Mmg Ltd. · HKEX:1208
Mmg — H1 2023 Earnings Presentation
42 slides from Mmg's earnings presentation, Aug 16, 2023
Slide 1: MMG 2023 Interim Results
16 August 2023 MMG 2023 Interim Results
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is intended solely for your personal reference and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organisation/firm) or published, in whole or in part, for any pu
Slide 3: Overview
Overview 2023 First Half Performance Financial Results Strategy and Outlook Question and Answers
Slide 4: 2023 first half in review
2023 first half in review Li Liangang Interim Chief Executive Officer
Slide 5: Safety – our first value
Safety – our first value TRIF1 TRIF MMG 2022/ 2023 Significant Events3,4 TRIF ICMM 5.00 4.7 4.5 4.5 4.50 4.3 3.9 4.00 2023 First Half 3.4 14 6 3.50 3.2 2.9 2.9 3.00 2.7 2.4 2.3 2.50 2.1 1.9 2.00 1.6 2022 Full Year 25 15 1.4 1.50 1.2 1.3 1.2 1.0 1.1 1.00 0.50 0 10 20 30 40 0.00 2013 2014 2015 2016 20
Slide 6: First half 2023 highlights
First half 2023 highlights Copper production Q2 production Dominant Revenue ↑31% increase at all from Copper Zinc production sites compared 5% 1% ↓22% to Q1 5% 5% 8% Revenue Operation cash flow ↑35% ↑216% 76% Record sales in Q2 at Las Bambas US$425.6 million Cu +96%, Mo +42%, Au +86%, Ag +89% Copper
Slide 7: Sustainability
Jarod Sustainability Internal carbon price implemented Rosebery trial of Dugald River hybrid loader solar farm successfully now operational completed US$567 million of US$31 million taxes and royalties of direct social paid to our host spend in our host governments in 2022 communities 7
Slide 8: Peru – community & social
Peru – community & social Transactional basis of relationships no Developing a sustainable model to allow longer sustainable Las Bambas to operate and grow to full capacity Corazón Program Engagement Model Social Management Governance processes Social Investment Model Shared Value Chain Land Purchas
Slide 9: Kinsevere expansion project
Kinsevere expansion project Production ~80kt of Cu and 4-6kt of Co at full capacity Capex US$550-600m, funded by available cash reserves and debt facilities Costs C1 costs to reduce due to higher copper production and a credits from cobalt Construction of cobalt plant in progress 9
Slide 10: Kinsevere expansion project milestones
Kinsevere expansion project milestones Deliver growth through development of our existing portfolio Board TSF 3 Concentrator Sokoroshe II Roaster & Cobalt plant Cobalt Copper Approved pit Acid plant Project Earthwork Earthwork Majority of structural and First copper Preparatory work Construction Fir
Slide 11: Las Bambas – Ferrobamba Deeps
Jarod Further drilling is planned for 2023 and 2024 with ongoing Positive exploration results studies to evaluate the mineralisation and Las Bambas – determine potential mining methods Ferrobamba Deeps including expansion of the open pit and/or an underground development Successfully defined the dep
Slide 12: Rosebery
Jarod Drilling program to continue concurrent Positive exploration results with studies on finding a sustainable long- Rosebery term tailings storage solution, to extend the life of the Rosebery Mine Several intersections including mine lens Accelerated drilling extensions (e.g. Z- program commenced
Slide 13: Financial results
Financial results Ross Carroll Chief Financial Officer
Slide 14: Financial performance
Financial performance Summary Income Statement 2023 2023 Six months ended 30 June (US$ million) vs. 2022 Revenue 1,896.2 35% EBITDA 635.8 (2%) Profit for the year before income tax 9.6 (94%) EBITDA margin 34% (26%) Net cash generated 425.6 216% from operating activities Basic profit per share US (0.
