Clive Newall - President & Director Hannes Meyer - CFO Juliet Wall - GM, Finance David Silvestro - Head of Tax

Orest Wowkodaw - Scotiabank Matthew Fields - Bank of America Merrill Lynch Sean Wondrack - Deutsche Bank Jeff Kramer - Morgan Stanley Matt Murphy - Macquarie Oscar Cabrera - CIBC Alex Terentiew - BMO Capital Markets Lawson Winder - Bank of America Merrill Lynch Karl Blunden - Goldman Sachs Ralph Profiti - Eight Capital Greg Barnes - TD Securities Ian Rossouw - Barclays Dalton Baretto - Canaccord Genuity

Thanks, Heidi and thank you, everyone, for joining us today. Joining me from London are Hannes Meyer, CFO; Juliet Wall, General Manager, Finance; Simon MacLean, Group Reporting Controller; and David Silvestro, Head of Tax.

A few housekeeping items before we proceed. I'll draw your attention to the fact that over the course of this conference call, we will be making several forward-looking statements and as such, I encourage you to read the cautionary note that accompanies our first quarter MD&A and the related results news release, as well as the risk factors particular to our company which are detailed in our most recent annual information form and available on our website and on SEDAR.

Following my opening remarks, Hannes will take us through the financial results, then we will open the lines to take your questions. A reminder that the presentation which accompanies this conference call is available on our website and can be accessed either on the Events section or on the Q1 2018 results conference call button under the News section of the homepage.

Okay, let's get started. It was a very solid first quarter in what is a very important year for First Quantum.

Our copper production exceeded last year's comparable at Sentinel in particular and Kansanshi operated strongly through very wet seasonal conditions in Zambia. As most of you know, the first quarter is usually the wettest part of the year affecting production and therefore unit cost of production.

Normally, as upseen eases out to the wager and the second quarter is an improvement in both of these areas. Meanwhile, the enhancements implemented at Sentinel viewing 2017 made a huge difference by strengthening the overall operation.

This is evident in the mine's performance, statistics and in the recent photographs that we show included in our presentation. Our Kansanshi smelter turned in yet another strong quarter treating over 350,000 tons of concentrate, far exceeding design.

Çayeli continues to recover from the unfortunate shaft incident last year. The team there continues to do a great job in managing the challenging conditions of this later-life mine.

Due to the timing of shipments, no sales were recorded at Çayeli in the quarter. We expect these will be made up mostly over the second and third quarters.

The Guelb Moghrein was the first full quarter operating the magnetite plant, total revenue of $5 million has been recorded from sales in the quarter. While this is not material at the moment, it does provide credit to the operation's overall cost.

The team there is working on producing a higher value product, debottlenecking the plant and assuring further sales opportunities. Overall, we've maintained a low unit cost of production with the benefits of our margin improvement programs and as I mentioned earlier, we expect some improvement with the onset of drier weather conditions in Zambia.

Looking forward, we remind you that we are planning some maintenance shut downs this second quarter. We have five days at Sentinel, eight days at Las Cruces, five days at Guelb Moghrein and eight days at Pyhäsalmi.

Turning to corporate activities, we continued the work to better-align debt maturities with a planned startup from operation of Cobre Panama and the course to increase liquidity. The issuance of $1.85 billion of senior notes comprising $850 million due 2024 and $1 billion due 2026 by the interest of 6.5% and 6.875% respectively, accomplished both of these objectives.

A bond issue is considered more appropriate this particular time, rather than the project financing route we have embarked at the end of 2015. For this reason, we have discontinued that process.

During the quarter, we reported on the assessment received from the Zambia Revenue Authority in regard to due to pay on the import of capital agents, consumables and spare parts, the use of Sentinel Mine from January 2013 to December 2017. We are in the process of providing the large volume of relevant documentation to the aid to see in our rebuttal of this assessment.

Working together with an external international accounting firm, our shipping agent, good progress is being made. What we have reviewed so far represents approximately two-thirds of the value of the assessment and we have not found any material errors.

We continue to work through the materials and maintain open transparent dialog with the relevant authorities. The obvious question is when do you think this matter will be resolved?

For that, we cannot give any guidance of the parties involved. But as always, it will be resolved.

Turning to Cobre Panama. I want to mention an achievement that we are particularly proud of.

