do not need to complete these columns in respect of Inmet Shares deposited by book-entry transfer.

** If you desire to deposit fewer than all Inmet Shares evidenced by any certificate(s) listed above, please indicate in this column the number of Inmet Shares you wish to deposit. Unless otherwise indicated, the total number of Inmet Shares evidenced by all certificates delivered will be deemed to have been deposited. See Instruction 7 of this Letter of Transmittal, “Partial Deposits”.

*** The following procedures must be followed in order to effect the valid deposit of the SRP Rights associated with the Deposited Inmet Shares: (a) if the Separation Time under the Shareholder Rights Plan has not occurred prior to the Expiry Time and Rights Certificates have not been distributed by Inmet, a deposit of Inmet Shares will also constitute a deposit of the associated SRP Rights; (b) if the Separation Time occurs before the Expiry Time and Rights Certificates have been distributed by Inmet prior to the time Inmet Shares are deposited under the Offer, Rights Certificates representing SRP Rights equal in number to the number of Deposited Inmet Shares must be delivered with the Letter of Transmittal or, if available, a Book-Entry Confirmation must be received by the Depositary with respect thereto; and (c) if the Separation Time occurs before the Expiry Time and Rights Certificates have not been distributed by the time Inmet Shares are deposited under the Offer, or the Rights Certificates have been distributed but not received by the Shareholder making the deposit, the Shareholder may deposit its SRP Rights before receiving Rights Certificates by using the guaranteed delivery procedure set out in Section 3 of the Offer, “Manner for Acceptance – Procedure for Guaranteed Delivery”. Note that, in any case, a deposit of Inmet Shares constitutes an agreement by the Shareholder making the deposit to deliver Rights Certificates representing SRP Rights equal in number to the number of Deposited Inmet Shares by the Shareholder, or, if available, a Book-Entry Confirmation must be received by the Depositary with respect thereto, on or before the third trading day on the TSX after the date, if any, that Rights Certificates are distributed. The Offeror reserves the right to require, if the Separation Time occurs before the Expiry Time, that the Depositary receive from the Shareholder making the deposit, prior to taking up the Deposited Inmet Shares by the undersigned for payment pursuant to the Offer, Rights Certificates (or, if available, a Book-Entry Confirmation) from the Shareholder representing SRP Rights equal in number to the Inmet Shares deposited by the Shareholder.

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BOX 3

ELECTION FOR CASH, SHARES OR CASH AND SHARES

Under the Offer, the undersigned may elect the Cash Alternative (as defined in the Offer and Circular) OR the Share Alternative (as defined in the Offer and Circular) OR the Cash and Share Alternative (as defined in the Offer and Circular) with respect to all of the Deposited Inmet Shares under the Offer with this Letter of Transmittal or book-entry transfer, as applicable. The undersigned hereby elects as follows:

¨       CASH ALTERNATIVE

Shareholders that check this box will receive $72.00 in cash for each Inmet Share deposited under the Offer (subject to proration on the terms as described in the Offer and Circular).

OR

¨       SHARE ALTERNATIVE

Shareholders that check this box will receive 3.2967 First Quantum Shares for each Inmet Share deposited under the Offer (subject to proration on the terms as described in the Offer and Circular).

OR

¨       CASH AND SHARE ALTERNATIVE

Shareholders that check this box will receive $36.00 in cash plus 1.6484 First Quantum Shares for each Inmet Share deposited under the Offer (subject to proration on the terms as described in the Offer and Circular).

If the undersigned fails to elect the Cash Alternative, the Share Alternative or the Cash and Share Alternative in this Letter of Transmittal, the undersigned will be deemed to have elected the Cash Alternative for all of the Deposited Inmet Shares.

No fractional First Quantum Shares will be issued pursuant to the Offer. In lieu of fractional First Quantum Shares, a Shareholder accepting the Offer who would otherwise receive a fraction of a First Quantum Share will receive a cash payment determined on the basis of $21.84 for each whole First Quantum Share.

If a Shareholder delivered a Notice of Guaranteed Delivery in respect of Inmet Shares deposited with this Letter of Transmittal, the election (or deemed election) made in that Notice of Guaranteed Delivery as to the consideration to be received under the Offer will supersede any election made in this Letter of Transmittal. See Instruction 2 below, “Procedure for Guaranteed Delivery”.

The undersigned hereby acknowledges receipt of the Offer and Circular and acknowledges that there will be a binding agreement between the undersigned and the Offeror effective immediately following the time at which the Offeror takes up such Deposited Inmet Shares, in accordance with the terms and conditions of the Offer and the Letter of Transmittal.

The undersigned represents and warrants that:

(a) the undersigned has received the Offer and Circular;

(b) the undersigned, or the person on whose behalf a book-entry transfer is made, has full power and authority to deposit, sell, assign and transfer the Deposited Inmet Shares and all rights and benefits arising from such Deposited Inmet Shares including, without limitation, any Distributions;

(c) the undersigned, or the person on whose behalf a book-entry transfer is made, owns the Deposited Inmet Shares and any Distributions deposited under the Offer;

(d) the Deposited Inmet Shares and Distributions deposited under the Offer have not been sold, assigned or transferred, nor has any agreement been entered into to sell, assign or transfer any of the Deposited Inmet Shares or Distributions deposited under the Offer, to any person;

(e) the deposit of the Deposited Inmet Shares and Distributions complies with applicable Laws; and

(f) when the Deposited Inmet Shares are taken up and paid for by the Offeror, the Offeror will acquire good title thereto (and to any Distributions), free and clear of all liens, restrictions, charges, encumbrances, claims and rights of others.

- 6 -

The undersigned acknowledges that under certain circumstances the Offeror may, among other things, (i) extend, vary or terminate the Offer (see Section 5 of the Offer, “Extension, Variation or Change to the Offer”), or (ii) make such adjustments as it considers appropriate to the consideration payable by the Offeror under the Offer and other terms of the Offer to reflect any changes on or after the date of the Offer in the Inmet Shares or Inmet’s capitalization (see Section 9 of the Offer, “Changes in Capitalization of Inmet; Adjustments; Liens”). In addition, the undersigned acknowledges that if, on or after the date of the Offer, Inmet should declare, set aside or pay any Distributions that are payable or distributable to Shareholders on a record date prior to the date of transfer into the name of the Offeror or its nominee or transferee on the securities registers maintained by or on behalf of Inmet in respect of Inmet Shares, then the Offeror may reduce the consideration payable under the Offer or the undersigned may be required to promptly transfer to the Offeror such Distributions, all in accordance with the terms of the Offer (see Section 9 of the Offer, “Changes in Capitalization of Inmet; Adjustments; Liens”).

The undersigned irrevocably constitutes and appoints, effective at and after the Effective Time, each director and officer of the Offeror, and any other person designated by the Offeror, as the true and lawful agent, attorney, attorney-in-fact and proxy of the holder of the Deposited Inmet Shares (which Deposited Inmet Shares upon being taken up are, together with any Distributions thereon, hereinafter referred to as the “Inmet Purchased Securities”) with respect to such Inmet Purchased Securities, with full power of substitution (such powers of attorney, being coupled with an interest, being irrevocable), in the name of and on behalf of such Shareholder:

(a) to register or record the transfer and/or cancellation of such Inmet Purchased Securities to the extent consisting of securities on the appropriate securities registers maintained by or on behalf of Inmet;

(b) for so long as any such Inmet Purchased Securities are registered or recorded in the name of such Shareholder, to exercise any and all rights of such Shareholder including, without limitation, the right to vote, to execute and deliver (provided the same is not contrary to applicable Laws), as and when requested by the Offeror, any and all instruments of proxy, authorizations or consents in form and on terms satisfactory to the Offeror in respect of any or all Inmet Purchased Securities, to revoke any such instruments, authorizations or consents given prior to or after the Effective Time, and to designate in any such instruments, authorizations or consents any person or persons as the proxyholder of such Shareholder in respect of such Inmet Purchased Securities for all purposes including, without limitation, in connection with any meeting or meetings (whether annual, special or otherwise, or any adjournments thereof, including, without limitation, any meeting to consider a Subsequent Acquisition Transaction) of holders of relevant securities of Inmet;

(c) to execute, endorse and negotiate, for and in the name of and on behalf of such Shareholder, any and all cheques or other instruments representing any Distributions payable to or to the order of, or endorsed in favour of, such Shareholder; and

(d) to exercise any other rights of a Shareholder with respect to such Inmet Purchased Securities, all as set out in the Letter of Transmittal.

Effective at and after the Effective Time, the undersigned revokes any and all other authority, whether as agent, attorney-in-fact, attorney, proxy or otherwise, previously conferred or agreed to be conferred by the Shareholder at any time with respect to the Deposited Inmet Shares or any Distributions. Such depositing Shareholder agrees that no subsequent authority, whether as agent, attorney-in-fact, attorney, proxy or otherwise will be granted with respect to the Deposited Inmet Shares or any Distributions by or on behalf of the depositing Shareholder unless the Deposited Inmet Shares are not taken up and paid for under the Offer or are withdrawn in accordance with Section 7 of the Offer, “Withdrawal of Deposited Inmet Shares”.

The undersigned also agrees following the Effective Time not to vote any of the Inmet Purchased Securities at any meeting (whether annual, special or otherwise or any adjournments thereof, including, without limitation, any meeting to consider a Subsequent Acquisition Transaction) of holders of relevant securities of Inmet and, except as may otherwise be agreed with the Offeror, not to exercise any of the other rights or privileges attached to the Inmet Purchased Securities, and agrees to execute and deliver to the Offeror any and all instruments of proxy, authorizations or consents in respect of all or any of the Inmet Purchased Securities, and agrees to designate or appoint in any such instruments of proxy, authorizations or consents, the person or persons specified by the Offeror as the proxy or the proxy nominee or nominees of the holder of the Inmet Purchased Securities. Upon such appointment, all prior proxies and other authorizations (including, without limitation, all appointments of any agent, attorney or attorney-in-fact) or consents given by the holder of such Inmet Purchased Securities with respect thereto will be revoked and no subsequent proxies or other authorizations or consents may be given by such person with respect thereto.

- 7 -

The undersigned covenants to execute, upon request of the Offeror, any additional documents, transfers and other assurances as may be necessary or desirable to complete the sale, assignment and transfer of the Inmet Purchased Securities to the Offeror. Each authority therein conferred or agreed to be conferred is, to the extent permitted by applicable Laws, irrevocable and may be exercised during any subsequent legal incapacity of such Shareholder and shall, to the extent permitted by applicable Laws, survive the death or incapacity, bankruptcy or insolvency of the Shareholder and all obligations of the Shareholder therein shall be binding upon the heirs, executors, administrators, attorneys, personal representatives, successors and assigns of such Shareholder.

The Depositary will act as the agent of the persons who have deposited Inmet Shares under the Offer for the purposes of receiving payment from the Offeror and transmitting such payment to such persons. Receipt by the Depositary of the share certificates and/or cash representing the consideration under the Offer shall be deemed to constitute receipt of payment by persons depositing Inmet Shares under the Offer.

All payments under the Offer will be made in Canadian dollars.

Settlement with each Shareholder who has deposited (and not withdrawn) Inmet Shares under the Offer that have been taken up and accepted for payment will be made by the Depositary issuing or causing to be issued a cheque (except for payments in excess of $25 million, which will be made by wire transfer (as described below)) payable in Canadian funds and, if applicable, delivering or causing to be delivered certificates representing First Quantum Shares (or, in the case of Inmet Shares deposited by book-entry transfer, credit of First Quantum Shares), in the amounts to which the person depositing Inmet Shares is entitled. Unless otherwise directed in this Letter of Transmittal, the certificate representing First Quantum Shares (or, in the case of Inmet Shares deposited by book-entry transfer, the credit of First Quantum Shares) and/or the cheque will be issued in the name of the registered holder of the Inmet Shares so deposited. Unless the person depositing the Inmet Shares instructs the Depositary to hold the certificate and/or the cheque for pick-up by checking the appropriate box (Block D) in this Letter of Transmittal, the certificate and/or the cheque will be forwarded by first class mail to such person at the address specified in this Letter of Transmittal. If no such address is specified, the certificate and/or the cheque will be sent to the address of the registered holder as shown on the securities register maintained by or on behalf of Inmet. Certificates and/or cheques mailed in accordance with this paragraph will be deemed to be delivered at the time of mailing. Pursuant to applicable Laws, the Offeror may, in certain circumstances, be required to make withholdings from the amount otherwise payable to a Shareholder. The undersigned further understands and acknowledges that under no circumstances will any interest accrue or any amount be paid by the Offeror or the Depositary by reason of any delay in exchanging Inmet Shares or making payments for any Inmet Shares to any person on account of Inmet Shares accepted for purchase pursuant to the Offer.

Pursuant to rules of the Canadian Payments Association, a $25 million ceiling has been established on cheques, bank drafts and other paper-based payments processed through Canada’s clearing system. As a result, any payment to the undersigned in excess of $25 million will be effected by the Depositary by wire transfer in accordance with the Large Value Transfer System Rules established by the Canadian Payments Association. Accordingly, settlement with the undersigned involving a payment in excess of $25 million, if applicable, will be made only in accordance with wire transfer instructions provided by the undersigned to the Depositary in writing. In the event wire transfer instructions are required as set out above, the Depositary will contact the undersigned promptly following the Expiry Time for purposes of obtaining wire transfer instructions. Any delay in payment by the Depositary resulting from the provision by the undersigned of wire transfer instructions will not entitle the undersigned to interest or other compensation in addition to the amounts to which the undersigned is entitled pursuant to the Offer.

Any Deposited Inmet Shares that are not taken up and paid for by the Offeror pursuant to the terms and conditions of the Offer for any reason, will be returned, at the expense of the Offeror, to the depositing Shareholder as soon as practicable following the Expiry Time or any withdrawal of the Offer, by either (i) sending certificates representing the Inmet Shares not purchased by first-class insured mail to the address of the depositing Shareholder specified in this Letter of Transmittal or, if such name or address is not so specified, in such name and to such address as shown on the securities register maintained by or on behalf of Inmet, or (ii) in the case of Inmet Shares deposited by book-entry transfer of such Inmet Shares pursuant to the procedures set out in Section 3 of the Offer, “Manner for Acceptance – Acceptance by Book-Entry Transfer”, such Inmet Shares will be credited to the depositing Shareholder’s account maintained with CDS or DTC, as applicable.

- 8 -

Shareholders will not be required to pay any fee or commission if they accept the Offer by depositing their Inmet Shares directly with the Depositary.

By reason of the use by the undersigned of an English language form of Letter of Transmittal, the undersigned shall be deemed to have required that any contract evidenced by the Offer as accepted through this Letter of Transmittal, as well as all documents related thereto, be drawn exclusively in the English language. En raison de l’usage d’une letter d’envoi en langue anglaise par le soussigné, le soussigné est réputé avoir requis que tout contrat attesté par l’offre et son acceptation par cette lettre d’envoi, de même que tous les documents qui s’y rapportent, soient rédigés exclusivement en langue anglaise.

- 9 -

SHAREHOLDER INFORMATION AND INSTRUCTIONS

Before signing this Letter of Transmittal, please review carefully and complete the following boxes, as appropriate.

BLOCK A REGISTRATION AND PAYMENT INSTRUCTIONS ISSUE CHEQUE/FIRST QUANTUM SHARES IN THE NAME OF: (please print or type)	BLOCK B DELIVERY INSTRUCTIONS SEND CHEQUE/ FIRST QUANTUM SHARES (Unless Block D is checked) TO: ¨ Same as address in Block A (check box) or to:
(Name)	(Name)
(Street Address and Number)	(Street Address and Number)
(City and Province or State)	(City and Province or State)
(Country and Postal (or Zip) Code)	(Country and Postal (or Zip) Code)
(Telephone — Business Hours)	(Telephone — Business Hours)
(Tax Identification, Social Insurance or Social Security Number)	(Tax Identification, Social Insurance or Social Security Number)
	*  The delivery instructions given in this Block B will also be used to return certificate(s) representing Deposited Inmet Shares if required for any reason.

BLOCK C TAXPAYER IDENTIFICATION NUMBER   U.S. residents/citizens must provide their Taxpayer Identification Number   (Taxpayer Identification Number)   If you are a U.S. Shareholder or are acting on behalf of a U.S. Shareholder, in order to avoid backup withholding you must complete the Substitute Form W-9 included below, or otherwise provide certification that you are exempt from backup withholding. If you are not a U.S. Shareholder, but have a U.S. address, you must provide a completed U.S. Internal Revenue Service Form W-8 in order to avoid backup withholding. See Instruction 8, “Substitute Form W-9 for U.S. Shareholders Only” for further details. BLOCK D SPECIAL PICK-UP INSTRUCTIONS   ¨       HOLD CHEQUE FOR PICK-UP AT THE OFFICE OF THE DEPOSITARY WHERE THIS LETTER OF TRANSMITTAL IS DEPOSITED (check box)

- 10 -

BLOCK E

DEPOSIT PURSUANT TO NOTICE OF GUARANTEED DELIVERY

¨       CHECK HERE IF INMET SHARES ARE BEING DEPOSITED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE OFFICE OF THE DEPOSITARY AND COMPLETE THE FOLLOWING: (please print or type)

Name of Registered Holder

Date of Execution of Notice of Guaranteed Delivery

Window Ticket Number (if any)

Name of Institution which Guaranteed Delivery

BLOCK F

U.S. SHAREHOLDERS — TAX

INDICATE WHETHER OR NOT YOU ARE A U.S. SHAREHOLDER OR ARE ACTING ON BEHALF OF A U.S. SHAREHOLDER:

¨       The person signing this Letter of Transmittal represents that it is not a U.S. Shareholder, is not acting on behalf of a U.S. Shareholder and does not have a U.S. address; or

¨       The person signing this Letter of Transmittal represents that it is a U.S. Shareholder, is acting on behalf of a U.S. Shareholder or has a U.S. address.

IF YOU ARE A U.S. SHAREHOLDER OR ARE ACTING ON BEHALF OF A U.S. SHAREHOLDER, THEN IN ORDER TO AVOID BACK-UP WITHHOLDING YOU MUST COMPLETE THE SUBSTITUTE FORM W-9 INCLUDED BELOW, OR OTHERWISE PROVIDE CERTIFICATION THAT YOU ARE EXEMPT FROM BACKUP WITHHOLDING, AS PROVIDED IN INSTRUCTION 8 BELOW. IF YOU REQUIRE A FORM W-8, PLEASE CONTACT THE INFORMATION AGENT AND/OR THE DEPOSITARY.

BLOCK G

SECTION 85 ROLLOVER OPTION ELECTION

As described in Section 4 of the Notice of Variation and Extension dated March 11, 2013 forming part of the Offer and Circular, “Amendments to Certain Canadian Federal Income Tax Considerations”, an Eligible Holder (as defined below) who elects the Rollover Option, and who receives First Quantum Shares as partial consideration for such holder’s Inmet Shares, may obtain a full or partial tax deferral in respect of the disposition of Inmet Shares as a consequence of filing with the Canada Revenue Agency (and, where applicable, with a provincial tax authority) a joint election made by the Eligible Holder and First Quantum (the “Tax Election”) under subsection 85(1) or (2) of the Tax Act and the corresponding provisions of any applicable provincial tax legislation.

An “Eligible Holder” means a beneficial owner of Common Shares who is (a) a resident of Canada for the purposes of the Tax Act and any applicable income tax treaty or convention and who is not exempt from tax on income under the Tax Act, or (b) a non-resident of Canada for the purposes of the Tax Act and any applicable income tax treaty or convention, whose Common Shares constitute “taxable Canadian property” (as defined by the Tax Act) and who is not exempt from Canadian tax in respect of any gain realized on the disposition of the Common Shares by reason of an exemption contained in an applicable income tax treaty or convention, or (c) a partnership if one or more members of the partnership are described in (a) or (b).

Eligible Holders should consult their own advisors as to whether they should make the Tax Election and (if so) the procedure for doing so. It is the Eligible Holder’s responsibility to take the steps required to make a valid Tax Election.

The joint Tax Election can only be made by a beneficial owner of Inmet Shares who is an Eligible Holder, and who receives First Quantum Shares as partial consideration for such holder’s Deposited Inmet Shares. No joint Tax Election will be made with any other persons. With the exception of execution of the election by First Quantum, compliance with the requirements for a valid election will be the sole responsibility of the Eligible Holder making such election.

By checking the box below to elect the Rollover Option, the undersigned (i) represents that the beneficial owner of the Deposited Inmet Shares is an Eligible Holder, and (ii) agrees and acknowledges that it is the Eligible Holder’s responsibility to do all things necessary to comply with the requirements for a valid Tax Election.

¨       Check here if the beneficial owner of the Deposited Inmet Shares (i) is an Eligible Holder and (ii) wishes to elect the Rollover Option in order to make a joint tax election with First Quantum under subsection 85(1) or (2) of the Tax Act (or the corresponding provisions of any applicable provincial tax legislation). Eligible Holders who check this box and submit this Letter of Transmittal will receive a Tax Election Package setting out procedures for completing the information that must be provided no later than 90 days after the Expiry Time.

- 11 -

SHAREHOLDER SIGNATURE

By signing below, the undersigned expressly agrees to the terms and conditions set forth above.

This Letter of Transmittal must be signed below by the registered Shareholder(s) exactly as name(s) appear(s) on the certificates representing the Deposited Inmet Shares or SRP Rights, or on a security position listing or by person(s) authorized to become registrant holder(s) by certificates and documents transmitted herewith, or, pursuant to Instruction 4, by a fiduciary or authorized representative.

BLOCK H SIGNATURE GUARANTEE
Signature guaranteed by (if required under Instruction 3):	Dated:
Authorized Signature of Guarantor	Signature of Shareholder or Authorized Representative (see Instructions 2, 3 and 4)
Name of Guarantor (please print or type)	Name of Shareholder or Authorized Representative (please print or type)
Address of Guarantor (please print or type)	Daytime telephone number and facsimile number of Shareholder or Authorized Representative
	(Tax Identification, Social Insurance or Social Security Number)

- 12 -

SUBSTITUTE FORM W-9

TO BE COMPLETED BY U.S. SHAREHOLDERS ONLY

SUBSTITUTE FORM W-9 Payer’s Request for Taxpayer Identification Number and Certification Part 1 — Taxpayer Identification Number (“TIN”) — ENTER YOUR TIN IN THE BOX AT RIGHT. (For most individuals, this is your social security number. If you do not have a TIN, see “Obtaining a Number” in the W-9 Guidelines included with this form.) CERTIFY BY SIGNING AND DATING BELOW.   Note: If the account is in more than one name, see the chart in the enclosed W-9 Guidelines to determine which number to give the payer.   Social Security Number(s) (If awaiting TIN, write “Applied For”)   OR   Employer Identification Number(s) (If awaiting TIN, write “Applied For”)

Part 2 — For payees exempt from backup withholding, please write “Exempt” here (see W-9 Guidelines):

Name

Business Name

Please Check Appropriate box for U.S. tax:

¨      Individual/Sole Proprietor         ¨    C Corporation        ¨    S Corporation    ¨     Partnership        ¨     Trust/Estate
¨	Limited liability company (Enter the tax classification: S = S corporation; C = corporation; P = partnership)
¨	Other

Address

City State Zip Code

Part 3 — Certification — Under penalties of perjury, I certify that:
(1)	The number shown on this form is my correct TIN (or I am waiting for a TIN to be issued to me);
(2)	I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and
(3)	I am a U.S. citizen or other U.S. person (defined below).
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return.
Signature                                                                                                       Date                                                                          , 2013

NOTE: FAILURE TO FURNISH YOUR CORRECT TIN MAY RESULT IN A U.S.$50 PENALTY IMPOSED BY THE INTERNAL REVENUE SERVICE AND IN BACKUP WITHHOLDING ON THE GROSS AMOUNT OF CONSIDERATION PAID TO YOU PURSUANT TO THE OFFER. FOR ADDITIONAL DETAILS, PLEASE REVIEW THE ENCLOSED “GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9” THAT FOLLOW THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE “APPLIED FOR” IN PART 1 OF SUBSTITUTE FORM W-9.

CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate IRS Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a TIN by the time of payment, a portion of the gross proceeds of such payment made to me may be withheld.

Signature                                                                                                       Date                                                                          , 2013

DEFINITION OF A U.S. PERSON: For federal income tax purposes, you are considered a U.S. person if you are (1) an individual who is a U.S. citizen or U.S. resident alien; (2) a partnership or corporation created or organized in the United States or under the laws of the United States; (3) an estate (other than a foreign estate); or (4) a domestic trust (as defined in Treasury Regulations section 301.7701-7).

- 13 -

INSTRUCTIONS

1. Use of Letter of Transmittal

(a) This Letter of Transmittal, or a manually executed facsimile hereof, properly completed and executed, with the signature(s) guaranteed if required by Instruction 3 below, together with accompanying certificate(s) representing the Deposited Inmet Shares and, if the Separation Time has occurred before the Expiry Time and Rights Certificates have been distributed before the Expiry Time, the Rights Certificates(s) representing the deposited SRP Rights (or, alternatively, Book-Entry Confirmation with respect thereto) and all other documents required by the terms of the Offer and this Letter of Transmittal must be physically received by the Depositary at its office specified in this Letter of Transmittal at or prior to the Expiry Time, unless the Offer is extended or withdrawn or unless the procedure for guaranteed delivery set out in Instruction 2 below is used.

(b) The method of delivery of certificates representing Inmet Shares and, if applicable, Rights Certificates (or a Book-Entry Confirmation, as applicable), the Letter of Transmittal, the Notice of Guaranteed Delivery and all other documents is at the option and risk of the person depositing such documents. The Offeror recommends that certificates, the accompanying Letter of Transmittal, the Notice of Guaranteed Delivery and any other documents be delivered by hand to the Depositary and that a receipt be obtained for their deposit. If the documents are mailed, the Offeror recommends that registered mail with return receipt or acknowledgement of receipt be used and that proper insurance be obtained. It is suggested that any such mailing be made sufficiently in advance of the Expiry Time to permit delivery to the Depositary on or prior to such time. Delivery will only be effective upon actual physical receipt by the Depositary.

(c) Shareholders whose Inmet Shares are registered in the name of an investment advisor, stockbroker, bank, trust company or other nominee should immediately contact that intermediary for assistance if they wish to accept the Offer in order to take the necessary steps to be able to deposit such Inmet Shares under the Offer.

2. Procedure for Guaranteed Delivery

If a Shareholder wishes to accept the Offer and deposit Inmet Shares pursuant to the Offer and (i) the certificate(s) representing such Shareholder’s Inmet Shares are not immediately available; or (ii) such Shareholder cannot deliver the certificates, the Letter of Transmittal and all other required documents to the Depositary by the Expiry Time; or (iii) such Shareholder cannot comply with the procedures for book-entry transfer on a timely basis, those Inmet Shares may nevertheless be deposited under the Offer, provided that all of the following conditions are met:

(a) such deposit is made only at the principal office of the Depositary in Toronto, Ontario by or through an Eligible Institution;

(b) a properly completed and duly executed Notice of Guaranteed Delivery printed on yellow paper (or a manually signed facsimile) is received by the Depositary at its principal office in Toronto, Ontario at or before the Expiry Time;

(c) the certificate or certificates representing the Deposited Inmet Shares, and, if the Separation Time has occurred before the Expiry Time and Rights Certificates have been distributed to Shareholders before the Expiry Time, the Rights Certificate(s) representing the deposited SRP Rights, in proper form for transfer, together with a properly completed and duly signed Letter of Transmittal (or a manually signed facsimile copy) in accordance with the instructions set out in the Letter of Transmittal, and other documents required by such Letter of Transmittal, are received at the Toronto office of the Depositary by 5:00 p.m. (Eastern Standard Time) on or before the third trading day on the TSX after the Expiry Date; and

(d) in the case of SRP Rights where the Separation Time has occurred before the Expiry Time but Rights Certificates have not been distributed to Shareholders before the Expiry Time, the Rights Certificate(s) representing the deposited SRP Rights in proper form for transfer, together with a properly completed and duly signed Letter of Transmittal (or a manually signed facsimile copy) in accordance with the instructions set out in the Letter of Transmittal and other documents required by such Letter of Transmittal, are received at the Toronto office of the Depositary by 5:00 p.m. (Eastern Standard Time) on or before the third trading day on the TSX after Rights Certificates are distributed to Shareholders.

