Slide 1: 2019 Annual Results
2019 Annual Results 5 March 2020
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 Geoffrey Gao, CEO 2019 full year highlights Ross Carroll, CFO Financial results Geoffrey Gao, CEO Strategy and outlook Questions and Answers 3
Slide 4: 2019 in review
2019 in review Geoffrey Gao Chief Executive Officer
Slide 5: 2019 Annual Review
2019 Annual Review Safety Focus Continued focus on safety and a culture of zero harm. Lower commodity prices and sales volumes, operational challenges and Full Year an impairment at Kinsevere drove a full year loss attributable to equity Loss holders of US$230.4 million. Revised mid-range Forecast p
Slide 6: Safety, Environment and Social Performance
Safety, Environment and Social Performance Safety performance Safety – our first value. 5.1 4.7 We continue to strive towards an injury 4.5 4.5 4.3 and incident free workplace. 4.1 3.9 Low Total Recordable Injury Frequency 3.4 (TRIF1) rate compared with ICMM2 3.0 member companies. 2.4 2.3 2.1
Slide 7: Business excellence
Business excellence Whole of business transformation MMG company-wide transformation program underway. Reorganisation has reduced overhead and Optimised structure, lower costs and empowering our people to add value. focussed on Lean corporate office with significant (~50%) headcount reduction
Slide 8: Peru Logistics & Las Bambas Social Challenges
Peru Logistics & Las Bambas Social Challenges Social protests impacted outbound product delivery for over 100 days during 2019 and also temporarily extended to in-bound supply logistics. Approximately 50kt of copper stockpiled on site at 31 December to be progressively shipped over the first hal
Slide 9: Financial results
Financial results Ross Carroll Chief Financial Officer
Slide 10: Financial performance
Financial performance 2019 Key Financial Metrics (US$ million) 2019 2018 v 2018 Income Statement (continuing operations)1 Revenue 3,032.3 3,670.2 (17%) EBITDA 1,461.5 1,751.2 (17%) Underlying (loss)/profit after tax (90.3) 136.6 (166%) Impairment expense (net of income tax benefit) (105.0) - (100%)
Slide 11: EBITDA waterfall FY19 v FY18
EBITDA waterfall FY19 v FY18 * Relates to change in accounting methodology for stripping activity at Las Bambas. 11
Slide 12: Underlying profit to MMG equity holders
Underlying profit to MMG equity holders 2019 NPAT attributable to equity holders 2019 2018 v MMG remains focused on improving (US$m) 2018 financial and operational performance Profit After Tax - Las Bambas 62.5% interest 58.5 119.6 (51%) in FY20 and driving returns to (Loss)/profit After Tax - Oth
Slide 13: Earnings sensitivity
Earnings sensitivity High earnings and cash flow leverage to copper and zinc prices Estimated impact on FY20 underlying EBIT from changes in commodity prices and currency3 1. AUD:USD FX exposure relates to FX gain/loss on production expenditure at Rosebery and Dugald River and administration expen
Slide 14: Debt reduced by US$511 million in 2019
Debt reduced by US$511 million in 2019 MMG has developed and commissioned two of the largest greenfield copper and zinc projects globally Key Projects 2020 Cost over the past 4 years. (est.) Growth has been largely debt funded. Chalcobamba development ~US$86 million Since commercial production
Slide 15: Debt maturity profile
Debt maturity profile Scheduled term debt repayments of US$591.4 million in FY2019 Average outstanding maturity profile now ~4.6 years Discussions underway to address shareholder loan repayment in 2021. Debt repayment schedule1 (US$m) 1. Principal and interest payments including Joint Venture
Slide 16: Las Bambas overview
Las Bambas overview 2019: EBITDA: U$1,237.1 million. Copper production of 382.5kt for the year, in line with revised guidance. Over 100 days of community disruption – resulted in lost production of ~20,000 tonnes and reduced sales volumes of ~70,000 tonnes. Las Bambas has been established as o