The project has logged over 10 million man hours worked without incurring a single lost time injury. It is specially remarkable considering the environment and its circumstances which include very high rainfall, different languages and cultures, a large and complex project with many heavy lifts and many work from this.

This achievement built on our project development team's track record includes over 5 million man hours worked, lost time injury-free at Sentinel and three continuous years of work on projects at Kansanshi also in that occurrence [ph]. As I noted at the beginning of my comments, 2018 is an important year for First Quantum.

Already, some pre-commissioning works are started at Cobre Panama, which is moving towards the face commissioning later this year with ramp up as expected in 2019 and into 2020 of the expanded capacity of 350,000 tons a year announced earlier this year. Taking to consideration the increased scope of the project, we have adjusted our progress base and therefore the percentage of completion.

Currently, the project overall is now about 70% complete with specific disciplines well-advanced. Site-wide concrete progress is 81% complete, structural steel erection is 65%, mechanical installation 57%, tailings management 79%, and pre-strip 78%.

The engineering is 95% complete and mainly focused on completing the works associated with the expansion. Procurement is basically done with only minor purchase orders remaining.

The port and power station, the more advanced of the 250-megawatt generating sets is essentially complete and expected to generate first power this quarter. This is a few weeks later than previously guided, reflective of the industrial action we experienced earlier this year which affected some progress in some areas by as much as six weeks.

The boiler currently being started up on diesel will subsequently switch to coal as coal shipments have begun arriving at the port. The second generating set is 89% complete and its commissioning underway, so it is closely following Set 1 as planned.

In the meanwhile, we have connected to the Panamanian Electricity Grid which provides adequate pre-commissioning power across the site, which has significantly reduced our reliance on site generators for the remainder of the construction phase. But the process plant which is about 58% complete, much of the mechanical equipment is installed including all the seven mills, the flotation cells and thickness.

Our focus now is installing the remaining mechanical equipment along with conveyers, piping and electrical work. The additional works associated with the expansion to the 85 million ton per annum capacity planned to be implemented progressively and are expected to be complete by the end of the third quarter 2019 we commissioned during the fourth quarter.

So to summarize where we are, our operations are performing well, our balance sheet is in good shape especially considering the significant investments in new capacity we have made over the past few years during very low metal prices. We remain focused on our priorities which are bringing Cobre Panama into operation in a manner in which Panama and our company can be proud of.

The deleverage of the balance sheet when that project is operating and to provide returns to our shareholders who have been patiently supportive of our vision and strategy. Now with that, I'll ask Hannes to take us through the financial review.

Thanks, Clive, and good day to everyone. Turning to Slide 15 in the Presentation, talking about quarterly production, our copper production was taped the same to all 13,000 tons about Q1 2017.

State owned [ph] production of 50,000 tons was 14,000 tons higher than Q1 2017 due to improved recovery and throughput. Despite the tough and prolonged to wait [ph] season, the Sentinel has done well at maintaining throughput labels in-line with the previous quarter.

The Kansanshi smelter achieved another record quarterly production and throughput having 351,000 dry metric tons and produced 87,000 tons of copper in the quarter. Turning to the next slide, Q1 overview.

Comparative EBITDA of $363 million plus $45 million higher and gross profit of $181 million was $64 million above the previous quarter, reflecting higher copper prices as the price profile of the sales hedge program improved. The copper sales hedge programs resulted in a hedge loss of $121 million in the quarter and reduced realized prices by $0.40 per pound.

Net debt of $5.6 billion was in-line with the previous quarter due to the higher EBITDA and a receipt of Franco-Nevada stream covering the capital expenditure and an installment for the acquisition of LS-Nikko effective 10% stake in Cobre Panama. Turning to Slide 17, the next one on all clear [ph] unit cash cost.

Copper C1 of $1.27 was in-line with Q1 2017. The all-in sustaining cost for the quarter increased $0.13 against the same period in the previous year, reflecting a planned increase in sustaining CapEx, at a loss about $0.06 per pound and higher royalty rates due to the increased copper price that was $0.07 per pound impact.

Copper C1 and all-in sustaining guidance for the year remains unchanged at $1.20 to $1.40 per pound and $1.65 to $1.85 per pound. The next slide, it is strengthening the balance sheet.