The Notice of Guaranteed Delivery must be delivered by mail, hand or courier or transmitted by electronic facsimile to the Depositary only at its principal office in Toronto, Ontario at or prior to the Expiry Time and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. Delivery of the Notice of Guaranteed Delivery and the Letter of Transmittal and accompanying certificate(s) representing Inmet Shares and, if applicable, SRP Rights and all other required documents to an address or transmission by facsimile to facsimile number other than those specified in the Notice of Guaranteed Delivery does not constitute delivery for purposes of satisfying a guaranteed delivery.

An “Eligible Institution” means a Canadian Schedule I chartered bank or an eligible guarantor institution with membership in an approved Medallion signature guarantee program, including certain trust companies in Canada, a member of the Securities Transfer Agents Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program (SEMP) or a member of the New York Stock Exchange Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchange in Canada or the United States, members of the Investment Industry Regulatory Organization of Canada, members of the Financial Industry Regulatory Authority, Inc. or banks and trust companies in Canada or the United States.

- 14 -

3. Signatures

This Letter of Transmittal must be completed and executed by the Shareholder accepting the Offer described above or by such Shareholder’s duly authorized representative (in accordance with Instruction 4).

(a) If this Letter of Transmittal is signed by the registered holder(s) of the accompanying certificate(s), such signature(s) on this Letter of Transmittal must correspond exactly with the name(s) as registered or as written on the face of such certificate(s) without any change whatsoever, and the certificate(s) need not be endorsed. If such certificate(s) are owned of record by two or more joint holders, all such holders must sign this Letter of Transmittal.

(b) If this Letter of Transmittal is executed by a person other than the registered holder(s) of the certificate(s) deposited herewith, or if the cheque(s) is (are) to be issued or delivered to a person other than the registered holder(s), or if the certificate(s) representing Inmet Shares in respect of which the Offer is not being accepted is (are) to be returned to a person other than such registered holder(s) or sent to an address other than the address of the registered holder(s) shown on the securities register maintained by or on behalf of Inmet:

(i) the accompanying certificate(s) must be endorsed or be accompanied by an appropriate share transfer power of attorney, in either case, duly and properly completed by the registered holder(s);

(ii) the signature(s) on the endorsement panel or share transfer power of attorney must correspond exactly to the name(s) of the registered holder(s) as registered or as written on the face of the certificate(s); and

(iii) such signature(s) must be guaranteed by an Eligible Institution, or in some other manner satisfactory to the Depositary (except that no guarantee is required if the signature is that of an Eligible Institution).

4. Guarantee of Signatures

If this Letter of Transmittal is executed by a person other than the registered holder(s) of Inmet Share certificate(s) deposited herewith , or if the cheque(s) is (are) to be issued or delivered to a person other than the registered holder(s), or if the certificate(s) representing Inmet Shares in respect of which the Offer is not being accepted is (are) to be returned to a person other than such registered holder(s) or sent to an address other than the address of the registered holder(s) shown on the securities register maintained by or on behalf of Inmet, such signatures must be guaranteed by an Eligible Institution, or in some other manner satisfactory to the Depositary (except that no guarantee is required if the signature is that of an Eligible Institution).

5. Fiduciaries, Representatives and Authorizations

Where this Letter of Transmittal or any share certificate or share transfer power of attorney is executed by a person on behalf of an executor, administrator, trustee, guardian, or on behalf of a corporation, partnership or association or is executed by any other person acting in a representative or fiduciary capacity, such person should so indicate when signing and this Letter of Transmittal must be accompanied by satisfactory evidence of such person’s authority to act. Either the Offeror, at its sole discretion, or the Depositary, at its sole discretion, may require additional evidence of authority or additional documentation.

6. Delivery Instructions

If any cheque(s) or certificate(s) representing First Quantum Shares is (are) to be sent to or, in respect of partial deposits of Inmet Shares, certificates representing Inmet Shares are to be returned to, someone at an address other than the address of the Shareholder as it appears in Block A on this Letter of Transmittal, then Block B on this Letter of Transmittal should be completed. If Block B is not completed, any cheque(s) or certificate(s) will be mailed to the depositing Shareholder at the address of such Shareholder as it appears in Block A or, if no address is provided in Block A, then it will be mailed to the address of such Shareholder as it appears on the securities register maintained by or on behalf of Inmet. Any cheque(s) or certificate(s) mailed in accordance with the terms of the Offer and this Letter of Transmittal will be deemed to be delivered at the time of mailing.

7. Partial Deposits

If less than the total number of Inmet Shares evidenced by any certificate(s) submitted is to be deposited, fill in the number of Inmet Shares to be deposited in the appropriate space in Box 1 on this Letter of Transmittal. In such case, new certificate(s) for the number of Inmet Shares not deposited will be sent to the registered holder as soon as practicable after the Expiry Time (unless such holder completes Block B on this Letter of Transmittal). The total number of Inmet Shares evidenced by all certificates delivered will be deemed to have been deposited unless otherwise indicated. Note that this Instruction is not applicable to holders who deposit their Inmet Shares by book-entry transfer.

8. Substitute Form W-9 for U.S. Shareholders Only

United States federal income tax law generally requires a U.S. Shareholder who receives cash in exchange for Inmet Shares to provide the Depositary with its correct Taxpayer Identification Number (“TIN”), which, in the case of a Shareholder who is an individual, is generally the individual’s social security number. If the Depositary is not provided with the correct TIN or an adequate basis for an exemption from backup withholding, such holder may be subject to penalties imposed by the Internal Revenue Service and backup withholding on the gross proceeds of any payment received hereunder. If withholding results in an overpayment of taxes, a refund may be obtained by timely filing a U.S. tax return.

To prevent backup withholding, each U.S. Shareholder must provide its correct TIN by completing the “Substitute Form W-9” set forth in this document, which requires the Shareholder to certify under penalties of perjury, (1) that the TIN provided is correct (or that such Shareholder is awaiting a TIN); (2) that (i) the Shareholder is exempt from backup withholding; (ii) the Shareholder has not been notified by the Internal

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Revenue Service that he is subject to backup withholding as a result of a failure to report all interest or dividends; or (iii) the Internal Revenue Service has notified the Shareholder that he is no longer subject to backup withholding; and (3) that the Shareholder is a U.S. person for U.S. federal income tax purposes (including a U.S. resident alien).

Exempt holders (including, among others, all C corporations) are not subject to backup withholding and reporting requirements. To prevent possible erroneous backup withholding, an exempt holder must enter its correct TIN in Part 1 of Substitute Form W-9, write “Exempt” in Part 2 of such form, and sign and date the form. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 (the “W-9 Guidelines”) for additional instructions.

If Inmet Shares are held in more than one name or are not in the name of the actual owner, consult the enclosed W-9 Guidelines for information on which TIN to report.

If a U.S. Shareholder does not have a TIN, such holder should: (i) consult the enclosed W-9 Guidelines for instructions on applying for a TIN, (ii) write “Applied For” in the space for the TIN in Part 1 of the Substitute Form W-9, and (iii) sign and date the Substitute Form W-9 and the Certificate of Awaiting Taxpayer Identification Number set forth in this document. In such case, the Depositary may withhold a portion of the gross proceeds of any payment made to such holder prior to the time a properly certified TIN is provided to the Depositary.

If a Shareholder has a U.S. address, but is not a U.S. Shareholder, such holder is required to submit an appropriate and properly completed IRS Form W-8 Certificate of Foreign Status, signed under penalties of perjury. Such appropriate IRS Form W-8 may be obtained from the Depositary.

A SHAREHOLDER WHO FAILS TO PROPERLY COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH IN THIS LETTER OF TRANSMITTAL OR, IF APPLICABLE, THE APPROPRIATE IRS FORM W-8 MAY BE SUBJECT TO BACKUP WITHHOLDING ON THE GROSS PROCEEDS OF ANY PAYMENTS MADE TO SUCH HOLDER PURSUANT TO THE OFFER. BACKUP WITHHOLDING IS NOT AN ADDITIONAL TAX. RATHER, THE TAX LIABILITY OF PERSONS SUBJECT TO BACKUP WITHHOLDING WILL BE REDUCED BY THE AMOUNT OF TAX WITHHELD. IF WITHHOLDING RESULTS IN AN OVERPAYMENT OF TAXES, A REFUND MAY BE OBTAINED BY TIMELY FILING A TAX RETURN WITH THE IRS. THE DEPOSITARY CANNOT REFUND AMOUNTS WITHHELD BY REASON OF BACKUP WITHHOLDING.

TO ENSURE COMPLIANCE WITH U.S. TREASURY DEPARTMENT CIRCULAR 230, SHAREHOLDERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS DOCUMENT IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER UNDER THE U.S. INTERNAL REVENUE CODE; (B) THESE DISCUSSIONS WERE WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE OFFER; AND (C) EACH TAXPAYER SHOULD SEEK ADVICE FROM AN INDEPENDENT TAX ADVISOR BASED ON ITS PARTICULAR CIRCUMSTANCES.

9. Currency of Payment

All amounts payable under the Offer will be paid in Canadian dollars.

10. Miscellaneous

(a) If the space in Box 1 of this Letter of Transmittal is insufficient to list all certificates for Inmet Shares, additional certificate numbers and number of Inmet Shares may be included on a separate signed list affixed to this Letter of Transmittal.

(b) If Deposited Inmet Shares are registered in different forms (e.g. “John Doe” and “J. Doe”), a separate Letter of Transmittal should be signed for each different registration.

(c) No alternative, conditional or contingent deposits will be accepted and no fractional Inmet Shares will be purchased. All depositing Shareholders by execution of this Letter of Transmittal, or a manually executed facsimile copy hereof, waive any right to receive any notice of the acceptance of Deposited Inmet Shares for payment, except as required by applicable Laws.

(d) The Offer and all contracts resulting from acceptance thereof shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. Each party to any agreement resulting from the acceptance of the Offer unconditionally and irrevocably attorns to the exclusive jurisdiction of the courts of the Province of Ontario and all courts competent to hear appeals therefrom.

(e) The Offeror will not pay any fees or commissions to any stockbroker, dealer or other person for soliciting deposits of Inmet Shares under the Offer.

(f) Before completing this Letter of Transmittal, you are urged to read the accompanying Offer and Circular.

(g) All questions as to the validity, form, eligibility (including, without limitation, timely receipt) and acceptance of any Deposited Inmet Shares, including the propriety and effect of the execution of the Letter of Transmittal, will be determined by the Offeror in its sole discretion. Depositing Shareholders agree that such determination shall be final and binding. The Offeror reserves the absolute right to reject any and all deposits which it determines not to be in proper form or which may be unlawful to accept under the Laws of any jurisdiction. The Offeror reserves the absolute right to waive any defects or irregularities in the deposit of any Inmet Shares. There shall be no obligation on the Offeror, the Depositary, or any other person to give notice of any defect or irregularity in acceptance and no liability shall be incurred or suffered by any of them to any person for failure to give such notice. The Offeror’s interpretation of the terms and conditions of the Offer, the Circular, the Letter of Transmittal, the Notice of Guaranteed Delivery and any other related documents will be final and binding. The Offeror reserves the right to permit the Offer to be accepted in a manner other than as set out in the Offer and Circular.

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(h) Additional copies of the Offer and Circular, this Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained without charge on request from the Depositary at its address specified in this Letter of Transmittal.

11. Lost Certificates

If a certificate representing Inmet Shares has been lost, stolen or destroyed, this Letter of Transmittal should be completed as fully as possible and forwarded, together with a letter describing the loss and providing your telephone number, to the Depositary at its office specified in this Letter of Transmittal. The Depositary will forward such letter to Inmet’s registrar and transfer agent so that the registrar and transfer agent may provide replacement instructions. If a certificate representing Inmet Shares has been lost, stolen, destroyed, mutilated or mislaid, the foregoing action must be taken sufficiently in advance of the Expiry Time in order to obtain a replacement certificate in sufficient time to permit the Inmet Shares represented by the replacement certificate to be deposited under the Offer at or prior to the Expiry Time.

12. Assistance

Questions or requests for assistance in accepting the Offer, completing this Letter of Transmittal and depositing the Inmet Shares with the Depositary may be directed to the Information Agent and/or the Depositary. Their contact details are provided at the end of this document.

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FOR U.S. SHAREHOLDERS ONLY

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number for the Payee (You) To Give the Payer — Social security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employee identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer. All “Section” references are to the Internal Revenue Code of 1986, as amended. “IRS” is the Internal Revenue Service.

For This Type of Account:	Give Name and Taxpayer Identification Number of
1.      Individual	The individual
2.      Two or more individuals (joint account)	The actual owner of the account or, if combined funds, the first individual on the account(1)
3.      Custodian account of a minor (Uniform Gift to Minors Act)	The minor(2)
4.      a. The usual revocable savings trust account (grantor is also trustee)	The grantor-trustee(1)
b.      So-called trust account that is not a legal or valid trust under state law	The actual owner(1)
c.      Grantor trust filing under Optional Form 1099 Filing Method 1 (see Treasury Regulation section 1.671-4(b)(2)(i)(A))	The grantor
d.      Grantor trust filing under Form 1041 Filing Method or Optional Form 1099 Filing Method 2 (see Treasury Regulation section 1.671-4(b)(2)(i)(B))	The trust
5.      Sole proprietorship or a disregarded entity	The owner(3)
6.      A valid trust, estate, or pension trust	The legal entity(4)
7.      Corporation (or LLC electing corporate status on Form 8832 or Form 2553)	The corporation
8.      Association, club, religious, charitable, educational, or other tax-exempt organization	The organization
9.      Partnership or multi-member LLC treated as a partnership	The partnership
10.    A broker or registered nominee	The broker or nominee
11.    Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments	The public entity

(1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person’s number must be furnished.

(2) Circle the minor’s name and furnish the minor’s social security number.

(3) You must show your individual name, but you may also enter your business or “doing business as” name on the second name line. You may use either your social security number or your employer identification number (if you have one).

(4) List first and circle the name of the trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title).

NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME LISTED, THE NUMBER WILL BE CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.

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Obtaining a Number

If you do not have a taxpayer identification number, you may apply for one. To apply for a social security number, get Form SS-5, Application for a Social Security Card, from your local Social Security Administration Office or online at www.ssa.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can find information about applying for an EIN online by accessing the IRS website at www.irs.gov/businesses and clicking on Employer Identification Number under Starting a Business. You can get Forms W-7 and SS-4 from the IRS by visiting www.irs.gov or by calling 1-800-829-3676.

Note: Writing “Applied For” on the form means that you have already applied for a TIN or that you intend to apply for one soon. As soon as you receive your TIN, complete another Substitute Form W-9, include your TIN, sign and date the form, and give it to the payer.

Payees Exempt from Backup Withholding

Payees specifically exempted from backup withholding for this purpose include:

(i) An organization exempt from tax under Section 501(a), an individual retirement account (IRA), or a custodial account under Section 403(b)(7) if the account satisfies the requirements of Section 401(f)(2);

(ii) The United States or a state thereof, the District of Columbia, a possession of the United States, or a political subdivision or wholly-owned agency or instrumentality of any one or more of the foregoing;

(iii) An international organization or any agency or instrumentality thereof;

(iv) A foreign government and any political subdivision, agency or instrumentality thereof;

(v) A C corporation;

(vi) A financial institution;

(vii) A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States;

(viii) A real estate investment trust;

(ix) A common trust fund operated by a bank under Section 584(a);

(x) An entity registered at all times during the tax year under the Investment Company Act of 1940;

(xi) A futures commission merchant registered with the Commodity Futures Trading Commission; and

(xii) A foreign central bank of issue.

Exempt payees described above must file a Substitute Form W-9 included in this Letter of Transmittal to avoid possible erroneous backup withholding. TO FILE THIS FORM WITH THE DEPOSITARY, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE “EXEMPT” IN PART 2 OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE DEPOSITARY.

PRIVACY ACT NOTICE — Section 6109 requires you to provide your correct taxpayer identification number to payers, who must report the payments to the IRS. The IRS uses the number for identification purposes and may also provide this information to various government agencies for tax enforcement or litigation purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold a portion of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to the payer. Certain penalties may also apply.

Penalties

(1) Failure to Furnish Taxpayer Identification Number. — If you fail to furnish your taxpayer identification number to a payer, you may be subject to a penalty of U.S.$50 for each such failure unless your failure is due to reasonable cause and not to wilful neglect.

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(2) Civil Penalty for False Information With Respect to Withholding. — If you make a false statement with no reasonable basis that results in no backup withholding, you may be subject to a U.S.$500 penalty.

(3) Criminal Penalty for Falsifying Information. — Wilfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION, CONTACT YOUR TAX ADVISOR OR THE INTERNAL REVENUE SERVICE.

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The Depositary for the Offer is:

By Mail   P.O. Box 7021 31 Adelaide Street East Toronto, ON M5C 3H2 Attention: Corporate Actions By Registered Mail, Hand or Courier   100 University Avenue 9^th Floor Toronto, ON M5J 2Y1 Attention: Corporate Actions

Toll Free (North America): 1-800-564-6253

Toll Free (Overseas): 1-514-982-7555

Email: corporateactions@computershare.com

The Information Agent for the Offer is:

Toll Free (North America): 1-866-656-4120

Outside North America Call Collect: 1-781-575-2421

Email: askus@georgeson.com

Any questions or requests for assistance or additional copies of the Offer and Circular or this Letter of Transmittal may be directed by Shareholders to the Depositary or the Information Agent at their respective telephone numbers and locations set out above.

PART II

INFORMATION NOT REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS

The following information is applicable to the Registrant.

Indemnification of Directors and Officers

Section 21.3 of the Registrant’s Articles provides that subject to the Business Corporations Act (British Columbia) (the “Act”), the Registrant may indemnify any person.

Section 160 of the Act, which governs the Registrant, provides that the Registrant may, indemnify an individual who is or was a director or officer of the Registrant, is or was a director or officer of another corporation (i) at a time when the corporation is or was an affiliate of the Registrant, or (ii) at the request of the Registrant, or at the request of the Registrant, is or was, or holds or held a position equivalent to that of, a director or officer of a partnership, trust, joint venture or other unincorporated entity and, except in sections 163(1)(c) and (d) and section 165 referred to below, the heirs and personal and other legal representatives of that individual (an “Eligible Party”), against all eligible penalties to which the Eligible Party is or may be liable and, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by an Eligible Party in respect of that proceeding. Section 161 of the Act provides that after the final disposition of an eligible proceeding, the Registrant must pay the expenses actually and reasonably incurred by the Eligible Party in respect of that proceeding if the Eligible Party (i) has not been reimbursed for those expenses, and (ii) is wholly successful, on the merits or otherwise, in the outcome of the proceeding or is substantially successful on the merits in the outcome of the proceeding.

“associated corporation” is any corporation or entity referred to in the foregoing definition of Eligible Party.

“eligible penalty” means a judgment, penalty or fine awarded in or imposed in, or an amount paid in settlement of, an eligible proceeding.

“eligible proceeding” includes a proceeding in which the Eligible Party, by reason of an Eligible Party (other than such heirs and personal and other legal representatives) being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the Registrant or an associated corporation is or may be joined as a party, or is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding.

“expenses” includes costs, charges and expenses, including legal or other fees, but does not include judgments, penalties, fines or amounts paid in settlement of a proceeding.

“proceedings” includes any legal proceeding or investigative action, whether current, threatened, pending or completed.

Section 162(1) of the Act provides that the Registrant may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an Eligible Party in respect of that proceeding. However, section 162(2) provides that the Registrant must not make the payments referred to in section 162(1) unless the Registrant first receives from the Eligible Party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited by section 163, the Eligible Party will repay the amounts advanced.

Section 163(1) of the Act provides that the Registrant must not indemnify or pay the expenses as described in the foregoing paragraphs, if any of the following circumstances applies:

(a) if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time that the agreement to indemnify or pay expenses was made, the Registrant was prohibited from giving the indemnity or paying the expenses by its memorandum or articles;

(b) if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and, at the time that the indemnity or payment is made, the Registrant is prohibited from giving the indemnity or paying the expenses by its memorandum or articles;

4

(c) if, in relation to the subject matter of the eligible proceeding, the Eligible Party did not act honestly and in good faith with a view to the best interests of the Registrant or the associated corporation, as the case may be;

(d) in the case of an eligible proceeding other than a civil proceeding, if the Eligible Party did not have reasonable grounds for believing that the Eligible Party’s conduct in respect of which the proceeding was brought was lawful.

In addition section 163(2) of the Act provides that if an eligible proceeding is brought against an Eligible Party by or on behalf of the Registrant or by or on behalf of an associated corporation, the Registrant must not (i) indemnify the Eligible Party against eligible penalties or (ii) pay the expenses described in the foregoing paragraphs.

Section 164 of the Act provides that, despite the foregoing provisions, on the application of the Registrant or an Eligible Party, the Supreme Court of British Columbia may do one or more of the following:

(a) order the Registrant to indemnify an Eligible Party against any liability incurred in respect of an eligible proceeding;

(b) order the Registrant to pay some or all of the expenses incurred in respect of an eligible proceeding;

(c) order the enforcement of, or any payment under, an agreement of indemnification entered into by the Registrant;

(d) order the Registrant to pay some or all of the expenses actually and reasonably incurred by any person in obtaining an order under section 164;

(e) make any other order the court considers appropriate.

Section 165 of the Act provides that the Registrant may purchase and maintain insurance for the benefit of an Eligible Party or the heirs and personal or other legal representatives of the Eligible Party against any liability that may be incurred by reason of the Eligible Party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the Registrant or an associated corporation.

As contemplated by Section 165 of the Act, the Registrant has purchased insurance against potential claims against the directors or officers of the Registrant and against loss for which the Registrant may be required or permitted by law to indemnify such directors and officers.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.

5

Exhibits

The following exhibits have been filed as part of this Form F-80:

Exhibit Number	Description
3.1*	The material change report of First Quantum dated January 13, 2012 in respect of the announcement of First Quantum reaching an agreement with Eurasian Natural Resources Corporation Plc to dispose of First Quantum’s residual DRC assets, namely the Kolwezi Project, the Frontier Mine and the Lonshi Mine, and settle all claims in relation to its DRC operations.
3.2*	The annual audited consolidated financial statements of First Quantum as at and for the financial year ended December 31, 2011, together with the notes thereto and the auditors’ report thereon.
3.3*	The management discussion and analysis of financial condition and results of operations of First Quantum dated March 6, 2012 for the financial year ended December 31, 2011.
3.4*	The material change report of First Quantum dated March 12, 2012 in respect of First Quantum closing the sale of its residual DRC assets, namely the Kolwezi Project, the Frontier Mine and the Lonshi Mine, to Eurasian Natural Resources Corporation Plc and finalizing the settlement of all claims in relation to its DRC operations.
3.5*	The annual information form of First Quantum dated March 31, 2012 for the year ended December 31, 2011.
3.6*	The management information circular of First Quantum dated April 5, 2012 in respect of the annual meeting of shareholders of First Quantum held on May 9, 2012.
3.7*	The material change report of First Quantum dated September 27, 2012 in respect of First Quantum’s offering of US$350 million of senior notes due 2019.
3.8*	The unaudited interim comparative consolidated financial statements of First Quantum as at and for the three and nine months ended September 30, 2012.
3.9*	The management discussion and analysis of financial condition and results of operations of First Quantum for the three and nine months ended September 30, 2012.
3.10*	The material change report of First Quantum dated December 19, 2012 in respect of the announcement made by First Quantum of its intention to make an offer to acquire all of the outstanding Inmet Shares for consideration of $72.00 per Inmet Share in cash and/or First Quantum Shares.
3.11	The annual audited consolidated financial statements of First Quantum as at and for the financial year ended December 31, 2012, together with the notes thereto and the auditors’ report thereon.
3.12	The management discussion and analysis of financial condition and results of operations of First Quantum dated March 5, 2013 for the financial year ended December 31, 2012.
4.1*	Consent of PricewaterhouseCoopers LLP.

* Previously filed with the Registrant’s Form F-80 (Commission File No. 333- 185937) filed with the U.S. Securities and Exchange Commission on January 9, 2013.

6

PART III

UNDERTAKINGS AND CONSENT TO SERVICE OF PROCESS

Item 1. Undertakings

(a) The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to the securities registered pursuant to Form F-80 or to transactions in said securities.

(b) The Registrant further undertakes to disclose in the United States, on the same basis as it is required to make such disclosure pursuant to applicable Canadian federal and/or provincial or territorial law, regulation or policy, information regarding purchases of the Registrant’s securities or of the subject issuer’s securities during the exchange offer. Such information shall be set forth in amendments to this Form.

Item 2. Consent to Service of Process

(a) Registrant has filed with the Commission a written irrevocable consent and power of attorney on Form F-X.

(b) Not applicable

(c) Any change to the name or address of the agent for service of the Registrant shall be communicated promptly to the Commission by amendment to Form F-X referencing the file number of the relevant registration statement.

7

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-80 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Vancouver, British Columbia, Canada, on the 11^th day of March 2013.

FIRST QUANTUM MINERALS LTD.
By:	/s/ Philip K. R. Pascall
	Philip K. R. Pascall
	Chief Executive Officer

8

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

First Quantum Minerals Ltd.

Signature	Title	Date
*	Chairman, Chief Executive Officer, Director (Principal Executive Officer)	March 11, 2013
Philip K. R. Pascall
*	Chief Financial Officer (Principal Financial and Accounting Officer)	March 11, 2013
Hannes Meyer
*	Executive Director Business Development, Director	March 11, 2013
Martin R. Rowley
*	Director	March 11, 2013
Andrew B. Adams
*	Director	March 11, 2013
Paul Brunner
*	Director	March 11, 2013
Peter St George

*By:	/s/ Philip K. R. Pascall
Name:	Philip K. R. Pascall
	Attorney-in-fact

9

Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, as amended, the Authorized Representative has signed this Registration Statement, solely in his capacity as the duly authorized representative of First Quantum Minerals Ltd. in the United States, in the City of Newark, State of Delaware, on March 12, 2013.

PUGLISI & ASSOCIATES
(Authorized U.S. Representatives)
By:	/s/ Donald J. Puglisi
Name:	Donald J. Puglisi
Title:	Managing Director, Puglisi & Associates

10

EX-3.11

Exhibit 3.11

First Quantum Minerals Ltd.

Consolidated Financial Statements

December 31, 2012 and 2011

(In U.S. dollars, tabular amounts in millions, except where indicated)

Management’s Responsibility for Financial Reporting

The consolidated financial statements of First Quantum Minerals Ltd. and the information contained in the annual report have been prepared by and are the responsibility of the Company’s management. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as included in the Handbook of the Canadian Institute of Chartered Accountants and, where appropriate, reflect management’s best estimates and judgments based on currently available information.

Management has developed and is maintaining a system of internal controls to obtain reasonable assurance that the Company’s assets are safeguarded, transactions are authorized and financial information is reliable.

The Company’s independent auditors, PricewaterhouseCoopers LLP, who are appointed by the shareholders, conduct an audit in accordance with Canadian generally accepted auditing standards. Their report outlines the scope of their audit and gives their opinion on the consolidated financial statements.