Slide 15: EBITDA waterfall
EBITDA waterfall Notes: 1. Other variance includes FX, corporate costs, exploration costs, etc. 2. Price variances include mark-to-market adjustments on open sales contracts and the impacts of commodity hedging. 15
Slide 16: MMG debt portfolio
MMG debt portfolio MMG Debt Repayment Schedule1 (US$m) MMG effective interest rate2 versus benchmarks as of 30 June 1,200 MLB 18 Yr Project Facility 8% DRM $450m 5 Yr Loan 7.55% CMN Shareholder Loan 6% 6.64% 800 5.74% 5.76% 5.20% 4% 400 2% 0 0% 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 BBB C
Slide 17: Capital expenditure outlook
Capital expenditure outlook Capital Expenditure Capital Intensity of Copper Developments1 US$/t CuEq annual production US$m 1000 30,000 750 20,000 500 Chalcobamba 10,000 250 0 0 KEP 2017 2018 2019 2020 2021 2022 2023e 2021 2022 2023 2024 2025 2026 2027 2028 2029 2023 capital expenditure guidance US$
Slide 18: 2023 earnings sensitivity to commodity price & FX
2023 earnings sensitivity to commodity price & FX High earnings and cash flow leverage to copper and zinc prices Sensitivity EBIT Impact (US$m) Copper US$/lb $0.10/lb / ($0.10/lb) 82/(82) Zinc US$/lb $0.10/lb / ($0.10/lb) 36/(36) Lead US$/lb $0.10/lb / ($0.10/lb) 8/(8) Gold US$/oz $100/oz / ($100/oz
Slide 19: Las Bambas
Copper Production Las Bambas ↑38% One of the world’s largest copper mines with near term organic growth optionality Copper Sales Six Months Ended 30 June 1H 2023 1H 2022 CHANGE % FAV/(UNFAV) ↑96% Production metrics Ore mined 21,374 kt 17,925 kt 19% Revenue Ore milled 25,872 kt 18,039 kt 43% ↑84% Ore
Slide 20: Kinsevere
Copper Production Kinsevere ↓2% Growing to be a ~100kt Copper Equivalent mine once expansion project fully ramped up C1 Six Months Ended 30 June 1H 2023 1H 2022 CHANGE % FAV/(UNFAV) US$3.53/lb Production metrics Ore mined 1,273 kt 407 kt 213% Awaiting completion of Oxide ore mined 270 kt 269 kt 0% K
Slide 21: Dugald River
Zinc Production Dugald River ↓28% A world top 10 producing Zn mine with a >20yr mine life Operation Suspension Six Months Ended 30 June 1H 2023 1H 2022 CHANGE % 34 Days FAV/(UNFAV) Production metrics Safe return to Ore mined 614 kt 851 kt (28%) operations following the (24%) Ore milled 653 kt 856 kt
Slide 22: Rosebery
Ore Mined Rosebery ↑4% Rosebery continues to deliver after almost 90 years of operations Mine Productivity Six Months Ended 30 June 1H 2023 1H 2022 CHANGE % ↑ FAV/(UNFAV) Production metrics Ore mined 442 kt 426 kt 4% Operating expenses Ore milled 441 kt 432 kt 2% ↓24% Ore milled grade – Zn 6.2% 6.4%
Slide 23: Strategy and outlook
Strategy and outlook Li Liangang Interim Chief Executive Officer
Slide 24: Our strategy and vision
Our strategy and vision Our purpose Our mission Our vision Our ambition Grow and diversify our We mine to create We mine for wealth for our people, to create a leading international mining resource, production and value, by leveraging progress host communities and shareholders company for a low carb
Slide 25: Sustainability framework
i framework Health, safety \Y/ — and wellbeing 2% Social engagement & and investment GC EQ) people and culture 25 Environmental stewardship — FOCUS AREAS —— G Climate change action 8) 5 Managing ‘S} environmental impacts os Trusted and responsible producer — FOCUS AREAS — Our products and sustainabl
Slide 26: Products for a changing world
Products for a changing world The metals we mine are uniquely positioned with a portfolio of base metals assets that are critical to a low carbon future. Notes: 1. AET: Accelerated Energy Transition 2. Data source: Wood Mackenzie reports and MMG estimates 26
Slide 27: KEP & Chalcobamba development
KEP & Chalcobamba development Add >150kt CuEq growth by 2025 Kinsevere Annual CuEq Production (kt) Las Bambas Annual Cu Production (kt) 500 120 454 400 100 400 100 385 80 383 305 380 300 330 81 80 80 311 60 68 72 290 48 255 265 200 40 48 49 40 20 100 140 22 0 2016 2017 2018 2019 2020 2021 2022 2023
Slide 28: 2023 interim results Q&A
