Antofagasta Plc · LSE:ANTO
Antofagasta — FTSE 100 Conference for Private Client Fund Managers (July 2014)
15 slides from Antofagasta's conference presentation, Jul 2, 2014
Slide 1: FTSE 100 Conference for Private Client Fund Managers
FTSE 100 Conference for Private Client Fund Managers LSE – ANTO LN ADR – ANFGY Andrew Lindsay – Director, London Office 2 July 2014 1
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: Company overview
Company overview • Four copper mines in Chile El Tesoro • Market capitalisation (price £7.74) $12.9 billion • Copper production 721,200 tonnes (2013) Michilla Esperanza • Production growth in the last 5 years 65% • Low net cash costs $1.36/lb (2013) • Chilean Luksic family ownership ≈ 65% • 5 year a
Slide 4: Chile
Chile • GDP per capita* $15,452 BOLIVIA • GDP* $269bn • GDP from mining** 11% Antofagasta • Average CPI 2009-2013* 2.4% CHILE • Current CPI** 4.0% (May 2014) • Exports from mining** 57% • World’s largest copper producer ≈ 35% Santiago • OECD member ARGENTINA Pacific Ocean Atlantic Ocean 600km *Sourc
Slide 5: Copper market
Copper market Global copper mine production Global refined copper consumption by country in 2013 by sector market Other Consumer products 16% 9% Transport Chile 13% Construction Zambia 35% 31% 5% DR Congo 6% Russia Industrial 6% machinery 13% Australia 6% China Electrical & United States 10% electro
Slide 6: Pricing environment and outlook
Pricing environment and outlook • LME copper price averaged $3.14/lb* in 2014 • Supply dependent on greenfield projects – YTD (2013 H1: $3.42/lb) can be prone to delays • Concerns over China’s growth and tightening • Exchange stocks are decreasing and rules on collateral financing forecasts of surpl
Slide 7: Financial overview
Financial overview 2009 2010 2011 2012 2013 Revenue ($bn) 3.0 4.6 6.1 6.7 6.0 EBITDA ($bn) 1.7 2.8 3.7 3.9 2.7 Net earnings ($bn) 0.7 1.1 1.2 1.0 0.7 EBITDA margin (%) 56.7 60.6 60.3 57.3 45.3 Copper production (kt) 443 521 641 710 721 Gold production (koz) 35 35 197 300 294 Moly production (kt) 7.8
Slide 8: Operations overview
Operations overview Los Pelambres • Concentrate producer • Large sulphide deposit with extensive resource base • Flagship mine, 5th largest copper mine in the world Esperanza • Concentrate producer • Sulphide deposit with significant gold by-product El Tesoro • Cathode producer • Oxide deposit Michi
Slide 9: Operations overview (cont.)
Operations overview (cont.) Copper Gold Moly Gross cash Net cash Mine life (kt) (koz) (kt) costs ($/lb) costs ($/lb) (years)** 2013 405 57 9 1.52 1.16 Los Pelambres 24 2014 guidance 390 55 7.5 1.55 1.25 2013 175 237 - 2.36 1.43 Esperanza 46 2014 guidance 170 215 - 2.25 1.45 2013 103 - - 1.36 1.36 El
Slide 10: 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 • Antucoya and brownfield expansions provide medium term production growth • Production o
Slide 11: Focus on operating and project cost control
Focus on operating and project cost control In periods of lower prices and increasing capital intensity: • Focus remains on cost control and efficiency throughout the operations • Focus on higher return, lower risk brownfield debottlenecking/ expansion projects • Advance greenfield projects steadily
Slide 12: Antucoya
Antucoya Delivering growth Current status • 85,000 tonnes per annum of production • 74% overall project progress (design, procurement, • Commence production first half 2015 construction) and 52% construction progress as at 31 March 2014 • First full year of production 2016 • $650m project financing
Slide 13: Focus on brownfield expansions
Focus on brownfield expansions Esperanza • Debottlenecking project to reach 105ktpd throughput from 97ktpd • Project completion in 2015 El Tesoro – Encuentro Oxides • Encuentro Oxides will ensure maximum utilisation of existing SX- EW facility from 2016 • Maintain production at nearly 100,000 tpa un
Slide 14: Longer-term growth opportunities beyond 2018
Longer-term growth opportunities beyond 2018 Los Pelambres – long term further Twin Metals, Minnesota expansion • The Group’s most advanced international • A world class deposit opportunity • Current resource base triple the size of the • 2.3 billion tonne resource containing copper, current 23 year
Slide 15: Investment case
Investment case High • Competitive cash costs quality • Strong production and resource base assets Cost • Focus on operating and project cost control control • Strong operating margins and capital efficiency Capital • Return of capital to shareholders discipline • Prioritising brownfield projects In
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