The Audit Committee of the Board of Directors meets periodically with management and the independent auditors to review the scope and results of the annual audit, and to review the consolidated financial statements and related financial reporting matters prior to approval of the consolidated financial statements.

Signed by	Signed by
Philip K.R. Pascall	Hannes Meyer
Chairman and Chief Executive Officer	Chief Financial Officer

March 5, 2013

Independent Auditor’s Report

To the Shareholders of First Quantum Minerals Ltd.

We have audited the accompanying consolidated financial statements of First Quantum Minerals Ltd., which comprise the consolidated balance sheets as at December 31, 2012 and December 31, 2011 and the consolidated statements of earnings, comprehensive income, cash flows and changes in shareholders’ equity for the years ended December 31, 2012 and December 31, 2011, and the related notes, which comprise a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of First Quantum Minerals Ltd. as at December 31, 2012 and December 31, 2011 and its financial performance and its cash flows for the years ended December 31, 2012 and December 31, 2011 in accordance with International Financial Reporting Standards.

Signed by

PricewaterhouseCoopers LLP

Chartered Accountants

March 5, 2013

PricewaterhouseCoopers LLP, Chartered Accountants

PricewaterhouseCoopers Place, 250 Howe Street, Suite 700, Vancouver, British Columbia, Canada V6C 3S7

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

First Quantum Minerals Ltd.

Consolidated Statements of Earnings

For the years ended December 31, 2012 and 2011

(expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

	Note	2012			2011
Sales revenues	18		2,950.4			2,583.5
Cost of sales	19,20		(1,849.4	)		(1,275.5	)
Gross profit			1,101.0			1,308.0
Exploration			(49.7	)		(73.0	)
General and administrative	20		(76.0	)		(73.8	)
Settlement of RDC claims and sale of assets	21		1,217.9			—
Bond inducement costs	10		—			(48.4	)
Other income (expense)	22		(4.3	)		7.3
Operating profit			2,188.9			1,120.1
Finance income			23.6			5.3
Finance costs	23		(15.3	)		(9.9	)
Earnings before income taxes			2,197.2			1,115.5
Income taxes	14		(327.8	)		(460.7	)
Net earnings for the year			1,869.4			654.8
Net earnings for the year attributable to:
Non-controlling interests			96.5			125.9
Shareholders of the Company			1,772.9			528.9
Earnings per common share
Basic	16		3.74			1.18
Diluted	16		3.72			1.18
Weighted average shares outstanding (000’s)
Basic	16		473,893			447,224
Diluted	16		476,310			449,457
Total shares issued and outstanding (000’s)	15		476,310			476,310

The accompanying notes are an integral part of these consolidated financial statements.

3

First Quantum Minerals Ltd.

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2012 and 2011

(expressed in millions of U.S. dollars)

	Note	2012			2011
Net earnings for the year			1,869.4			654.8
Other comprehensive income (loss)
Unrealized gain (loss) on available-for-sale investments	6		(7.3	)		0.2
Tax on unrealized gain (loss) on available-for-sale investments			1.8			—
Comprehensive income for the year			1,863.9			655.0
Total comprehensive income for the year attributable to:
Non-controlling interests			96.5			125.9
Shareholders of the Company			1,767.4			529.1
			1,863.9			655.0

The accompanying notes are an integral part of these consolidated financial statements.

4

First Quantum Minerals Ltd.

Consolidated Statements of Cash Flows

For the years ended December 31, 2012 and 2011

(expressed in millions of U.S. dollars)

	Note	2012			2011
Cash flows from operating activities
Net earnings for the year			1,869.4			654.8
Items not affecting cash
Depreciation	7		172.3			112.0
Unrealized foreign exchange (gain) loss			1.9			(2.1	)
Deferred income tax expense (recovery)			290.4			(13.1	)
Income tax expense			37.4			473.8
Share-based compensation expense	17		15.9			8.8
Bond inducement costs	10		—			48.4
Net finance (income) costs			(8.3	)		9.9
Settlement of RDC claims and sale of assets	21		(1,217.9	)		—
Other			4.1			6.8
			1,165.2			1,299.3
Taxes paid			(458.8	)		(598.4	)
Change in non-cash operating working capital
(Increase) decrease in trade, other receivables and derivatives			(183.0	)		92.3
Increase in inventories			(224.4	)		(241.1	)
(Increase) decrease in trade and other payables			80.4			(118.9	)
Long term incentive plan contributions			(36.9	)		(20.9	)
			342.5			412.3
Cash flows from investing activities
Purchase of property, plant and equipment			(1,316.7	)		(1,049.5	)
Deposits on property, plant and equipment			(56.6	)		(59.2	)
Proceeds from sale of property, plant and equipment			1.6			—
Acquisitions of investments			(46.1	)		—
Interest received			3.5			4.1
Proceeds from settlement of RDC claims and sale of assets			736.5			9.9
			(677.8	)		(1,094.7	)
Cash flows from financing activities
Net movement in trading facility			0.7			(14.6	)
Repayments of debt			(5.1	)		(83.6	)
Proceeds from issuance of senior notes	9		338.8			—
Proceeds on issuance of common shares			—			16.1
Cash paid on bond inducement	10		—			(48.4	)
Restricted cash			—			40.4
Dividends paid			(91.0	)		(79.3	)
Dividends paid to non-controlling interests			(39.0	)		(10.8	)
Finance lease payments			(3.8	)		(3.7	)
Interest paid			(8.4	)		(26.5	)
			192.2			(210.4	)
Decrease in cash and cash equivalents			(143.1	)		(892.8	)
Cash and cash equivalents – beginning of year			452.1			1,344.9
Cash and cash equivalents – end of year	26		309.0			452.1

The accompanying notes are an integral part of these consolidated financial statements.

5

First Quantum Minerals Ltd.

Consolidated Balance Sheets

As at December 31, 2012 and 2011

(expressed in millions of U.S. dollars)

	Note	December 31, 2012			December 31, 2011
Assets
Current assets
Cash and cash equivalents	26		309.0			452.1
Trade and other receivables	4		390.2			238.1
Inventories	5		903.7			649.9
Current portion of other assets	8		230.1			34.0
			1,833.0			1,374.1
Investments	6		55.6			18.0
Property, plant and equipment	7		4,953.6			3,824.4
Promissory note receivable	21		481.8			—
Other assets	8		212.4			81.5
Total assets			7,536.4			5,298.0
Liabilities
Current liabilities
Trade and other payables			355.5			273.4
Current taxes payable			32.5			289.4
Current portion of debt	9		49.1			48.1
Current portion of provisions and other liabilities	11		6.5			11.0
			443.6			621.9
Debt	9		347.7			14.8
Provisions and other liabilities	11		299.2			286.4
Deferred income tax liabilities	14		564.5			206.4
Total liabilities			1,655.0			1,129.5
Equity
Share capital			1,929.6			1,950.6
Retained earnings			3,405.7			1,723.8
Accumulated other comprehensive income (loss)			(4.3	)		1.2
Total equity attributable to shareholders of the Company			5,331.0			3,675.6
Non-controlling interests			550.4			492.9
Total equity			5,881.4			4,168.5
Total liabilities and equity			7,536.4			5,298.0
Commitments	27

Approved by the Board of Directors and authorized for issue on March 5, 2013.

Signed by	Signed by
Andrew Adams, Director	Peter St. George, Director

The accompanying notes are an integral part of these consolidated financial statements.

6

First Quantum Minerals Ltd.

Consolidated Statements of Changes in Equity

For the years ended December 31, 2012 and 2011

(expressed in millions of U.S. dollars)

	Note	2012			2011
Share capital
Common shares
Balance – beginning of year			2,003.8			1,479.3
Shares issued and share options exercised			—			16.1
Conversion of convertible bonds	10		—			508.4
Balance – end of year			2,003.8			2,003.8
Equity portion of convertible bonds
Balance – beginning of year			—			48.3
Conversion of convertible bonds	10		—			(48.3	)
Balance – end of year			—			—
Treasury shares
Balance – beginning of year			(68.0	)		(57.0	)
Restricted and performance stock units vested			6.0			9.9
Shares purchased	15b		(36.9	)		(20.9	)
Balance – end of year			(98.9	)		(68.0	)
Contributed surplus
Balance – beginning of year			14.8			15.9
Share-based compensation expense for the year	17a		15.9			8.8
Restricted and performance stock units vested	17a		(6.0	)		(9.9	)
Balance – end of year			24.7			14.8
Total share capital			1,929.6			1,950.6
Retained earnings
Balance – beginning of year			1,723.8			1,274.2
Earnings for the year attributable to shareholders of the Company			1,772.9			528.9
Dividends			(91.0	)		(79.3	)
Balance – end of year			3,405.7			1,723.8
Accumulated other comprehensive income
Balance – beginning of year			1.2			1.0
Other comprehensive income (loss) for the year			(5.5	)		0.2
Balance – end of year			(4.3	)		1.2
Non-controlling interests
Balance – beginning of year			492.9			377.8
Earnings attributable to non-controlling interests			96.5			125.9
Dividends			(39.0	)		(10.8	)
Balance – end of year			550.4			492.9

The accompanying notes are an integral part of these consolidated financial statements.

7

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

1 Nature of operations

First Quantum Minerals Ltd. (“First Quantum” or “the Company”) is engaged in the production of copper, nickel, gold, cobalt, platinum-group elements (“PGE”) and acid, and related activities including exploration and development. The Company has operating mines located in Zambia, Australia, Finland and Mauritania. The Company is developing the Sentinel copper project in Zambia, and exploring the Haquira copper deposit in Peru. Operations in the République démocratique du Congo (“RDC”) were suspended in 2010. In March 2012 the Company sold materially all of its ownership interests in the RDC (note 21).

The Company has its primary listing on the Toronto Stock Exchange and a secondary listing on the London Stock Exchange. The Company is registered and domiciled in Canada, and its registered office is the 8^th Floor – 543 Granville Street, Vancouver, BC, Canada, V6C 1X8.

2 Basis of preparation

These consolidated financial statements have been prepared in compliance with IFRS. For these purposes, IFRS comprise the standards issued by the International Accounting Standards Board (“IASB”) and Interpretations issued by the IFRS Interpretations Committee (“IFRICs”) and the former Standing Interpretations Committee (“SICs”). The Company has consistently applied the same accounting policies throughout all periods presented.

3 Summary of significant accounting policies

The significant accounting policies used in the preparation of these consolidated financial statements are described below.

a) Basis of measurement

These consolidated financial statements have been prepared under the historical cost convention, with the exception of available-for-sale financial assets which are measured at fair value.

b) Principles of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (“its subsidiaries”). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of earnings from the effective date of acquisition or up to the effective date of disposal, as appropriate.

The principal operating subsidiaries are Kansanshi Mining Plc (“Kansanshi”), First Quantum Mining and Operations Limited (“FQMO”), Mauritanian Copper Mines SARL (“Guelb Moghrein”), FQM Kevitsa Mining OY (“Kevitsa”) and Ravensthorpe Nickel Operations Pty Ltd. (“Ravensthorpe”). The exploration subsidiaries include Antares Minerals Inc. (“Antares”) and Kalumbila Minerals Limited (“Kalumbila”). All the above operating subsidiaries are 100% owned, with the exception of Kansanshi in which the Company holds an 80% interest.

The Company established an independent trust to purchase the common shares necessary to satisfy the Company’s long-term incentive plan. The Company consolidates the trust as it has the power to govern the financial and operating policies and to obtain the benefits from its activities.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Company’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling interest’s share of changes in equity since the date of the combination.

c) Significant judgments, estimates and assumptions in applying accounting policies

Many of the amounts disclosed in the financial statements involve the use of judgments, estimates and assumptions. These judgments and estimates are based on management’s best knowledge of the relevant facts and circumstances at the time, having regard to prior experience, and are continually evaluated.

i. Significant judgments

• Determination of ore reserves and resources

Judgments about the amount of product that can be economically and legally extracted from the Company’s properties is made by management using a range of geological, technical and economic factors, history of conversion of mineral deposits to proven and probable reserves as well as data regarding quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates. This process may require complex and difficult geological judgments to interpret the data. The Company uses qualified persons (as defined by the Canadian Securities Administrators’ National Instrument 43-101) to compile this data.

8

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

Changes in the judgments surrounding proven and probable reserves may impact the carrying value of property, plant and equipment (note 7), restoration provisions (note 12), recognition of deferred income tax amounts (note 14) and depreciation (note 7).

• Achievement of commercial production – (accounting policy note 3f(i))

Once a mine reaches the operating levels intended by management, depreciation of capitalized costs begins. Significant judgment is required to determine when certain of the Company’s assets reach this level; management consider several factors including: completion of a reasonable period of commissioning; consistent operating results are being achieved at a pre-determined level of design capacity and indications exist that this level will continue; mineral recoveries are at or near expected production level; and the transfer of operations from development personnel to operational personnel has been completed.

On August 18, 2012, the Company determined that the Kevitsa mine was capable of operating at the levels intended by management and a declaration of commercial production was made.

• Determination of useful lives of assets for depreciation purposes – (accounting policy note 3f)

Significant judgment is involved in the determination of useful life and residual values for long-lived assets that drive the calculation of depreciation charges. Changes in the judgment of useful lives and residual values may impact the depreciation charge shown in the consolidated statements of earnings and in note 7.

• Taxes – (accounting policy note 3k)

Judgment is required in determining whether deferred income tax assets and liabilities are recognized on the balance sheet. In the normal course of business the Company is subject to assessment by taxation authorities in various jurisdictions. These authorities may have different interpretations of tax legislation or tax agreements than those applied by the Company in computing current and deferred income taxes. These different interpretations may alter the timing or amounts of taxable income or deductions. The final amount of taxes to be paid or recovered depends on a number of factors including the outcome of audits, appeals and negotiation. The Company provides for potential differences in interpretation based a best estimate of the probable outcome of these matters. Changes in these estimates could result in material adjustments to the Company’s current and deferred income taxes.

• Functional currency – (accounting policy note 3d)

The functional currency of the Company and for each of the Company’s subsidiaries is the United States dollar (“USD”), which is the primary economic environment in which the entity operates. Determination of functional currency may involve certain judgments to determine the primary economic environment and this is re-evaluated for each new entity, or if conditions change.

ii. Significant accounting estimates and assumptions

Estimates are inherently uncertain and therefore actual results may differ from the amounts included in the financial statements, potentially having a material future effect on the Company’s consolidated financial statements. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:

• Determination of ore reserves and resources and life of mine plan

Reserves are estimates of the amount of product that can be economically and legally extracted from the Company’s properties. Estimating the quantity and/or grade of reserves requires the size, shape and depth of ore bodies or fields to be determined by analyzing geological data such as drilling samples. Following this, the quantity of ore that can be extracted in an economical manner is calculated using data regarding the life of mine plans and forecast sales prices (based on current and long-term historical average price trends).

The majority of the Company’s property, plant and equipment are depreciated over the estimated lives of the assets on a units-of-production basis. The calculation of the units-of-production rate, and therefore the annual depreciation expense could be materially affected by changes in the underlying estimates which are driven by the life of mine plans. Changes in estimates can be the result of actual future production differing from current forecasts of future production, expansion of mineral reserves through exploration activities, differences between estimated and actual costs of mining and differences in the commodity prices used in the estimation of mineral reserves.

Changes in the proven and probable reserves estimates may impact the carrying value of property, plant and equipment (note 7), restoration provisions (note 12), recognition of deferred income tax amounts (note 14) and depreciation (note 7).

• Review of asset carrying values and impairment charges – (accounting policy note 3h)

The Company reviews the carrying value of property, plant and equipment each reporting period to determine whether there is any indication of impairment using both internal and external sources of information. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statement of earnings.

9

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

External sources of information regarding indications of impairment include considering the changes in market, economic and legal environment in which the Company operates that are not within its control and affect the recoverable amount or timing of mining interests. Internal sources of information include changes to the life of mine plans and economic performance of the assets.

Management’s determination of recoverable amounts include estimates of mineral prices, recoverable reserves, and operating, capital and restoration costs are subject to certain risks and uncertainties that may affect the recoverability of mineral property costs. The calculation of the recoverable amount can also include assumptions regarding the appropriate discount rate and inflation and exchange rates. Although management has made its best estimate of these factors, it is possible that changes could occur in the near term that could adversely affect management’s estimate of the net cash flow to be generated from its projects. The carrying value of property, plant and equipment at the balance sheet date is disclosed in note 7 and by mine location in note 24.

• Estimation of the amount and timing of restoration and remediation costs – (accounting policy note 3i)

Accounting for restoration provisions requires management to make estimates of the future costs the Company will incur to complete the restoration and remediation work required to comply with existing laws, regulations and agreements in place at each mining operation and any environmental and social principles the Company is in compliance with. The calculation of the present value of these costs also includes assumptions regarding the applicable risk-free interest rate for discounting those future cash outflows, inflation and foreign exchange rates and assumptions relating to probabilities of alternative estimates of future cash outflows. Actual costs incurred may differ from those amounts estimated. Also, future changes to environmental laws and regulations could increase the extent of restoration work required to be performed by the Company. Increases in future costs could materially impact the amounts charged to operations for restoration.

The provision represents management’s best estimate of the present value of the future restoration and remediation costs. The actual future expenditures may differ from the amounts currently provided; any increase in future costs could materially impact the amounts included in the liability disclosed in the consolidated balance sheet. The carrying amount of the Company’s restoration provision is disclosed in note 12.

• Deferred income taxes – (accounting policy note 3k)

The Company recognizes deferred income tax assets arising from unutilized tax losses which requires management to assess the likelihood that the Company will generate taxable earnings in future periods in order to utilize those losses, and the timing of this. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. Forecast cash flows are based on life of mine projections.

To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realize the net deferred income tax assets recorded at the balance sheet date could be impacted. In addition, future changes in tax laws could limit the ability of the Company to obtain tax deductions in future periods from deferred income tax assets. Deferred income tax assets are disclosed in note 14.

d) Foreign currency translation

The presentation currency and the functional currency of the Company and all of the Company’s operations is the USD. The Company’s foreign currency transactions are translated into USD at the rate of exchange in effect at the date of the transaction. Monetary assets and liabilities are translated using period end exchange rates with any gains and losses included in the determination of net earnings. Non-monetary assets and liabilities are translated using historical rates.

e) Inventories

Product inventories comprise ore in stockpiles; acid and metal work-in-progress; finished acid; finished cathode and metal in concentrate; and gold bullion. Product inventories are recorded at the lower of average cost and net realizable value. Cost includes materials, direct labour, other direct costs and production overheads and depreciation of plant, equipment and mineral properties directly involved in the mining and production processes. Waste rock stripping costs related to production are inventoried as incurred.

When inventories have been written down to net realizable value, a new assessment of net realizable value is made in each subsequent period. When the circumstances that caused the write down no longer exist, or when there is clear evidence of an increase in net realizable value because of changed economic circumstances the amount of the write down is reversed.

Consumable stores are valued at the lower of purchase cost and net realizable value and recorded as a current asset.

Inventories on hand that will not be processed within one year are classified as long-term.

f) Property, plant and equipment

i) Mineral properties and mine development costs

Exploration and evaluation costs are expensed in the period incurred. Property acquisition costs are capitalized. Development costs relating to specific properties are capitalized once management determines the property will be developed. A development decision is made based upon consideration of project economics, including future metal prices, reserves and resources, and estimated operating and capital costs. Capitalization of costs incurred and revenue received during production ceases when the property is capable of operating at levels intended by management.

10

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

Property acquisition and mine development costs, including costs incurred during the production phase to increase future output by providing access to additional reserves, are deferred and depreciated on a units-of-production basis over the component of the reserves to which they relate.

ii) Property, plant and equipment

Property, plant and equipment are recorded at cost less accumulated depreciation. Costs recorded for assets under construction include all expenditures incurred in connection with the development and construction of the assets. No depreciation is recorded until the assets are substantially complete and ready for productive use. Where relevant, the Company has estimated residual values on certain plant and equipment.

Property, plant and equipment are depreciated using either the straight-line or units-of-production basis over the shorter of the estimated useful life of the asset or the life of mine. The major asset categories of depreciable assets and their estimated useful lives are as follows:

Computer equipment and software	30-33	%
Office equipment	33	%
Furniture and fittings	15	%
Buildings	2%-5	%
Motor vehicles	20-25	%

Depreciation on equipment utilized in the development of assets, including open pit and underground mine development, is depreciated and recapitalized as development costs attributable to the related asset.

iii) Borrowing costs

Borrowing costs attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the asset until such time as the asset is substantially complete and ready for its intended use or sale. Where funds have been borrowed specifically to finance an asset, the amount capitalized is the actual borrowing costs incurred. Where the funds used to finance an asset form part of general borrowings, the amount capitalized is calculated using a weighted average of rates applicable to relevant general borrowings of the Company during the period.

g) Finance leases

Finance leases which transfer to the Company substantially all the risks and rewards incidental to ownership of the leased item are capitalized at the inception of the lease at the fair value of the leased asset, or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and the reduction of the lease liability so as to achieve a constant periodic rate of interest on the remaining balance of the liability. Finance charges are reflected in net earnings. The depreciation policy for leased assets is consistent with that for similar assets owned.

h) Asset impairment

The Company performs impairment tests on property, plant and equipment, mineral properties and mine development costs when events or changes in circumstances occur that indicate the assets may not be recoverable. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the assets belong. Cash generating units are individual operating mines or exploration and development projects.

Recoverable amount is the higher of fair value less costs to sell and value in use. Fair value less costs to sell is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. For mining assets this would generally be determined based on the present value of the estimated future cash flows arising from the continued development, use or eventual disposal of the asset. In assessing these cash flows and discounting them to present value, assumptions used are those that an independent market participant would consider appropriate. Value in use is the estimated future cash flows expected to arise from the continuing use of the assets in their present form and from their disposal discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statement of earnings.

Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, such that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in net earnings immediately.

i) Restoration provisions

The Company recognizes liabilities for constructive or legal obligations, including those associated with the reclamation of mineral properties and property, plant and equipment, when those obligations result from the acquisition, construction, development or normal operation of assets. Provisions are measured at the present value of the expected expenditures required to settle the obligation using a pre-tax discount rate reflecting the time value of money and risks specific to the liability. The liability is increased for the passage of time and adjusted for changes to the current market-based risk-free discount rate, and the amount or timing of the underlying cash flows

11

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

needed to settle the obligation. The associated restoration costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the expected useful life of the asset.

j) Revenue recognition

The Company produces copper cathode, copper, nickel, gold, cobalt and PGE in concentrate and gold bullion. Copper, nickel, gold, cobalt and PGE products are sold under pricing arrangements where final prices are set at a specified date based on market prices. Revenues are recognized when title and risk pass to the customer. Changes between the prices recorded upon recognition of revenue and the final price due to fluctuations in metal market prices result in the existence of an embedded derivative in the accounts receivable. This embedded derivative is recorded at fair value, with changes in fair value classified as a component of cost of sales.

k) Current and deferred income taxes

Current tax expense is calculated using income tax rates that have been enacted or substantively enacted at the balance sheet date.

Deferred income tax is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the liability method. Deferred income tax liabilities are generally recognized for all taxable temporary differences, and deferred income tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on income tax rates and income tax laws that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred income tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects to recover or settle the carrying amount of its assets and liabilities.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities, and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

l) Share-based compensation

The Company grants equity settled performance stock units (“PSUs”) and equity settled restricted stock units (“RSUs”) under its long-term incentive plan and share options under its share option plan to directors and employees. The Company expenses the fair value of PSUs, RSUs and share options granted over the vesting period.

PSUs typically vest at the end of a three year period if certain performance and vesting criteria, based on the Company’s share price performance relative to a representative group of other mining companies, have been met. The fair value of PSUs is determined using a valuation model that takes into account, as of the grant date, the expected life of the PSU, expected volatility, expected dividend yield, and the risk-free interest rate over the life of the PSU to generate potential outcomes for share prices, which are used to estimate the probability of the PSUs vesting at the end of the performance measurement period.

RSUs typically vest at the end of a three year period and the fair value of RSUs is determined by reference to the share price of the Company at the date of grant.

m) Earnings per share

Earnings per share are calculated using the weighted average number of shares outstanding during the period. Shares acquired under the long-term incentive plan are treated as treasury shares and are deducted from the number of shares outstanding for the calculation of basic earnings per share. Diluted earnings per share are calculated using the treasury share method whereby all “in the money” options, warrants and equivalents are assumed to have been exercised at the beginning of the period and the proceeds from the exercise are assumed to have been used to purchase common shares at the average market price during the period.

n) Financial instruments

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, trade receivables, investments, promissory note receivable, trade payables and accrued liabilities, debt, convertible bonds and derivative instruments.

i) Cash and cash equivalents

Cash and cash equivalents comprise cash at banks and on hand and other short-term investments with initial maturities of less than three months. It excludes cash subject to restrictions under debt facilities. Cash and cash equivalents and restricted cash have been classified as loans and receivables.

ii) Trade receivables and promissory note receivable

Trade receivables and promissory note receivable are classified as loans and receivables and accordingly are recorded initially at fair value, net of transaction costs incurred, and subsequently at amortized cost using the effective interest rate method.

iii) Investments

12

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

Investments are recognized initially at fair value on the trade date, plus, in the case of investments that are not at fair value through profit or loss, directly attributable transaction costs. Investments are designated as available-for-sale and are normally measured at the reporting date at fair value. Fair value is determined in the manner described in note 25. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Unrealized gains and losses on the marketable securities are recognized in other comprehensive income, until the security is disposed of or is determined to be impaired at which time the cumulative gain or loss previously recognized is included in the consolidated statement of earnings. Dividends on available-for-sale equity investments are recognized in the income statement when the right to receive payment is established.

iv) Derivatives and hedging

A portion of the Company’s metal sales is sold on a provisional basis whereby sales are recognized at prevailing metal prices when title transfers to the customer and final pricing is not determined until a subsequent date, typically two months later. The Company enters into derivative contracts to directly offset the exposure to final pricing adjustments on the provisionally priced contracts. The Company also periodically enters into derivative instruments to mitigate exposure to foreign exchange rates and interest rates. The Company does not apply hedge accounting. Derivative financial instruments, including embedded derivatives, are classified as fair value through profit or loss and measured at fair value as determined by active market prices and valuation models, as appropriate. Valuation models require the use of assumptions concerning the amount and timing of estimated future cash flows and discount rates. In determining these assumptions, the Company uses readily observable market inputs where available or, where not available, inputs generated by the Company. Changes in the fair value of derivative instruments are recorded in the consolidated statement of earnings.

v) Trade and other payables and debt

Trade payables and debt are classified as other financial liabilities and are recognized initially at fair value, net of transaction costs incurred, and are subsequently stated at amortized cost. For debt, any difference between the amounts originally received, net of transaction costs, and the redemption value is recognized in the consolidated statement of earnings over the period to maturity using the effective interest rate method.

vi) Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted. For loans and receivables, the amount of impairment is the difference between the asset’s carrying value and the present value of estimated future cash flows, discounted at the original effective interest rate. Any impairment loss is recognized in the consolidated statement of earnings immediately.

With the exception of available-for-sale investments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through the comprehensive statement of earnings to the extent that the carrying amount of the investment at the date of impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. In respect of available-for-sale equity securities, impairment losses previously recognized in the consolidated statement of earnings are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized directly in equity.

o) Accounting standards issued but not yet effective

Standards and interpretations issued but not yet effective up to the date of issuance of the financial statements are listed below. This listing of standards and interpretations issued are those that the Company reasonably expects to have an impact on disclosures, financial position or performance when applied at a future date.

• IAS 1 – Financial statement presentation – Presentation of Items of Other Comprehensive Income.