2023 interim results Q&A | 7‘ %
Slide 29: MMG assets base & 2023 guidance
MMG assets base & 2023 guidance We have a globally diversified portfolio of base metals operations and development projects KINSEVERE (100%) DUGALD RIVER (100%) 2023 production 2023 production guidance: High Lake Izok Lake guidance: 40,000 - 48,000 tonnes 135,000 – 150,000 of copper cathode tonnes 2
Slide 30: Appendix
Appendix
Slide 31: NPAT waterfall
NPAT waterfall Notes: 1. Other variance includes FX, corporate costs, exploration costs, etc. 2. Price variances include mark-to-market adjustments on open sales contracts and the impacts of commodity hedging. 31
Slide 32: 2023 illustrative 'spot' EBITDA & FCF
2023 illustrative ‘spot’ EBITDA & FCF Based on the Updated Mid-Point of 2023 Guidance Illustrative Free Cash Flow Copper Las Bambas Kinsevere Total Copper Total Copper Sales (t) 3 Group Guidance US$m 350,000 44,000 Payable % 2 96.65% 100% Copper EBITDA 1,255.6 Total Copper Payable (t) 338,288 44,000
Slide 33: Profit to MMG equity holders
Profit to MMG equity holders 1H 2023 MMG encountered challenges in the underlying NPAT attributable to equity holders (US$m) 1H 2023 1H 2022 vs. operating and market conditions in the first half of 2023, 1H 2022 including: Profit after tax - Las Bambas 62.5% interest 56.1 17.1 228% • A 34-day suspen
Slide 34: Financial dashboard
Financial dashboard Revenue by Commodity Revenue by Customer Discharge Port 2% 0.1% China 5% Copper 5% 4% South Korea 5% Zinc 6% 1% Dem. Rep. Congo 8% Lead 9% Australia Gold Japan 10% Silver 67% Chile 76% Molybdenum India Other EBITDA by Operating Segment (US$ mn) Operating Expenses Las Bambas 643.0
Slide 35: Historical production performance
Historical production performance Las Bambas – Copper in Copper Concentrate (kt) Dugald River – Zinc in Zinc Concentrate (kt) 178 180 173 150 170 454 147 385 383 305 135 330 311 290 255 265 2016 2017 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 Guidance Guidance Kinsevere – Copper Cat
Slide 36: Profit & loss statement
Profit & loss statement Six Months Ended 30 June 2023 US$ Million 2022 US$ Million Change % Fav/(Unfav) Revenue 1,896.2 1,408.0 35% Operating expenses (1,257.1) (761.8) (65%) Exploration expenses (25.0) (10.8) (131%) Administration expenses (3.3) (5.5) 40% Net other income 25.0 21.8 15% EBITDA 635.8
Slide 37: Balance sheet
Balance sheet US$ Million AS AT 30 JUNE 2023 AS AT 31 December 2022 Non-current assets 10,584.3 10,875.6 Current assets 2,134.5 1,659.9 Total assets 12,718.8 12,535.5 Total equity 4,199.6 4,228.5 Non-current liabilities – other 2116.1 2142.1 Non-current liabilities – borrowings 3,993.5 4,209.6 Curre
Slide 38: Statement of cash flow
Statement of cash flow Six Months Ended 30 June 2023 US$ Million 2022 US$ Million Receipts from customers 1,719.3 1,430.4 Payments to suppliers and employees (1,217.6) (1,061.1) Payments for exploration expenditure (22.5) (10.8) Income tax paid (35.6) (212.0) Net settlement of commodity hedges (18.0
Slide 39: MMG overview
MMG overview Overview Broker Coverage Broker Name Founded in 2009 Headquarters in Melbourne and Beijing Citi Jack Shang HSBC Howard Lau A diversified metals company BOCI Research Lawrence Lau Four operating mines in Australia, Peru and DRC Goldman Sachs Joy Zhang MMG’s flagship asset Las Bambas - a
Slide 40: Mineral resources
Mineral resources Copper and Zinc Mineral Resources of 11.2Mt and 11.0Mt Respectively Mineral Resources Contained Metal (100% Asset Basis) as at 30 June 2022 Project Copper (kt) Zinc (kt) Lead (kt) Silver (moz) Gold (moz) Molybdenum (kt) Cobalt (kt) Las Bambas 9,000 140 2 240 Kinsevere 1,204 52 Duga
Slide 41: Ore reserves
Ore reserves Copper and Zinc Ore Reserves of 6.2Mt and 2.7Mt Respectively Ore Reserves Contained Metal (100% Asset Basis) as at 30 June 2022 Project Copper (kt) Zinc (kt) Lead (kt) Silver (moz) Gold (moz) Molybdenum (kt) Cobalt (kt) Las Bambas 5,500 81 1.2 130 Kinsevere 800 29 Dugald River 2,292 314
Slide 42: Thank you
Thank you