South32 Ltd. · ASX:S32
South32 — Merger or Acquisition (June 2018)
19 slides from South32's merger presentation, Jun 18, 2018
Slide 1: South32 to acquire Arizona Mining in agreed all cash offer
18 June 2018 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 SOUTH32 TO ACQUIRE ARIZONA MINING IN AGREED ALL CASH OFFER South32 Limited (ASX, LSE, JSE:
Slide 2: South32 to acquire Arizona Mining in agreed all cash offer
For personal use only Photos to be sourced from Lion at appropriate time • South32 to acquire Arizona Mining in agreed all cash offer • 18 June 2018
Slide 3: Important notices
Important notices • This presentation should be read in conjunction with the “Financial results and outlook – Half year ended 31 December 2017” announcement released on 15 February 2018, which is available on South32’s website (www.south32.net). For personal use only FORWARD-LOOKING STATEMENTS • Thi
Slide 4: Transaction highlights
For personal use only Transaction highlights Major shareholder and Board approved, fully funded active participant in High grade base metals cash offer for Arizona Mining Arizona Mining over resource open at depth of C$6.20 per share past 18 months and laterally 50% offer premium Cumulative investme
Slide 5: Transaction overview
For personal use only Transaction overview US$1.3B for the shares, warrants and options we don’t already own in Arizona Mining Inc. (TSX:AZ)2 Large and highly prospective Taylor development project Central deposit optionality tenement package Price per share Investment Date Share purchase (C$) (US$M
Slide 6: Key terms and transaction timeline
Key terms and transaction timeline • C$6.20 per share in cash For personal use only • 50% premium based on 20-day volume weighted average price6 Consideration • US$1.3B2 investment funded from cash on hand • Entered into an arrangement designed to manage foreign exchange rate exposure associated wit
Slide 7: Hermosa Project location
Hermosa Project location South32’s Americas footprint For personal use only Attractive Proximate to Positioned for Trilogy Metals mining jurisdiction key infrastructure Atlantic and Pacific Arctic with access to including energy, Bornite customer markets skilled labour road and rail Arizona Mining H
Slide 8: Hermosa Project history
Hermosa Project history Resource1,8 has increased State permits received For personal use only more than 200% in the past 2 years Project is well advanced and remains open at depth and Pathway to development identified laterally ↑ 39% to Maiden Taylor ↑ 133% to 101Mtons1 resource8 resource7 72Mtons8
Slide 9: Hermosa Project overview
Hermosa Project overview Hermosa Project A Taylor deposit For personal use only • Zinc-lead-silver sulphide deposit within patented area • Known resource and development pathway • PEA completed January 2018 (project IRR 48%, pre-production capital US$519M)5 • PEA assumed initial 8 years of productio
Slide 10: Taylor deposit in a global context
Taylor deposit in a global context Zinc cash cost curve (induced CY25) Taylor resource1 versus peers For personal use only 25% 4,000 Existing operations Development projects Red Dog 3,000 20% Taylor deposit Consensus long term zinc11 Dairi Resource Grade in ZnEq US$/t (net of credits) 2,000 Rampura
Slide 11: Taylor deposit resource
Taylor deposit resource Taylor deposit resource statement12 Taylor deposit resource outline For personal use only Classification Mtons Zn (%) Pb (%) Ag (oz/t) ZnEq (%) Measured 15.2 4.0 4.0 1.6 9.6 Indicated 85.8 4.2 4.3 2.2 10.5 Open Measured and Indicated 101.0 4.1 4.3 2.1 10.4 Inferred 43.6 3.9 4
Slide 12: Taylor deposit compares favourably to Cannington
For personal use only Taylor deposit compares favourably to Cannington Taylor deposit (PEA)12 Cannington Well placed to progress and optimise Taylor’s development Mining method Open stoping Open stoping Technical involvement Similar scope to with project Cannington since May 2017 Backfill Paste Past
Slide 13: Central deposit and Hermosa regional prospectivity
Central deposit and Hermosa regional prospectivity Central deposit Hermosa Project regional targets For personal use only • Previously identified development pathway subject to further study • Refinery configuration, metallurgy and recoveries remain a key focus area • An attractive long-term develop
Slide 14: Transaction funding
Transaction funding Capital Management Framework is unchanged since listing For personal use only ROIC US$608M returned to 15 June 2018 Committed to US$1B capital management Scheduled for completion program Competition for excess capital in April 2019 - Investment in the business - Acquisitions - Gr
Slide 15: Transaction summary
For personal use only Transaction summary Major shareholder and Board approved, fully funded active participant in High grade base metals cash offer for Arizona Mining Arizona Mining over resource open at depth of C$6.20 per share past 18 months and laterally 50% offer premium Cumulative investment
Slide 16: Supplementary information
For personal use only • Supplementary information
Slide 17: Previous Mineral Resource estimates
Previous Mineral Resource estimates Taylor deposit (29 November 2016) For personal use only Zn Pb Cu Ag ZnEq Classification Mtons (%) (%) (%) (oz/t) (%) Indicated Mineral Resource 31.1 4.7 4.4 0.1 1.8 10.9 Inferred Mineral Resource 82.7 4.2 4.7 0.2 2.2 11.1 Source: Filed by Arizona Mining Inc on SED
Slide 18: Footnotes
Footnotes Notes: For personal use only 1. Refer to slide 10 for estimates of Mineral Resources for the Taylor deposit, and the Mineral Resources and Ore Reserves section of the Important Notices on slide 2 for further information in respect of the foreign estimates and Arizona Mining’s Mineral Resou
Slide 19: Footnote
For personal use only Footnote SLIDE 18