The amendments of IAS 1 change the grouping of items presented in other comprehensive income. Items that could be reclassified (or ‘recycled’) to net earnings at a future point in time would be presented separately from items that will never be reclassified. The amendment becomes effective for annual periods beginning on or after July 1, 2012. The amendment affects presentation only and has no impact on the Company’s financial position or performance. The Company does not anticipate these amendments to have a significant impact on its consolidated financial statements.

• IFRS – 9 Financial instruments: Classification and Measurement

IFRS 9 addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and amended in October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured at fair value and those measured at amortized cost. The determination is made at initial recognition. The classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than in net earnings, unless this creates an accounting mismatch. The standard becomes effective for annual periods beginning on or after January 1, 2015. The Company does not anticipate the adoption of IFRS 9 to have a significant impact on its consolidated financial statements.

13

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

• IFRS 10 – Consolidated Financial Statements

The amendments of IFRS 10 change the definition of control under IFRS so that the same criteria are applied to all entities to determine control. The standard becomes effective for annual periods beginning on or after January 1, 2013. The Company does not anticipate the adoption of IFRS 10 to have a significant impact on its consolidated financial statements.

• IFRS11 – Joint Arrangements

The amendments of IFRS 11 reduce the types of joint arrangement to two: joint ventures and joint operations. IFRS11 requires the use of equity accounting for interests in joint ventures, eliminating the existing policy choice of proportionate consolidation for jointly controlled entities under IAS 31. The standard becomes effective for annual periods beginning on or after January 1, 2013. The Company does not anticipate the adoption of IFRS 11 to have a significant impact on its consolidated financial statements.

• IFRS 12 – Disclosure of Interest in Other Entities

The amendments of IFRS 12 sets out the disclosure requirements for entities reporting under IFRS 10 and IFRS 11, and replaces the disclosure requirements currently found in IAS 28, Investments in Associates. The standard becomes effective for annual periods beginning on or after January 1, 2013. The amendment affects presentation only and has no impact upon the Company’s financial position or performance. The Company does not anticipate the adoption of IFRS 12 to have a significant impact on its consolidated financial statements.

• IFRS 13 – Fair Value Measurement

This standard aims to improve consistency and reduce complexity by providing a precise definition of fair value and single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRS. The standard becomes effective for annual periods beginning on or after January 1, 2013. The Company does not anticipate the adoption of IFRS 13 to have a significant impact on its consolidated financial statements.

• IFRIC 20 – Stripping Costs in the Production Phase of a Surface Mine

The Interpretation of IFRIC 20 gives clarification on the requirements for accounting for stripping costs associated with waste removal in surface mining, including when production stripping costs should be recognized as an asset, how the asset is initially recognized, and subsequent measurement. IFRIC 20 is effective for annual periods beginning on or after January 1, 2013. The Company is currently evaluating the impact the new guidance will have on its consolidated financial statements.

4 Trade and other receivables

	December 31, 2012		December 31, 2011
Trade receivables and other receivables		319.9		175.0
VAT receivable		70.3		63.1
		390.2		238.1

5 Inventories

	December 31, 2012		December 31, 2011
Ore in stockpiles		158.1		95.1
Work-in-progress		27.2		14.3
Finished product		324.8		230.2
Total product inventory		510.1		339.6
Consumable stores		393.6		310.3
		903.7		649.9

During the year $1,667.5 million (December 31, 2011 – $1,177.0 million) of inventory was expensed in cost of sales.

14

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

6 Investments

	December 31, 2012		December 31, 2011
Equity securities – at cost		16.0		9.5
Equity securities – at fair value		35.6		4.4
Asset-backed commercial paper		4.0		4.1
		55.6		18.0

The following table summarizes the movements in the fair value of investments:

	2012			2011
Balance – beginning of year		18.0			18.0
Additions		46.1			—
Disposals		—			(0.2	)
Gain (loss) in fair value		(8.5	)		0.2
Balance – end of year		55.6			18.0

During the year the loss in fair value of available-for-sale investments was $7.3 million (December 31, 2011: gain of $0.2 million), which is included in the above gain (loss) in fair value of investments.

15

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

7 Property, plant and equipment

							Mineral properties and mine development costs
	Plant and equipment			Capital work- in-progress			Operating mines			Development projects			Total
Cost
As at January 1, 2011		1,548.3			337.1			48.7			1,289.7			3,223.8
Additions		—			1,078.9			—			—			1,078.9
Disposals		(17.9	)		—			—			—			(17.9	)
Transfers between categories		478.1			(507.8	)		265.9			(236.2	)		—
Restoration provisions		—			—			58.8			59.0			117.8
Capitalized interest		5.5			1.9			—			19.7			27.1
Capitalized depreciation		—			12.1			—			—			12.1
As at December 31, 2011		2,014.0			922.2			373.4			1,132.2			4,441.8
Additions		—			1,314.8			—			—			1,314.8
Disposals		(16.0	)		—			—			—			(16.0	)
Transfers between categories		792.6			(934.7	)		390.6			(248.5	)		—
Restoration provisions		—			—			8.2			3.2			11.4
Capitalized interest		—			1.6			—			—			1.6
As at December 31, 2012		2,790.6			1,303.9			772.2			886.9			5,753.6
Accumulated depreciation
As at January 1, 2011		(456.8	)		—			(36.1	)		—			(492.9	)
Depreciation charge		(107.3	)		—			(4.7	)		—			(112.0	)
Capitalized depreciation		(12.1	)		—			—			—			(12.1	)
Disposals		4.5			—			—			—			4.5
Other		(4.9	)		—			—			—			(4.9	)
As at December 31, 2011		(576.6	)		—			(40.8	)		—			(617.4	)
Depreciation charge		(137.8	)		—			(34.5	)		—			(172.3	)
Disposals		12.3			—			—			—			12.3
Other		(22.6	)		—			—			—			(22.6	)
As at December 31, 2012		(724.7	)		—			(75.3	)		—			(800.0	)
Net book value
As at December 31, 2011		1,437.4			922.2			332.6			1,132.2			3,824.4
As at December 31, 2012		2,065.9			1,303.9			696.9			886.9			4,953.6

During the year $1.6 million (December 31, 2011 – $27.1 million) of interest was capitalized relating to qualifying assets. The amount capitalized in 2012 was determined by applying the weighted average cost of borrowings of 7.71% to the accumulated qualifying expenditures on mining interests. The amount capitalized in 2011 related to interest costs directly attributable to the qualifying assets under development with the cost of borrowing rate of 8.74%.

16

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

8 Other assets

	December 31, 2012			December 31, 2011
Deposits on property, plant and equipment		115.8			59.2
Deferred income tax assets (note 14)		81.1			11.3
Derivative instruments (note 25)		5.0			5.1
Prepaid and other expenses		225.1			28.9
Other		15.5			11.0
Total other assets		442.5			115.5
Less: current portion of other assets		(230.1	)		(34.0	)
		212.4			81.5
Current portion consists of:
Derivative instruments (note 25)		5.0			5.1
Prepaid income taxes		164.4			—
Prepaid expenses		60.7			28.9
		230.1			34.0

9 Debt

	December 31, 2012			December 31, 2011
Drawn debt
Senior notes (a)		339.1			—
Kansanshi subordinated debt facility (b)		14.8			19.3
Short-term borrowings (c)		42.6			43.3
Other		0.3			0.3
Total		396.8			62.9
Less: current portion of debt facilities and short-term debt		(49.1	)		(48.1	)
		347.7			14.8
Undrawn debt
Kevitsa facility (d)		250.0			250.0
Short-term borrowings (c)		67.4			66.7
Kansanshi senior term and revolving facility (e)		1,000.0			—

The scheduled future minimum principal repayments are as follows:

	$
2013		49.1
2014		6.8
2015		6.6
2016		1.6
2017		1.6
Thereafter		331.1
		396.8

17

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

a) Senior Notes

In October 2012, the Company completed a public offering of $350 million in senior notes due in 2019, bearing interest at an annual rate of 7.25%. The cash received from the offering of $338.8 million is net of issue and transaction costs of $11.2 million; issue costs of $0.3 million have been expensed between the date of offering and the balance sheet date.

The notes are guaranteed on a subordinated basis by certain subsidiaries of the Company. The Company may redeem some or all of the notes at any time on or after October 15, 2015 at redemption prices ranging from 105.438% in the first year to 100% in the final year, plus accrued interest. Although part of this redemption feature indicates the existence of an embedded derivative, the value of this is not significant. Prior to October 15, 2015, the notes may be redeemed at 100% plus a make-whole premium, and accrued interest. In addition, until October 15, 2015, the Company may redeem up to 35% of the principal amount of notes, in an amount not greater than the net proceeds of certain equity offerings, at a redemption price of 107.25% plus accrued interest.

The Company is subject to certain restrictions on asset sales, payments, and incurrence of indebtedness and issuance of preferred stock.

b) Kansanshi subordinated debt facility

Kansanshi entered into a €34.0 million subordinated debt facility in December 2003 to finance the Kansanshi project. This facility is repayable in nine equal annual payments commencing October 31, 2007. The facility has a principal amount outstanding of €11.3 million (December 31, 2011 – €15.1 million). The carrying amount shown above of $14.8 million (December 31, 2011 – $19.3 million) is net of issue and transaction costs of €0.1 million (December 31, 2011 – €0.2 million).

Interest is calculated annually, within a range of 3.2% to 13.2%, based on the average LME cash copper price for the preceding calendar year. The interest rate is at its lower limit at a realized copper price of less than $1,300 per tonne and increases incrementally until the copper price reaches its $2,200 per tonne upper limit. Indexation to the price of copper results in the existence of an embedded derivative. This embedded derivative is recorded at fair value at each period with changes in fair value recorded as a component of net earnings disclosed within finance costs.

c) Short-term borrowings

In 2010, the Company’s metal marketing division entered into two uncommitted borrowing facilities totalling $110.0 million. The facilities are used to finance purchases and the term hedging of copper and gold undertaken by the metal marketing division. Interest on the facilities is calculated at the bank’s benchmark rate plus 1.75%. The loans are collateralized by physical inventories.

d) Kevitsa facility

In March 2011, a subsidiary of the Company entered into a $250.0 million project loan collateralized by the assets and offtake agreements of the Kevitsa project. The facility is available in two tranches. Tranche A of $175.0 million is required to be repaid in equal annual instalments over four years starting March 31, 2013, and tranche B of $75.0 million is required to be repaid on September 30, 2017. The funds are to be used to finance the development of the Kevitsa mine. Interest on the Kevitsa facility is to be calculated at LIBOR plus 3.5%.

e) Kansanshi senior term and revolving facility

In March 2012, Kansanshi entered into a $300.0 million senior term loan (the “term loan”) and a $700.0 million revolving credit facility (the “facility”) to finance the Kansanshi expansion projects and the copper smelter project collateralized by the assets and offtake agreements of Kansanshi. The term loan is repayable in six equal semi-annual instalments commencing on July 25, 2014 and interest is calculated at a rate equal to three year LIBOR plus 3%. The revolving facility is required to be repaid by January 24, 2017 and interest is calculated at a rate of either the three or six month LIBOR plus 3%.

18

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

10 Convertible bonds

In June 2009, the Company issued $500.0 million in 6% convertible bonds (the “Bonds”) due June 19, 2014 for net proceeds of $488.0 million after payment of commissions and expenses related to the offering. The Bonds bore interest at 6% per annum, payable semi-annually in equal instalments.

On July 27, 2011, the Company announced a voluntary incentive payment offer in relation to the Bonds. The offer included a cash payment of $8,088.91 per $100,000 in principal amount of the Bonds (the “Incentive Payment”) and a cash payment of $1,410.68 per $100,000 in principal amount of the Bonds (the “Conversion Price Adjustment Payment”) to convert any or all of the convertible bonds due 2014. The incentive offer period expired on July 28, 2011 with 99.98% of the bondholders accepting the conversion offer. The offer was later extended to the remaining bondholder who accepted the offer in November 2011.

On August 4, 2011, the Company issued 44,777,735 common shares and on December 5, 2011 the Company issued 8,957 common shares. The $460.0 million convertible debt liability and the $48.3 million equity component of the convertible debt have been transferred to common share capital. The incentive payment and other transactions costs of $48.4 million have been recognized in the statement of earnings in 2011.

	2012		2011
Convertible bonds
As at January 1		—		452.1
Accretion expense		—		7.9
Transferred to common share capital		—		(460.0	)
As at December 31		—		—
Equity
As at January 1		—		48.3
Transferred to common share capital		—		(48.3	)
As at December 31		—		—

11 Provisions and other liabilities

	December 31, 2012			December 31, 2011
Derivative instruments (note 25)		3.9			8.4
Restoration provisions (note 12)		270.5			252.5
Finance leases (note 13)		27.2			28.6
Other		4.1			7.9
Total other liabilities		305.7			297.4
Less: current portion		(6.5	)		(11.0	)
		299.2			286.4
Current portion consists of:
Derivative instruments		3.4			7.3
Restoration provisions (note 12)		0.6			1.3
Finance leases (note 13)		2.1			1.9
Other		0.4			0.5
		6.5			11.0

19

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

12 Restoration provisions

The Company has restoration and remediation obligations associated with its operating mines, processing facilities and development projects. The following table summarizes the movements in the restoration provisions:

	2012			2011
As at January 1		252.5			131.1
Changes in estimate		11.4			117.8
Accretion expense		6.6			3.6
As at December 31		270.5			252.5
Less: current portion		(0.6	)		(1.3	)
		269.9			251.2

The restoration provisions have been recorded initially as a liability based on management’s best estimate of cash flows, using a risk-free discount rate between 0.7% and 3.0% and an inflation factor between 2.8% and 4.0%. Payments are expected to occur over the life of each of the operating mines over a period of approximately 30 years.

13 Finance leases

The Company has two finance leases for plant and equipment. The carrying value of the leased assets as of the balance sheet date was as follows:

	December 31, 2012			December 31, 2011
Cost		30.0			30.0
Less: accumulated depreciation		(6.4	)		(3.2	)
Net carrying value of finance lease agreements		23.6			26.8

The present value of future minimum lease payments under non-cancellable finance lease agreements was as follows:

	December 31, 2012				December 31, 2011
	Discounted		Undiscounted		Discounted		Undiscounted
Within one year		2.1		3.8		1.9		3.7
After one year but not more than five years		10.0		15.2		9.2		14.9
More than five years		15.1		19.9		17.5		23.3
Total minimum lease payments		27.2		38.9		28.6		41.9

20

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

14 Income taxes

The significant components of the Company’s income tax expense are as follows:

	2012		2011
Current income tax expense		37.4		473.8
Deferred income expense (recovery)		290.4		(13.1	)
		327.8		460.7

The income taxes shown in the consolidated statements of earnings differ from the amounts obtained by applying statutory rates to the earnings before income taxes due to the following:

	2012						2011
	Amount $			%			Amount $			%
Earnings before income taxes		2,197.2						1,115.5
Income taxes at Canadian statutory rates		549.3			25			295.6			27
Settlement of RDC claims and sale of assets (b)		(304.5	)		(14	)		—			—
Effect of Zambian variable tax (a)		95.9			4			139.4			12
Recognition of previously unrecognized losses		(81.8	)		(4	)		—			—
Difference in foreign tax rates		38.6			2			41.7			4
Non-deductible expenses		37.7			2			43.7			4
Losses not recognized		(5.5	)		—			(30.4	)		(3	)
Foreign tax holiday (c)		(1.9	)		—			(29.3	)		(3	)
Income tax expense		327.8			15			460.7			41

a) Included in the current and deferred income tax expense are amounts relating to the variable profit tax (“VPT”) introduced in Zambia in 2008. The VPT causes an increase in the effective tax rate from the 30% base income tax rate for the Company to 43%.

b) Settlement of the RDC claims (note 21) has no associated tax liability.

c) Guelb Moghrein was subject to a five year tax holiday with the Mauritanian government. Guelb Moghrein has been subject to Mauritanian income taxes on income earned subsequent to February 2012.

The deferred income tax assets and liabilities included on the balance sheet are as follows:

	2012			2011
Deferred income tax assets		81.1			11.3
Deferred income tax liabilities		(564.5	)		(206.4	)
		(483.4	)		(195.1	)

The significant components of the Company’s deferred income taxes are as follows:

	2012			2011
Temporary differences relating to property, plant and equipment and finance leases		(807.0	)		(291.4	)
Unused operating losses		272.4			13.2
Temporary differences relating to non-current liabilities (including restoration provisions)		36.7			84.5
Temporary differences relating to inventory		5.2			3.1
Other		9.3			(4.5	)
Net deferred income tax liabilities		(483.4	)		(195.1	)

The Company believes that it is probable that the results of future operations will generate sufficient taxable income to realize the

21

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

above noted deferred income tax assets. The Company has operating loss carry-forwards that may be available for tax purposes in Canada totalling $146.1 million (December 31, 2011 – $195.2 million) expiring between 2014 and 2032.

The Company has non-Canadian resident subsidiaries that have undistributed earnings of $3,982.5 million (December 31, 2011 – $2,168.4 million). These undistributed earnings are not expected to be repatriated in the foreseeable future and the Company has control over the timing of such, therefore taxes that may apply on repatriation have not been provided for.

15 Share capital

a) Common shares

Authorized

Unlimited number of common shares without par value.

Issued

	Number of shares (000’s)
Balance as at January 1, 2011		430,878
Share options exercised		17
Conversion of convertible bonds (i)		44,787
Shares issued (ii)		628
Balance as at December 31, 2011 and December 31, 2012		476,310

i) Conversion of convertible bonds

The convertible bonds were converted into common shares of the Company during 2011 (note 10).

ii) Lusaka stock exchange listing

On July 20, 2011 the Company issued 628,395 common shares for gross proceeds of $15.9 million in connection with a listing of depositary receipts on the Lusaka Stock Exchange in Zambia (the “LuSE”). These shares, together with 7,700 common shares in the capital of the Company purchased on the open market, will underlie the depositary receipts. The depositary receipts are held by Zambian investors and employees and trade under the LuSE Symbol “FQM”.

b) Treasury shares

The Company established an independent trust to purchase, on the open market, the common shares pursuant to the long-term incentive plan (note 17). The Company consolidates the trust as it constitutes a special purpose entity. Consequently, shares purchased by the trust to satisfy obligations under the long-term incentive plan are recorded as treasury shares in shareholders’ equity. Generally, dividends received on shares held in the trust will be paid to plan participants in cash as received.

	Number of shares (000’s)
Balance as at January 1, 2011		3,755
Shares purchased		950
Shares vested		(748	)
Balance as at December 31, 2011		3,957
Shares purchased		1,734
Shares vested		(1,024	)
Balance as at December 31, 2012		4,667

c) Dividends

On March 6, 2012, the Company declared a final dividend payment of C$0.1277 per share or $61.4 million in respect of the financial year ended December 31, 2011 (March 15, 2011 – C$0.1206 per share or $53.5 million).

On August 1, 2012, the Company declared an interim dividend of C$0.0603 per share or $29.6 million in respect of the financial year ended December 31, 2012 (August 8, 2011 – C$0.0533 per share or $25.8 million).

22

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

16 Earnings per share

	2012		2011
Basic and diluted earnings attributable to shareholders of the Company		1,772.9		528.9
Basic weighted average number of shares outstanding (000’s of shares)		473,893		447,224
Effect of dilutive securities:
Treasury shares		2,417		2,233
Diluted weighted average number of shares outstanding (000’s of shares)		476,310		449,457
Earnings per common share – basic		3.74		1.18
Earnings per common share – diluted		3.72		1.18

17 Share-based compensation

a) Long-term incentive plan

The Company has a long-term incentive plan (the “Plan”), which provides for the issuance of performance stock units (“PSUs”) and restricted stock units (“RSUs”) in such amounts as approved by the Company’s Compensation Committee. Included in general and administrative expense is share-based compensation expense of $15.9 million (December 31, 2011 – $8.8 million) related to this Plan.

Under the Plan, each PSU entitles participants, which includes directors, officers, and employees, to receive up to one-and-a-half common shares of the Company at the end of a three year period if certain performance and vesting criteria, which are based on the Company’s performance relative to a representative group of other mining companies, have been met. The fair value of each PSU is recorded as compensation expense over the vesting period. The fair value of each PSU is estimated using a Monte Carlo Simulation approach. A Monte Carlo Simulation is a technique used to approximate the probability of certain outcomes, called simulations, based on normally distributed random variables and highly subjective assumptions. This model generates potential outcomes for stock prices and allows for the simulation of multiple stocks in tandem resulting in an estimated probability of vesting.

Under the Plan, each RSU entitles the participant to receive one common share of the Company subject to vesting criteria. RSU grants typically vest fully at the end of the three year period. The fair value of each RSU is recorded as compensation expense over the vesting period. The fair value of each RSU is estimated based on the market value of the Company’s shares at the grant date and an estimated forfeiture rate of 11.5% (December 31, 2011 – 11.5%).

	2012			2011
	Number of units (000’s)			Number of units (000’s)
Performance stock units
Outstanding – beginning of year		2,106			1,898
Granted		1,064			654
Vested		(522	)		(314	)
Forfeited		(129	)		(132	)
Outstanding – end of year		2,519			2,106
Restricted stock units
Outstanding – beginning of year		1,699			1,637
Granted		1,107			626
Vested		(502	)		(435	)
Forfeited		(210	)		(129	)
Outstanding – end of year		2,094			1,699

23

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

The following assumptions were used in the Monte Carlo Simulation model to calculate compensation expense in respect of the PSUs granted:

	2012			2011
Risk-free interest rate		1.08	%		1.90	%
Vesting period		3 years			3 years
Expected volatility		59.2	%		77.5	%
Expected forfeiture per annum		4	%		4	%
Weighted average probability of vesting		47.1	%		36.2	%

b) Key management compensation

Key management personnel include the members of the senior management team and directors.

	2012		2011
Salaries, fees and other benefits		4.5		4.0
Bonus payments		2.0		2.0
Share-based compensation		2.4		3.7
Total compensation paid to key management		8.9		9.7

18 Sales revenues by nature

	2012		2011
Copper		2,232.2		2,317.9
Nickel		396.5		—
Gold		296.4		240.9
PGE and other elements		25.3		24.7
		2,950.4		2,583.5

19 Cost of sales

	2012			2011
Costs of production		(1,797.1	)		(1,192.0	)
Movement in inventory		120.0			28.5
Depletion and amortization		(172.3	)		(112.0	)
		(1,849.4	)		(1,275.5	)

24

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

20 Expenses by nature

	2012			2011
Raw materials and consumables		(772.4	)		(644.8	)
Employment costs, benefits and contractors		(468.7	)		(342.7	)
Repairs and maintenance		(181.6	)		(155.1	)
Depreciation		(172.3	)		(112.0	)
Freight		(122.1	)		(38.1	)
Royalties		(147.4	)		(80.8	)
Utilities		(58.9	)		(46.3	)
Travel		(17.4	)		(16.0	)
Other		(104.6	)		(38.4	)
Increase in inventories		120.0			124.9
		(1,925.4	)		(1,349.3	)

Expenses presented above include cost of sales and general and administrative.

21 Settlement of RDC claims and sale of assets

On January 5, 2012 the Company reached an agreement with Eurasian Natural Resources Corporation PLC (“ENRC”) to dispose of its residual RDC assets for $1.25 billion. The transaction closed on March 2, 2012.

The Company received consideration of $750.0 million in cash and a three-year $500.0 million promissory note. The promissory note is payable on March 2, 2015 and bears interest at a rate of 3% per annum payable annually in arrears. As part of the transaction, First Quantum, ENRC, the RDC Government, International Finance Corporation (“IFC”) and Industrial Development Corporation (“IDC”) have also settled all disputes relating to the companies being sold and their assets and operations in the RDC.

The net settlement amount received has not given rise to a tax liability and accordingly reduces the Company’s overall effective tax rate for the period.

A reconciliation of the proceeds of the settlement is as follows:

Received in cash	750.0
Fair value of three-year promissory note	475.0
	1,225.0
Payments made to IFC and IDC	(14.0	)
Transaction costs	(4.6	)
Net liabilities disposed of	11.5
Settlement of RDC claims and sale of assets	1,217.9

The promissory note receivable from ENRC is measured at amortized cost using the effective interest rate method and is accreted to face value over the original term using an annual effective interest rate of 1.72%. Interest income on the note for the year ended December 31, 2012 was $5.6 million, net of $6.8 million of accretion. The accrued interest receivable at December 31, 2012 of $12.5 million is included within other assets.

25

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

22 Other income (expense)

	2012			2011
Foreign exchange gain (loss)		(7.3	)		6.2
Loss on sale of assets		(2.1	)		(5.1	)
Sundry income		5.1			6.2
		(4.3	)		7.3

23 Finance costs

	2012			2011
Interest expense on debt and finance leases		(9.5	)		(7.0	)
Interest expense on convertible bonds		—			(25.2	)
Interest expense other		(0.8	)		(0.9	)
Accretion on restoration provision		(6.6	)		(3.6	)
Other finance costs		—			(0.3	)
Total finance costs		(16.9	)		(37.0	)
Less: interest capitalized		1.6			27.1
		(15.3	)		(9.9	)

26

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

24 Segmented information

The Company’s reportable operating segments are individual mine development projects or operations, being Kansanshi, Guelb Moghrein, Ravensthorpe, Kevitsa, Sentinel and Corporate. Each of these mines and development projects report information separately to the CEO, the chief operating decision maker.

The corporate segment is responsible for the evaluation and acquisition of new mineral properties, regulatory reporting, treasury and finance and corporate administration. Included in the corporate segment is the Company’s metal marketing division which purchases and sells third party material.

The Company’s operations are subject to seasonal aspects, in particular the rain season in Zambia. The rain season in Zambia generally starts in November and continues through April, with the heaviest rainfall normally experienced in the months of January, February and March. As a result of the rain season, mine pit access and the ability to mine ore is lower in the first quarter of the year than other quarters and the cost of mining is higher.

For the year ended December 31, 2012, segmented information is presented as follows:

	Kansanshi			Guelb Moghrein			Ravensthorpe			Kevitsa			Sentinel		Corporate			Total
Segmented revenues		1,979.9			394.4			387.7			72.1			—		219.2			3,053.3
Less inter-segment revenues		—			—			—			—			—		(102.9	)		(102.9	)
Sales revenues		1,979.9			394.4			387.7			72.1			—		116.3			2,950.4
Cost of sales
Costs of production		(1,053.6	)		(235.6	)		(356.6	)		(40.0	)		—		(111.3	)		(1,797.1	)
Movement in inventory		83.7			(6.4	)		48.4			9.1			—		(14.8	)		120.0
Depreciation		(80.6	)		(34.7	)		(37.0	)		(17.3	)		—		(2.7	)		(172.3	)
Segmented gross profit (loss)		929.4			117.7			42.5			23.9			—		(12.5	)		1,101.0
Other		(14.1	)		(10.0	)		2.8			(6.4	)		—		1,115.6			1,087.9
Segmented operating profit		915.3			107.7			45.3			17.5			—		1,103.1			2,188.9
Net finance income (costs)		(3.0	)		(0.1	)		(4.3	)		(1.5	)		—		17.2			8.3
Segmented profit before undernoted items		912.3			107.6			41.0			16.0			—		1,120.3			2,197.2
Income taxes		(380.7	)		6.1			13.1			9.0			—		24.7			(327.8	)
Non-controlling interests		(96.7	)		—			—			—			—		0.2			(96.5	)
Segmented profit		434.9			113.7			54.1			25.0			—		1,145.2			1,772.9
Property, plant and equipment		1,670.6			208.6			939.3			810.0			692.3		632.8			4,953.6
Total assets		2,685.3			378.9			1,155.1			914.5			851.7		1,550.9			7,536.4
Total liabilities		798.0			52.7			226.9			36.3			71.4		469.7			1,655.0
Capital expenditures		755.2			32.5			59.8			171.4			271.6		26.2			1,316.7

The Sentinel project was under development at December 31, 2012. The exploration and development costs related to this property are capitalized.