We continue to proactively manage our balance sheet to ensure we have strong liquidity and appropriate governance. At the end of Q1 2018, the company was in compliance with all existing facility covenants and in the quarter in a strong position where $1.67 billion of committed undrawn facilities and $810 million of unrestricted cash.

On February 27, the company completed the offering of $1.85 billion of senior notes comprising a $50 million due in 2024 and $1 billion in 2026. The proceeds of the offering were used to repay in full and cancel the term loan of $700 million and repay the outstanding balance of the company's senior revolving credit day facility which remains available to draw that one, as well as pay transaction fees associated with the offering and for general corporate purposes.

In February, the Company completed the $250 million term loan facility at the Kalumbila which owns the Sentinel mine. The facility was upsized to $400 million in March 2018 in accordance with the accordion feature of the facility agreement.

The increased facility has been drawn down in April 2018. In February, the outstanding balance of $175 million on the Kansanshi senior term was repaid in full and canceled.

To the next slide for the hedge program outlook, with the increase in copper price, the now-improved financial position, we've aligned our strategy to ensure that we capitalize more of the upside. We are planning to utilize zero cost colors and put options in recent hedged transactions.

The outstanding hedges are relatively low in volume and have an improving price profile. Moving to the next slide, Cobre Panama capital expenditure.

Cobre Panama total CapEx guidance remains unchanged of $6.3 billion with $1.2 billion of total capital spends to completion. Expenditure during the quarter was $358 million or $236 million on a hedge basis.

Guidance on other group CapEx also remains unchanged. Thank you.

Clive?

Okay. Thanks, Hannes.

So with that, Heidi, perhaps we could hand it over for questions, please.

Hi. Good morning.

I was wondering if you could give us more color on the customs dispute in Zambia. You mentioned your two-thirds through.

Have there been discussions with high levels of government there beyond the tax authority in terms of expected timeline to resolve this?

You want to take that, David?

Yes. Sure, thanks, Clive.

We have engaged in some discussions. I think overall, those discussions have been positive and we have agreed the process under which we will move forward to resolve the matter.

In terms of specific timelines, I think we need to work through that process and everyone understands, they're just going to know of the documentation that needs to be reviewed and that will take the relevant amount of time. Positive discussions and we're working in a transparent way with the authorities to resolve the matter.

Okay. And I think when this news broke about a month ago or so, at the time you were indicating this could take four to six months to go through all the documentation.

But it sounds like you're already two-thirds through in a little over a month. Does that imply that this could get resolved quicker than four to six months?

I think that in sense of the document review process, that that may be the case, yes. But in terms of resolution of the overall matter, I couldn't comment than what we've previously indicated.

And we've also focused on the big ticket items first as well. There are an awful lot of much smaller invoices to go through as well.

That's right. We've taken the value approach, so the two-thirds we have indicated probably represents one-third of the actual document by volume.

Going forward, we are into the more low-value high-volume phase of the review process.

Okay, that's great. And then just finally on the hedging program.

It's starting to wind down, which I think everyone is happy to see. Are there plans to continue to add hedging this year and I'm curious also whether you're planning to add any for 2019 during the ramp up phase, or whether we should assume that this will end this year?

Thank you.

Orest, we evaluate the various requirements. It consists of production and we've seen good production at Sentinel coming online.

The end of Cobre Panama and that capital plays, in the life of that, we evaluate all of these things and consider that term. If we do any further hedges, it will probably be along the same sort of color structure that we've done in the last six to nine months.

So it is something we continue to evaluate.

Okay, but it sounds like you're leaving the door open for potentially hedging into '19, or am I misreading that?

I'm not saying no and I'm not saying yes. The door probably stays open.

But it's probably not our intention at the moment, but we will evaluate.

We have to take into consideration our views, our ongoing changing views of the copper mine going forward. I mean what we feel today may not be the same in what we feel in six months' time.

Our strategy will be adjusted according to that as well.

Okay, thank you very much.

Hey, everyone. Can you walk us through the mechanics of the repayment you made of this year with the loan with the proceeds from Franco-Nevada this quarter?

Was that required for the agreement? Was that just voluntary?

And essentially now just going forward, when you repay that loan, just half of it come to you now that you own that 10% stake from LS-Nikko?

