Volcan Compania Minera S.a.a. Class A · BVL:VOLCAAC1
Volcan Compania Minera S.a.a. Class A — J.P. Morgan Global Emerging Markets Corporate Conference 2020
31 slides from Volcan Compania Minera S.a.a. Class A's conference presentation, February 2020
Slide 1: Volcan Compania Minera
Volcan Compania Minera J.P. Morgan Global Emerging Markets Corporate Conference - February 2020
Slide 2: Disclaimer
Disclaimer Some statements contained in this presentation or in documents referring to this presentation may contain inaccuracies. No reliance for any purpose whatsoever may be placed on the information or opinions contained in this presentation or on the completeness of this presentation. Volcan Co
Slide 3: Agenda
Agenda Overview Operations & Financial Results Growth Strategy Energy and Chancay Port VoLcAN
Slide 4: Volcan overview
Volcan overview v T6years of mining experience ¥ 354k Ha. of mining concessions ¥ Located in a mining friendly region in 16% explotation Peru with logistics competitive 4% exploration advantages 80% potential v¥ 7mines,7 concentrator plants &1 vy R&Ras of Dec 2019 (mm MT) lixiviation plant Y Total 2
Slide 5: Global zinc, lead and silver producer rankings
• Glencore 1,160 Fresnillo 52 Glencore 323 KGHM Polska 43 Hindustan Zinc 209 Hindustan Zinc 724 Glencore 32 JSC Gorevsky 155 Teck 635 Pan American Silver Doe Run 115 26 Nexa 333 South32 111 Newmont Goldcorp 25 Boliden 291 Teck 100 Polymetal Intl. 22 Sumitomo 259 Zhongjin Lingnan Metals 96 Hindustan
Slide 6: Production 2019 by mine
Number Type Production 2019 Mine of of Treated Zn Pb Cu Ag Au Plants Plant MM MT (k fmt) (k fmt) (k fmt) (MM Oz) (k Oz) San Cristóbal 1 Concentrator 1.2 60 6 1.6 3.0 2.5 Andaychagua 1 Concentrator 1.0 40 9 0.0 2.4 1.5 Carahuacra 1 Concentrator 0.8 31 3 0.4 1.1 0.9 Ticlio 0.2 10 2 0.9 0.4 0.9 Animón
Slide 7: Mining Operations — Reserves & Resources as of 12.31.2019
Mining Operations — Reserves & Resources as of 12.31.2019 Reserves Resources Resources M&l Inferred 33MM TM 72MM TM 202 MM TM Polymetallic 4.8% Zn 5.9% Zn 2.8% Zn Operations 11% Plo 1.3% Pb 0.9% Pb p 0.2% Cu 0.2% Cu 0.04% Cu 3.0 oz/tm Ag 3.6 Oz/tm Ag 2.7 Oz/tm Ag 30 MM TM 27MM TM Polymetallic 4.5% Z
Slide 8: Safety and fatal risk management
S FE W RK 1.54 1.22 1.05 0.76 2016 2017 2018 2019 ✓ ✓ 1,225 ✓ 893 ✓ 502 295 2016 2017 2018 2019 GCOM FATAL RISK MANEGEMENT 5.15 LIFE-SAVING LEADERSHIP 4.43 HAZARD GEST. OPERACIONAL 3.76 BEHAVIOURS 2.65 PROTOCOLS ASSURANCE TRAINING 2016 2017 2018 2019
Slide 9: Environmental and operational risks
✓ ✓ Accidents • during Atmospheric the transport of emissions hazardous • cargo Liquid effluents • exceeding the New limits Projects • • ✓ Degradation Inadequate of waste areas disposal Waste of Tailings natural dams resources rupture
Slide 10: Social Responsibility & Sustainable Development
Social Responsibility & Sustainable Development Education Development Health and Economic Development By 2021, Volcan and Ensefna Peru are an Volcan works in cooperation with Prisma NGO committed to the improvement of the P MA asits strategic partner in health & economic education reality of Junin a
Slide 11: Agenda
Agenda Overview Operations & Financial Results Growth Strategy Energy and Chancay Port VoLcAN a
Slide 12: Production trends 2015-2019
285 273 255 241 239 60 52 51 47 49 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 25 22 5 5 5 4 17 17 16 4 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
Slide 13: Unit cost of production
✓ ✓ 53.7 ✓ 49.5 47.9 46.6 45.2 ✓ ✓ 2015 2016 2017 2018 2019 ✓ 1 Unit cost of production excludes the following costs: purchases of concentrate or mineral from 3rd-parties, extraordinary costs associated with events such as employee liquidation costs or intercompany mineral purchases.
