Mmg Ltd. · HKEX:1208
Mmg — Merger or Acquisition (November 2023)
33 slides from Mmg's merger presentation, Nov 21, 2023
Slide 1: Acquisition of Khoemacau
Acquisition of Khoemacau Strategic acquisition of the Khoemacau Copper Mine and surrounding tenements on the prospective Kalahari Copper Belt in Botswana 21 November 2023
Slide 2: Disclaimer
Disclaimer Disclaimer Projections The information in this investor presentation (this "Presentation") is prepared by MMG Limited (HKEx stock code: 1208) This Presentation contains projected financial information. Neither MMG nor the Target's independent auditors have ("MMG", together with its subsid
Slide 3: 1. Transaction overview
1. Transaction overview
Slide 4: Key transaction terms
Key transaction terms Overview • MMG has entered into a binding agreement to acquire 100% of Khoemacau for an enterprise value of US$1.875bn1 • Khoemacau is one of the highest quality new copper mines globally in the world-class mining jurisdiction of Botswana Shareholder • The acquisition constitut
Slide 5: Khoemacau snapshot
Khoemacau snapshot High-grade, low-cost Near-term production expansion Low-capital intensity project High-grade mine with attractive financial Delivered through increased processing Cost-efficient pathway to achieve metrics, bottom half of cost curve capacity and additional mining fronts production
Slide 6: 2. Transformational transaction
2. Transformational transaction 6
Slide 7: Attractive operating and financial metrics
Attractive operating and financial metrics Post-expansion, Khoemacau is expected to generate significant cash flows at a low cost and high margin Key operating and financial metrics (estimates shown either as a range or average) Capital intensity and average capex Copper head grade range (%) CuEq pr
Slide 8: Cornerstone asset with >20 year life
Cornerstone asset with >20 year life Khoemacau Kinsevere Location: Botswana Location: DRC Resource1: 6.4Mt Cu, 263Moz Ag Resource: 1.2Mt Cu, 52kt Co Izok High-grade, low-cost mine with Growing to be a ~100ktpa copper ~130ktpa copper post-expansion equivalent mine once expansion fully ramped up Izok
Slide 9: Building a premier diversified copper producer
Building a premier diversified copper producer Proforma portfolio (Proforma) Las Bambas 5% Mineral Dugald River 11% Reduces 28% MMG’s asset resources by Kinsevere 11% 7.1Mt 41% 18.1Mt 25.2Mt concentration asset Izok Lake 57% 4% (kt CuEq)1 Rosebery 16% 8% risk 8% 11% Khoemacau Peru Australia 10% Prov
Slide 10: Transaction accretive to MMG across a range of metrics
Transaction accretive to MMG across a range of metrics CuEq production (ktpa)1 C1 cash cost (US$/lb CuEq)2 +30% -6% 2.06 635 1.93 490 MMG MMG Proforma (post-expansion) MMG MMG Proforma (post-expansion) EV / EBITDA (x)3 EV / Resource (US$/t CuEq)4 420 5.6x 4.3x vs vs 265 MMG Implied acquisition multi
Slide 11: MMG well positioned to deliver on expansion project
MMG well positioned to deliver on expansion project Khoemacau has a low-risk expansion plan Demonstrated track record of delivering major projects • Strong in-country team % of nameplate ore milled vs McNulty Type 11 120% McNulty Type 1 • Favourable metallurgy Las Bambas ore milled • Longhole stopin
Slide 12: Positions MMG as a Top copper focused producer
Positions MMG as a Top 10 copper focused producer Listed global copper producers – copper production (ktpa)1 2,000 Diversified Peer Copper Focused Peer 1,600 1,200 Further growth 800 potential 400 - Boliden CMOC KGHM KAZ MMG Jiangxi Freeport Barrick PT Amman Zijin Antofagasta Rio Tinto Teck Lundin N
Slide 13: Enhanced exposure to highly attractive copper market
Enhanced exposure to highly attractive copper market Growing copper demand growth driven by decarbonisation Forecast supply deficit of 13.8Mt by 2040 EVs, renewables and Fastest growth from Greenfield projects facing Copper production and future supply gap (Mt Cu)2 investment in support “decarbonisa
Slide 14: 3. Investment highlights
3. Investment highlights 14
Slide 15: Investment highlights
Investment highlights 1 Scarce, high-grade and long-life producing copper mine with low technical risk 2 Bottom half cost curve position with further upside from optimisation 3 Near-term expansion to ~130ktpa copper production 6-8 points. With slides ordered to support them 4 Near-term brownfield pr
Slide 16: Large-scale, high-grade Resource
1 Large-scale, high-grade Resource Asset Highlights Geologically consistent PFS complete for High-grade Resource One of the largest Newly built, modern along strike, with all ~130ktpa expansion with 2.0% Cu grade at underground copper underground mine with deposits remaining open project, with furth
Slide 17: Bottom-half C1 cost curve position
2 Bottom-half C1 cost curve position Further upside from optimisation C1 cash cost curve position (US$/lb)1 Leverage MMG’s competitive advantage with China sourcing & 700 2nd quartile 3rd quartile 4th quartile 1st quartile Chinese technology deployment 600 Solar power potential is an opportunity to