27

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

For the year ended December 31, 2011, segmented information is presented as follows:

	Kansanshi			Guelb Moghrein			Ravensthorpe		Kevitsa		Sentinel		Corporate			Total
Segmented revenues		2,048.3			346.2			—		—		—		299.6			2,694.1
Less inter-segment revenues		—			—			—		—		—		(110.6	)		(110.6	)
Sales revenues		2,048.3			346.2			—		—		—		189.0			2,583.5
Cost of sales
Costs of production		(810.7	)		(186.5	)		—		—		—		(194.8	)		(1,192.0	)
Movement in inventory		21.7			6.8			—		—		—		—			28.5
Depreciation		(72.2	)		(38.7	)		—		—		—		(1.1	)		(112.0	)
Segmented gross profit (loss)		1,187.1			127.8			—		—		—		(6.9	)		1,308.0
Other		3.8			(8.9	)		—		—		—		(182.8	)		(187.9	)
Segmented operating profit (loss)		1,190.9			118.9			—		—		—		(189.7	)		1,120.1
Net finance income (costs)		(5.2	)		—			—		—		—		0.6			(4.6	)
Segmented profit (loss) before undernoted items		1,185.7			118.9			—		—		—		(189.1	)		1,115.5
Income taxes		(509.1	)		—			—		—		—		48.4			(460.7	)
Non-controlling interests		(126.4	)		—			—		—		—		0.5			(125.9	)
Segmented profit (loss)		550.2			118.9			—		—		—		(140.2	)		528.9
Property, plant and equipment		958.0			214.5			956.3		713.2		358.0		624.4			3,824.4
Total assets		1,470.0			332.1			1,049.5		747.5		422.2		1,276.7			5,298.0
Total liabilities		668.8			42.0			221.1		61.8		21.7		114.1			1,129.5
Capital expenditures		332.1			46.9			303.0		303.4		59.7		4.4			1,049.5

Projects under development during 2011 included Kevitsa, Ravensthorpe and Sentinel, with Ravensthorpe achieving commercial production on December 28, 2011. The exploration and development costs related to these properties are capitalized.

28

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

Geographical information

	December 31, 2012		December 31, 2011
Revenue by destination (a)
Zambia		1,618.6		1,728.9
China		793.9		362.5
South Africa		118.2		113.6
United Arab Emirates		89.5		—
Saudi Arabia		79.8		202.4
India		45.9		4.2
Sweden		44.1		—
Egypt		43.7		76.3
Brazil		37.7		—
South Korea		36.2		60.0
Canada		25.8		—
Taiwan		10.3		17.8
Switzerland		6.0		16.9
Other		0.7		0.9
		2,950.4		2,583.5

a) Presented based on the ultimate destination of the product if known. If the eventual destination of the product sold through traders is not known then revenue is allocated to the location of the product at the time when the risks and rewards of ownership are passed.

	December 31, 2012		December 31, 2011
Non-current assets by location
Zambia		2,497.9		1,397.7
Australia		939.3		956.3
Finland		817.7		713.2
Peru		615.2		607.6
Mauritania		208.6		214.5
United Kingdom		1.9		4.4
Other		4.3		0.9
		5,084.9		3,894.6
Investments, deferred income tax assets and promissory note receivable		618.5		29.3
		5,703.4		3,923.9

29

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

25 Financial instruments

The Company’s activities expose it to a variety of risks arising from financial instruments. These risks, and management’s objectives, policies and procedures for managing these risks, are disclosed in the accounting policy in note 3n and as follows:

Fair values

The Company classifies its financial assets as fair value through profit or loss, available-for-sale, or loans and receivables. Financial liabilities are classified as either fair value through profit or loss, or other financial liabilities.

The following provides a comparison of carrying and fair values of each classification of financial instrument at December 31, 2012:

	Loans and receivables		Available- for-sale		Fair value through profit or loss		Other financial liabilities		Total carrying amount		Total fair value
Financial assets
Cash and cash equivalents		309.0		—		—		—		309.0		309.0
Trade receivables and other prepayments (a)		319.9		—		—		—		319.9		319.9
Derivative instruments		—		—		5.0		—		5.0		5.0
Investments
At cost (b)		—		16.0		—		—		16.0		—
At fair value		—		39.6		—		—		39.6		39.6
Promissory note receivable (c)		481.8		—		—		—		481.8		481.8
Financial liabilities
Trade and other payables		—		—		—		355.5		355.5		355.5
Derivative instruments		—		—		3.9		—		3.9		3.9
Debt facilities		—		—		—		396.8		396.8		396.8

a) Trade receivables and other prepayments

Copper products are sold under pricing arrangements where final prices are set at a specified future date based on market copper prices. Changes between the prices recorded upon recognition of revenue and the final price due to fluctuations in copper market prices give rise to an embedded derivative in the accounts receivable. This derivative is classified as fair value through profit or loss and recorded at fair value, with changes in fair value recognized as a component of cost of sales.

b) Investments – at cost

The Company holds investments in privately held entities which are measured at cost as the fair value cannot be reliably measured.

c) Promissory note receivable

The promissory note from ENRC (note 21) is classified as a loan or receivable and carried at amortized cost. Management estimates that the fair value of the note receivable approximates the carrying value of $481.8 million which includes accrued interest of $12.5 million at December 31, 2012.

30

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

The following provides a comparison of carrying and fair values of each classification of financial instrument at December 31, 2011:

	Loans and receivables		Available- for-sale		Fair value through profit or loss		Other financial liabilities		Total carrying amount		Total fair value
Financial assets
Cash and cash equivalents		452.1		—		—		—		452.1		452.1
Trade receivables and other prepayments (a)		165.4		—		—		—		165.4		165.4
Derivative instruments		—		—		5.1		—		5.1		5.1
Investments
At cost (b)		—		9.5		—		—		9.5		—
At fair value		—		8.5		—		—		8.5		8.5
Financial liabilities
Trade and other payables		—		—		—		254.0		254.0		254.0
Derivative instruments		—		—		8.4		—		8.4		8.4
Debt facilities		—		—		—		62.8		62.8		62.8

Fair value hierarchy

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 Inputs for the asset or liability that are not based on observable market data.

The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy as at December 31, 2012:

	Level 1		Level 2		Level 3		Total fair value
Financial assets
Derivative instruments – LME contracts		4.6		—		—		4.6
Derivative instruments – OTC contracts		—		0.4		—		0.4
Investments at fair value		35.6		—		4.0		39.6
Financial liabilities
Derivative instruments – LME contracts		1.1		—		—		1.1
Derivative instruments – OTC contracts		—		1.3		—		1.3
Embedded derivative in subordinated debt facility		—		1.5		—		1.5

31

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy as at December 31, 2011:

	Level 1		Level 2		Level 3		Total fair value
Financial assets
Derivative instruments – LME contracts		4.3		—		—		4.3
Derivative instruments – OTC contracts		—		0.8		—		0.8
Investments at fair value		4.4		—		4.1		8.5
Financial liabilities
Derivative instruments – LME contracts		3.5		—		—		3.5
Derivative instruments – OTC contracts		—		2.5		—		2.5
Embedded derivative in subordinated debt facility		—		2.4		—		2.4

The Company’s derivative instruments are valued using pricing models and the Company generally uses similar models to value similar instruments. Where possible, the Company verifies the values produced by comparing its pricing models to active market prices. Forward contracts for copper, nickel, gold and PGE are purchased on the London Metal Exchange and London Bullion Market and have direct quoted prices, therefore these contracts are classified within Level 1 of the fair value hierarchy. Other forward contracts held by the Company for copper and gold are OTC and therefore the valuation models require the use of assumptions concerning the amount and timing of estimated future cash flows and discount rates using inputs which can generally be verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy.

The Company’s investments in marketable equity securities are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The fair value of the marketable equity securities is calculated as the quoted market price of the marketable security multiplied by the quantity of shares held by the Company. The Company’s investments classified as Level 3 include asset backed commercial paper. The Company reviews the fair value periodically to determine whether the value is materially impaired.

Financial risk management

Credit risk

The Company’s credit risk is primarily attributable to cash and bank balances, short-term deposits, derivative instruments, trade and other receivables and promissory note receivable. The Company’s exposure to credit risk is represented by the carrying amount of each class of financial assets, including commodity contracts, recorded in the consolidated balance sheet.

The Company limits its credit exposure on cash held in bank accounts by holding its key transactional bank accounts with highly rated financial institutions. The Company manages its credit risk on short-term deposits by only investing with counterparties that carry investment grade ratings as assessed by external rating agencies and spreading the investments across these counterparties. Under the Company’s risk management policy, allowable counterparty exposure limits are determined by the level of the rating unless exceptional circumstances apply. A rating of “A-” grade or equivalent is the minimum allowable rating required as assessed by international credit rating agencies. Likewise, it is the Company’s policy to deal with banking counterparties for derivatives who are rated “A-” grade or above by international credit rating agencies and graduated counterparty limits are applied depending upon the rating.

Exceptions to the policy for dealing with relationship banks with ratings below “A-” are reported to, and approved by, the Audit Committee. As at December 31, 2012, substantially all cash and short-term deposits are with counterparties with ratings “A-” or higher.

The Company’s credit risk associated with trade accounts receivable is managed through establishing long-term contractual relationships with international trading companies using industry-standard contract terms. More than 20% of the Company’s trade receivables are generated from two customers together representing greater than 40% of the total sales for the year. Other accounts receivable consist of amounts owing from government authorities in relation to the refund of value-added taxes applying to inputs for the production process and property, plant and equipment expenditures.

The promissory note receivable from ENRC includes mandatory prepayment features triggered by the counterparty’s circumstances: delisting from the London Stock Exchange; the counterparty’s long-term unsecured, unsubordinated debt being downgraded to a rating lower than “B-” by Moody’s Investor Services Limited; a material portion of the counterparty’s assets are nationalized and/or expropriated by any government entities; or it becomes unlawful for the counterparty to perform any of their obligations under the promissory note.

32

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

Significant credit risk exposures to any single counterparty or group of counterparty having similar characteristics are as follows:

	December 31, 2012		December 31, 2011
Commodity traders and smelters (Trade receivables and other receivables)		319.9		175.0
Government authorities (Prepaid taxes and VAT receivable)		234.7		63.1
Promissory note due from ENRC		481.8		—
		1,036.4		238.1

The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Company’s maximum exposure to credit risk.

Liquidity risk

The Company manages liquidity risk by maintaining cash and cash equivalent balances and available credit facilities to ensure that it is able to meet its short-term and long-term obligations as and when they fall due. Company-wide cash projections are managed centrally and regularly updated to reflect the dynamic nature of the business and fluctuations caused by commodity price and exchange rate movements.

In addition, the Company was obligated under its corporate revolving credit and term loan facility to maintain liquidity and satisfy various ratio tests on an historical and prospective cash flow basis. These ratios were in compliance during the year ended December 31, 2012 and December 31, 2011.

The Company had the following balances and facilities available to them at the balance sheet dates:

	December 31, 2012		December 31, 2011
Cash and cash equivalents		309.0		452.1
Working capital balance (a)		1,131.0		352.5
Undrawn debt facilities		1,317.4		316.7

a) Working capital is defined as the net total of accounts receivable, inventory, prepayments, accounts payable, accruals, and current taxes payable or receivable.

Contractual and other obligations as at December 31, 2012 are as follows:

	Carrying Value		Contractual Cashflows		< 1 year		1 – 3 years		3 – 5 years		Thereafter
Debt		396.8		584.9		73.3		60.0		50.8		400.8
Trade and other payables		355.5		355.5		355.5		—		—		—
Current taxes payable		32.5		32.5		32.5		—		—		—
Deferred payments		4.2		4.2		4.2		—		—		—
Finance leases		27.2		38.9		3.8		7.6		7.6		19.9
Commitments		897.2		897.2		897.2		—		—		—
Restoration provisions		270.5		519.0		0.6		5.6		1.0		511.8
Total		1,983.9		2,432.2		1,367.1		73.2		59.4		932.5

33

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

Contractual and other obligations as at December 31, 2011 are as follows:

	Carrying Value		Contractual Cashflows		< 1 year		1 – 3 years		3 –5 years		Thereafter
Debt		62.9		63.2		48.2		10.1		4.9		—
Trade and other payables		273.4		273.4		273.4		—		—		—
Current taxes payable		289.4		289.4		289.4		—		—		—
Deferred payments		7.9		7.9		0.4		0.4		—		7.1
Finance leases		28.6		41.9		3.7		7.4		7.4		23.4
Commitments		380.4		380.4		380.4		—		—		—
Restoration provisions		252.5		239.7		1.3		2.6		2.6		233.2
Total		1,295.1		1,295.9		996.8		20.5		14.9		263.7

Market risks

a) Commodity price risk

The Company is subject to commodity price risk from fluctuations in the market prices of copper, gold, nickel and PGE and other elements. The Company is also exposed to commodity price risk on diesel fuel required for mining operations and sulphur required for acid production. The Company’s risk management policy allows for the management of these exposures through the use of derivative financial instruments.

The Company does not purchase, hold or sell derivative financial instruments unless there is an outstanding contract resulting in exposure to market risks that it intends to mitigate. As at December 31, 2012 and December 31, 2011, the Company had entered into derivative contracts for copper, gold, nickel and PGE in order to reduce the effects of fluctuations in metal prices between the time of the shipment of metal from the mine site and the date agreed for pricing the final settlement.

As at December 31, 2012 and December 31, 2011, the Company had not entered into any diesel or sulphur derivatives.

The Company’s commodity price risk related to accounts receivable related to changes in fair value of embedded derivatives in accounts receivable reflecting copper and gold sales provisionally priced based on the forward price curve at the end of each quarter and the commodity price risk related to long-term debt related to the embedded copper derivative in the Kansanshi subordinated debt facility.

The following table shows the impact on net earnings from changes in the fair values of financial instruments of a 10% change in the copper, gold and nickel commodity prices, based on December 31, 2012 prices. There is no impact of these changes on other comprehensive income except indirectly through the impact on the fair value of the available-for-sale investments. The impact of a 10% movement in commodity prices is as follows:

	Average contract price on December 31				Impact of price change on net earnings
	2012		2011		2012		2011
Copper	$	3.61/lb	$	3.41/lb		1.9		0.9
Gold	$	1,705/oz	$	1,692/oz		0.3		0.1
Nickel	$	7.81/lb	$	8.21/lb		0.8		0.8
PGE and other elements		—		—		0.4		—

34

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

b) Interest rate risk

The Company’s interest rate risk arises from interest paid on floating rate borrowings and the interest received on cash and short-term deposits.

Deposits are invested on a short-term basis to ensure adequate liquidity for payment of operational and capital expenditures. To date no interest-rate management products, such as swaps, are used in relation to deposits.

The Company manages its interest rate risk on borrowings on a net basis after first recognizing the natural hedge arising from floating rate deposits. The Company has a policy allowing floating-to-fixed interest rate swaps targeting 50% of exposure over a five year period. As at December 31, 2012, the Company held no floating-to-fixed interest rate swaps. As at December 31, 2011 the Company held no floating-to-fixed interest rate swaps.

At December 31, 2012, the impact on a full year net earnings of a 100 basis point change in interest rate would be as follows:

	December 31, 2012		Impact of interest rate change on net earnings
			100 basis point increase			100 basis point decrease
Interest-bearing deposits and cash at bank		309.0		2.2			(1.0	)
Floating rate borrowings		42.6		(0.3	)		0.1

At December 31, 2011, the impact on a full year net earnings of a 100 basis point change in interest rate would be as follows:

	December 31, 2011		Impact of interest rate change on net earnings
			100 basis point increase			100 basis point decrease
Interest-bearing deposits and cash at bank		452.1		3.2			(1.6	)
Floating rate borrowings		43.3		(0.3	)		0.1

c) Foreign exchange risk

The Company’s functional and reporting currency is USD. As virtually all of the Company’s revenues are derived in USD and the majority of its business is conducted in USD, foreign exchange risk arises from transactions denominated in currencies other than USD. Commodity sales are denominated in USD, the majority of borrowings are denominated in USD and the majority of operating expenses are denominated in USD. The Company’s primary foreign exchange exposures are to the local currencies in the countries where the Company’s operations are located, principally the Zambian kwacha (“ZMK”), Australian dollar (“AUD”) Mauritanian ouguiya (“MRO”) and the Euro (“EUR”); and to the local currencies of suppliers who provide capital equipment for project development, principally the AUD, EUR and the South African rand (“ZAR”).

35

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

The Company’s risk management policy allows for the management of exposure to local currencies through the use of financial instruments at a targeted amount of up to 100% for exposures within one year down to 50% for exposures in five years.

As at December 31, 2012, the Company is exposed to currency risk through the following financial assets and liabilities denominated in currencies other than USD:

	Cash and cash equivalents		Trade and other receivables		Investments		Financial liabilities
CAD		0.2		2.8		42.2		2.8
AUD		13.6		2.1		—		2.7
ZMK		5.4		232.3		—		38.6
EUR		44.8		4.5		—		21.3
ZAR		14.8		0.2		—		0.4
MRO		0.8		9.2		—		1.0
Other		0.5		0.3		—		0.8
Total		80.1		251.4		42.2		67.6

Based on the above net exposures as at December 31, 2012, a 10% change of the above currencies against the USD would result in a $6.4 million increase or decrease in the Company’s net earnings and would result in a $3.8 million increase or decrease in the Company’s other comprehensive income.

As at December 31, 2011, the Company is exposed to currency risk through the following financial assets and liabilities denominated in currencies other than USD:

	Cash and cash equivalents		Trade and other receivables		Investments		Financial liabilities
CAD		6.6		—		4.3		—
AUD		9.6		—		—		54.8
ZMK		9.6		32.4		—		8.8
EUR		16.6		22.9		—		55.0
ZAR		5.6		—		—		18.3
MRO		1.7		—		—		5.9
Other		0.9		—		—		12.1
Total		50.6		55.3		4.3		154.9

Based on the above net exposures as at December 31, 2011, a 10% change of the above currencies against the USD would result in an $4.5 million increase or decrease in the Company’s net earnings and would result in a $0.4 million increase or decrease in the Company’s other comprehensive income.

Capital management

The Company’s objectives when managing capital are to continue to provide returns for shareholders, and comply with lending requirements while safeguarding the Company’s ability to continue as a going concern. The Company considers the items included in equity to be capital.

The Company manages the capital structure and makes adjustments in light of changes in economic conditions and the risk characteristics of the Company’s assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares, or sell assets to reduce debt.

36

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

Derivatives not designated as hedged instruments

As at December 31, 2012, the following derivative positions were outstanding:

			Average price
	Open Positions (tonnes/ounces)		Contract		Market		Maturities Through
Embedded derivatives in provisional sales contracts:
Copper		50,191	$	3.61/lb	$	3.59/lb		March 2013
Nickel		3,996		7.81/lb		7.70/lb		February 2013
Gold		19,462		1,705/oz		1,676/oz		March 2013
Commodity contracts:
Copper		53,453	$	3.61/lb	$	3.59/lb		March 2013
Nickel		3,315		7.81/lb		7.70/lb		February 2013
Gold		21,253		1,705/oz		1,676/oz		March 2013

A summary of the fair values of unsettled derivative financial instruments for commodity contracts recorded on the consolidated balance sheet:

	December 31, 2012			December 31, 2011
Commodity contracts:
Asset position	$	5.0		$	5.1
Liability position		(2.4	)		(6.0	)

Derivative liabilities on the balance sheet also include $1.4 million (December 31, 2011 – $2.4 million) relating to the embedded derivative liability in the Kansanshi subordinated debt (note 9) recorded at fair value.

26 Supplementary cash flow information

Cash and cash equivalents comprise the following:

	2012		2011
Cash on hand and balances in bank		200.9		251.8
Short-term deposits		108.1		200.3
		309.0		452.1

27 Commitments

In conjunction with the development of Sentinel, and other projects including the copper smelter project at Kansanshi, the Company has committed to approximately $897.2 million (December 31, 2011 – $380.4 million) in capital expenditures.

37

First Quantum Minerals Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2012 and 2011

(amounts expressed in millions of U.S. dollars, except where indicated and share and per share amounts)

28 Post balance sheet events

a) Offer to acquire shares of Inmet Mining Corporation (“Inmet”)

On January 9, 2013 the Company announced that it has formally commenced an offer to acquire all of the outstanding shares of Inmet for total consideration of approximately C$5.1 billion. Inmet shareholders have the opportunity to elect shares in the Company, cash, or a combination thereof, subject to an overall consideration mix of approximately 50% in shares and 50% in cash. The offer is open until March 11, 2013.

b) Dividend declared

The Company has declared a final dividend of C$0.1147 per share in respect of the financial year ended December 31, 2012. The final dividend of C$0.1147, together with the interim dividend of $0.0603 CAD, is a total of C$0.175 for the 2012 financial year.

38

EX-3.12

Exhibit 3.12

Management’s Discussion and Analysis

For the year ended December 31, 2012

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, 2012. The Company’s results have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and are presented in United States dollars, tabular amounts in millions, except where noted. Changes in accounting policies have been applied consistently to comparative periods unless otherwise 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 “Regulatory Disclosures” 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 March 5, 2013.

SUMMARIZED OPERATING AND FINANCIAL RESULTS

(USD millions unless otherwise noted)	Q4 2012		Q3 2012		Q4 2011		2012		2011
Copper production (tonnes)		84,918		84,144		67,316		307,115		265,576
Copper sales (tonnes)		77,570		77,396		65,638		295,466		273,257
Cash cost of copper production (C1)1 (per lb)	$	1.42	$	1.44	$	1.53	$	1.49	$	1.41
Realized copper price (per lb)	$	3.46	$	3.45	$	3.33	$	3.51	$	3.87
Nickel production (contained tonnes)		10,096		9,916		5,666		36,759		5,666
Nickel sales (contained tonnes)		8,081		7,120		1,388		30,379		1,388
Cash cost of nickel production (C1)1 (per lb)	$	6.12	$	6.24		—	$	5.92		—
Realized nickel price (per payable lb)	$	7.74	$	7.69		—	$	7.96		—
Gold production (ounces)		64,383		50,784		43,524		201,942		175,225
Gold sales (ounces)		61,350		48,889		49,209		202,303		180,442
Sales revenues		774.6		724.8		567.3		2,950.4		2,583.5
Gross profit		295.0		261.0		182.7		1,101.0		1,308.0
EBITDA1		309.7		276.2		180.6		2,361.2		1,232.1
Net earnings attributable to shareholders of the Company		186.7		107.3		76.0		1,772.9		528.9
Earnings per share	$	0.39	$	0.23	$	0.16	$	3.74	$	1.18
Diluted earnings per share	$	0.39	$	0.23	$	0.16	$	3.72	$	1.18
Comparative earnings2		186.7		107.3		78.9		555.0		580.5
Comparative earnings per share2	$	0.39	$	0.23	$	0.17	$	1.17	$	1.30

¹  Cash costs (C1) and earnings before interest, tax, depreciation and amortization (“EBITDA”) are not recognized under IFRS. See “Regulatory Disclosures” for further information.

²  Earnings attributable to shareholders of the Company have been adjusted to remove the effect of unusual items to arrive at comparative earnings. Comparative earnings and comparative earnings per share are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS. The Company has disclosed these measures to assist with the understanding of results and to provide further financial information about the results to investors. See “Regulatory Disclosures” for a reconciliation of comparative earnings.

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

Results for full year 2012

Production

Copper production 16% higher than 2011; new annual production record set at Kansanshi

• Copper production of 307,115 tonnes included record production at Kansanshi, primarily due to an increase in sulphide grades and throughput, and the contribution from Kevitsa which achieved commercial production in August 2012 following a successful commissioning and rapid ramp-up phase at the nickel and copper operation. This is the second project successfully commissioned by the Company during the past year.

Nickel production of 36,759 tonnes after first full year of production from Ravensthorpe

• Results from the new nickel business included Ravensthorpe’s first full year of production and the commencement of production from Kevitsa.

Gold production 15% higher than 2011

• Gold production of 201,942 ounces resulting from gold circuit enhancements at Kansanshi which yielded higher recoveries and the first contribution from Kevitsa.

Copper production cash costs increased 6%

• Average copper production cash cost of $1.49 per pound reflects a downward trend throughout the year as increased sulphuric acid cost was partially offset by higher by-product credits.

Sales revenues 14% higher than 2011

• Sales revenues rose to $2,950.4 million from increased copper and gold sales volumes and commercial production at Ravensthorpe and Kevitsa. Positive volume contributions were partially offset by lower average realized copper prices.

Gross profit 16% lower than 2011

• Gross profit of $1,101.0 million was negatively impacted by the 9% lower average realized copper price and inflationary increases in operating costs which outweighed higher sales volumes and the contribution from Ravensthorpe and Kevitsa.

Net earnings attributable to shareholders of the Company increased to $1,772.9 million

• Earnings included a $1,217.9 million gain on disposal of République démocratique du Congo (“RDC”) residual claims and assets. 2012 comparative earnings were lower than 2011 predominately due to the lower year-over-year average realized copper price and inflationary cost pressures which were partially offset by the contribution from Ravensthorpe and Kevitsa.

Results for Q4 2012

Production

• Total copper production improved 26% over Q4 2011 with higher sulphide grades and higher throughput as a result of the continued expansion of the oxide circuit at Kansanshi, higher throughput rates at Guelb Moghrein and the contribution from Kevitsa.

• Total nickel production improved 78% over Q4 2011 with a full quarter of commercial production at both the Ravensthorpe and Kevitsa operations.

• Total gold production improved 48% over Q4 2011 with higher grades and recovery rates at Kansanshi together with the contribution from Kevitsa.

Copper production cash costs

• Copper production cash costs decreased from Q4 2011 due to lower mining and freight costs and higher by-product credits.

Sales revenues

• Sales revenues increased by 37% from Q4 2011 with increased copper and gold sales volumes, higher average realized copper and gold prices and the contribution from Ravensthorpe and Kevitsa.

Gross profit

• Q4 2012 gross profit of $295.0 million was 61% higher than Q4 2011 with higher sales volumes, higher average realized copper and gold prices, lower copper production cash costs and the contribution from Ravensthorpe and Kevitsa.

Net earnings

• Q4 2012 net earnings attributable to shareholders of the Company were higher than Q4 2011 due to higher copper and gold average realized prices, higher sales volumes, lower copper production cash costs and the contribution of Ravensthorpe and Kevitsa.

• Reduction of the effective income tax rate for the quarter as a result of a number of non-recurring factors that include the recognition of previously unrecognized tax.

2012 Management’s Discussion and Analysis 2

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

Significant advancement of development projects and exploration activities

• Benefit from expansion of the oxide processing circuit at Kansanshi to 7.2 million tonnes per annum (“Mtpa”) was seen in the oxide throughput during Q4 2012. The stage two expansion to 14.5 Mtpa is scheduled for completion and commencement of commissioning from mid-2013.

• Detailed design work and construction on the Kansanshi smelter is progressing well and all major equipment has been ordered. The project remains on schedule for construction completion in mid-2014 followed by commissioning and ramp up.

• Construction of the Sentinel project is on schedule. Board approval was received to increase the plant throughput from 40 Mtpa to 55 Mtpa.

• Board approval was granted for the expansion of the sulphide treatment facilities at Kansanshi by construction of a new section of plant capable of treating up to 25 Mtpa of sulphide ore. Construction of this new plant is to commence in the first half of 2013.

• A significant resource and reserve upgrade was announced at Kansanshi with initial comparative estimates showing the mineral resource tonnage has increased by approximately 121% and total contained copper increased by 74%.