Yes. There's no a requirement to repay the shield alone [ph] has shifts in efficient way of redistributing the cash back to the owners.

And yes, you are correct, we own half of that shield alone. So the Franco Stream was just injected into the company and then the cash used to return the two the two shareholders within that structure being Cores [ph] and ourselves.

Okay, thank you. And then with nickel prices recovering over the last year, has there been any discussion about restarting Ravensthorpe or maybe trying to sell the asset again?

We continue to review that and we continue to keep Ravensthorpe on a very high level of care and maintenance and in fact for doing various remedial tasks around the projects and preparations, the development of the next ore body. But there are no plans that the current price of $6 in a bit is still insufficiently high to merit bringing back online at this point.

Hi there. First question.

There is a little bit of disclosure in your financials regarding the Las Cruces, but potentially something you found there. Could you comment on that a little bit, please?

Can you say that again, Sean? Something we've...?

Development of Las Cruces? It says that you may have discovered another ore body, I believe it said.

Can you comment on that? Or is it still too early?

No. I don't think we said that.

We are evaluating the underlying primary ore body which is effectively a separate ore body and the drill program ongoing as we speak. And we will establish measured and indicated resource over the course of the next few months that there is exploration going on in the region, but I haven't seen any discoveries announced recently.

Okay. I'm mistaken regarding that one.

The next question, just regarding obviously you guys delivered a lot during the quarter, close to 4.5x in that leverage now. Just based on a 3x kind of copper price this year, I show you guys the ratio deleveraging down closer to about 3x in that leverage.

Does that sound right to you, Hannes? Taking...

I wouldn't like to guide on that; but you are correct that we did deliver quite quickly through the year. Last year, our hedges sort of locked us in at about $2.40 or so copper price.

So with a higher copper price, you could see that's coming through and you saw that in this last quarter. In the last quarter, we still suffered $120 million loss on the hedge books.

I think that current hedge book is just over $20 million or so in the water. You'll see that benefit certainly coming through, plus the higher production at Sentinel.

That certainly helps a lot in deleveraging through this year.

Hi. Thanks for taking my question.

Just checking in, given the task situation in Zambia and the additional commitment to Cobre, should we expect there won't be any material advancements or capital commitments to other projects either in Zambia or South America until Cobre reaches commercial operation's state and the Zambian tax situation has settled?

I think obviously, Cobre Panama completely dominates our focus at the moment and our plan capital expenditure is largely related to maintenance capital elsewhere. The bulk of it goes into Cobre Panama.

We have no short-term plans or medium term plans for developing any new projects. This is substantial project.

There are obviously some smaller projects around Zambia, but there is no major projects in the immediate plant.

Got it. Thank you.

And then...

The CapEx guidance that we did the last four, it's not specific, but did the last four from initial development stand from 2019 onwards. That's why you do see a bit of a step-up in the CapEx guidance.

But it's not specific as to what that relates to.

Okay, understood. Just with regards with the streaming.

I think total now, it's north of $1 billion to $2 billion, initially it's got to be about $1 billion and maybe some of that is capital return of the owners versus the development CapEx but are the streaming transactions done at this point, or should we expect there to be more going forward?

We've done 100% of Cobre Panama offset. I think that's done.

Hi. I have a question on the industrial action at Cobre Panama.

Good to hear everyone is back to work in this whole peak construction levels. I've seen some articles in the press on continued union wage negotiations.

Just wondering if you could provide some color on that and do you think Cobre Panama still has potential for work disruption or are those issues in the press more national and your local issues are fairly resolved?

I think lots of comment better-reflects the nature of the dispute and that is was part of the major union and engineering union in Panama, flexing its muscles for a wage settlement across the engineering workers throughout Panama. We were just in the middle of that and I think that is an ongoing negotiation not with us, but with lots of other parties as well.

As to whether it's a potential for further disputes, it's very difficult to tell, but in America generally, it's a fairly common occurrence, isn't it?

Right. And you have peak construction right now.

When does that start to decline? As in where do your workforce needs start to go down?

Later this year. We'll be running at peak labor for quite a few months yet.

Okay. And then maybe just a last one on Cobre Panama.

Just wondering, commissioning of the power plant. Have you had any surprises there?

Are you satisfied with the quality of work as you commission those first major piece of equipment?