Slide 18: Brownfield expansion to ~130ktpa
3 Brownfield expansion to ~130ktpa Khoemacau expansion to leverage off existing infrastructure and proven mining and processing methods Khoemacau ramp-up profile by deposit Roadmap to ~130ktpa copper production 9.0 • Zone 5 extensions & expansion deposits to deliver >130ktpa Mine Output (Mtpa) Resou
Slide 19: Highly competitive capital intensity
4 Highly competitive capital intensity Khoemacau brownfield expansion represents a cost-efficient way to achieve production at scale Capital intensity of new and future copper projects 35,000 Bubble size = Avg. CuEq production 30,000 25,000 Capital Intensity (US$/t) 20,000 15,000 10,000 Khoemacau (b
Slide 20: 4,040km2 land holding across Kalahari Copper Belt
5 4,040km2 land holding across Kalahari Copper Belt Expansion potential Current exploration and development pipeline Exploration target Discoveries Resource and PEA2 PFS2 Production Full geological potential not yet Initial drilling has intersected High priority targets to feed unlocked into resourc
Slide 21: Excellence in ESG
6 Excellence in ESG Small operating footprint, strong current performance in sustainability and low carbon intensity potential Health & safety Environment Ongoing focus on sustainable water usage, biodiversity Average TRIF for the last 3 years of 1.751 management Comprehensive safety and health mana
Slide 22: Botswana is a world-class mining jurisdiction
7 Botswana is a world-class mining jurisdiction Strong sovereign rating and risk profile Excellent regional infrastructure and access Ranked as the most attractive mining jurisdiction in Africa and top 10 worldwide Paved road and air access. Proximity to east and west coast ports minimises operation
Slide 23: Appendix
Appendix 23
Slide 24: Khoemacau overview
Khoemacau overview Project overview Executive management team Location • Botswana, Africa (4,040km2 property license area) Johan Ferreira Boikobo Paya Dale Quaker Chief Executive Officer Executive Director Chief Financial Officer • Zone 5 Group - 166Mt @ 2.0% Cu & 26g/t Ag (3,324kt Cu & 140Moz Ag) S
Slide 25: Map of current operations
Map of current operations Map of current operations Overview of current operations National Mining Grid Haka •1 Fully mechanised underground mine at Zone 5 wellfield N 6 Legend • Sub-level open stoping at 3.65Mtpa Transmission Line • 3,500m strike length with three corridors accessed via boxcuts Hak
Slide 26: Map of expansion operations
Map of expansion operations Map of expansion operations Overview of expansion operations National Mining Grid Haka wellfield Legend 10 Transmission Line •1 Zone 5 mine expanded from 3.65Mtpa to 4.5Mtpa (three declines) N Haka Pipeline • 2 New mines at Zone 5 North, Zeta North-East, and Mango, replic
Slide 27: Fully permitted with required licences in place
Fully permitted with required licences in place Overview of licenses Prospecting license locations • 10 prospecting licenses covering 4,040km2 of the Kalahari Copper Belt • All licenses were renewed through the end of 2022 and are in good standing • Mining licenses cover all existing operations (Zon
Slide 28: Khoemacau endowment and exploration pipeline
Khoemacau endowment and exploration pipeline Zone 5 Group Endowment 166Mt resource supports base-load ~130ktpa for >20 years • Zone 5 Group mineral resource provides base-load 130ktpa for >20 years • Excellent growth potential with Banana Zone, Boseto and a 4th group emerging as potential hubs Boset
Slide 29: Highly prospective and predictable mineralisation zone
Highly prospective and predictable mineralisation zone Mineralisation zone A • Khoemacau hosts one of the largest sedimentary Cu systems outside of the Central African Copperbelt and this system is demonstrated to have continuity Zone 5 Group along strike and at depth Boseto Group Plutus Zeta NE Zon
Slide 30: Kalahari Copper Belt overview
Kalahari Copper Belt overview Overview • Kalahari Copper Belt is a major copper-silver region more than 1,000km in length and 180 to 240km wide • Consists of a deformed package of metasedimentary and metavolcanic rocks along the northwest margin of the Kalahari Craton • Zone 5 deposit is the largest
Slide 31: The largest copper mine within the Kalahari Copper Belt
The largest copper mine within the Kalahari Copper Belt Highlights Southern African Cu deposits (Botswana, South Africa and Namibia) Bubble size = contained Cu Resources = other Kalahari Copper Belt projects Largest resource at 6.4Mt Cu 3.0 Average Resource Grade (% Cu) 2.5 High grade 1.4% resource
Slide 32: Ore Reserves and Mineral Resources
Ore Reserves and Mineral Resources Ore Reserves Mineral Resources (inclusive of Ore Reserves) Proved and Probable Measured Indicated Measured and Indicated Inferred Measured, Indicated & Inferred Ore Grade Contained Ore Grade Contained Ore Grade Contained Ore Grade Contained Ore Grade Contained Ore
Slide 33: Thank you
Thank you