Slide 1: Mae
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Slide 2: Important Information
Important Information The information contained in this presentation is intended solely for your personal reference and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organisation/firm) or published, in whole or in part,
Slide 3: Safety – our leading indicator
Safety – our leading indicator TRIFR1 A safe mine is a well managed mine. per one million hours Core element of our culture. 4.8 4.1 Management incentives directly 3.0 linked to safety performance. 2.4 2.4 Continuing alignment of approach, activities and performance to ICMM3 2010 2011 2012 2
Slide 4: David Lamont
David Lamont Executive Director and Chief Financial Officer 4
Slide 5: Financial highlights
Financial highlights Foreign exchange and commodity price Revenue of US$1,193.7m, increased by 1%. performance Indexed, 1H13=100 EBITDA of US$364.7m, increased by 21%. 1H14 1H13 EBIT of US$116.5m, increased by 25%. 90 A$ / US$ Profit of US$47.7m, increased by 33%. 100 Net cash generated fr
Slide 6: EBIT variance analysis
EBIT variance analysis EBIT variance Price variance US$ million US$ million 200 180 160 Zinc 43.5 Century 34.2 140 120 Sepon (26.1) 100 Copper (65.0) 80 Kinsevere (15.4) 1H13 EBIT 93.0 Rosebery (8.6) 60 Price1 Golden Grove Gold (1.5) (34.6) (18.7) 40 Lead (3.2) Silver (8.4) 20 0 (1) Price variance i
Slide 7: EBIT variance analysis
EBIT variance analysis EBIT variance Volume variance US$ million US$ million 200 180 Golden Grove 160 40.0 Silver 5.5 140 Lead 21.2 Rosebery 20.5 Zinc 3.2 120 Volume 50.7 Century 10.8 100 Copper 40.3 Kinsevere 27.5 80 1H13 EBIT 93.0 Gold (19.5) 60 Sepon (48.1) Price1 (34.6) 40 20 0 (1) Price varianc
Slide 8: EBIT variance analysis
EBIT variance analysis EBIT variance US$ million 200 “Banked” cost savings 180 Sepon 160 US$30.0m following cessation of gold production. Production expenses Century 140 22.8 US$21.0m from cost saving initiatives leading up to Volume closure. 120 50.7 Rosebery 100 US$7.7m due to strategic cont
Slide 9: EBIT variance analysis
EBIT variance analysis EBIT variance US$ million Stock 200 movement Exploration 14.1 2.1 Currency 180 38.8 160 Administrative Production expenses expenses 140 (21.7) 22.8 120 Volume 50.7 Increase includes: 100 US$8.1million relating to Las Bambas transaction and integration. 80 1H13 EBIT 93.0 US
Slide 10: EBIT variance analysis
EBIT variance analysis EBIT variance US$ million Stock 200 movement Exploration 14.1 2.1 Currency 180 38.8 160 Administrative Production expenses expenses Other 140 (21.7) (9.7) 22.8 120 Volume 50.7 D&A 100 (39.0) 1H14 EBIT 116.5 80 1H13 EBIT 93.0 60 Price1 (34.6) 40 20 0 (1) Price variance is inclu
Slide 11: Improving core profitability
Improving core profitability Initiatives delivering cost improvements. Focus on asset utilisation. Production expenses decreased at all sites except Kinsevere. Improved operating EBITDA margin at 31% - measure of core profitability. Revenue by operating site EBITDA by operating site US$ mill
Slide 12: Analysis of cash flow
Analysis of cash flow Inflows 1H 2014 Cash flow summary US$ million Cash generated from operating Operations $200.5m Other $39.0m activities of US$200.5m. Inflows Outflows Purchase of property, plant and equipment (PP&E) and the PP&E Financing Dividend development software of $126.6m $53.0m $52.
