Financial Policy

Published January, 2022

First Quantum has updated its corporate Financial Policy, reflecting continued higher commodity prices, continued strong operational performance and an accelerated reduction of Group debt since the second quarter of 2020. First Quantum’s Financial Policy underlines its confidence in the future of the business whilst still enabling the Company to advance its strong portfolio of growth projects. In the near term, First Quantum’s focus remains:

1. Debt reduction: Our commitment is to reduce total debt to levels appropriate for our business. The targeted debt reduction programme of $2 billion is expected to be completed by H1 2022. This debt reduction target has been extended by a further $1 billion in the short to medium term. Our longer-term policy objective is a through-the-commodity-cycle Net debt/EBITDA ratio of less than 2 times.
2. Investment in the business: Disciplined business and growth investments will be considered in line with the Financial Policy leverage limits. This will include investment in brownfield projects to add incremental value at our existing mines. Capital investment in greenfield projects towards creating a third major production centre will remain limited whilst we first deliver on debt reduction and advance our brownfield projects.
3. Increasing cash returns to shareholders: Given the outlook for strong ongoing earnings from the business, the Board intends to commence a cautious increase in shareholder dividends. The Board has adopted a new dividend policy comprising:
• A Performance Dividend so that an aggregate of 15% of available cash flows generated after planned capital spending and distributions to non-controlling interests are allocated to shareholder returns.
• Within the Performance Dividend there is expected to be a minimum Annual Base Dividend of C$0.10 per share, comprising of biannual dividends of C$0.05 per share.

The Board expects the Base Dividend to be sustainable in a range of market conditions whilst acknowledging the cyclical nature of the industry. Through the Performance Dividend, the Board will maintain an appropriate capital allocation between debt reduction, investment in the future of the business and cash returns to shareholders. The declaration of dividends remains at the discretion of the Board.

• Interim dividend: to be announced with second quarter and half year results, and paid in September
• Final Dividend: to be announced with fourth quarter and full year results, and paid in March

Available free cash flows for assessment of Performance Dividends will be reviewed at least annually.

The Company has established a Dividend Reinvestment and Share Purchase Plan (the "Plan") for its Canadian resident shareholders ("Eligible Shareholders"). The Plan enables Eligible Shareholders to reinvest the cash dividends paid on all or a portion of their Common Shares into additional Common Shares, which will be issued at 97% of the Average Market Price (as defined in the Plan) and provides the opportunity to make optional cash purchases of additional Common Shares on a semi-annual basis, on dividend payment dates.

To participate in the Plan, registered Eligible Shareholders must deliver a properly completed enrolment form to Computershare Trust Company of Canada ("Computershare") (in its capacity as "Plan Agent" under the Plan), as directed under the Plan, by no later than 4:00 p.m. Eastern time on the fifth business day immediately preceding a dividend record date in order for the cash dividend to which such record date relates to be reinvested under the Plan.