• Maiden resource estimates for the Enterprise project confirmed the potential for an operation capable of producing on average 38,000 tonnes nickel per annum with scope to increase to 60,000 tonnes when nickel market conditions allow. On the strength of this resource estimate, Board approval was granted for the development of this project.

Balance sheet positioned to support growth initiatives

• On October 10, 2012, the Company completed the offering of $350.0 million of Senior Notes due 2019. Interest will accrue at the rate of 7.25% per annum, payable semi-annually.

• On January 30, 2012, a five-year $1.0 billion senior term and revolving facility was signed for Kansanshi Mining PLC to enable the execution of planned capital projects at Kansanshi.

• On January 5, 2012, the Company reached an agreement with Eurasian Natural Resources Corporation PLC (“ENRC”) to dispose of its residual RDC claims and assets for $1.25 billion. The agreement closed on March 2, 2012 with the Company receiving payment of $750.0 million and a three-year promissory note for $500.0 million.

Other corporate developments

• On January 9, 2013, the Company announced that it has formally commenced an offer to acquire all of the outstanding shares of Inmet Mining Corporation (“Inmet”) for total consideration of approximately C$5.1 billion. Inmet shareholders have the opportunity to elect shares in the Company, cash, or a combination thereof, subject to an overall consideration mix of approximately 50% in shares and 50% in cash. The offer is open until March 11, 2013.

• The Company has declared a final dividend of C$0.1147 per share in respect of the financial year ended December 31, 2012. The final dividend of C$0.1147, together with the interim dividend of C$0.0603, is a total of C$0.1750 for the 2012 financial year. This total dividend paid for the 2012 financial year is 15% of net earnings attributable to shareholders of the Company (adjusted for unusual items) which is in line with the 15% of net earnings attributable to shareholders of the Company used as guidance in 2011.

Operational outlook for 2013

Production	Group		Kansanshi		Guelb Moghrein		Ravensthorpe		Kevitsa
Copper (000’s tonnes)		302 - 330		250 - 270		37 - 41		—		15 - 19
Nickel (000’s contained tonnes)		40 - 45		—		—		31 - 35		9 -10
Gold (000’s ounces)		190 - 215		126 - 140		52 - 61		—		12 - 14

• Expected average cash cost of approximately; $1.50 to $1.60 per pound of copper.

• Expected average cash cost of approximately; $5.50 to $6.00 per pound of nickel.

• Expected total capital expenditure of approximately $2.0 billion in 2013.

2012 Management’s Discussion and Analysis 3

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

OPERATIONS

Kansanshi Copper and Gold Operation	Q4 2012		Q3 2012		Q4 2011		2012		2011
Sulphide ore tonnes milled (000’s)		2,679		2,763		1,628		9,254		8,855
Sulphide ore grade processed (%)		1.0		0.9		0.6		1.0		0.7
Sulphide copper recovery (%)		92		92		92		93		91
Mixed ore tonnes milled (000’s)		1,951		1,955		2,986		8,561		8,377
Mixed ore grade processed (%)		1.1		1.0		1.0		1.1		1.0
Mixed copper recovery (%)		74		77		64		69		63
Oxide ore tonnes milled (000’s)		1,738		1,500		1,492		6,210		6,072
Oxide ore grade processed (%)		2.0		2.6		2.3		2.2		2.3
Oxide copper recovery (%)		90		84		88		86		86
Copper production (tonnes)		70,431		71,484		59,163		261,351		230,295
Copper sales (tonnes)		61,758		65,830		54,036		249,884		235,832
Gold production (ounces)		45,410		35,245		29,580		136,056		112,286
Gold sales (ounces)		38,179		33,510		27,742		131,159		114,488
Cash costs (C1) (per lb)1	$	1.45	$	1.46	$	1.52	$	1.49	$	1.41
Total costs (C3) (per lb)1	$	1.90	$	1.86	$	1.90	$	1.88	$	1.70
Sales revenues		494.3		507.1		405.7		1,979.9		2,048.3
Gross profit		238.0		223.8		186.2		929.4		1,187.1
EBITDA1		251.1		240.4		202.3		995.9		1,263.0

¹  C1 and C3 costs and EBITDA are not recognized under IFRS. See “Regulatory Disclosures” for further information.

Full year operating results

Full year copper production increased by 13% from 2011 to a record of 261,351 tonnes in 2012. This was achieved mainly through an increase in grade, specifically in sulphide ore, as well as increases in throughput and recovery. Throughput increased as a result of plant expansions completed as part of Kansanshi’s multi-stage plant upgrade to an annual production capacity of 400,000 tonnes of copper metal.

Annual production from the sulphide circuit was significantly higher than in 2011 due to higher ore grades processed during the year. Ongoing mine pit development work has established significantly wider pits and improved access to various ore types at target grades to coincide with the plant expansions underway. Specifically, this work led to an increase in the availability of sulphide ore at target grades in addition to the circuits being reconfigured during Q2 2012 to the current capacity of 12 Mtpa for sulphide and 6.5 Mtpa for mixed ore treatment.

The mixed ore circuit achieved increased recoveries and grade, while throughput remained consistent with the prior year. Following the circuit interchange in Q2 2012, the reduced throughput on the mixed circuit allowed longer residence time in flotation resulting in improved recoveries. In the second half of the year, throughput significantly exceeded capacity of 6.5 Mtpa due to optimization of the front end, improving plant availability and utilization.

Year-on-year the oxide circuit achieved slightly higher throughput, which has been offset by lower grades. The effect of completion of the oxide expansion works to 7.2 Mtpa allowed increased throughput in Q4 2012. The limited availability of locally-sourced sulphuric acid meant that most of the high grade, higher acid consuming oxide ore was stockpiled in 2012.

Gold production was 21% higher than in 2011 as a result of gold circuit enhancements and improvements resulting in higher recoveries.

Year-on-year cash costs have increased by 6% from 2011, however there has been a downward trend throughout the year with cash costs decreasing each quarter to $1.45 per lb in Q4 2012. An increase in the gold credit in 2012 was largely offset by an increase in treatment and refining charges. The increase in costs compared to 2011 is mainly due to an increase in processing costs including higher acid costs.

Full year sales revenues decreased by 3% compared to the prior year despite an increase in copper sales volumes of 6% and an increase in gold sales volumes of 15%. These increases in sales volumes were offset by a decrease in net realized copper prices of 9%. The effect of these lower realized copper prices is also seen at the gross profit level which fell 22% to $929.4 million from $1,187.1 million in 2011.

2012 Management’s Discussion and Analysis 4

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

Q4 operating results

Copper production increased by 19% from Q4 2011 due to increased throughput, grades and recoveries. Throughput in Q4 2012 increased as a result of the oxide circuit expansion works and benefited from a later than usual start to the Zambian rainy season.

The exposure of sulphide ore faces at target grades, as a result of the mine pit development work, led to the increased sulphide grades in Q4 2012 compared to the prior year.

Mixed ore throughput in Q4 2012 continued to exceed the 6.5 Mtpa design capacity. Increased recoveries compared to Q4 2011 resulted from the longer residence time in flotation.

Oxide throughput has increased 16% from Q4 2011 as a result of the completion of the oxide expansion to 7.2 Mtpa capacity in Q3 2012. This increase in throughput has been offset by a decrease in grade as high-grade, high-acid consuming ore was stockpiled in the quarter.

Gold production was 54% higher than Q4 2011 as a result of gold circuit enhancements resulting in higher recoveries.

Q4 2012 C1 costs decreased by $0.07 per lb from Q4 2011. C1 costs benefited from lower mining costs and an increased gold credit as a result of higher gold sales volumes and a higher net realized gold price. This benefit outweighed higher acid costs.

Sales revenues and gross profit increased by 22% and 28% respectively in Q4 2012 compared to Q4 2011. The increase in sales revenues reflects both an increase in sales volumes and higher realized prices. Gross profit was higher than Q4 2011 due primarily to higher realized copper prices offset partially by higher royalty rates. The Zambian copper royalty rate was increased from 3% to 6%, effective April 2012, being the principal reason for the increase of $18.6 million in the royalty expense in Q4 2012 compared to Q4 2011.

Smelters in Zambia are at or near capacity, and as a result of increased copper in concentrate production at Kansanshi, this has meant that inventory has increased at the end of Q4 2012.

Compared to Q3 2012, Kansanshi has achieved a steady state with the exception of the oxide circuit, where oxide expansions have increased throughput in Q4 2012 offset by a decrease in ore grade as high grade, high acid consuming ore was stockpiled. Mixed ore recoveries have decreased due to a less favourable blend of sulphide and oxide ore processed. Cash costs were consistent with Q3 2012.

Outlook

Production in 2013 is expected to be between 250,000 and 270,000 tonnes of copper, and 126,000 and 140,000 ounces of gold.

The reduction in mining rates during the wet season will impact on progress in opening up mining areas and hence oxide ore availability. This, in turn, is expected to result in on-going variation in feed quality with respect to copper grade and gangue acid consumption (GAC). Two mobile screening plants, received and commissioned in Q4 2012 will continue to assist in reducing the GAC of ore ahead of processing.

The construction of the fifth acid plant was completed and commissioning occurred during Q4 2012 with minor process changes planned for Q1 2013. In the medium term, some of Kansanshi’s mining areas for oxide ore are characterized as high grade, high acid-consuming ore. Currently the supply of sulphuric acid from acid plants requires the import of sulphur at high costs. Consideration will be given to withholding the high grade, high acid-consuming ore from production until acid is available at minimal cost from the Kansanshi smelter. If this decision is made, the capacity of the oxide expansions and fifth acid plant may not be fully exploited.

Copper in concentrate inventory levels may remain at year-end levels in the short term unless there is a change in smelter capacity levels or a temporary export permit can be obtained.

Sulphide ore processing is expected to remain strong. Refinements to the process control systems across mill and float are expected to maintain and further enhance metallurgical performance in the sulphide circuit through increased circuit stability and rapid automated response to mineralogical and process variations.

2012 Management’s Discussion and Analysis 5

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

Guelb Moghrein Copper and Gold Operation	Q4 2012		Q3 2012		Q4 2011		2012		2011
Sulphide ore tonnes milled (000’s)		825		687		634		3,062		2,691
Sulphide ore grade processed (%)		1.4		1.3		1.4		1.3		1.4
Sulphide copper recovery (%)		93		94		91		91		91
Copper production (tonnes)		11,038		8,656		8,155		37,670		35,281
Copper sales (tonnes)		13,007		8,962		11,601		40,174		35,774
Gold production (ounces)		16,802		12,827		13,943		60,519		62,938
Gold sales (ounces)		20,864		13,631		21,467		67,089		65,954
Cash costs (C1) (per lb)1	$	1.13	$	1.43	$	1.63	$	1.48	$	1.46
Total costs (C3) (per lb)1	$	1.69	$	1.93	$	2.45	$	2.04	$	2.20
Sales revenues		127.3		85.6		97.2		394.4		346.2
Gross profit		47.5		24.3		3.5		117.7		127.8
EBITDA1		54.2		29.6		20.9		142.4		157.7

¹ C1 and C3 costs and EBITDA are not recognized under IFRS. See “Regulatory Disclosures” for further information.

Full year operating results

2012 copper production was 7% higher than in the prior year. Efforts are ongoing to maintain steady state operations and throughput has increased by 14% year-on-year. The better throughput performance in 2012 is a result of the mill optimization works and improved blast fragmentation.

There was a slight decrease in copper grades, year-on-year, however there was an increase in the last quarter of 2012 reflecting the current ore profile in the pit.

Cash costs increased by $0.02 per lb to $1.48 per lb compared to the prior year. A larger gold credit has been offset by an increase in mining costs specifically for explosives, contractors and equipment hire.

2012 sales revenues increased by 14% compared to 2011 reflecting an increase in copper sales volumes of 12% offset by a lower net realized price. 2012 sales revenues also benefited from higher gold sales volumes. Gross profit fell by 8% due to increased costs for personnel, maintenance and consumables partially offset by the increase in sales revenues.

Q4 operating results

Q4 2012 copper production increased by 35% from Q4 2011, mainly as a result of increased throughput rates. A record quarterly throughput rate of 825,000 tonnes was achieved in Q4 2012 due to ball mill optimization work and better fragmentation of ore. Copper recovery in Q4 2012 increased following a circuit reconfiguration in Q3 2012 allowing longer flotation residence time which has increased recoveries.

Gold production increased by 21% from Q4 2011 with higher throughput partially offset by slightly lower grade and recovery.

Cash costs in Q4 2012 are 31% lower than Q4 2011 as a result of lower processing costs, site administration costs and treatment and refining charges. Cash costs also benefited from the unit cost effect of producing 35% more copper.

Sales revenues and gross profit have both increased in comparison to Q4 2011 with a 40% increase in copper sales revenues and a 12% increase in gold sales revenues. The increase in sales revenues reflects both an increase in copper sales volumes and higher realized prices. This increase in revenues and lower cash operating costs drove the increase in gross profit.

Increases in throughput and grade drove the 28% increase in copper production in Q4 2012 compared to Q3 2012. Gold production increased by 31% from Q3 2012.

Outlook

Production in 2013 is expected to be between 37,000 and 41,000 tonnes of copper, and between 52,000 and 61,000 ounces of gold. Production is expected to benefit from higher volumes of material mined exposing ore in two additional cutbacks.

Process plant enhancements continue with a focus on better availability in the grinding circuit to achieve more consistent operation at steady state to maintain throughput rates as ore grades are expected to be slightly lower than those in 2012. The project to install an additional mill from the mothballed Bwana Mkubwa copper plant that was planned for Q4 2012 has been replaced by a new SAG mill project which is now under design and planning. Commissioning is expected in mid-2014.

2012 Management’s Discussion and Analysis 6

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

Ravensthorpe Nickel Operation	Q4 2012		Q3 2012			Q4 2011		2012		2011
Beneficiated ore tonnes processed (000’s)		687		733			645		2,811		645
Beneficiated ore grade processed (%)		1.5		1.4			1.3		1.5		1.3
Nickel recovery (%)		78		77			68		77		68
Nickel production (contained tonnes)		8,227		8,032			5,666		32,884		5,666
Nickel sales (contained tonnes)		7,288		6,272			1,388		28,738		1,388
Nickel production (payable tonnes)		6,338		6,188			4,189		25,347		4,189
Nickel sales (payable tonnes)		5,425		4,790			1,110		21,857		1,110
Cash costs (C1) (per lb)1	$	6.05	$	6.43			—	$	5.97		—
Total costs (C3) (per lb)1	$	7.33	$	7.84			—	$	7.25		—
Sales revenues		94.3		81.3			—		387.7		—
Gross profit (loss)		2.8		(1.6	)		—		42.5		—
EBITDA		14.6		6.4			—		82.3		—

¹  C1 and C3 costs and EBITDA are not recognized under IFRS. See “Regulatory Disclosures” for further information.

Full year operating results

2012 was Ravensthorpe’s first full year of production after reaching commercial production on December 28, 2011. The year has seen Ravensthorpe ramp up to design capacity in the earlier months of the year and commencing in-pit mining in Q2 2012. By Q3 2012, the majority of the ore feed was being sourced from the pit and nickel production for the full year was in-line with plan as a result of steady state operation of the complete circuit. Nickel grades and recoveries have remained consistent through the year.

C1 costs for the year consistently beat guidance and ended the year at $5.97 per lb against original full year guidance in Q1 2012 of $6.60 per lb to $6.80 per lb. At the beginning of the year, low cost sulphur inventory contributed to a lower cost of production. Throughout the year, the consistent operation of the sulphuric acid plant which generates power as a by-product, provided for sufficient and stable power generation for the operation and reduced diesel costs. Ore costs increased as the mining operations moved to the main pit in the second half of 2012.

Q4 operating results

Limonite ore availability was limited early in Q4 2012 which resulted in new mining areas being opened up to provide a future source of ore. Mining activity continued to feed ore to the crushers with a limited amount of material stockpiled to accommodate crusher availability.

C1 costs have decreased in Q4 2012 compared to Q3 2012. Lower processing costs in the quarter were driven by lower sulphur costs as well as processing circuit improvements which have resulted in savings in flocculant consumption. A lower C1 cost was achieved despite a $0.07 per lb increase in mining costs resulting from additional waste being mined.

Outlook

Production in 2013 is expected to be between 31,000 and 35,000 tonnes of nickel.

Crushing plants and beneficiation are expected to continue to operate well in 2013. A number of circuit improvements in beneficiation during Q1 2013 are expected to result in improvements in plant utilization. Processing circuit enhancements in Q4 2012 have already resulted in savings and the same focus will now be extended to the operation of the CCD’s.

The sulphuric acid plant is expected to continue to have stable operations with efficient use of power distribution, significantly reduced diesel fuel consumption and associated savings. Taking advantage of lower cost sulphur opportunities with associated logistical improvements will remain a focus for Ravensthorpe.

2012 Management’s Discussion and Analysis 7

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

Kevitsa Nickel-Copper-PGE1 Operation	Q4 2012		Post- commercial production Q3 2012		Pre- commercial production Q3 2012		2012		2011
Ore tonnes milled (000’s)		1,413		687		720		3,138		—
Nickel ore grade processed (%)		0.2		0.2		0.2		0.2		—
Nickel recovery (%)		59		60		54		56		—
Nickel production (tonnes)		1,870		1,041		843		3,875		—
Nickel sales (tonnes)		792		848		—		1,640		—
Copper ore grade processed (%)		0.3		0. 3		0.3		0.3		—
Copper recovery (%)		84		84		87		83		—
Copper production (tonnes)		3,448		1,874		2,130		8,094		—
Copper sales (tonnes)		2,805		2,604		1,040		6,448		—
Gold production (ounces)		2,172		1,431		1,282		5,367		—
Platinum production (ounces)		6,123		3,926		3,174		13,808		—
Palladium production (ounces)		5,419		3,373		2,827		12,183		—
Nickel cash costs (C1) (per lb)2	$	6.37	$	3.79		—	$	5.47		—
Nickel total costs (C3) (per lb)2	$	7.19	$	5.35		—	$	6.54		—
Copper cash costs (C1) (per lb)2	$	1.75	$	0.11		—	$	1.28		—
Copper total costs (C3) (per lb)2	$	3.06	$	1.49		—	$	2.61		—
Sales revenues		36.5		35.6		—		72.1		—
Gross profit		6.4		17.5		—		23.9		—
EBITDA		11.2		23.6		—		34.8		—

¹  Platinum-group elements (“PGE”)

²  C1 and C3 costs and EBITDA are not recognized under IFRS. See “Regulatory Disclosures” for further information

Q4 2012 marked the first full quarter of commercial production for Kevitsa. Throughput rates exceeded expectations whilst recoveries were below life of mine targets due to the weathered nature of the initial ore processed. Slightly lower feed grades in line with life of mine plans has resulted in lower output of copper and nickel compared to Q3 2012.

There has been steady improvement in both mining capacity and the efficiency of machinery operations, the latter of which has been affected during the first period of commercial production in the Arctic winter.

Nickel and copper cash costs increased over Q3 2012 with a ramp up in contractor usage and maintenance costs in line with plan and higher electricity costs due to an increase in electricity tariffs which is normal for the time of year. Copper by-product credits decreased from Q3 2012 as Q3 2012 benefited from the sale of production from the commissioning phase. Nickel by-product credits were unfavorably impacted by some stockpiling of nickel concentrate in the quarter.

Outlook

Production in 2013 is expected to be between 15,000 and 19,000 tonnes of copper, between 9,000 and 10,000 tonnes of nickel and 12,000 to 14,000 ounces of gold.

In Q1 2013 mining is planned to ramp up to a full seven days per week shift roster as opposed to the five days per week system implemented for the majority of 2012. Mining volumes have been set at 12.9 Mt of waste and 7.3 Mt of ore equating to a strip ratio of 1.8. The amount of weathered ore going into the plant is expected to reduce in the first half of 2013. Pre-stripping the Stage 2 cutback will commence in the first half of 2013.

A focus on improving nickel recoveries and achieving pilot study levels has been ongoing for several months. Different scenarios of flotation kinetics are being trialed and sampled during Q1 2013 for further optimization work.

2012 Management’s Discussion and Analysis 8

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

The Company has submitted an environmental assessment and application to increase the plant throughput rate from the current approved 5.5 Mtpa up to a maximum of 10 Mtpa. Liaison with the relevant authorities is in progress with respect to granting of the upgraded permit.

2012 Management’s Discussion and Analysis 9

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

DEVELOPMENT ACTIVITIES

Kansanshi expansions, Zambia

The multi-stage Kansanshi plant upgrade to an annual production capacity of 400,000 tonnes of copper continues into 2013. The stage one oxide circuit expansion to 7.2 Mtpa was completed in Q2 2012 and optimized during Q3 2012 with the benefits being seen in the oxide throughput of Q4 2012. Progress on the stage two oxide capacity expansion to 14.5 Mtpa continued with a phased commissioning commencing from mid-2013. The expansion encompasses additional crushing, flotation, leach tanks, CCD thickeners, solvent extraction, electro-winning and associated ancillary systems and equipment. Acid supply and economics will dictate the rate of oxide treatment until the smelter is commissioned in mid-2014 however the output of the five acid plants as well as the current volume of acid that can be externally sourced will allow for interim treatment rates of approximately 10 Mtpa.

The second phase of the 400,000 tonne annual production capacity expansion project is an expansion of the sulphide treatment facilities by construction of a new section of plant capable of treating up to 25 Mtpa of sulphide ore. Board approval has been granted for the project and construction of this new plant is planned to commence in the first half of 2013.

Copper smelter project, Zambia

Kansanshi’s concentrate is currently treated at smelters in Zambia, however, existing domestic smelting capacity will be insufficient to process the substantial increase in production resulting from the Kansanshi expansion and the Sentinel project. The new copper smelter is designed to process 1.2 million tonnes of concentrate to produce over 300,000 tonnes of copper metal annually. The smelter is also expected to produce 1.0 million tonnes of sulphuric acid as a by-product at a low cost which will benefit Kansanshi by allowing the treatment of high acid-consuming oxide ores and the leaching of some mixed ores. The additional acid is also expected to optimize the expansion of the oxide leach facilities and allow improved recoveries of leachable minerals in material now classified and treated as mixed ore.

Detailed design works on the smelter are well progressed and all of the major equipment packages have been ordered. On site, earthworks construction is approximately 85% complete and concrete pouring is 20% complete. Mechanical installation commenced in January 2013. The project is scheduled for construction completion in mid-2014 followed by commissioning and ramp up.

Sentinel project, Zambia

A mineral resource and reserve estimate for the Sentinel copper project was released in March 2012. An estimated measured and indicated resource of 1,027 Mt at 0.51% copper grade, containing 5.2 Mt of copper has been delineated, inclusive of an estimated recoverable proven and probable mineral reserve of 774 Mt at 0.50% copper grade, containing 3.9 Mt of copper. The life of mine strip ratio is anticipated to be 2.2 and the estimated mine life is in excess of 15 years. An infill drilling programme has commenced to identify further detail of the geological resources that will be encountered during the initial years of operation.

The project is expected to produce between 270,000 and 300,000 tonnes of copper in concentrate annually.

Sentinel construction activities continued to ramp up in Q4 2012 following the approval from the Company’s Board of Directors. Project milestones to the end of December 2012 include detailed design engineering 70% complete; construction completion of process plant earthworks for the major equipment areas; over 30,000 cubic metres of concrete poured on site; and approximately 3,000 tonnes of structural steel fabricated with approximately 1,500 tonnes of steel already received on site and being erected. The development of project infrastructure continues: the major tenders for the Zambia Electricity Supply Corporation Limited 330kV transmission line and substation works have been released; the first senior houses are complete and ready for occupation; the visitor guesthouse is complete; and a further 20 houses are on schedule for completion in Q1 2013.

The Company will continue project development with an on-going commitment to social responsibility within the complete license area.

Project capital costs were estimated at approximately $1.72 billion with project completion unchanged and expected during 2014. However a throughput increase from 40 Mtpa to 55 Mtpa, plus the addition of a nickel processing plant (Enterprise development) has been added to the project development which increased the total capital cost estimate to $2.0 billion.

Enterprise project, Zambia

The maiden mineral resource estimate for the Enterprise nickel deposit has been identified at 40.1 Mt at 1.07% nickel. This supports proved and probable mineral reserves of 32.7 Mt at 1.10% nickel and based on a 4 Mtpa operation, the mine life would be approximately eight years producing 38,000 to 40,000 tonnes of nickel per annum. There is further potential to increase both the mineral resource and reserve as drilling continues in the adjacent Enterprise South West Zone. The Enterprise deposit is located approximately 12 kilometres north west of the Sentinel development.

The longest lead equipment items, being the SAG mill and the ball mill, have been ordered and engineering design has commenced.

2012 Management’s Discussion and Analysis 10

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

Exploration

Exploration programs continued with ongoing drilling campaigns active at Trident and Kansanshi. A maiden resource and reserve estimate was released for the Enterprise nickel project and a significant resource and reserve upgrade was announced for Kansanshi.

Trident Exploration

At Trident up to 10 drill rigs were active mostly on regional targets, but also included some infill drilling on Sentinel and additional resource drilling around Enterprise. In total, approximately 110,000 metres of drilling was completed at Trident in 2012.

Enterprise nickel project (Main and SW) Grade-Tonnage Estimate as at November 28, 2012

	Ore tonnes		Grade		Contained nickel
	(million tonnes)		(Nickel %)		(‘000 tonnes)
Measured resource		2.7		1.51		41
Indicated resource		37.4		1.04		390
Total measured and indicated		40.1		1.07		431
Inferred resource		7.1		0.70		50

Note: The Mineral Resource is reported at a 0.15% nickel cut off and was estimated as a block model within constraining mineralized wireframe. Differences may occur due to rounding.

Several regional targets were drill tested during the Q4 2012. The target at Bream, 20 kilometres north east of Enterprise, continues to return encouraging low grade disseminated chalcopyrite intercepts in reconnaissance drilling over several hundred metres of strike within highly altered sequence.

Kansanshi

At Kansanshi, 14 core rigs continued operating on the project divided between incremental resource and reserve additions immediately around the existing pits and the district exploration program. These programs are designed to provide enhanced definition of longer term oxide and sulphide resource potential as well as to test the ultimate extents of the mineral system.

More than 120,000 metres of resource development drilling has now been completed at Kansanshi. Modeling and resource estimation of the Kansanshi and South East Dome resources were finalized during the period and released as part of the Kansanshi resource and reserve upgrade statement in December.

The mineral resource estimate for the combined Main and North West regions includes a total of 690.0 Mt at 0.86% total copper (“TCu”) defined by a cut-off grade of 0.3% TCu in the measured and indicated classification plus an additional 344.5 Mt at 0.7% TCu in the inferred classification. The mineral resource for the South East Dome includes 54.0 Mt at 0.9% TCu defined at a cut-off grade of 0.3% TCu in the indicated classification plus an additional 20.8 Mt at 0.91% TCu in the inferred classification.

Initial comparative estimates show that the mineral resource tonnage has increased by approximately 121% and total contained copper metal by 74%. The inferred mineral resources has increased by greater amounts and these largely adjacent regions will now be the focus of the targeted in-fill drilling program for 2013.

Exploration drilling during the quarter continued to the northern side of South East Dome where additional intercepts suggest that the resource and potential pit may be extended into the Rocky Hill area.

Regional transect drilling has included several deep holes (700 – 1,000 metres) along the core of the Kansanshi Antiform, some of which have intercepted notable mineralization to depths of over 800 metres below surface. The context and extent of this mineralization is not yet fully understood however it further enhances the scale of the Kansanshi system.