Slide 14: Capex and regional exploration
278 50.0 263 270 12 45.0 18 209 6 40.0 220 29 35.0 23.1 17.2 170 30.0 129 3 25.0 100 120 20.0 17.0 172 175 180 15.0 70 119 113 5.9 5.5 22.4 23.1 10.0 20 5.0 10.0 13.2 8.5 0.0 -30 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Growth Capex Regional exploration (USD MM) 50.0 0.0 exploration (USD MM
Slide 15: Sales prices and sales variation
822 857 795 775 744 Sales Prices 2015 2016 2017 2018 2019 Zn (USD/MT) 1,917 2,077 2,836 2,917 2,539 707 758 830 Pb (US$/TM) 1,782 1,858 2,311 2,245 1,978 775 744 Cu (US$/TM) 5,426 4,901 6,148 6,464 6,022 Ag (USD/Oz) 15.6 17.0 17.1 15.7 16.1 88 64 27 Au (US$/Oz) 1,154 1,234 1,262 1,265 1,387 2015 201
Slide 16: Sales, costs and expenses
343 303 289 225 244 2015 2016 2017 2018 2019 289 -31.5 -20.3 9.8 -5.2 -1.5 244 4.0 2017 Sales COGS Administrative Exploration exp. Sales Other income 2018 exp. exp. (expenses)
Slide 17: Cash balance, debt and EBITDA
2.9 3.0 Cash Balance - Dec. 2018 63 2.5 2.0 Cash from operations 22 2.0 Interest -39 Financing -27 Other businesses 17 2015 2016 2017 2018 2019 Cash Balance - Dec. 2019 36 Total Debt (1) 841 813 802 781 764 Cash 192 203 102 63 36 Net Debt 648 610 701 718 728 EBITDA 225 303 343 289 244
Slide 18: Agenda
Overview Operations & Financial Results Growth Strategy Energy and Chancay Port VoLcAN
Slide 19: Mines and projects by potential
High Romina • Puajanca Potential Animón San Cristóbal Palma • Adriana, Andrea, Mines Santa, etc Medium Andaychagua Potential Óxidos Carahuacra Carhuacayán Mines Zoraida Mines under Cerro de Pasco Islay Ticlio Alpamarca OP evaluation
Slide 20: Project resources by class
• • • • • Class MM TM Zn % Pb % Ag Oz Indicated 10.6 4.7 2.6 1.2 Inferred 4.0 4.4 2.9 1.2 Total 14.6 4.6 2.7 1.2 • • • • •
Slide 21: Project resources by class
• • • • • Class MM TM Zn % Pb % Ag Oz Indicated 3.6 3.6 1.5 1.5 Inferred 6.5 3.4 1.3 1.3 Total 10.1 3.5 1.4 1.4 •
Slide 22: Project resources by class
• • • • • • • • Class MM TM Zn % Pb % Ag Oz Indicated 3.0 4.8 3.3 4.6 Inferred 1.0 4.8 3.7 4.8 Total 4.0 4.8 3.4 4.7
Slide 23: Palma and Santa Lidia blocks
• • • • • • Palma block • • Santa Lidia block Class MM TM Zn % Pb % Ag Oz Indicated 12.5 4.5 0.9 0.9 Inferred 10.2 4.2 0.8 0.6 Total 22.7 4.4 0.9 0.8 DDHs Palma block DDHs Sta. Lidia block
Slide 24: Agenda
Agenda Overview Operations & Financial Results Growth Strategy Energy and Chancay Port Yorcan 24
Slide 25: Electric balance and energy generation
‒ ‒ ‒ • Electric Balance (GWh) 2018 2019 var % Energy generation 307.8 386.7 25.6 Chungar 153.0 151.2 -1.2 Tingo 9.1 8.6 -5.4 Huanchor 145.6 159.1 9.3 Rucuy 0.0 67.7 Energy consumption 711.8 755.6 6.2 Energy purchase 549.6 595.8 8.4 Cost of Energy USD/MWh Produced Energy 22.6 Purchased Energy 57.9 ¹
Slide 26: Chancay Port
Chancay Port Project Potential: * Strategic location: 80 km north from Lima in the bay of Chancay *The bay has exceptional natural features for a port + First HUB Port in Peru and the South Pacific Ocean *Integration with Central Andean railroad & main highway * Capacity to handle Triple E vessels -
Slide 27: Annex
Annex VoLcAN
Slide 28: Company history timeline
1997 2000 2014 2018 1943 1999 2012 2017 2019
Slide 29: Bonds and Credit Ratings
Bonds and Credit Ratings International Bond Emission vy USD 600 MM issued February 2012 Oustanding: $535 MM v Rate: 5.375% due February 2022 y¥ Demand: USD 4.8 B Credit Ratings FitchRatings BBB- Moopy’s Ba2 VoLcAN
Slide 30: Stock Market Highlights
Stock Market Highlights! Class A Shares !: Full voting rights Shares outstanding: 1,633,414,553 Stock Market Listings 459 shareholders Lima Since 1956 Madrid (Latibex) Since 2000 . . Santiago Since 2007 Class B Shares Div. premium of 5% over Class A Shares outstanding: 2,443,157,622 7,947 shareholde
Slide 31: Slide 31
Volcan Compania Minera S.A.A. — J.P. Morgan Global Emerging Markets Corporate Conference 2020 on 6ix