Slide 17: Dugald River overview
Dugald River overview 2019: EBITDA: US$108.7 million. Zinc production of 170kt for the mine’s first full year of commercial production. Continued performance of the mill in excess of nameplate capacity. GUIDANCE: Dugald River is a world top 10 producing Zn mine with a >20yr mine life 2020 zi
Slide 18: Rosebery overview
Rosebery overview 2019: EBITDA: US$125.9 million. 1mt+ mining and milling volumes for second consecutive year. 10% increase in zinc production to 83.5kt, but lower lead, gold and sliver production. Rosebery continues to perform as it enters its 86th year of operations GUIDANCE: 55-65kt of zi
Slide 19: Kinsevere overview
Kinsevere overview 2019: EBITDA: US$44.8 million. 68kt of copper cathode production. Increased material movement, and operational challenges at Mashi pit during H1. GUIDANCE: Kinsevere has established MMG’s regional credentials and operational 68-75kt of copper cathode in 2020. experience
Slide 20: 2020 Strategy and Outlook
2020 Strategy and Outlook Geoffrey Gao Chief Executive Officer
Slide 21: Fundamentals remain strong
Fundamentals remain strong Mined copper supply gap and requirement for new capacity MMG’s unique insights into China and understanding of China fundamentals provides competitive advantage and underpins our commodity outlook. 6.0Mt of new mine production Attractive fundamentals remain despite sho
Slide 22: MMG: 10 years on…
MMG: 10 years on… “The right time to conduct a strategic and systemic review of the business to deliver a step change in operational performance and business costs and ensure a sustainable platform to deliver growth” Maximise benefits of a decentralised operating 1. Optimise Overheads and Improve Ef
Slide 23: Outlook
Outlook • 418 – 445kt of copper. • Strong underlying • Commissioning of 3rd ball • 225 – 245kt of zinc. market fundamentals. Mill and Chalcobamba at Las Bambas. • Particularly copper, with promising H2 outlook. • Kinsevere sulphide/cobalt feasibility study and brownfield exploration. • Completion of
Slide 24: Appendix
Mprocress IVEIVIG
Slide 25: MMG asset base and 2020 guidance
MMG asset base and 2020 guidance We have a globally diversified portfolio of base metals operations and development projects HIGH LAKE IZOK LAKE LAOS HONG KONG VIENTIANE LAS BAMBAS (62.5%) DUGALD RIVER (100%) 2020 production guidance: 2020 production guidance: 350,000 to 370,000 tonnes of DRC 170,00
Slide 26: Free cash flow sensitivity to copper and zinc
Free cash flow sensitivity to copper and zinc Illustrative Free Cash Flow (US$ million) for FY20 at different copper and zinc prices* Copper Price – US$/lb 2.70 2.80 2.90 3.00 3.10 3.20 0.90 285 347 409 470 532 594 1.00 314 376 438 499 561 623 Zinc Price – US$/lb 1.10 343 405 467 528 590 652 1.20 37
Slide 27: Capitalising waste removal cost
Capitalising waste removal cost OPEN PIT MINES ORE VS. WASTE Whole Pit Waste material needs to be removed in order to access ore. Example: for every one ton of ore, Phases within two tons of waste removal may be needed. the pit NORMAL WASTE REMOVAL Normal waste removal is necessary to extract ore in
Slide 28: Change in calculation methodology for waste removal cost capitalisation
Change in calculation methodology for waste removal cost capitalisation Las Bambas “Ferrobamba” mine pit has 8 distinct phases MMG’s updated approach to capitalisation MMG’s previous approach to capitalisation • Estimate ‘normal’ waste removal for each phase individually • Estimate ‘normal’ waste re
Slide 29: Cost-curve and share price performance
Cost-curve and share price performance C1 copper cost curve (2020)1 C1 zinc cost curve (2020)1 1. Wood Mackenzie Q4 2019 Composite C1 Cash Cost Curve 29
Slide 30: Excellence in project delivery and ramp up
