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Reserves & Resources

Mineral Resource and Reserves

Additional drilling and geological modelling culminated in the filing of an updated NI 43-101 Technical Report in May 2015. The Mineral Resource estimate reflects enhanced reconciliation data as well as an update of the geological interpretation plus the inclusion of additional drillhole data from in-pit RC drilling.

Mineral Reserves – Kansanshi

The following Mineral Reserve estimate for the Main, NW and SE Dome open pits at Kansanshi existed as at December 31, 2016. This estimate is derived from conventional optimization processes, detailed stage and ultimate pit designs and life of mine production scheduling completed for the May 2015 NI 43-101 Technical Report, and subsequently adjusted to account for mining depletion and stockpile movements to date.

The mine operating cost inputs to the optimization are based on depth incremented estimates provided by First Quantum Mining and Operations and account for indicative ore haul profiles to IPCC positions and waste hauls under trolley assist. Other operating costs and metal costs (eg, processing costs, transport charges, refining charges) are based on a review of actual costs, adjusted for future production levels and efficiencies.

The Mineral Reserves have been defined using the long-term consensus copper price of $3.00/lb and a gold price of $1,200/oz, and reflect a 9% Zambian Government royalty (applicable at the time of the estimate). By virtue of variable processing recovery relationships, the marginal cut-off grade applicable to the above metal prices varies throughout.

As presented in table below, the total in-pit Mineral Reserve inventory is 607.9 Mt at the average grades of 0.68%TCu, 0.14%ASCu (note the 0.71%ASCu grade for leach ore) and 0.12 g/tAu.

Combined Main, NW and SE Dome pits as at December 31, 2016, - reported based on a $3.00/lb long-term copper price

Classification/Pit Leach Ore (float/leach feed) Mixed Ore (float/leach feed) Sulphide Ore (float feed)
Ore (Mt) TCu (%) ASCu (%) Au (g/t) Ore (Mt) TCu (%) ASCu (%) Au (g/t) Ore (Mt) TCu (%) ASCu (%) Au (g/t)
Main & NW / Proven 12.0 1.06 0.65 0.11 8.6 0.53 0.13 0.09 61.7 0.49 0.01 0.11
Main & NW / Probable 77.1 1.18 0.73 0.13 62.6 0.72 0.16 0.12 329.8 0.57 0.02 0.12
Total Main & NW Pits 89.1 1.16 0.72 0.13 71.2 0.70 0.15 0.12 391.6 0.56 0.02 0.11
SE Dome / Proven 0.0 0.00 0.00 0.00 0.0 0.00 0.00 0.00 0.0 0.00 0.00 0.00
SE Dome / Probable 3.8 0.89 0.40 0.14 5.5 0.65 0.15 0.12 46.8 0.80 0.03 0.13
Total SE Dome Pit 3.8 0.89 0.40 0.14 5.5 0.65 0.15 0.12 46.8 0.80 0.03 0.13
Total Proven 12.0 1.06 0.65 0.11 8.6 0.53 0.13 0.09 61.7 0.49 0.01 0.11
Total Probable 80.9 1.17 0.72 0.13 68.1 0.71 0.16 0.12 376.6 0.60 0.02 0.12
Total Mineral Reserves 92.9 1.15 0.71 0.13 76.7 0.69 0.15 0.12 438.3 0.58 0.02 0.12

The current depleted Mineral Reserve as at December 31, 2016, has been estimated and verified by the Company personnel under the supervision of Michael Lawlor of the Company, who is a qualified person and holds the following valid qualifications: BEng (Mining)(Hons), MEngSc, FAusIMM.

Additional Mineral Reserve stockpile inventory, totalling 76.5 Mt at the average grades of 0.46%TCu and 0.16%ASCu as presented in the table below.

Kansanshi stockpiles - as at December 31, 2016

Classification/Stockpile Leach Ore (float/leach feed) Mixed Ore (float/leach feed) Sulphide Ore (float feed)
Ore (Mt) TCu (%) AsCu (%) Au (g/t) Ore (Mt) TCu (%) AsCu (%) Au (g/t) Ore (Mt) TCu (%) AsCu (%) Au (g/t)
Total Proven - - - - - - - - - - - -
Total Probable - - - - 63.4 0.48 0.19 0.10 13.1 0.38 0.01 0.10
Total Reserve - - - - 63.4 0.48 0.19 0.10 13.1 0.38 0.01 0.10

The current depleted Mineral Reserve inventory as at December 31, 2016, has been estimated and verified by the Company personnel under the supervision of Michael Lawlor of the Company, who is a qualified person and holds the following valid qualifications: BEng (Mining)(Hons), MEngSc, FAusIMM.

At $3.00/lb copper price, the total Mineral Reserve at Kansanshi, including stockpiles, is 684.4 Mt at average grades of 0.66%TCu and 0.15%ASCu. The actual average float/leach feed and float feed economics in the shorter term, to at least 2018, can be sustained by a copper price of $2.10/lb. Ore cut-off grades will be adjusted during periods of subdued copper pricing. Material stockpiled during the near term will be treated in future years when copper prices lift to +/- $3.00/lb.

Mineral Resources

Combined Main, NW and SE Dome deposits as at December 31, 2016 - reported using a 0.2% TCu cut-off grade

Classification Tonnes (Mt) TCu (%) ASCu (%) Au (g/t)

Total Measured

76.5

0.65

0.14

0.11

Total Indicated

700.7

0.71

0.14

0.12

Total Measured and Indicated 777.2 0.70 0.14 0.12

Total Inferred

663.7

0.59

0.04

0.10

The current depleted Mineral Resource as at December 31, 2016, was estimated and verified by David Gray of the Company who is a qualified person and holds the following valid qualifications: BSc Hons(Geo), MAusIMM, Pr.Sci.Nat.

The 0.2% TCu cut-off grade for this estimate provides a Mineral Resource inventory which encloses the contemporary Mineral Reserve estimate, and is consistent with the cut-off grade adopted for the last reported estimate in the May 2015 NI 43-101 Technical Report.

Current surface stockpiles from the end of 2016 total 76.5 Mtonnes @ 0.46%TCu and 0.16%ASCu, as presented in the table below.

Kansanshi stockpiles - as at December 31, 2016

Classification/Stockpile Leach Ore (float/leach feed) Mixed Ore (float/leach feed) Sulphide Ore (float feed)
Ore (Mt) TCu (%) AsCu (%) Au (g/t) Ore (Mt) TCu (%) AsCu (%) Au (g/t) Ore (Mt) TCu (%) AsCu (%) Au (g/t)
Total Measured - - - - - - - - - - - -
Total Indicated - - - - 63.4 0.48 0.19 0.10 13.1 0.38 0.01 0.10
Total Meas. Plus Ind. - - - - 63.4 0.48 0.19 0.10 13.1 0.38 0.01 0.10

The current depleted Mineral Resource inventory as at December 31, 2016, was estimated and verified by David Gray of the Company who is a qualified person and holds the following valid qualifications: BSc Hons(Geo), MAusIMM, Pr.Sci.Nat.

The classification of the Mineral Resource is based on drill grid spacing, estimate confidences and improved models of the copper mineralization. The increased quantity of the gold assays contained within the Kansanshi drillhole database, together with mine reconciliation data, allows for the classification of gold mineralization to be aligned with the copper mineralization.

Apart from mining depletions, there has been no change to the Mineral Resource inventory reported in the May 2015 NI 43-101 Technical Report.