Finland

Deep drilling targeting geophysical targets immediately to the south west of Kevitsa has demonstrated a much larger body of the Dunite/pyroxenite intrusion (host to the Kevitsa mineralization) than was previously known. Scattered chalcopyrite/pentlandite at depth in this hole suggests potential for Kevitsa style mineralization well beyond the area previously tested by drilling.

Reconnaissance drilling and ground geophysics is in progress or planned during the northern winter season on a number of Mafic nickel-copper, sediment hosted copper and IOCG copper-gold targets through Finland.

Peru

Detailed soil sampling over targets identified in the 2012 helicopter magnetic survey has confirmed porphyry style geochemistry over six main target areas within the Haquira tenure. The multi-element sampling has demonstrated a very extensive footprint halo around known mineralization that should prove useful for defining new porphyry mineralization in Southern Peru.

2012 Management’s Discussion and Analysis 11

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

Exploration drilling at Haquira is likely to be postponed during 2013 while the Company concentrates on the community and environmental aspects of the project development.

In May 2012, the Company acquired a 19.99% ownership stake in Zincore Metals Inc (“Zincore”). Since then, Zincore has released results for three of the seven holes drilled to date on their early stage Dolores copper porphyry prospect, in which the Company has an option to earn 80%. The current holes are widely spaced and have encountered extensive intercepts of low grade mineralization in holes nearly 3 kilometres apart (for more details see Zincore press releases – TSX-V: ZNC).

Turkey

The Company has entered into a placement and option joint venture agreement with Empire Mining Corporation (now Columbus Copper Corporation (TSX-V: CCU)) which hold rights to a porphyry/skarn copper project at Bursa in Western Turkey. Drilling and a high resolution airborne magnetic survey commenced on the project during Q4 2012.

Mauritania & West Africa

The diamond drill program on the Oriental Hill mineralization adjacent to the current Guelb Moghrein open pit continued during Q4 2012. As part of the program five metallurgical holes have been completed for detailed metallurgical testing. Consistent thicknesses of oxide and typical Guelb Moghrein style ‘FMC’ mineralization have been intercepted and are somewhat wider than anticipated in the south.

Drilling on the Bou Seroual gold target east of Guelb Moghrein has intercepted quartz-ankarite-sulphide veins in an extensively altered shear zone. Assay results for gold are pending.

The first of three exploration permits in western Cote D’Ivoire has been granted to the Company’s alliance partner Newgenco. These permits cover prospective nickel-copper-PGE targets in the Man region. Reconnaissance geochemistry and geophysics are now able to commence.

2012 Management’s Discussion and Analysis 12

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

SALES REVENUES

		Q4 2012		Q3 2012		Q4 2011		2012		2011
Kansanshi	- copper		437.9		462.3		368.4		1,797.3		1,909.3
	- gold		56.4		44.8		37.3		182.6		139.0
Guelb Moghrein	- copper		92.5		64.1		66.2		286.7		244.4
	- gold		34.8		21.5		31.0		107.7		101.8
Ravensthorpe	- nickel		93.0		79.6		—		380.8		—
	- cobalt		1.3		1.7		—		6.9		—
Kevitsa	- nickel		6.9		8.8		—		15.7		—
	- copper		20.6		18.7		—		39.3		—
	- gold, PGE and cobalt		9.0		8.1		—		17.1		—
Corporate and other			22.2		15.2		64.4		116.3		189.0
			774.6		724.8		567.3		2,950.4		2,583.5

Full year 2012 sales revenues were 14% higher than 2011. Revenue in 2012 has benefited from a full year of commercial production at Ravensthorpe, contributing $387.7 million and the first full quarter of production at Kevitsa, contributing $72.1 million. Excluding the two new operations, sales revenues decreased by 4% year-on-year due to the lower net realized copper price which fell by 9%. Gold revenues increased to $296.4 million in 2012 due to higher sales volumes and higher realized prices.

Q4 2012 total sales revenues were 37% higher than the prior year quarter due to the contribution of Ravensthorpe and Kevitsa of $94.3 million and $36.5 million respectively. Excluding the two new operations, sales revenues increased by 13% from Q4 2011 from a combination of higher realized copper and gold prices and higher sales volumes of both metals. This was offset by a decrease in revenue from the Corporate segment which in 2011 benefited from a one-off sale of excess sulphur.

The Company’s revenues are recognized at provisional prices when title passes to the customer. Subsequent adjustments for final pricing are materially offset by derivative adjustments and shown on a net basis in cost of sales (see “Hedging Program” for further discussion).

Copper selling price (per lb)	Q4 2012			Q3 2012			Q4 2011			2012			2011
Average LME cash price		3.59			3.50			3.40			3.61			4.00
Realized copper price		3.46			3.45			3.33			3.51			3.87
Treatment/refining charges (“TC/RC”) and freight charges		(0.23	)		(0.26	)		(0.32	)		(0.25	)		(0.27	)
Net realized copper price		3.23			3.19			3.01			3.26			3.60

The LME copper price averaged $3.59 per lb for the quarter, an increase of $0.19 per lb from the average for Q4 2011. Copper prices traded lower from the end of September (closing $3.75 per lb) to a quarter low of $3.42 per lb on November 9, 2012 when the Dow Jones Industrial Average registered its biggest one day loss in 2012.

Nickel selling price (per lb)	Q4 2012			Q3 2012			Q4 2011		2012			2011
Average LME cash price		7.70			7.41			8.30		7.95			10.35
Realized nickel price per payable pound		7.74			7.69			—		7.96			—
TC/RC charges		(0.35	)		(0.44	)		—		(0.25	)		—
Net realized nickel price per payable pound		7.39			7.25			—		7.71			—

The LME nickel price averaged $7.70 per lb for the quarter, a decrease of $0.60 per lb from the average for Q4 2011. The rally in nickel prices that began in the final week of August and continued through September reached its peak of $8.54 per lb on October 2, 2012 and then started to fall back reaching a quarter low of $7.19 per lb on November 5, 2012. The last week of November saw a rebound to around $7.94 per lb in early December, and then to a month high of $8.05 per lb at the close on December 12, 2012.

2012 Management’s Discussion and Analysis 13

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

SUMMARY FINANCIAL RESULTS

	Q4 2012			Q3 2012			Q4 2011			2012			2011
Gross profit
Kansanshi		238.0			223.8			186.2			929.4			1,187.1
Guelb Moghrein		47.5			24.3			3.5			117.7			127.8
Ravensthorpe		2.8			(1.6	)		—			42.5			—
Kevitsa		6.4			17.5			—			23.9			—
Other		0.3			(3.0	)		(7.0	)		(12.5	)		(6.9	)
Total gross profit		295.0			261.0			182.7			1,101.0			1,308.0
Exploration		(13.4	)		(6.3	)		(19.7	)		(49.7	)		(73.0	)
General and administrative		(20.4	)		(22.5	)		(15.8	)		(76.0	)		(73.8	)
Other income (expense)		(5.0	)		(1.0	)		(3.8	)		(4.3	)		7.3
Net finance income (costs)		1.0			1.2			(0.1	)		8.3			(4.6	)
Settlement of RDC claims and sale of assets		—			—			—			1,217.9			—
Bond inducement costs		—			—			—			—			(48.4	)
Income taxes		(50.5	)		(99.7	)		(49.5	)		(327.8	)		(460.7	)
Net earnings for the period		206.7			132.7			93.8			1,869.4			654.8
Net earnings for the period attributable to:
Non-controlling interests		20.0			25.4			17.8			96.5			125.9
Shareholders of the Company		186.7			107.3			76.0			1,772.9			528.9
Comparative earnings		186.7			107.3			78.9			555.0			580.5
Earnings per share
Basic	$	0.39		$	0.23		$	0.16		$	3.74		$	1.18
Diluted	$	0.39		$	0.23		$	0.16		$	3.72		$	1.18
Comparative earnings per share	$	0.39		$	0.23		$	0.17		$	1.17		$	1.30

Full year exploration costs decreased from 2011. The prior year includes exploration expenses at Enterprise, which were capitalized in 2012 following a development decision by the Board. Full year exploration expenses comprise primarily;

• $13.7 million in Peru

• $8.4 million at Kansanshi

• $9.6 million in Finland and Sweden

• $8.7 million at Guelb Moghrein

General and administrative costs were consistent with costs in 2011. A reduction in legal expenses related to RDC matters were partially offset by an increase in personnel costs in 2012 driven by an increased complement of employees to develop and manage the Company’s expanded asset base.

On January 5, 2012, the Company reached an agreement with ENRC to dispose of its residual claims and assets in respect of the Kolwezi Tailings project and the Frontier and Lonshi mines and related exploration interests, all located in the Katanga Province of the RDC and to settle all current legal matters relating to these interests for a total consideration of $1.25 billion. The transaction was completed on March 2, 2012. The total consideration was comprised of $750.0 million, paid on March 2, 2012, together with a deferred consideration of $500.0 million in the form of a three-year Promissory Note with an interest coupon of 3% payable annually in arrears. Under the terms of the acquisition, ENRC acquired, with certain limited exceptions, all of First Quantum’s assets and property either physically located within the RDC or relating to the operations formerly carried out by First Quantum and its subsidiaries in the RDC. In connection with the transaction, First Quantum, ENRC, the RDC Government, International Finance Corporation and Industrial Development Corporation have also settled all disputes relating to the companies being sold and their assets and operations in the RDC and each of First Quantum, ENRC, the RDC Government,

2012 Management’s Discussion and Analysis 14

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

International Finance Corporation and Industrial Development Corporation have released one another in respect of all claims and judgments relating to the foregoing or to any other matter arising in the RDC on or before the date of closing.

The $1,217.9 million gain recognized on the disposal includes the fair value of proceeds received, net of transaction costs and the underlying net liabilities of subsidiaries disposed of.

Income taxes for the full year amount to an effective income tax rate of approximately 33% of earnings (excluding the $1,217.9 received in settlement of RDC claims and sale of assets) compared to 40% (based on comparative earnings) in the prior year. The decrease is due to a number of non-recurring factors that include the recognition of previously unrecognized tax losses. In future, it is expected that the effective tax rate will reduce slightly below 43% as a result of increased earnings in lower tax jurisdictions.

LIQUIDITY AND CAPITAL RESOURCES

	Q4 2012			Q4 20111			2012			20111			20101
Cash flows from operating activities
- before changes in working capital		319.1			285.5			1,165.2			1,299.3			1,340.4
- after changes in working capital		70.2			(5.2	)		342.5			412.3			802.9
Cash flows from investing activities
Payments for property, plant and equipment		(420.0	)		(294.4	)		(1,373.3	)		(1,108.7	)		(357.6	)
Proceeds from settlement of RDC claims and sale of assets		—			—			736.5			—			—
Acquisitions		—			—			—			—			(514.9	)
Other investing activities		(27.3	)		—			(41.0	)		14.0			646.9
Cash flows from financing activities		311.2			(2.8	)		192.2			(210.4	)		(151.6	)
Net cash flows		(65.9	)		(302.4	)		(143.1	)		(892.8	)		(425.7	)
Cash balance		309.0			452.1			309.0			452.1			1,344.9
Total assets		7,536.4			5,298.0			7,536.4			5,298.0			4,957.9
Total long-term liabilities		1,211.4			507.6			1,211.4			507.6			853.1
Cash flows from operating activities per share2
before working capital (per share)	$	0.67		$	0.60		$	2.46		$	2.91		$	3.34
after working capital (per share)	$	0.15		$	(0.01	)	$	0.72		$	0.92		$	0.92

¹  Cash flows before changes in working capital has been adjusted from that previously disclosed due to changes in presentation of taxes paid and interest received in the cash flow.

²  Cash flows per share is not recognized under IFRS. See “Regulatory Disclosures” for further information.

2012 operating cash flows before changes in working capital decreased from 2011 due to higher non-cash expenses in 2011. Changes in working capital during 2012 resulted in a reduction of cash of $822.7 million which includes $458.8 million in Zambian taxes that the Company paid during the year. Increases in accounts receivable and inventory totalled $444.3 million during 2012, resulting in part, from the commencement of operations at Kevitsa.

Capital expenditure on the Company’s key development projects totalled $1,373.3 million for the year. Capital expenditure comprised primarily;

• $755.2 million at Kansanshi for the oxide circuit expansions, smelter project and mine pit development costs

• $328.2 million at Sentinel, including deposits, for site development and long-lead plant and mine equipment

• $171.4 million at Kevitsa for project development, completion and costs incurred during the commissioning phase

Proceeds from settlement of RDC claims and sale of assets represents the net cash proceeds received during Q1 2012. The $500.0 million promissory note is payable by ENRC on March 2, 2015.

Cash flows from financing activities for the year include dividend payments made to shareholders of the Company of $91.0 million as well as dividends paid to non-controlling interest of $39.0 million. Cash flows from financing activities in 2011 include dividend payments of $79.3 million and $10.8 million made to shareholders of the Company and non-controlling interest respectively. Prior year cash flows from financing activities also include bond inducement costs of $48.4 million and the final $80.7 million repayment of the $400.0 million term loan facility which was previously in place.

Cash flows from financing activities in Q4 2012 comprise primarily of the net proceeds from the $350.0 million senior notes issue which was completed on October 10, 2012. Q4 2012 also includes dividends of $23.2 million paid to non-controlling interests.

2012 Management’s Discussion and Analysis 15

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

As at December 31, 2012, the Company had the following contractual obligations outstanding:

	Carrying Value		Contractual Cashflows		< 1 year		1 –3 years		3 –5 years		Thereafter
Debt		396.8		584.9		73.3		60.0		50.8		400.8
Trade and other payables		355.5		355.5		355.5		—		—		—
Current taxes payable		32.5		32.5		32.5		—		—		—
Deferred payments		4.2		4.2		4.2		—		—		—
Finance leases		27.2		38.9		3.8		7.6		7.6		19.9
Commitments		897.2		897.2		897.2		—		—		—
Restoration provisions		270.5		519.0		0.6		5.6		1.0		511.8
Total		1,983.9		2,432.2		1,367.1		73.2		59.4		932.5

Total commitments of $897.2 million comprise primarily of capital expenditure for property, plant and equipment related to the development of Sentinel, upgrades at Kansanshi, the smelter construction and other projects.

The significant capital expansion and development program is expected to be funded using available cash, future cash flows from operations and debt facilities. At December 31, 2012, both the $250.0 million Kevitsa debt facility and $1.0 billion Kansanshi senior term and revolving facility were undrawn and available for drawdown.

2012 Management’s Discussion and Analysis 16

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

Hedging program

As at December 31, 2012, the following derivative positions were outstanding:

			Average price
	Open Positions (tonnes/ounces)		Contract		Market		Maturities Through
Embedded derivatives in provisional sales contracts:
Copper		50,191	$	3.61/lb	$	3.59/lb		March 2013
Nickel		3,996		7.81/lb		7.70/lb		February 2013
Gold		19,462		1,705/oz		1,676/oz		March 2013
Commodity contracts:
Copper		53,453	$	3.61/lb	$	3.59/lb		March 2013
Nickel		3,315		7.81/lb		7.70/lb		February 2013
Gold		21,253		1,705/oz		1,676/oz		March 2013

A summary of the fair values of unsettled derivative financial instruments for commodity contracts recorded on the consolidated balance sheet:

	December 31, 2012			December 31, 2011
Commodity contracts:
Asset position	$	5.0		$	5.1
Liability position		(2.4	)		(6.0	)

a) Provisional pricing and derivative contracts

A portion of the Company’s metal sales is sold on a provisional pricing basis whereby sales are recognized at prevailing metal prices when title transfers to the customer and final pricing is not determined until a subsequent date, typically two months later. The difference between final price and provisional invoice price is recognized in net earnings. In order to mitigate the impact of these adjustments on net earnings, the Company enters into derivative contracts to directly offset the pricing exposure on the provisionally priced contracts. The provisional pricing gains or losses and offsetting derivative gains or losses are both recognized as a component of cost of sales. Derivative assets are presented in other assets and derivative liabilities are presented in other liabilities with the exception of copper, gold and nickel embedded derivatives which are included within accounts receivable.

As at December 31, 2012, substantially all of the Company’s metal sales contracts subject to pricing adjustments were hedged by offsetting derivative contracts.

2012 Management’s Discussion and Analysis 17

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

EQUITY

At the date of this report, the Company has 476,310,282 shares outstanding. There were no changes in common shares outstanding during 2012.

OTHER ITEMS

Zambian taxation

The Government of the Republic of Zambia (“GRZ”) announced in January 2008 a number of proposed changes to the tax regime in the country in relation to mining companies. The Company, through some of its Zambian subsidiaries, is party to Development Agreements with the GRZ for its existing operations which provide an express right to full and fair compensation for any loss, damages or costs (including interest) incurred by the Company by reason of the government’s failure to comply with the tax stability guarantees set out in the Development Agreements and rights of international arbitration in the event of any dispute. The Company’s Zambian subsidiaries have complied with the GRZ’s new tax regime without prejudice to its rights under the Development Agreement.

Following the change of government in 2011, the first Budget of the new government introduced a further increase in the copper mineral royalty tax from 3% to 6%, effective April 2012, in breach of the Development Agreements.

In the 2013 Budget, delivered in October 2012, the GRZ has decreased the rate of Capital Allowances from 100% per annum to 25% per annum. This will impact the timing of the tax benefit from the Company’s significant capital programs at Kansanshi and Sentinel.

Until resolved differently with the GRZ, the Company is recognizing and paying taxes in excess of the Development Agreement, resulting in an effective tax rate of approximately 43% at Kansanshi.

2012 Management’s Discussion and Analysis 18

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

SUMMARY OF RESULTS

The following unaudited tables set out a summary of quarterly and annual results for the Company:

Consolidated operating statistics	2010			Q1 11			Q2 11			Q3 11			Q4 11			2011			Q1 12			Q2 12			Q3 12			Q4 12			2012
Sales revenues
Copper	$	2,196.0		$	651.6		$	606.9		$	585.0		$	474.4		$	2,317.9		$	573.3		$	528.1		$	559.1		$	571.7		$	2,232.2
Nickel		—			—			—			—			—			—			80.1			128.1			88.3			100.0			396.5
Gold		197.2			53.6			53.1			66.0			68.2			240.9			68.5			64.3			68.8			94.8			296.4
PGE and other elements		—			—			—			—			24.7			24.7			6.8			1.8			8.6			8.1			25.3
Total sales revenues		2,393.2			705.2			660.0			651.0			567.3			2,583.5			728.7			722.3			724.8			774.6			2,950.4
Gross profit		1,211.7			439.5			363.2			322.6			182.7			1,308.0			270.3			274.7			261.0			295.0			1,101.0
EBITDA		1,120.2			425.6			346.7			279.2			180.6			1,232.1			1,498.9			276.4			276.2			309.7			2,361.2
Net earnings attributable to shareholders of the Company		305.8			206.7			155.3			90.9			76.0			528.9			1,336.9			142.0			107.3			186.7			1,772.9
Comparative earnings		549.7			206.7			155.3			139.6			78.9			580.5			119.0			142.0			107.3			186.7			555.0
Basic earnings per share	$	0.76		$	0.48		$	0.36		$	0.20		$	0.16		$	1.18		$	2.82		$	0.30		$	0.23		$	0.39		$	3.74
Comparative earnings per share	$	1.37		$	0.48		$	0.36		$	0.30		$	0.17		$	1.30		$	0.25		$	0.30		$	0.23		$	0.39		$	1.17
Diluted earnings per share	$	0.69		$	0.44		$	0.33		$	0.20		$	0.16		$	1.18		$	2.81		$	0.30		$	0.23		$	0.39		$	3.72
Dividends declared per common share ($CDN per share)	$	0.142		$	0.121			—		$	0.053			—		$	0.174		$	0.1277			—		$	0.0603			—		$	0.1880
Weighted average # shares (000’s)		401,322			428,770			428,775			456,865			474,071			447,224			474,069			474,035			473,776			473,718			473,893
Cash flows from operating activities
Before working capital movements	$	3.34		$	0.84		$	0.62		$	0.85		$	0.60		$	2.91		$	0.41		$	0.78		$	0.60		$	0.67		$	2.46
After working capital movements	$	0.92		$	0.88		($	0.13	)	$	0.21		($	0.01	)	$	0.92		$	0.29		$	0.49		($	0.21	)	$	0.15		$	0.72
Copper statistics
Total copper production (tonnes)		323,017			74,888			64,587			58,785			67,316			265,576			65,869			72,184			84,144			84,918			307,115
Total copper sales (tonnes)		311,560			70,665			65,511			71,443			65,638			273,257			67,789			72,711			77,396			77,570			295,466
Realized copper price (per lb)		3.25			4.23			4.05			3.84			3.33			3.87			3.67			3.48			3.45			3.46			3.51
TC/RC (per lb)		(0.06	)		(0.03	)		(0.04	)		(0.06	)		(0.06	)		(0.05	)		(0.07	)		(0.08	)		(0.09	)		(0.08	)		(0.08	)
Freight charges (per lb)		(0.21	)		(0.19	)		(0.20	)		(0.24	)		(0.26	)		(0.22	)		(0.18	)		(0.19	)		(0.18	)		(0.15	)		(0.17	)
Net realized copper price (per lb)		2.98			4.01			3.81			3.54			3.01			3.60			3.42			3.21			3.19			3.23			3.26
Cash costs – copper (C1) (per lb)1	$	1.18		$	1.15		$	1.43		$	1.52		$	1.53		$	1.41		$	1.59		$	1.53		$	1.44		$	1.42		$	1.49
Total costs – copper (C3) (per lb)1	$	1.47		$	1.48		$	1.78		$	1.85		$	1.97		$	1.76		$	1.89		$	1.96		$	1.86		$	1.91		$	1.91
Nickel statistics
Nickel production (contained tonnes)		—			—			—			—			5,666			5,666			8,573			8,174			9,916			10,096			36,759
Nickel sales (contained tonnes)		—			—			—			—			1,388			1,388			5,332			9,846			7,120			8,081			30,379
Nickel production (payable tonnes)		—			—			—			—			4,189			4,189			6,617			6,204			6,932			8,039			27,792
Nickel sales (payable tonnes)		—			—			—			—			1,110			1,110			4,199			7,443			5,554			6,124			23,320
Realized nickel price (per payable lb)		—			—			—			—			—			—			8.85			7.84			7.69			7.74			7.96
TC/RC (per payable lb)		—			—			—			—			—			—			(0.20	)		(0.05	)		(0.44	)		(0.35	)		(0.25	)
Net realized nickel price (per payable lb)		—			—			—			—			—			—			8.65			7.79			7.25			7.39			7.71
Cash costs – nickel (C1) (per payable lb)1		—			—			—			—			—			—		$	5.69		$	5.70		$	6.24		$	6.12		$	5.92
Total costs – nickel (C3) (per payable lb)1		—			—			—			—			—			—		$	6.93		$	6.95		$	7.64		$	7.30		$	7.19
Gold statistics
Total gold production (ounces)		191,395			49,146			41,087			41,468			43,524			175,225			42,495			44,280			50,784			64,383			201,942
Total gold sales (ounces)		188,368			45,349			38,426			47,458			49,209			180,442			45,619			46,445			48,889			61,350			202,303
Net realized gold price (per ounce)		1,047			1,183			1,382			1,386			1,386			1,335			1,502			1,384			1,408			1,546			1,465
Platinum statistics
Platinum production (ounces)		—			—			—			—			—			—			—			585			7,100			6,123			13,808
Platinum sales (ounces)		—			—			—			—			—			—			—			—			4,066			3,709			7,775
Palladium statistics
Palladium production (ounces)		—			—			—			—			—			—			—			564			6,200			5,419			12,183
Palladium sales (ounces)		—			—			—			—			—			—			—			—			3,681			3,500			7,181

1 Cash costs, total costs and EBITDA are not recognized under IFRS. See “Regulatory Disclosures” for further information.

