Volcan Compania Minera S.a.a. Class A · BVL:VOLCAAC1
Volcan Compania Minera S.a.a. Class A — Santander XXVI Latin American Conference (January 2022)
29 slides from Volcan Compania Minera S.a.a. Class A's conference presentation, January 2022
Slide 1: Volcan Compañía Minera
Volcan Compañía Minera Santander – XXVI Latin American Conference January 2022
Slide 2: Disclaimer
Disclaimer Some statements contained in this presentation or in documents referring to this presentation may contain inaccuracies. No reliance for any purpose whatsoever may be placed on the information or opinions contained in this presentation or on the completeness of this presentation. Volcan Co
Slide 3: Agenda
Agenda 1 Overview 2 Operations & Financial Results 3 Growth Strategy 4 Energy and Chancay Port 3
Slide 4: Volcan overview
Volcan overview Volcan is a Leading Producer of Zinc, Silver and Lead PASCO • Operations in most prospective polymetallic region of Zinc Metal 2019 (000’ MT) Peru 1,160 Glencore • R&R as of December 2020* Hindustan Zinc 724 • Reserves: 28 m tonnes Teck 635 • Resources: 618 m tonnes Nexa 333 Boliden
Slide 5: Volcan Strategic Overview
Volcan Strategic Overwiew Operations Capital Structure • Key mining units => growth: San Cristóbal-Carahuacra, Andaychagua, Animón • Key projects => construction: Romina, start production by 2S24 • Non-strategic => ensure profitability and close studies: Ticlio, Alpamarca, Islay • Specials=> evaluat
Slide 6: Exploration strategy
Exploration strategy Objectives: Brownfield 1. Upgrade Volcan’s resource base 15% Advanced 2. Guarantee the LOA with 2-2-4 drilling strategy: Projects 2 years measured resources, 2 years indicated resources and 4 years 7% Zoraida inferred resources North Cluster Carhuacayan South Cluster 3. Continue
Slide 7: Safety
Safety LTIFR S FE W RK (Lost Time Injury Frequency Rate) Program to eliminate fatalities and 1.5 1.2 1.3 1.1 improving our safety performance. 0.8 0.8 2016 2017 2018 2019 2020 2021 ✓ Clear standards defined in the Fatal Hazard protocols DISR ✓ Life-Saving Behaviors expected from everyone (Disabling
Slide 8: Environmental
Enviromental The environmental management system in Volcan is focused on the management of the Environmental Critical Risks, allowing to establish "standards" and apply good environmental practices Tailing Dam Adequacy and Assurance Program ✓ Adequacy according to the guidelines of Canadian Dam Acci
Slide 9: Communities
Communities 25 Communities across 3 territories Chungar Cerro de Pasco 2x communities 11x communities and 5 sites Pasco Key community programs: • Health • Anemia prevention • Medical checks • Oxygen plants • Education • Teachers training programs • Economic Development Alpamarca-Romina Lima • Cattle
Slide 10: Agenda
Agenda 1 Overview 2 Operations & Financial Results 3 Growth Strategy 4 Energy and Chancay Port 10
Slide 11: Production
Production Zinc Production (k fmt) Silver Production (MM oz) 273 255 241 239 215-225 167 22 17 17 16 14-16 12 2016 2017 2018 2019 2020 2021e 2016 2017 2018 2019 2020 2021e Lead Production Gold Production (k fmt) (MM oz) 22 22 - 25 52 51 55-57 47 49 41 12 11 8 2016 2017 2018 2019 2020 2021e 6 Copper
Slide 12: Production cost
Production cost Explanations of unit cost increase: Annual Unit Cost ✓ Increase in mining preparations (USD/MT)1 ✓ Greater maintenance of liabilities ✓ Increase in the prices of oil and its derivatives, and other important inputs for operations. ✓ Protocol costs for Covid-19 ✓ Higher transportation
Slide 13: CAPEX and exploration disbursement
CAPEX and exploration disbursement Mining CAPEX (USD MM) Exploration disbursements and DDH 263 281 209 210 129 23 83 17 180-190 17 7 190 181 192 116 118 6 7 22 23 20 10 13 9 2016 2017 2018 2019 2020 2021e 2016 2017 2018 2019 2020 2021 Regional exploration (USD MM) 50.0 0.0 exploration (USD MM) Local
Slide 14: Sales y EBITDA
Sales y EBITDA Jan-Sep Sales prices 2016 2017 2018 2019 2020 2021 Zn (USD/MT) 2,077 2,836 2,917 2,539 2,280 2,871 Pb (US$/TM) 1,858 2,311 2,245 1,978 1,855 2,173 Cu (US$/TM) 4,901 6,148 6,464 6,022 6,074 7,940 Ag (USD/Oz) 17.0 17.1 15.7 16.1 21.4 26.2 Au (US$/Oz) 1,234 1,262 1,265 1,387 1,773 1,817
