The Kamoa-Kakula PEA is preliminary and includes an economic analysis that is based, in part, on Inferred Mineral Resources. Inferred Mineral Resources are considered too speculative geologically for the application of economic considerations that would allow them to be categorized as Mineral Reserves and there is no certainty that the results will be realized. Mineral Resources do not have demonstrated economic viability and are not Mineral Reserves.

Kamoa-Kakula produced 333,497 tonnes of copper in concentrate in 2022, achieving the upper end of its original 2022 production guidance range of 290,000 to 340,000 tonnes. Kamoa-Kakula's 2022 production achievement represents a year-over-year increase of 215%. Kamoa-Kakula's 2023 guidance range for production and cash costs is provided below.

The construction of a new concentrate thickener nears completion as part of the debottlenecking program. Once complete, the Phase 1 and 2 concentrators are expected to reach a combined processing capacity of 9.2 million tonnes per annum Kamoa-Kakula's 2023 guidance is based on several assumptions and estimates as of December 31, 2022. Guidance involves estimates of known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially.

Production guidance is based on assumptions about the timing for the completion of the debottlenecking program, among other things. Cash cost (C1) guidance factors in an increase in the grid power tariff supplied by DRC state-owned utility, Société Nationale d'Electricité (SNEL), which was increased from approximately $0.06 per kilowatt-hour (kWh) to $0.10 per kWh from December 2022. This marks the first increase by the predominantly hydro-powered grid in over 10 years.

Kamoa-Kakula's energy subsidiary continues to receive a 40% rebate on the power invoices payable, which repays the loan made to SNEL to rehabilitate state-owned hydropower infrastructure assets. Based upon the Kamoa-Kakula 2023 PFS, the loan is anticipated to be amortized over approximately 9 years. Cash cost (C1) guidance is based on assumptions including, among other things, prevailing logistics costs based on estimated regional trucking capacity, particularly as idled operations may come online, as well as increased benchmark treatment and refining charges, and inflation in consumables and other inputs.

Cash cost (C1) per pound of payable copper for Third Quarter 2022 was $1.43/lb. and $1.38/lb. for the nine months ended September 30, 2022, with the cost of sales per pound of payable copper sold for the same periods being $1.05/lb.

and $1.09/lb. respectively. C1 cash cost is a non-GAAP measure used by management to evaluate operating performance and includes all direct mining, processing, stockpile rehandling charges, and general and administrative costs.

Smelter charges and freight deductions on sales to the final port of destination (typically China), which are recognized as a component of sales revenues, are added to C1 cash cost to arrive at an approximate cost of delivered finished metal. For historical comparatives see the Non-GAAP Financial Performance Measures section of this news release. Please also see the Management's Discussion and Analysis for the three and nine months that ended September 30, 2022, for a discussion of non-GAAP measures.

All figures in the above table are on a 100%- project basis. Kamoa-Kakula's Phase 3 expansion is expected to increase annualized copper production to an average of approximately 620,000 tonnes per year over the next ten years, which will position Kamoa Copper as the world's fourth largest copper mining complex, and the largest copper mine on the African continent. With an average grade of 4.9% over the next ten years, the project generates over $3 billion in EBITDA per year, based on consensus commodity prices, a significant increase from Phase 1 and 2. Phase 3 includes a new 5.0-Mtpa concentrator that is located approximately 10 kilometres (km) north of the Phase 1 and 2 concentrators, as shown in Figure 6. The design of the concentrator is similar to that of the existing Phase 1 and 2 concentrators, albeit with an enlarged capacity.

Based on extensive metallurgical test work, the Kamoa concentrator is expected to achieve an overall recovery of 87%, producing a concentrate at an average grade of 37% copper. The Kamoa deposits, like that of Kakula, also benefit from having very low deleterious elements, including arsenic levels of 0.02%. The Phase 3 concentrator will be fed by ore from the existing adjacent underground mining operation at Kansoko Sud (formerly referred to as Kansoko), as well as two new underground mining operations, Kamoa 1 and Kamoa 2, which are currently under development.

Mining activities at Kansoko Sud have been ongoing since November 2020, in preparation for the Phase 3 expansion. Approximately 1.06 million tonnes of development ore are stockpiled on surface, near the Phase 3 concentrator site. It consists of an estimated grade of 3.6% copper, for a total of over 38,000 tonnes of contained copper, as of December 2022.

This is in addition to the 126,000 tonnes of contained copper stockpiled at Kakula. The Kamoa 1 and Kamoa 2 mines share a single box cut with twin declines (service portal and conveyor). Construction of the declines is well advanced, with over 1,512 metres of development completed to date.

Underground mining activities are expected to commence at Kamoa 1 this year and Kamoa 2 in 2025, which will both involve the same mechanized drift-and-fill mining methods employed at Kakula.