Excellence in project delivery and ramp up Ramp up profiles of greenfield copper concentrators1 Ramp up profiles of greenfield zinc concentrators1 120% 140% H1 2019 flooding event 120% Mill throughput % of installed Capacity Mill throughput as % of installed Capacity 100% 100% 80% 80% 60% 60% 40% La
Slide 31: Financial dashboard
Financial dashboard Revenue by commodity Revenue by customer location 1% 5% China 4%3% 14% Zinc 6% Copper Japan and 27% Korea Gold 44% Asia (other) Silver Lead Australia 2% Moly Europe 19% 3% 72% Other EBITDA by operating segment Operating expenses (sites) 7% People 8% 7% 3% 15% 7% External Dugald R
Slide 32: Las Bambas 2019 performance
Las Bambas 2019 performance Key highlights: Financials Revenue of US$2,013.0 million 22% lower, due to lower US$ million 2019 2018 % commodity prices and the impact of community actions that blocked logistics routes and limited sales volumes. Revenue 2,013.0 2,578.6 (22%) Copper ore grades mille
Slide 33: Kinsevere 2019 performance
Kinsevere 2019 performance Key highlights Financials Full year production of 67,935 tonnes of copper cathode. This US$ million 2019 2018 % 15% reduction on prior year reflected unfavourable grades, challenging operating conditions and a 48% increase in waste Revenue 406.7 516.4 (21%) movement. Imp
Slide 34: Rosebery 2019 performance
Rosebery 2019 performance Key highlights Financials Revenue decreased by 17% to US$272.8 million compared US$ million 2019 2018 % to 2018, largely due to lower gold and sliver sales volumes Revenue 272.8 328.7 (17%) and lower lead and zinc prices. EBITDA 125.9 171.6 (27%) Total production expens
Slide 35: Dugald River 2019 performance
Dugald River 2019 performance Key highlights Financials First full year of commercial production, with results achieved US$ million 2019 2018 % in spite of lower average zinc and lead prices and operation Revenue1 336.0 247.3 36% challenges in Q1 associated with flooding. EBITDA1 108.7 87.6 24%
Slide 36: Profit and Loss Statement
Profit and Loss Statement 2019 2018 Year ended 31 December US$ million US$ million Revenue 3,032.3 3,670.2 Operating expenses (1,558.8) (1,862.8) Exploration expenses (37.7) (47.5) Administration expenses (23.3) (35.8) Other income / (expenses) 49.0 27.1 EBITDA 1,461.5 1,751.2 Depreciation and amort
Slide 37: Balance Sheet
Balance Sheet US$ million 31 Dec 2019 31 Dec 2018 Non-current assets 11,602.5 11,982.6 Current assets – cash and cash equivalents 217.5 601.9 Current assets – other 845.1 670.9 Total assets 12,665.1 13,255.4 Total equity 2,677.9 2,896.3 Non-current liabilities – other 1,625.3 1,486.8 Non-current lia
Slide 38: Statement of Cash Flow
Statement of Cash Flow Year ended 31 December 2019 2018 US$ million Receipts from customers 3,470.8 4,262.1 Payments to suppliers and employees (2,090.4) (2,392.9) Payments for exploration expenditure (37.7) (47.5) Income tax paid (197.6) (90.2) Net cash generated from operating activities 1,145.1 1
Slide 39: MMG overview
MMG overview Overview Founded in 2009, MMG is a diversified base metals company with four operating mines located across four continents Broker Coverage Headquartered in Melbourne (Australia), with a primary listing on the Broker Name HKEx (1208 HK). Argonaut Helen Lau Primary exposure to copp
Slide 40: Mineral Resources
Mineral Resources Copper and zinc Mineral Resources of 12.6Mt and 11.1Mt respectively Mineral Resources – Contained Metal (100% asset basis) As at 30 June 2019 Copper (Acid Project Copper Zinc Lead Silver Gold Molybdenum Cobalt Soluble) kt kt kt kt moz moz Kt Kt Las Bambas 10,613 148 2.2 286 Kinseve
Slide 41: Ore Reserves
Ore Reserves Copper and zinc Ore Reserves of 6.9Mt and 3.2Mt respectively Ore Reserves – Contained Metal (100% asset basis) As at 30 June 2019 Copper (Acid Project Copper Zinc Lead Silver Gold Molybdenum Soluble) kt kt kt kt moz moz kt Las Bambas 6,560 94 1.6 191 Kinsevere 307 252 Dugald River 2,854
Slide 42: “erouress EMEIVIG
AA “erouress EMEIVIG