Slide 15: Leverage & Liquidity
Leverage & Liquidity Net Debt / EBITDA Cash Balance (MM USD) 151.1 +60.0 -17.4 -16.6 -55.1 +51.7 177 +39.4 115 Cash balance Operations flow Operations flow Operations flow Growth and Financial Interests Cash balance 31.12.20 1Q21 2Q21 3Q21 other obligations 30.09.21 investments Net Debt/EBITDARatio
Slide 16: Agenda
1 Overview 2 Operations & Financial Results 3 Growth Strategy 4 Energy and Chancay Port 16
Slide 17: Growth Strategy
Growth Strategy 5.Feasibility Positive & reserves Prospective (Advanced) Scope CERRO DE PASCO 4.Pre-feasibility/Scoping/Venture& Measured, NORTHERN CLUSTER resource generation indicatedand inferredresources ANIMON Islay Romina 3.Resource Discovery Santander delineation Carhuacayan ALPAMARCA SOUTHERN
Slide 18: Romina Project
Romina Project ✓ Located about 200 km from the city of Lima, very close to the Alpamarca unit ✓ R&R of 14.5 m tm only in the Puagjanca body ✓ Estimated start of operations by the end of 2024 ✓ Estimated production for the first 13 years: 442 thousand mt of Zn, 248 thousand mt of Pb and 12.5 million
Slide 19: Advanced Projects & Southern Cluster Brownfield Exploration
Advanced Projects & Southern Cluster Brownfield Exploration Carhuacayán – La Tapada (Alpamarca) • Scoping study in progress • Resources 10.1Mt @ 3.4%Zn, 1.4%Pb, 1.4oz.Ag/t (Indicated & Inferred) • 2022 ddh plan 5km to increase resources by 2.0 Mt La Tapadaore body • La Tapada body is open at depth S
Slide 20: Northern Cluster Brownfield Exploration
Northern Cluster Brownfield Exploration Animon currentoperation • Cuerpo Esperanza (Animón) • 2019 discovered Esperanza ore body – high grade replacement mineralization Tertiary red belt rocks (Casapalca) 600m • Located 600m below the current operating area, in limestone rocks • Potential 29Mt @ 8.6
Slide 21: Greenfield Exploration
Greenfield Exploration Objectives Find new significant zinc deposits Reduce ground holdings by cycling Licences through exploration or divestment/partnership Strategy Complete regional-scale geophysical and alteration mapping to obtain consistent coverage of most Licence areas Follow primary regiona
Slide 22: Agenda
Agenda 1 Overview 2 Operations & Financial Results 3 Growth Strategy 4 Energy and Chancay Port 22
Slide 23: Energy Operations
Energy Operations Rucuy Hydroelectric Plant +100 MW hydroelectric energy portfolio ‒ 11 Hydroelectric Plants (23 MW) connected to Chungar ‒ 2 Hydroelectric Plants (40 MW) connected to the national grid ‒ 45 MW in projects: Tingo expansion (15 MW), CCHHs Chancay (30 MW) Jan-Sep Electric Balance (GWh)
Slide 24: Chancay Port Project
Chancay Port Project First stage of the Chancay Multipurpose Port Terminal: • Strategic location: 80 km north from Lima in the bay of Chancay. The bay has exceptional natural features for a port ✓ 2 multipurpose docks ✓ 2 container docks • Capacity to handle Triple E vessels ✓ entrance complex • Int
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Slide 26: Annexes
Annexes VoLcAN
Slide 27: Volcan timeline
Volcan timeline Volcan placed 10 years Volcan acquired Empresa corporate bonds totaling Volcan began its Minera Paragsha S.AC, USD 600 MM at a fixed Glencore acquired Volcan signed an operation in owner of Cerro de Pasco rate of 5.375% 55% of Class A agreement to sell Ticlio mine mine, Paragsha plan
Slide 28: Bonds and Credit Ratings
Bonds and Credit Ratings International Bond Emission ✓ USD 600 MM issued in February 2012 ✓ USD 475 MM issued in February 2021 ✓ Outstanding amount: USD 410 MM ✓ 4.375% due February 2026 ✓ 5.375% due February 2022 Credit Ratings BB B1 28
Slide 29: Stock Market Highlights
Stock Market Highlights 1 Class A Shares 1: Full voting rights Stock Market Listings Shares outstanding: 1,633,414,553 469 shareholders Lima Since 1956 Madrid (Latibex) Since 2000 Santiago Since 2007 Class B Shares 2: Div. premium of 5% over Class A Shares outstanding: 2,443,157,622 7,751 shareholde
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