Yes. All the testing, steam blows and everything was very successful.

It went pretty smoothly to say that the industrial issues happened just the wrong moment. Otherwise it would be up and running by now.

Thank you, Operator. Good morning, afternoon, or evening, everyone.

Clive, I think this is about the third time that we heard you say that you will return cash to shareholders, being very patient with your development project pipeline. As you are looking to perhaps increase the size of throughput in Cobre Panama to 100 million tons and the other projects, how do you envision that return of cash to shareholders with dividends?

Have you thought about how you're going to do that?

No, not in detail yet, Oscar. We're still a year or two away from that.

It hasn't been the focus of the Board just yet. It will be in the form of dividend in some form of a competitive dividend.

Right. Just to make sure I understood your response to Matt's question with regards to potential issues with the larger union, did you say that this is ongoing with other companies but not you?

Or could be ongoing with you as well?

We reached an agreement with them, but they are continuing negotiations with the engineering organizations around Panama. I felt we meet [ph].

I'm sorry. Can you just remind me the number?

I believe it was 10% or the workforce that was involved in this? And was it mainly benefits or increased pay that they were looking for?

I think it was a smaller number, the 10% of the labor force involved -- actually has some tracks members, but it was more -- the dispute from our perspective was that it was effectively a dispute between several unions for some tracks and the other unions on site. It was a disruption of work because of that that was the problem.

Hi, guys. Thanks for taking my call.

A couple of questions. First, just here on Sentinel.

I understand grades were a little bit lower and you have the rainy season, so there are water management cost. But the cost in the quarter were $1.83 a pound.

Ideally, where do you expect cost for the mines to stabilize? I know you can give us some guidance out there on a profound basis or maybe just on-site operating cost per ton?

And then the second question, the smelters is not performing quite well. As you now, it hit some record numbers there for concentrate process.

Are you seeing suspicion smelter deposit in Zambia even with some of your peers ramping up in that region, or is melting capacity something that you are going to need to be keeping in more close watch on going forward? Thanks.

I think on the C1 cost we've guided for this year, Juliet, the number was I think $1.70? It's just a range.

We just keep in our range, so we haven't given specific on Sentinel, but we would expect it to decrease quarter every quarter throughout this year and on the standalone basis for the second half of this year to be more in the $1.50, and then just seeing that lower number continuing to 2019 and onwards.

And I think in the long run, you can probably expect somewhere around $1.50 C1 cost two years from now.

Yes on the smelting front, Alex, there's plenty of spare capacity in the region at the moment at local smelters because Glencore has not started ramping up the monthly overall or [indiscernible]. I think probably concentrates from the Congo are a little bit diminished at the moment with the various issues in the DRC.

So there is capacity around right now.

Okay, that's great. Thanks.

A follow up to one of your earlier questions on nickel. Is enterprise something that you guys will look to take advantage of the high nickel price and capture some of that optionality, or is there a price at which nickel and enterprise becomes something you want to pursue?

I think enterprise, we would prefer to bring enterprise online as a significantly higher price than the current price and we don't really see that likelihood this year right now. We're not rushing into anything as enterprise.

But it's very much kept in mind and we watch the markets very carefully.

Hey, guys. Thanks for taking the call and my question.

You talked a little bit more about exploration in this release versus the last and you mentioned satellite zones that you are targeting at Kansanshi. I'm just curious, are those more oxide or sulfide in nature?

And can we expect those to potentially to be added to resources that you're in?

It's a bit early to be contemplating adding to resources because the drilling season is only just -- well, it hasn't been gotten going yet. In Zambia we have to wait for the ground to dry out after the rainy season.

But yes, we have a number of targets in the region, some oxide, some sulfide. I would say predominantly sulfide at the moment.

We would very much like to identify some more oxide, but we're always in this position, we always have quite a few targets in the immediate.

Okay. Can you guys still hear me?

Hello. We're back.

Hopefully this next question doesn't bring the whole call down again. It's just I noticed at year-end 2017, you added a copper estimate to the reserve estimate at Ravensthorpe.

Just curious if that changes the calculus on whether or not to restart and with the ideal nickel prices to restart. Having that copper...

You mean cobalt, don't you, Lawson? Not copper.

I thought copper?

No, just cobalt.

Okay.

You probably read the notes. Its symbol is CO so you may have read this as copper.

