Antofagasta Plc · LSE:ANTO
Antofagasta — Bank of America Merrill Lynch Global Metals, Mining & Steel Conference 2014
23 slides from Antofagasta's conference presentation, May 13, 2014
Slide 1: Bank of America Merrill Lynch Global Metals, Mining & Steel Conference
Bank of America Merrill Lynch Global Metals, Mining & Steel Conference Diego Hernández – CEO, Antofagasta Minerals 13 May 2014
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 oOverview oOperations Review oCost Management oGrowth Opportunities o2014 Priorities and Investment Case oQuestions 3
Slide 4: Overview
Overview High o Competitive cash costs quality o Strong production and resource base assets Cost o Focus on operating and project cost control control o Strong operating margins and capital efficiency Capital o Return of capital to shareholders discipline o Prioritising brownfield projects Investing
Slide 5: 2013 highlights
2013 highlights 2013 2012 Variance Revenue ($m) 5,971.6 6,740.1 (11.4)% EBITDA margin (%) 45.3 57.3 (20.9)% Operational cash flow ($m) 2,659.2 3,826.0 (30.5)% Total dividend (cents/share) 95.0 98.5 (3.6)% Earnings per share (cents) 66.9 105.2 (36.4)% Copper production (tonnes) 721,200 709,600 1.6% N
Slide 6: Pricing environment and outlook
Pricing environment and outlook o LME copper price averaged $3.19/lb in Q1 2014 (2013 Q4: $3.25/lb) o Concerns over China’s growth and tightening rules on collateral financing o Demand still strong in China, with a positive trend in NA and Europe o Prices supported by export ban in Indonesia, a tigh
Slide 7: Operations overview
Operations overview
Slide 8: Operations overview
Operations overview Focus remains on cost control and efficiency throughout the operations: o Los Pelambres – solid 2013 operational and cash cost performance, ahead of guidance. Secured long-term power agreements that will start to reduce exposure to volatile spot energy prices from H2 2014 o Esper
Slide 9: Cost management
ANTOFAGASTA ZS wa Cost management
Slide 10: Group cash costs
Group cash costs 2014 Group net cash cost guidance: $1.45/lb o Group remains well positioned on the cost curve o Working to control costs 10
Slide 11: Cost reduction initiatives
Cost reduction initiatives Supply Centralised, further economies Water Increased water recycle rates chain of scale, shared resources consumption up to 85% Increased procurement of Work Renewable Signing long-term, well priced equipment and other supplies practices energy energy PPAs from China Use
Slide 12: Growth opportunities
ANTOFAGASTA @) PLC , Growth opportunitie i
Slide 13: Investment priorities and portfolio roadmap
Investment priorities and portfolio roadmap In periods of lower prices and increasing capital intensity: o Focus on higher return, lower risk brownfield, debottlenecking/ expansion projects o Advance greenfield projects steadily for future development 2014 2015 2016 2017 2018 2019 2020 Key Antucoya
Slide 14: Production growth
Production growth Group Production Profile (‘000s tonnes) 1,000 900 800 700 600 500 400 2013FY 2014E 2015E 2016E 2017E 2018E Base Case (Incl. Esperanza 105ktpd) Antucoya Encuentro Oxides Los Pelambres Expansion o Antucoya and brownfield expansions provide medium term production growth o Production o
Slide 15: Antucoya – on track for 2015 ramp-up
Antucoya – on track for 2015 ramp-up Delivering growth Current status o 85,000 tonnes per annum of o 74% overall project progress (design, production procurement, construction) and 52% o Commence production first half 2015 construction progress as at 31 March 2014 o First full year of production 201
Slide 16: Focus on brownfield expansions
Focus on brownfield expansions Esperanza o Debottlenecking project to reach 105ktpd daily throughput - 20% increase on current level o Project completion in 2015 El Tesoro o Encuentro Oxides will ensure maximum utilisation of existing SX-EW facility from 2016 o Maintain production at nearly 100,000
Slide 17: Longer-term growth in Chile: CMD
Longer-term growth in Chile: CMD o Centinela Mining District includes a portfolio of projects for longer term growth o Esperanza Sur and Encuentro Sulphides combined into single project to reduce capital intensity and maximise value o Currently in pre-feasibility stage, set for completion at the end
Slide 18: Longer-term growth opportunities
Longer-term growth opportunities Los Pelambres o A world class deposit o Current resource base triple the size of the current 23 year mine plan o A full expansion of Los Pelambres could see doubling in current throughput capacity o Full evaluation and permitting will take some time o Critical factor
Slide 19: Exploration success
Exploration success Exploration strategy o Active Chilean and international exploration programmes o JV internationally with partners who have local knowledge o Continue to advance a portfolio of early- stage exploration projects Group total mineral resources (bn tonnes) Exploration 16.2 CAGR: 15.2%
Slide 20: 2014 priorities and investment case
2014 priorities and investment case
Slide 21: 2014 priorities – delivering on the strategy
2014 priorities – delivering on the strategy Existing Core Business o Constant focus on cost management o Delivery of production and cash cost guidance o Continue to get the best possible performance from existing assets Organic & sustainable growth of the Core Business o Progress Antucoya on schedu
Slide 22: Investment case
Investment case High o Competitive cash costs quality o Strong production and resource base assets Cost o Focus on operating and project cost control control o Strong operating margins and capital efficiency Capital o Return of capital to shareholders discipline o Prioritising brownfield projects In
Slide 23: Questions?
Questions?
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