Slide 13: Las Bambas
Las Bambas Las Bambas acquired for US$7.005 billion1 on 31 July 2014. Acquisition cost and future capital requirements funded by debt and equity. Debt facilities are long term and highly competitive: Seven year facility of US$0.97 billion, not exceeding LIBOR plus 3.50% per annum2; Eightee
Slide 14: Andrew Michelmore
New picture (GC) Andrew Michelmore Executive Director and Chief Executive Officer 14
Slide 15: Extracting optimal value from our assets
Extracting optimal value from our assets Solid safety, volume and cost performance continues across all sites. Total copper production increased 4% with consistent performance at Sepon and Kinsevere. Total zinc production decreased 4% due to lower grades at Century as it progresses through fin
Slide 16: Zinc - continuing uncertainty of future supply
Zinc - continuing uncertainty of future supply Refined zinc surplus / (deficit)1 LME zinc price Long-term zinc outlook highly ‘000 tonnes US$ / tonne dependent on future mine supply. 750 4,000 Planned closures and limited new projects and expansions are now 500 being considered by the market. 2,
Slide 17: Chinese copper consumption will dominate short-term demand growth
Chinese copper consumption will dominate short-term demand growth Stable, long-term demand growth – Refined copper consumption1 million tonnes dominated by China in the short China CAGR2 4.4% term. Rest of World Broad recovery in copper demand 9.2 10.8 continues in developed economies. New cop
Slide 18: Creating future value from our foundations
Creating future value from our foundations Committed to near mine exploration – increase reserves, continue to extend mine life. Studies underway to sustain Sepon production given current reserve grade. Transition of Queensland Operations. Near mine exploration focus at Kinsevere. Continue
Slide 19: Las Bambas is transformational to MMG
Las Bambas is transformational to MMG Transaction completed 31 July 2014. Current mine life in excess of 20 years – significant upside exploration potential. Immediate focus on completing project. Update on project in Third Quarter Production Report. 2017 Forecast attributable annual product
Slide 20: Establishing platforms for future growth
Establishing platforms for future growth Peru Democratic Republic of the Congo Third largest global copper producer. Seventh largest global copper producer. Second largest copper reserve. Fifth largest copper reserve. Stable government. Pro-mining government. Large-scale infrastructure projects unde
Slide 21: Progress at Las Bambas
Progress at Las Bambas 21
Slide 22: Key messages
Key messages We think safety first – TRIFR1 2.4. First half 2014 profit increased 33% to US$47.7 million. Continue to focus on optimising future value from our foundations. Positive long-term view for our core commodities. Establishing platforms for future growth. Las Bambas is transform
Slide 23: Appendix
A “procress IWEIVIG
Slide 24: 1H14 Financial dashboard
1H14 Financial dashboard Revenue by commodity Revenue by customer location 23% 35% Australia Zinc Europe Copper 19% 12% Middle East Gold Japan & Korea 52% 6% Silver Other Asia 15% 24% 4% Lead China 3% 7% EBITDA by operating segment Operating expenses 5% People 9% Sepon 24% External Services 40% 20%
Slide 25: Overview of assets
Overview of assets Izok Corridor copper / lead / silver / zinc Sepon copper Century Las Bambas Kinsevere lead / silver / zinc copper / gold / copper molybdenum / silver Dugald River Golden Grove lead / silver / zinc copper / gold / lead / silver / zinc Legend: Rosebery Operating assets copper / gold
Slide 26: Sepon
Sepon Highlights Financials Improved EBITDA margin of 60%. US$ million 1H14 1H13 % Significant reduction in operating expenses following closure Revenue 304.2 378.4 (20) of gold plant. Solid operating performance and good management of EBITDA 1 182.9 211.6 (14) production-related costs in 1H14
Slide 27: Kinsevere
Kinsevere Highlights Financials Consistent production above designed nameplate capacity. US$ million 1H14 1H13 % Production expenses increased 14% in line with 13% Revenue 228.9 216.8 6 increase in both production and sales volumes. Reduced reliance on diesel as a power source – 40% of EBITDA
Slide 28: Century
Century Highlights Financials Solid result with increases in revenue, EBIT and EBITDA US$ million 1H14 1H13 % margin. Revenue 412.1 367.1 12 Several strategic cost savings initiatives underway leading up to closure of the open pit mine. EBITDA 1 147.3 52.4 181 Reduced expenditure on consumable
Slide 29: Rosebery
Rosebery Highlights Financials Ongoing commitment to improvements in safety, volume and US$ million 1H14 1H13 % costs. Revenue 118.0 106.2 11 Geotechnical restrictions impacted production in 1H14 – mine plan re-sequenced targeting higher grade areas. EBITDA 1 30.2 29.2 3 Strategic contract man
Slide 30: Golden Grove
Golden Grove Highlights Financials Continued focus on initiatives to sustainably reduce costs. US$ million 1H14 1H13 % Production expenses reduced 13%. Revenue 130.5 109.1 20 Significant cost savings related to use of contractors. EBITDA 1 4.4 1.5 193 Refocus of operations underground. Str
Slide 31: 2014 Guidance
2014 Guidance Sepon Rosebery Copper – production 88,000 – 93,000 tonnes Zinc – production 80,000 – 85,000 tonnes Copper – C1 costs US$0.95 – US$1.05 / lb Zinc – C1 costs US$0.25 – US$0.30 / lb Lead – production 22,000 – 24,000 tonnes Kinsevere Copper – production 63,000 – 68,000 tonnes Golden Grove
Slide 32: Condensed consolidated interim income statement
Condensed consolidated interim income statement Six months ended 30 June 2014 2013 Variance US$ million Unaudited Unaudited % Revenue 1,193.7 1,177.6 1 Other income 5.4 0.5 980 Expenses (Excluding depreciation and amortisation) (834.4) (875.9) 5 EBITDA 364.7 302.2 21 Depreciation and amortisation (2
Slide 33: Condensed consolidated interim balance sheet
Condensed consolidated interim balance sheet 30 June 2014 31 December 2013 US$ million Unaudited Audited Non-current assets 3,849.2 3,849.9 Current assets – cash and cash equivalents 144.4 137.4 Current assets – other 639.5 696.2 Total assets 4,633.1 4,683.5 Total equity 1,829.8 1,816.8 Non-current
Slide 34: Consolidated financial performance: Cash flow statement
Consolidated financial performance: Cash flow statement Six months ended 30 June 2014 2013 Unaudited Unaudited US$ million Receipts from customers 1,197.2 1,234.7 Payments to suppliers (855.2) (900.0) Payments for exploration expenditure (31.2) (33.3) Income tax paid (80.3) (93.7) Net cash generated