Okay. Well, that was stupid of me if that's what happened.

I apologize for that. If I might just ask one quick more question.

The Cobre Panama settlement, it was my understanding that there was some sort of agreement reach in order to get the workers back to work. The outside union, do they now have full access to the site?

Is that the change in the situation right now?

We haven't put the details of agreement in the public domain yet; it's quite complicated. If we could maybe just talk about that later in the next conference call.

Okay.

Hi, guys. I just wanted to focus on the regulatory matters.

You did quite an update on the ZCCM process in your report. I just wanted to understand what the range of outcomes are that could come out of that.

This might seem like a favorable decision in February and then an appeal going on now?

I guess we disclosed that. It was the arbitration and it dismissed the ZCCM case.

In general, those appeals are not very successful, so we'll lose that to go through that process and see what happens.

Got you. And then on the operating side.

We haven't heard much in the power situation in Zambia right now. Is everything going smoothly?

It seems that way and with the high rainfall in this season, would that bode well for the availability of power for the rest of the year?

Yes. I think the good rainfall helps a lot, but there's also new capacity that came online last year which increased the overall capacity quite substantially and at the moment, we have all the power that we need and in fact we're running our high pressure asset leads plant at Kansanshi to boost production there.

It requires a lot of power. There's plenty of power available.

All right. Thanks a lot for the updates.

Yes. Hi.

Thank you for taking my questions. I have two basic questions.

On KMPMC shareholder loan agreement, I like to know what is maturity of those loan, how does it rank relative to bonds? And I just wanted to clarify what we discussed earlier; so in the second half of the loan balance you owe to yourselves.

So first quarter balance 659, effectively loan balance is 330, roughly. Is that correct?

Yes, sounds about correct. Look in terms of those loans you should view it as capital rather than a loan in a bond environment.

Are you saying they are ranked junior to the bonds?

No. I'm trying to think now that -- yes, and so it does rank junior due to Franco [ph] streaming arrangement as well.

But I mean you should really view that as part of a capital structure and more equity of nature rather than a date.

Okay. And is there a particular maturity date on that?

Currently it's 2023 but that will be extended. So we'll push that up.

And second question is on the hedging program, so I see in the second quarter of '18 a 100,000 tons has been hedged. I'm just trying to understand what the effective price of that maybe at?

So assuming couple of prices stay where they are what would be approximate effective price that you would get for that volume?

Sorry, 100,000 tons you said…

Yes, Slide 19.

Slide 19, let me just go back to that slide. Look, at current prices probably about 3/10th of the color is about 301.

So we probably get around $3 but more, roughly.

Two questions for me. Firstly, Clive, with respect to this provision process that's been agreed with the ZRA; should we view the accounting involvement and the shipping agent as sort of working on the First Quantum challenge or should we more view this as sort of perhaps -- like a neutral party audit where they provide recommendations to the ZRA and then perhaps some binding recommendations as well?

They would be working in our team in terms of coming together relevant documentation. So we'd be working with the accounting firm and the shipping agents to pull together new risk documents that are needed for each bill of entry.

Okay. And maybe just a quick follow-up, on concession Clive, grades are up at all 3 ore types but coverage were significantly down sort of on quarter-over-quarter.

And the MD&A spoke to what's been referred to as ore changes, are these specific to ore type classification or is there a change in geology that we're seeing there?

No, there is a zone of tarnished [indiscernible] particularly. And that tarnishing just causes a reduction in recovery but it's not going to last very long but in case there is more in future, we're actually putting in some technology to actually overcome that issue to the extent that that's possible to reduce the impact on recovery.

So it's a temporary thing.

I guess just two questions; first, just from a housekeeping perspective. The additional 170 you drew in April on the upsized loan, just to be clear is that cash going to come in as unrestricted and I guess those are the impact of total liquidity that you show on the Slide 18?

Again, I just want to make sure we're modeling that correctly.

The 170 we drew down in April, the facility was in place by March 31, it was undrawn the 170 and yes, it is unrestricted.

And then secondly…

So it was long available at the end of March but we have grown it subsequent.

Understood. And then just a broader question on the balance sheet strategy, as Cobre ramps up, again 1920, I guess how would you think about gross debt in the context of that -- give or take [indiscernible] production profile?