2012 Management’s Discussion and Analysis 19

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

Kansanshi statistics	2010			Q1 11			Q2 11			Q3 11			Q4 11			2011			Q1 12			Q2 12			Q3 12			Q4 12			2012
Mining
Waste mined (000’s tonnes)		23,847			6,700			13,087			16,133			15,848			51,768			16,062			18,217			24,494			22,365			81,138
Ore mined (000’s tonnes)		23,045			6,152			6,025			5,761			6,568			24,506			5,882			6,150			8,463			9,952			30,447
Processing
Sulphide ore processed (000’s tonnes)		10,382			2,318			2,724			2,185			1,628			8,855			1,433			2,379			2,763			2,679			9,254
Sulphide ore grade processed (%)		0.8			0.9			0.7			0.4			0.6			0.7			1.0			1.0			0.9			1.0			1.0
Sulphide ore recovery (%)		93			94			93			88			92			91			95			94			92			92			93
Mixed ore processed (000’s tonnes)		5,462			1,638			1,696			2,057			2,986			8,377			2,562			2,093			1,955			1,951			8,561
Mixed ore grade processed (%)		1.3			1.2			1.0			0.9			1.0			1.0			1.1			1.1			1.0			1.1			1.1
Mixed ore recovery (%)		67			68			62			61			64			63			64			64			77			74			69
Oxide ore processed (000’s tonnes)		5,674			1,517			1,469			1,594			1,492			6,072			1,424			1,548			1,500			1,738			6,210
Oxide ore grade processed (%)		2.2			2.4			2.1			2.3			2.3			2.3			2.0			2.0			2.6			2.0			2.2
Oxide ore recovery (%)		86			84			86			84			88			86			85			84			84			90			86
Copper cathode produced (tonnes)		86,682			25,445			21,037			25,173			24,838			96,493			21,274			22,938			27,194			25,341			96,747
Copper cathode tolled produced (tonnes)		97,501			26,655			23,478			22,782			18,515			91,430			21,085			18,757			16,701			15,912			72,455
Copper in concentrate produced (tonnes)		46,941			12,697			11,641			2,224			15,810			42,372			14,252			21,130			27,589			29,178			92,149
Total copper production		231,124			64,797			56,156			50,179			59,163			230,295			56,611			62,825			71,484			70,431			261,351
Concentrate grade (%)		24.9			23.0			22.1			19.1			24.4			22.3			28.2			26.3			23.9			23.5			25.0
Gold produced (ounces)		109,629			30,612			25,417			26,677			29,580			112,286			27,158			28,244			35,245			45,410			136,056
Cash Costs (per lb) 1
Mining	$	0.44		$	0.42		$	0.55		$	0.52		$	0.63		$	0.53		$	0.58		$	0.55		$	0.50		$	0.52		$	0.54
Processing		0.58			0.62			0.76			0.97			0.81			0.79			0.90			0.82			0.83			0.91			0.86
Site administration		0.03			0.04			0.06			0.09			0.06			0.06			0.05			0.07			0.05			0.06			0.06
TC/RC and freight charges		0.28			0.30			0.30			0.31			0.32			0.31			0.37			0.35			0.37			0.33			0.35
Gold credit		(0.23	)		(0.24	)		(0.26	)		(0.33	)		(0.30	)		(0.28	)		(0.36	)		(0.27	)		(0.29	)		(0.37	)		(0.32	)
Cash costs (C1) (per lb)1	$	1.10		$	1.14		$	1.41		$	1.56		$	1.52		$	1.41		$	1.54		$	1.52		$	1.46		$	1.45		$	1.49
Total costs (C3) (per lb)1	$	1.31		$	1.39		$	1.68		$	1.87		$	1.90		$	1.70		$	1.82		$	1.93		$	1.86		$	1.90		$	1.88
Revenues ($ millions)
Copper cathodes	$	1,240.0		$	494.0		$	444.2		$	424.1		$	302.6		$	1,664.9		$	355.0		$	338.9		$	334.5		$	334.6		$	1,363.0
Copper in concentrates		298.4			69.2			47.6			61.8			65.8			244.4			90.7			112.5			127.8			103.3			434.3
Gold		115.5			34.1			31.9			35.7			37.3			139.0			44.8			36.6			44.8			56.4			182.6
Total sales revenues	$	1,653.9		$	597.3		$	523.7		$	521.6		$	405.7		$	2,048.3		$	490.5		$	488.0		$	507.1		$	494.3		$	1,979.9
Copper cathode sales (tonnes)		80,782			29,412			26,370			29,350			24,522			109,654			24,128			23,238			27,138			27,946			102,450
Copper tolled cathode sales(tonnes)		97,295			26,655			23,478			22,782			18,514			91,429			21,085			18,758			16,700			15,912			72,455
Copper in concentrate sales(tonnes)		47,112			7,006			7,773			8,970			11,000			34,749			13,332			21,755			21,992			17,900			74,979
Gold sales (ounces)		115,742			31,210			25,944			29,592			27,742			114,488			30,308			29,162			33,510			38,179			131,159

1 Cash costs and total costs are not recognized under IFRS. See “Regulatory Disclosures” for further information.

2012 Management’s Discussion and Analysis 20

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

Guelb Moghrein statistics	2010			Q1 11			Q2 11			Q3 11			Q4 11			2011			Q1 12			Q2 12			Q3 12			Q4 12			2012
Mining
Waste mined (000’s tonnes)		9,827			2,267			3,114			3,696			4,162			13,239			4,532			4,673			4,720			5,652			19,577
Ore mined (000’s tonnes)		3,045			931			661			878			1,140			3,610			994			1,046			807			723			3,570
Processing
Sulphide ore processed (000’s tonnes)		2,796			758			631			668			634			2,691			797			753			687			825			3,062
Sulphide ore grade processed (%)		1.5			1.4			1.5			1.4			1.4			1.4			1.3			1.3			1.3			1.4			1.3
Recovery (%)		91			92			91			91			91			91			92			88			94			93			91
Copper in concentrate produced (tonnes)		36,969			10,091			8,429			8,606			8,155			35,281			9,258			8,718			8,656			11,038			37,670
Gold produced (ounces)		81,766			18,534			15,670			14,791			13,943			62,938			15,337			15,554			12,827			16,802			60,519
Cash Costs (per lb)1
Mining	$	0.35		$	0.40		$	0.46		$	0.78		$	0.69		$	0.57		$	0.65		$	0.67		$	0.55		$	0.73		$	0.66
Processing		0.77			0.82			1.20			1.28			1.45			1.17			1.23			1.31			1.13			1.01			1.16
Site administration		0.25			0.25			0.38			0.23			0.39			0.31			0.33			0.31			0.34			0.31			0.32
TC/RC and freight charges		0.48			0.47			0.62			0.49			0.69			0.57			0.76			0.58			0.57			0.44			0.58
Gold credit		(0.95	)		(0.68	)		(1.04	)		(1.45	)		(1.59	)		(1.16	)		(1.13	)		(1.26	)		(1.17	)		(1.36	)		(1.24	)
Cash costs (C1) (per lb)1	$	0.90		$	1.26		$	1.62		$	1.33		$	1.63		$	1.46		$	1.84		$	1.61		$	1.43		$	1.13		$	1.48
Total costs (C3) (per lb)1	$	1.65		$	2.03		$	2.49		$	1.89		$	2.45		$	2.20		$	2.41		$	2.20		$	1.93		$	1.69		$	2.04
Revenues ($ millions)
Copper in concentrates	$	192.7		$	49.1		$	56.8		$	72.3		$	66.2		$	244.4		$	66.6		$	63.5		$	64.1		$	92.5		$	286.7
Gold		81.7			19.5			21.2			30.1			31.0			101.8			23.7			27.7			21.5			34.8			107.7
Total sales revenues	$	274.4		$	68.6		$	78.0		$	102.4		$	97.2		$	346.2		$	90.3		$	91.2		$	85.6		$	127.3		$	394.4
Copper in concentrate sales (tonnes)		32,932			6,031			7,810			10,332			11,601			35,774			9,244			8,961			8,962			13,007			40,174
Gold sales (ounces)		72,626			14,139			12,482			17,866			21,467			65,954			15,311			17,283			13,631			20,864			67,089
Ravensthorpe statistics	2010			Q1 11			Q2 11			Q3 11			Q4 11			2011			Q1 12			Q2 12			Q3 12			Q4 12			2012
Processing
Beneficiated ore processed (000’s tonnes)		—			—			—			—			645			645			724			667			733			687			2,811
Beneficiated ore grade processed (%)		—			—			—			—			1.3			1.3			1.5			1.6			1.4			1.5			1.5
Recovery (%)		—			—			—			—			68			68			78			77			77			78			77
Nickel produced (contained tonnes)		—			—			—			—			5,666			5,666			8,573			8,053			8,032			8,227			32,884
Nickel produced (payable tonnes)		—			—			—			—			4,189			4,189			6,617			6,204			6,188			6,338			25,347
Cash Costs (per lb)1
Mining		—			—			—			—			—			—		$	0.57		$	0.69		$	0.93		$	1.00		$	0.80
Processing		—			—			—			—			—			—			3.73			4.10			4.45			4.16			4.14
Site administration		—			—			—			—			—			—			0.61			0.50			0.51			0.41			0.51
TC/RC and freight charges		—			—			—			—			—			—			1.03			0.45			0.65			0.57			0.64
Cobalt credit		—			—			—			—			—			—			(0.25	)		(0.04	)		(0.11	)		(0.09	)		(0.12	)
Cash costs (C1) (per lb) 1		—			—			—			—			—			—		$	5.69		$	5.70		$	6.43		$	6.05		$	5.97
Total costs (C3) (per lb) 1		—			—			—			—			—			—		$	6.93		$	6.95		$	7.84		$	7.33		$	7.25
Revenues ($ millions)
Nickel		—			—			—			—			—			—		$	80.1		$	128.1		$	79.6		$	93.0		$	380.8
Cobalt		—			—			—			—			—			—			2.1			1.8			1.7			1.3			6.9
Total sales revenues		—			—			—			—			—			—		$	82.2		$	129.9		$	81.3		$	94.3		$	387.7
Nickel sales (contained tonnes)		—			—			—			—			1,388			1,388			5,332			9,846			6,272			7,288			28,738
Nickel sales (payable tonnes)		—			—			—			—			1,110			1,110			4,199			7,443			4,790			5,425			21,857

1 Cash costs and total costs are not recognized under IFRS. See “Regulatory Disclosures” for further information.

2012 Management’s Discussion and Analysis 21

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

Kevitsa statistics	Q2 12		Q3 12		Q3 12		Q4 2012		2012
			Pre- commercial production		Post- commercial production
Mining
Total tonnes mined (000’s tonnes)		500		558		1,164		5,238		7,460
Processing
Ore tonnes milled (000’s tonnes)		318		720		687		1,413		3,138
Nickel ore grade processed (%)		0.2		0.2		0.2		0.2		0.2
Nickel recovery (%)		24		54		60		59		56
Nickel production (tonnes)		121		843		1,041		1,870		3,875
Copper ore grade processed (%)		0.3		0.3		0.3		0.3		0.3
Copper recovery (%)		64		87		84		84		83
Copper production (tonnes)		642		2,130		1,874		3,448		8,094
Gold production (ounces)		482		1,282		1,431		2,172		5,367
Platinum production (ounces)		585		3,174		3,926		6,123		13,808
Palladium production (ounces)		564		2,827		3,373		5,419		12,183
Cash costs – Nickel (C1) (per lb) 1 / 2		—		—		3.79		6.37		5.47
Total costs – Nickel (C3) (per lb) 1 / 2		—		—		5.35		7.19		6.54
Cash costs – Copper (C1) (per lb) 1 / 2		—		—		0.11		1.75		1.28
Total costs – Copper (C3) (per lb) 1 / 2		—		—		1.49		3.06		2.61
Revenues ($ millions)
Nickel		—		—	$	8.8	$	6.9	$	15.7
Copper		—		—		18.7		20.6		39.3
Gold		—		—		2.5		3.7		6.2
PGE and other		—		—		5.6		5.3		10.9
Total sales revenues		—		—	$	35.6	$	36.5	$	72.1
Nickel sales (tonnes)		—		—		848		792		1,640
Copper sales (tonnes)		—		1,040		2,604		2,805		6,448
Gold sales (ounces)		—		702		1,749		2,306		4,757
Platinum sales (ounces)		—		775		3,291		3,709		7,775
Palladium sales (ounces)		—		697		2,984		3,500		7,181

1 Cash costs and total costs are not recognized under IFRS. See “Regulatory Disclosures” for further information.

2 Cash costs and total costs are calculated on a co-product basis for nickel and copper. Common costs are allocated to each product based on the ratio of production volumes multiplied by budget metal prices. By-product credits are allocated based on the finished product concentrate in which they are produced.

2012 Management’s Discussion and Analysis 22

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

REGULATORY DISCLOSURES

Seasonality

The Company’s results as discussed in this MD&A are subject to seasonal aspects, in particular the rain season in Zambia. The rain season in Zambia generally starts in November and continues through April, with the heaviest rainfall normally experienced in the months of January, February and March. As a result of the rain season, pit access and the ability to mine ore is lower in the first quarter of the year than other quarters and the cost of mining is higher.

Off-balance sheet arrangements

The Company had no off-balance sheet arrangements as of the date of this report.

Non-GAAP financial measures

This document refers to cash costs (C1) and total costs (C3) per unit of payable production, operating cash flow per share, EBITDA and comparative earnings, which are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS.

The calculation of these measures is described below, and may differ from those used by other issuers. The Company discloses these measures in order to provide assistance in understanding the results of our operations and to provide additional information to investors.

Calculation of cash costs and total Costs

The consolidated cash costs (C1) and total costs (C3) presented by the Company are measures that are prepared on a basis consistent with the industry standard definitions but are not measures recognized under IFRS. In calculating the cash and total costs for each segment, the costs are prepared on the same basis as the segmented financial information that is contained in the financial statements.

Cash costs include all mining and processing costs less any profits from by-products such as gold, cobalt or platinum group elements. TC/RC and freight deductions on metal sales, which are typically recognized as a component of sales revenues, are added to cash costs to arrive at an approximate cost of finished metal. Total costs are cash costs plus depreciation, exploration, interest, royalties.

Calculation of operating cash flow per share, EBITDA and comparative earnings

In calculating the operating cash flow per share, before and after working capital movements, the operating cash flow calculated for IFRS purposes is divided by the basic weighted average common shares outstanding for the respective period. EBITDA is calculated as operating profit before depreciation. Comparative earnings and comparative earnings per share have been adjusted to remove the effect of the settlement of claims and sale of RDC assets in 2012 and bond inducement costs in 2011. These may differ from those used by other issuers.

	Q4 2012		Q3 2012		Q4 2011		2012			2011
Net earnings attributable to shareholders of the Company		186.7		107.3		76.0		1,772.9			528.9
Add:
Bond inducement costs		—		—		—		—			48.4
Net loss from Frontier before asset impairments		—		—		2.6		—			3.1
Net loss from Bwana / Lonshi before asset impairments		—		—		0.3		—			0.1
Deduct:
Settlement of RDC claims and sale of assets		—		—		—		(1,217.9	)		—
Comparative earnings		186.7		107.3		78.9		555.0			580.5
Earnings per share as reported	$	0.39	$	0.23	$	0.16	$	3.74		$	1.18
Comparative earnings per share	$	0.39	$	0.23	$	0.17	$	1.17		$	1.30

2012 Management’s Discussion and Analysis 23

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

a) Significant judgments, estimates and assumptions in applying accounting policies

Many of the amounts disclosed in the financial statements involve the use of judgments, estimates and assumptions. These judgments and estimates are based on management’s best knowledge of the relevant facts and circumstances at the time, having regard to prior experience, and are continually evaluated.

i. Significant judgments

Determination of ore reserves and resources

Judgments about the amount of product that can be economically and legally extracted from the Company’s properties is made by management using a range of geological, technical and economic factors, history of conversion of mineral deposits to proven and probable reserves as well as data regarding quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates. This process may require complex and difficult geological judgments to interpret the data. The Company uses qualified persons (as defined by the Canadian Securities Administrators’ National Instrument 43-101) to compile this data.

Achievement of commercial production

Once a mine reaches the operating levels intended by management, depreciation of capitalized costs begins. Significant judgment is required to determine when certain of the Company’s assets reach this level; management consider several factors including: completion of a reasonable period of commissioning; consistent operating results are being achieved at a pre-determined level of design capacity and indications exist that this level will continue; mineral recoveries are at or near expected production level; and the transfer of operations from development personnel to operational personnel has been completed.

Determination of useful lives of assets for depreciation purposes

Significant judgment is involved in the determination of useful life and residual values for long-lived assets that drive the calculation of depreciation charges. Changes in the judgment of useful lives and residual values may impact the depreciation charge shown in the consolidated statements of earnings.

Taxes

Judgment is required in determining whether deferred income tax assets and liabilities are recognized on the balance sheet. In the normal course of business the Company is subject to assessment by taxation authorities in various jurisdictions. These authorities may have different interpretations of tax legislation or tax agreements than those applied by the Company in computing current and deferred income taxes. These different interpretations may alter the timing or amounts of taxable income or deductions. The final amount of taxes to be paid or recovered depends on a number of factors including the outcome of audits, appeals and negotiation. The Company provides for potential differences in interpretation based a best estimate of the probable outcome of these matters. Changes in these estimates could result in material adjustments to the Company’s current and deferred income taxes.

Functional currency

The functional currency of the Company and for each of the Company’s subsidiaries is the United States dollar (“USD”), which is the primary economic environment in which the entity operates. Determination of functional currency may involve certain judgments to determine the primary economic environment and this is re-evaluated for each new entity, or if conditions change.

ii. Significant accounting estimates and assumptions

Estimates are inherently uncertain and therefore actual results may differ from the amounts included in the financial statements, potentially having a material future effect on the Company’s consolidated financial statements. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:

Determination of ore reserves and resources and life of mine plan

Reserves are estimates of the amount of product that can be economically and legally extracted from the Company’s properties. Estimating the quantity and/or grade of reserves requires the size, shape and depth of ore bodies or fields to be determined by analyzing geological data such as drilling samples. Following this, the quantity of ore that can be extracted in an economical manner is calculated using data regarding the life of mine plans and forecast sales prices (based on current and long-term historical average price trends).

The majority of the Company’s property, plant and equipment are depreciated over the estimated lives of the assets on a units-of-production basis. The calculation of the units-of-production rate, and therefore the annual depreciation expense could be materially affected by changes in the underlying estimates which are driven by the life of mine plans. Changes in estimates can be the result of actual future production differing from current forecasts of future production, expansion of mineral reserves through exploration activities, differences between estimated and actual costs of mining and differences in the commodity prices used in the estimation of mineral reserves.

Changes in the proven and probable reserves estimates may impact the carrying value of property, plant and equipment, restoration provisions, recognition of deferred income tax amounts and depreciation.

2012 Management’s Discussion and Analysis 24

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

Review of asset carrying values and impairment charges

The Company reviews the carrying value of property, plant and equipment each reporting period to determine whether there is any indication of impairment using both internal and external sources of information. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statement of earnings.

External sources of information regarding indications of impairment include considering the changes in market, economic and legal environment in which the Company operates that are not within its control and affect the recoverable amount or timing of mining interests. Internal sources of information include changes to the life of mine plans and economic performance of the assets.

Management’s determination of recoverable amounts include estimates of mineral prices, recoverable reserves, and operating, capital and restoration costs are subject to certain risks and uncertainties that may affect the recoverability of mineral property costs. The calculation of the recoverable amount can also include assumptions regarding the appropriate discount rate and inflation and exchange rates. Although management has made its best estimate of these factors, it is possible that changes could occur in the near term that could adversely affect management’s estimate of the net cash flow to be generated from its projects.

Estimation of the amount and timing of restoration and remediation costs

Accounting for restoration provisions requires management to make estimates of the future costs the Company will incur to complete the restoration and remediation work required to comply with existing laws, regulations and agreements in place at each mining operation and any environmental and social principles the Company is in compliance with. The calculation of the present value of these costs also includes assumptions regarding the applicable risk-free interest rate for discounting those future cash outflows, inflation and foreign exchange rates and assumptions relating to probabilities of alternative estimates of future cash outflows. Actual costs incurred may differ from those amounts estimated. Also, future changes to environmental laws and regulations could increase the extent of restoration work required to be performed by the Company. Increases in future costs could materially impact the amounts charged to operations for restoration.

The provision represents management’s best estimate of the present value of the future restoration and remediation costs. The actual future expenditures may differ from the amounts currently provided; any increase in future costs could materially impact the amounts included in the liability disclosed in the consolidated balance sheet.

Deferred income taxes

The Company recognizes deferred income tax assets arising from unutilized tax losses which requires management to assess the likelihood that the Company will generate taxable earnings in future periods in order to utilize those losses, and the timing of this. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. Forecast cash flows are based on life of mine projections.

To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realize the net deferred income tax assets recorded at the balance sheet date could be impacted. In addition, future changes in tax laws could limit the ability of the Company to obtain tax deductions in future periods from deferred income tax assets.

Financial instruments risk exposure

The Company’s activities expose it to a variety of risks arising from financial instruments. These risks, and management’s objectives, policies and procedures for managing these risks are disclosed as follows:

Credit risk

The Company’s credit risk is primarily attributable to cash and bank balances, short-term deposits, derivative instruments, trade and other receivables and promissory note receivable. The Company’s exposure to credit risk is represented by the carrying amount of each class of financial assets, including commodity contracts, recorded in the consolidated balance sheet.

The Company limits its credit exposure on cash held in bank accounts by holding its key transactional bank accounts with highly rated financial institutions. The Company manages its credit risk on short-term deposits by only investing with counterparties that carry investment grade ratings as assessed by external rating agencies and spreading the investments across these counterparties. Under the Company’s risk management policy, allowable counterparty exposure limits are determined by the level of the rating unless exceptional circumstances apply. A rating of “A-” grade or equivalent is the minimum allowable rating required as assessed by international credit rating agencies. Likewise, it is the Company’s policy to deal with banking counterparties for derivatives who are rated “A-” grade or above by international credit rating agencies and graduated counterparty limits are applied depending upon the rating.

Exceptions to the policy for dealing with relationship banks with ratings below “A-” are reported to, and approved by, the Audit Committee. As at December 31, 2012 substantially all cash and short-term deposits are with counterparties with ratings “A-” or higher.

The Company’s credit risk associated with trade accounts receivable is managed through establishing long-term contractual relationships with international trading companies using industry-standard contract terms. More than 20% of the Company’s trade receivables are generated from two customers together representing greater than 40% of the total sales for the year. Other accounts receivable consist of amounts owing from government authorities in relation to the refund of value-added taxes applying to inputs for the production process and property, plant and equipment expenditures.

2012 Management’s Discussion and Analysis 25

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

The promissory note receivable from ENRC includes mandatory prepayment features triggered by the counterparty’s circumstances: delisting from the London Stock Exchange; the counterparty’s long-term unsecured, unsubordinated debt being downgraded to a rating lower than “B-” by Moody’s Investor Services Limited; a material portion of the counterparty’s assets are nationalized and/or expropriated by any government entities; or it becomes unlawful for the counterparty to perform any of their obligations under the promissory note.

Liquidity risk

The Company manages liquidity risk by maintaining cash and cash equivalent balances and available credit facilities to ensure that it is able to meet its short-term and long-term obligations as and when they fall due. Company-wide cash projections are managed centrally and regularly updated to reflect the dynamic nature of the business and fluctuations caused by commodity price and exchange rate movements.

In addition, the Company was obligated under its corporate revolving credit and term loan facility to maintain liquidity and satisfy various ratio tests on an historical and prospective cash flow basis. These ratios were in compliance during the year ended December 31, 2012 and December 31, 2011.

Market risks

a) Commodity price risk

The Company is subject to commodity price risk from fluctuations in the market prices of copper, gold, nickel and PGE and other elements. The Company is also exposed to commodity price risk on diesel fuel required for mining operations and sulphur required for acid production. The Company’s risk management policy allows for the management of these exposures through the use of derivative financial instruments.

The Company does not purchase, hold or sell derivative financial instruments unless there is an outstanding contract resulting in exposure to market risks that it intends to mitigate. As at December 31, 2012 and December 31, 2011, the Company had entered into derivative contracts for copper, gold, nickel and PGE in order to reduce the effects of fluctuations in metal prices between the time of the shipment of metal from the mine site and the date agreed for pricing the final settlement.

As at December 31, 2012 and December 31, 2011, the Company had not entered into any diesel or sulphur derivatives.

The Company’s commodity price risk related to accounts receivable related to changes in fair value of embedded derivatives in accounts receivable reflecting copper and gold sales provisionally priced based on the forward price curve at the end of each quarter and the commodity price risk related to long-term debt related to the embedded copper derivative in the Kansanshi subordinated debt facility.

b) Interest rate risk

The Company’s interest rate risk arises from interest paid on floating rate borrowings and the interest received on cash and short-term deposits.

Deposits are invested on a short-term basis to ensure adequate liquidity for payment of operational and capital expenditures. To date no interest-rate management products, such as swaps, are used in relation to deposits.

The Company manages its interest rate risk on borrowings on a net basis after first recognizing the natural hedge arising from floating rate deposits. The Company has a policy allowing floating-to-fixed interest rate swaps targeting 50% of exposure over a five year period. As at December 31, 2012, the Company held no floating-to-fixed interest rate swaps. As at December 31, 2011 the Company held no floating-to-fixed interest rate swaps.

c) Foreign exchange risk

The Company’s functional and reporting currency is USD. As virtually all of the Company’s revenues are derived in USD and the majority of its business is conducted in USD, foreign exchange risk arises from transactions denominated in currencies other than USD. Commodity sales are denominated in USD, the majority of borrowings are denominated in USD and the majority of operating expenses are denominated in USD. The Company’s primary foreign exchange exposures are to the local currencies in the countries where the Company’s operations are located, principally the Zambian kwacha (“ZMK”), Australian dollar (“AUD”) Mauritanian ouguiya (“MRO”) and the Euro (“EUR”); and to the local currencies of suppliers who provide capital equipment for project development, principally the AUD, EUR and the South African rand (“ZAR”).

Accounting standards issued but not yet effective

Standards and interpretations issued but not yet effective up to the date of issuance of the financial statements are listed below. This listing of standards and interpretations issued are those that the Company reasonably expects to have an impact on disclosures, financial position or performance when applied at a future date.

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

IAS 1 – Financial statement presentation – Presentation of Items of Other Comprehensive Income.

The amendments of IAS 1 change the grouping of items presented in other comprehensive income. Items that could be reclassified (or ‘recycled’) to net earnings at a future point in time would be presented separately from items that will never be reclassified. The amendment becomes effective for annual periods beginning on or after July 1, 2012. The amendment affects presentation only and has no impact on the Company’s financial position or performance. The Company does not anticipate these amendments to have a significant impact on its consolidated financial statements.

IFRS – 9 Financial instruments: Classification and Measurement

IFRS 9 addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and amended in October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured at fair value and those measured at amortized cost. The determination is made at initial recognition. The classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than in net earnings, unless this creates an accounting mismatch. The standard becomes effective for annual periods beginning on or after January 1, 2015. The Company does not anticipate the adoption of IFRS 9 to have a significant impact on its consolidated financial statements.

IFRS 10 – Consolidated Financial Statements

The amendments of IFRS 10 change the definition of control under IFRS so that the same criteria are applied to all entities to determine control. The standard becomes effective for annual periods beginning on or after January 1, 2013. The Company does not anticipate the adoption of IFRS 10 to have a significant impact on its consolidated financial statements.

IFRS11 – Joint Arrangements

The amendments of IFRS 11 reduce the types of joint arrangement to two: joint ventures and joint operations. IFRS11 requires the use of equity accounting for interests in joint ventures, eliminating the existing policy choice of proportionate consolidation for jointly controlled entities under IAS 31. The standard becomes effective for annual periods beginning on or after January 1, 2013. The Company does not anticipate the adoption of IFRS 11 to have a significant impact on its consolidated financial statements.

IFRS 12 – Disclosure of Interest in Other Entities

The amendments of IFRS 12 sets out the disclosure requirements for entities reporting under IFRS 10 and IFRS 11, and replaces the disclosure requirements currently found in IAS 28, Investments in Associates. The standard becomes effective for annual periods beginning on or after January 1, 2013. The amendment affects presentation only and has no impact upon the Company’s financial position or performance. The Company does not anticipate the adoption of IFRS 12 to have a significant impact on its consolidated financial statements.

IFRS 13 – Fair Value Measurement

This standard aims to improve consistency and reduce complexity by providing a precise definition of fair value and single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRS. The standard becomes effective for annual periods beginning on or after January 1, 2013. The Company does not anticipate the adoption of IFRS 13 to have a significant impact on its consolidated financial statements.

IFRIC 20 – Stripping Costs in the Production Phase of a Surface Mine

The Interpretation of IFRIC 20 gives clarification on the requirements for accounting for stripping costs associated with waste removal in surface mining, including when production stripping costs should be recognized as an asset, how the asset is initially recognized, and subsequent measurement. IFRIC 20 is effective for annual periods beginning on or after January 1, 2013. The Company is currently evaluating the impact the new guidance will have on its consolidated financial statements.

Disclosure Controls and Procedures

The Company’s disclosure controls and procedures are designed to provide reasonable assurance that all relevant information is communicated to senior management, to allow timely decisions regarding required disclosure.

An evaluation of the effectiveness of the Company’s disclosure controls and procedures, as defined under the rules of the Canadian Securities Administration, was conducted as of December 31, 2012 under the supervision of the Company’s Disclosure

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

Committee and with the participation of management. Based on the results of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report in providing reasonable assurance that the information required to be disclosed in the Company’s annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported in the securities legislation.

Since the December 31, 2012 evaluation, there have been no adverse changes to the Company’s controls and procedures and they continue to remain effective.

Internal Control over Financial Reporting

Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of financial statements in compliance with IFRS. The Company’s internal control over financial reporting includes policies and procedures that:

• pertain to the maintenance of records that accurately and fairly reflect the transactions of the Company;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS;

• ensure the Company’s receipts and expenditures are made only in accordance with authorization of management and the Company’s directors; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized transactions that could have a material effect on the annual or interim financial statements.

An evaluation of the effectiveness of the Company’s internal control over financial reporting was conducted as of December 31, 2012 by the Company’s management, including the Chief Executive Officer and Chief Financial Officer. Based on this evaluation, management has concluded that the Company’s internal controls over financial reporting were effective.

There were no changes in the Company’s business activities during the period ended December 31, 2012 that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

Limitations of Controls and Procedures

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, believe that any disclosure controls and procedures or internal control over financial reporting, no matter how well conceived and operated, can provide only reasonable and not absolute assurance that the objectives of the control system are met. Further, the design of a control system reflects the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any systems of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

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

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 and Enterprise, 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, PGE, and sulphuric acid, estimated mineral reserves and mineral resources, our exploration and development program, estimated future expenses, exploration and development capital requirements, the Company’s hedging policy, and our 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, we have made numerous assumptions including among other things, assumptions about the price of copper, gold, nickel, PGE, cobalt and sulphuric acid, anticipated costs and expenditures and our ability to achieve our goals. Although our management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that a forward-looking statement or information herein will prove to be accurate. 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 our 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 and Australia, adverse weather conditions in Zambia, Finland and Mauritania, labour disruptions, mechanical failures, water supply, procurement and delivery of parts and supplies to the operations, the production of off-spec material.

See our Annual Information Form for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information. Although we have 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 our control. Accordingly, readers should not place undue reliance on forward-looking statements or information. We undertake 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.

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