South32 Ltd. · ASX:S32
South32 — BMO Capital Markets Global Metals & Mining Conference 2020
25 slides from South32's conference presentation, Feb 24, 2020
Slide 1: BMO Capital Markets Global Metals & Mining Conference Presentation 2020
24 February 2020 South32 Limited For personal use only (Incorporated in Australia under the Corporations Act 2001 (Cth)) (ACN 093 732 597) ASX / LSE / JSE Share Code: S32 ADR: SOUHY ISIN: AU000000S320 south32.net BMO CAPITAL MARKETS GLOBAL METALS & MINING CONFERENCE PRESENTATION 2020 South32 Limited
Slide 2: BMO Capital Markets Global Metals and Mining Conference
For personal use only BMO Capital Markets Global Metals and Mining Conference 24 February 2020
Slide 3: Important notices
Important notices • This presentation should be read in conjunction with the “Financial Results and Outlook – half year ended 31 December 2019” announcement released on 13 February 2020, which is available on South32’s website (www.south32.net). Figures in italics indicate that an adjustment has bee
Slide 4: Safety performance
For personal use only Safety performance Fatalities1,3 1 0 0 FY18 FY19 H1 FY20² 5.1 4.5 3.9 TRIF 1,3 FY18 FY19 H1 FY20² 2.8 Employee 2.0 1.6 Occupational Illness1,3 FY18 FY19 H1 FY20² SLIDE 3
Slide 5: H1 FY20 overview
For personal use only H1 FY20 overview Underlying EBITDA Free cash flow(a) US$300M returned US$678M US$284M to shareholders(b) Underlying earnings Net cash balance Fully franked interim dividend US$54M Fully franked special dividend US$54M US$131M US$277M On-market share buy-back US$192M Capital man
Slide 6: Our portfolio
Our portfolio Large producer of manganese ore Base metals development and and alumina exploration options For personal use only Ambler Metals Conditional agreement to divest South African Energy Coal US$76M allocated to exploration across our portfolio in FY204 Manganese alloy smelters under review
Slide 7: H1 FY20 performance update
H1 FY20 performance update Lower prices for our key commodities more than offset weaker producer currencies and the benefit of our strong operating result For personal use only H1 FY20 Underlying EBITDA contribution by commodity(a)(b) Metallurgical coal operating margin(b) 51% Priorities 45% Alumini
Slide 8: Manganese market
Manganese market Long term price to be set Environmental restrictions and Weaker steel and alloy demand Higher cost producers responded by marginal South African supply grade decline have underpinned a For personal use only • during H2 CY19 by exiting the market transitioning to more expensive rise
Slide 9: Metallurgical coal market
Metallurgical coal market Demand growth driven mainly by Spreads are widening again due to Chinese Long run growth driven by India For personal use only increase in Chinese steel output preference for imported premium HCC and other emerging Asian economies (+76Mt or 8.3% YoY in CY19) and weak ex-Chi
Slide 10: Alumina market
Alumina market Deteriorating Chinese bauxite supply Market rebalanced post Alunorte Chinese supply to drive market balance with For personal use only and increasing delivered costs of and Al Taweelah ramp-up imported alumina remaining cost competitive imports to steepen cost curve Alumina price Chin
Slide 11: Capital allocation
Capital allocation Its application has been We have balanced returns to shareholders For personal use only Our framework remains unchanged disciplined and consistent with investment in our business Capital management framework Shareholder returns (paid and committed) Capital allocation (US$M) (Capit
Slide 12: Capital management program
Capital management program Program expanded by Average buy-back price US$180M to US$1.43B Flexible program to Shares on issue reduced by A$3.03 per share For personal use only return excess capital efficiently 8% since commencement US$198M remaining after payment and in a timely manner in April 2017
Slide 13: Our development options
Our development options Ambler Metals JV (50%) For personal use only Alaska, USA Embedding high quality Favourable commodities in Arctic Copper, zinc, lead, silver, gold growth options lower risk jurisdictions Arctic Deposit pre-feasibility study (PFS) to commence in Q3 FY20 Bornite Deposit offers r
Slide 14: Eagle Downs Metallurgical Coal project
For personal use only Eagle Downs Metallurgical Coal project Eagle Downs location map 50% interest and operating control in a fully Development studies underway permitted, partially developed mine FY20 capital expenditure guidance Final investment decision of US$11M (South32 share) expected in H1 FY
Slide 15: Hermosa project
Hermosa project Initial JORC Resource for the Taylor Deposit Mineral Resource (100% basis)(a) Taylor Deposit has de-risked Deposit remains open Net Smelter Return (NSR) cut-off US$90/t For personal use only and increased our at depth and laterally Total Mineral Resources confidence in the project Or
Slide 16: Hermosa project
Hermosa project Hermosa land package Taylor Deposit, Clark Deposit and regional landholdings Capital expenditure For personal use only Voluntary remediation directed to establishing program completed surface infrastructure Regional landholdings increased by 30% since acquisition Hermosa Tailings Sto
Slide 17: Ambler Metals JV
Ambler Metals JV Regional scale in an • Arctic, a high grade VMS Bornite, a large carbonate hosted Identified prospects and For personal use only attractive mining jurisdiction development option copper deposit VMS clusters Ambler Metals JV location map High grade development option in northwest Ala
Slide 18: Ambler Metals JV
Ambler Metals JV Initial JORC Resource estimates Further resource definition drilling at Bornite open at depth and laterally For personal use only declared by South32 Arctic to support development studies Arctic Deposit Mineral Resource Estimate (100% basis)(a)(b) Bornite Deposit Mineral Resource Es
Slide 19: Our exploration footprint
Our exploration footprint Pipeline of greenfield base metal Strategy to advance, identify and For personal use only options established cycle options New partnerships established in Greenfield exploration guidance Argentina and Ireland in past 6 months US$30M Arctic advanced to a development US$10M
Slide 20: H1 FY20 summary
For personal use only H1 FY20 summary Underlying EBITDA Free cash flow(a) US$300M returned US$678M US$284M to shareholders(b) Underlying earnings Net cash balance Fully franked interim dividend US$54M Fully franked special dividend US$54M US$131M US$277M On-market share buy-back US$192M Capital mana
Slide 21: Supplementary Information
For personal use only Supplementary Information
Slide 22: Mineral Resources for the Arctic Deposit
Mineral Resources for the Arctic Deposit Arctic Deposit Mineral Resource Estimate as at 31 January 2020 (100% basis) For personal use only Indicated Mineral Resources Inferred Mineral Resources Total Mineral Resources Mt % Cu % Zn % Pb g/t Ag g/t Au Mt % Cu % Zn % Pb g/t Ag g/t Au Mt % Cu % Zn % Pb
Slide 23: Mineral Resources for the Bornite Deposit
Mineral Resources for the Bornite Deposit Bornite Deposit Mineral Resources at 31 January 2020 (100% basis) For personal use only Indicated Mineral Resources Inferred Mineral Resources Total Mineral Resources Mt % Cu Mt % Cu Mt % Cu Open pit 40 1.06 38 1.03 78 1.04 Underground - - 70 2.29 70 2.29 No
Slide 24: Footnotes
Footnotes 1. Fatalities, Total Recordable Injury Frequency (TRIF) per million hours worked and Employee Occupational Illness (EOI) per million hours worked, are all calculated in accordance with the United States Government Occupational Safety and Health Assessment (OSHA) guidelines for the recordin
Slide 25: For personal use only
For personal use only
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