I appreciate that some of this is tied to copper prices and ultimately your ability to generate EBITDA from the net leverage perspective but I guess do you feel comfortable with this $6 billion give or take of unsecured or do you think gross deleveraging is still going to be a focus as free cash flow ramps up. I think that will be helpful to frame up sort of your long-term balance sheet strategy?

Thanks.

I think delever anyway through the higher copper price and Cobre Panama ramping up with rather commitment as well to reduce absolute amount of data as well. So the $6 billion isn't the high-five now and we have been investing heavily in Cobre Panama and that's been the deliberate strategy.

So in the long run we would probably have to put a target on that, probably not at least $2 billion off that gross amount. And if you look at a net debt to EBITDA as a ratio, probably around two although with Cobre Panama coming online and depending on your outlook on the copper price, even that $4 billion is probably -- will probably even be below that level at that time.

The bonds are an important part of the capital structure and it is -- we've developed a good sort of bond older base at this station. It's -- I would see the bond -- probably smaller bonds in future but still relevant in the bond market, big amount of presence in the bond market to retain that bond holder, following that we have at the moment.

Clive, with the labor action at Cobre has the store into the mill timing slipped; are we talking at early 2019 now or are you still going to squeeze it in the end of 2018?

Well, we lost a month, five weeks, maybe in some areas six weeks as a result of it. Yes, it slipped -- it slipped by that amount.

I think we're still targeting first concentrate this year but it will be right till the end of the year, so it's made it tighter quite clearly.

Just on cover and the ramp up, do you mind providing more details on the delay? I know you mentioned that you have [indiscernible] to continue it's commissioning activities but at what stage do you actually require both lines to be up and running in the pipeline to -- for ramping up the plants?

Sure. We need the power station running fully by -- it's going to probably by mid next year I think we'll be ramped up to that extent that we would need that amount of power.

I haven't seen a schedule of that to be honest, so I'm kind of guessing slightly here but the second line is very close behind the first line. I think it's 89% complete and once this first line is up and running, I imagine it will be getting straight into commissioning in the second one.

So they are much closer together, partly because of this month's delay.

And then just on the remaining parts of the plant and you said it might be quite high time for ramping up this year. I mean which area is sort of main focus area for you on the critical pass items?

Is it the price or…

In the process Panama [ph] still quite a bit to do although the heavy stuff, often lifting the converse sections has been done. There is work going on all over the citing, it's all coming together at the appropriate time but clearly the plants has quite a bit to go.

Just a couple of quick clarification questions from me. First of all, Clive, is it still your intention to shut down the lead circuit at Kansanshi for 70 days beginning this quarter?

No. Do we have another shot [indiscernible].

Yes, there is a complete relining; yes, it maybe not be this quarter -- the current quarter.

And then secondly, did I hear you correctly earlier and that we're going to get a personal look at your plans for the last processed sulfide later this year?

Just on the results base that we -- the first priority is to get it drilled out so that we understand the ore body and the scale and not the -- everything about it. So there is a lot of test work to do as well but it's the results that is still not completed yet and the drilling is still ongoing, so it will be a few months yet.

I just had a quick question on copper shipments for the first quarter. It looked like they were about 7,000 tons below production, and I recognized that half of that is Çayeli and the rest looks like it was around Zambia.

Was that a weather related issue on getting their shipments out the door, can you just talk about that for a second?

On Çayeli, no, it's just getting shipped full. Çayeli is relatively small production, so we try to maximize or minimize the freight charged by filling the capacity of the vessel that's taking the ore.

So from there it's definitely time, just timing of shifts. I think that out of the smelter, the -- just timing of deliveries of anode and blister are -- you know, we often get things like this with slight buildup of inventory.

Yes, and we also -- remember this was another record quarter production; so when you committed sales in the next quarter you sort of look at your budget and your planning, you factor in a bit of a safety margin, you don't commit all of those sales. So when you run this smelter as successfully as the guys have done, you actually produced more than yourself.

Now we've taken action on that and the remaining of that balance will be sold through the year. So you will see that inventory decrease in the next few quarters.

Thank you very much operator and thanks everybody for joining us on the call. If you have any follow-up questions, please contact either myself or Sharon Long and we'll try and get back to you as soon as we can.

Thanks and goodbye until the next one.