Antofagasta Plc · LSE:ANTO
Antofagasta — Bank of America Merrill Lynch 2016 Global Metals, Mining & Steel Conference
24 slides from Antofagasta's conference presentation, 2016
Slide 1: Bank of America Merrill Lynch 2016 Global Metals, Mining & Steel Conference
Bank of America Merrill Lynch 2016 Global Metals, Mining & Steel Conference Diego Hernández – Adviser to the Board
Slide 2: Cautionary statement
Cautionary statement This presentation has been prepared by Antofagasta plc. By reviewing and/or attending this presentation you agree to the following conditions. This presentation contains forward-looking statements. All statements other than historical facts are forward-looking statements. Exampl
Slide 3: Agenda
Agenda Overview Operations review Investment Case Questions and growth opportunities 3
Slide 4: Overview
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Slide 5: Safety First Culture
Safety First Culture Safety Performance • Unacceptably, a fatality occurred at Antucoya in April 2016 Achieved 33% • Committed to zero fatalities target 6 reduction in LTIFR • 33% improvement in injury rate 5 5 • New safety and occupational health model 4 3.00 being extended to contractors 3 2.5 1.9
Slide 6: 2015 Highlights
2015 Highlights The Group’s position in a challenging environment • Strong balance sheet Position • Competitive operating cost position • Re-setting community engagement • Managing timing of growth projects Optimise our portfolio • Sale of water division Optimise • Bring Antucoya to full production
Slide 7: Investment Case: Responding to uncertain times
Investment Case Responding to uncertain times High quality Cost Capital Robust assets control discipline platform • Strong and growing • Focus on operating • Strong and flexible • Continuing to production efficiencies through balance sheet optimise mines innovation and • Large resource base • Manage
Slide 8: Copper market outlook
Copper market outlook o Copper price recovered in the first quarter of the year, providing relief to higher cost producers China o Price remains under pressure as mine supply grows modestly “New Normal” in China? • Small surpluses expected in 2016 and 2017 • Market tightens from 2018 onwards o Consu
Slide 9: Operations review and growth opportunities
Operations review and growth opportunities 9
Slide 10: Strategy
Strategy Existing core business • Constant focus on cost management and compliance • Delivery of production and cash cost guidance • Continue to get the best possible performance from existing assets • New proactive approach with community and other stakeholders Organic & sustainable growth of the c
Slide 11: Operations overview
Operations overview Los Pelambres 2015 2016 Centinela 2015 2016 363,200t Cu 355-365,000t Cu 221,100t Cu 240-250,000t Cu C1 $1.23/lb C1 $1.25 C1 $1.85/lb C1 $1.30/lb • Lower throughput due to harder • Higher stripping in 2016 ore zone of the mine • Throughput expansions • Highest molybdenum progressi
Slide 12: Growth opportunities
Growth opportunities Encuentro Centinela Second Antucoya(1) Oxides(1) Concentrator(4) Cu: 85ktpa(2) Cu: 50ktpa(2) Cu: 140ktpa(2) Capex:$1,900m Capex:$636m(3) Capex:$2,700m 2016 2017 2018 2019 2020+ Centinela Centinela 105ktpd(1) Moly Plant(1) Los Pelambres Phase 1 Los Pelambres Phase 2 Cu: 10-12ktpa
Slide 13: Zaldívar acquisition
Zaldívar acquisition • 50% from Barrick for $1.0 billion closed in Q4 2015, • Antofagasta operator of the mine • Rare opportunity to acquire good-quality copper asset in familiar jurisdiction • Production growth as grade increases up to 40-50% with costs dropping to $1.30-$1.50/lb • $15-20 million o
Slide 14: Antucoya – ramp-up
Antucoya – ramp-up Delivering growth on budget • Commissioning issues in the crushing circuits caused delay in ramp-up • Commercial production commenced in April 2016 • Reach design capacity by mid-2016 • Dust suppression systems completed by the end of the year Antucoya Start of operation: Q3 2015
Slide 15: Centinela Mining District: Under construction
Centinela Mining District Under construction Centinela debottlenecking • Debottlenecking concentrates plant to increase throughput to 105 ktpd • Front-end completed in 2015 • Thickened tailings • Installation of tailing thickeners in 2016 Molybdenum plant • Construction underway • Completion in 2017
Slide 16: Centinela Mining District: Future development
Centinela Mining District Future development Centinela Second Concentrator • Planned 2nd concentrator 7 km from current facilities • Two-phase growth: o Phase 1 - 90 ktpd throughput o Phase 2 - +50 ktpd throughput • Annual production: • 140 kt copper • 150 koz gold • 3.0 kt molybdenum • EIA approval
Slide 17: Los Pelambres Incremental Expansion: Phased development
Los Pelambres Incremental Expansion Phased development Phase 1 • Maximising throughput under existing permits • Throughput expansion to 190 ktpd + desalination plant • New grinding and flotation circuit to counter the increasing hardness of the ore • Estimated capex of $1.1 billion including desalin
Slide 18: Further growth opportunities: Beyond 2020
Further growth opportunities Beyond 2020 Twin Metals Minnesota Project • 2.4 billion tonne resource containing copper, nickel and PGMs • Optimising pre-feasibility study • Consolidated ownership of project • Advancing permitting process Exploration and evaluation • Chile and internationally • Reduce
Slide 19: Operating cost savings
Operating cost savings 2015 2016 $246m of savings achieved $160m of savings targeted Mine Site Costs Corporate Costs Target Areas • $152m ($0.11/lb) of • $94m of Exploration & • Additional $160 million from mine site costs , +6% of savings Evaluation, and Corporate 2015 costs, already included in 20
Slide 20: Capital expenditures
Capital expenditures 2014 -2016 ($m) Sustaining capex Development Mine Development Others (1) ($597m) 1,800 $1,646m ($51m) 1,600 97 64 1,400 1,200 $1,049m $998m 1,000 38 63 1,086 47 800 265 600 678 403 400 200 399 270 283 0 2014 actual 2015 actual 2016 E Sustaining $566/t Cu $431/t Cu $414/t Cu cape
Slide 21: 2015 Performance and Guidance
2015 Performance and Guidance Production and cost improvements to offset another challenging year Cu Au Mo $/lb 2015 Production 2015 Production 2015 Production 2015 Net Cash Cost 630,300 t 213,900 oz 10,100 t 1.50/lb 2016 Guidance 2016 Guidance 2016 Guidance 2016 Guidance 710,000 - 740,000 t 245,000
Slide 22: Investment case
Investment case 22
Slide 23: Investment Case: Responding to uncertain times
Investment Case Responding to uncertain times High quality Cost Capital Robust assets control discipline platform • Strong and growing • Focus on operating • Strong and flexible • Continuing to production efficiencies through balance sheet optimise mines innovation and • Large resource base • Manage
Slide 24: Questions
Questions ANTOFAGASTA PLC
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