Southern Copper Corporation · NYSE:SCCO
Southern Copper — Investor Presentation (March 2010)
22 slides from Southern Copper's investor presentation, March 2010
Slide 1: Southern Copper Corporation
Southern Copper Corporation March 2010 0
Slide 2: I. Introduction
I. Introduction 1
Slide 3: Management Presenters
Management Presenters Presenters Title Raúl Jacob Manager of Financial Planning & IR 2
Slide 4: Corporate Structure
Corporate Structure 80.0% (*) Public Float 20.0% (*) 99.29 % 99.95 % SCC Peru Branch Minera México (*) As of December 31, 2009 3
Slide 5: Metal Market
Metal Market Copper Molybdenum Short Term • World copper demand drops by 6.6% in 2009 (CRU). • 92% of world reserves and production capacity are Chinese restocking and SBR purchases (235K) avoided a 17% concentrated in: USA, China, Mexico, Peru and decrease. Chil Chile. • 2010: China copper demand:
Slide 6: Copper Plays Strong Role in Infrastructure
Copper Plays Strong Role in Infrastructure 2009 World Copper Consumption 2008 World Refined Copper by Region Consumption by End-use Consumer Transport Japan Products Equipment All Other 5% 9% 12% 8% Industrial Machinery p Europe 9% 21% Asia Ex China 21% USA 9% Building Electrical 28% 42% China 36% S
Slide 7: World Copper Consumption by Region
World Copper Consumption by Region 2008 2009 Japan Japan All Other All Other 7% 5% 8% 8% Europe 21% Asia Ex China A i EEx Chi Asia China Europe 21% 21% 26% USA 9% USA China 11% China 27% 36% Source: CRU Jan 2010 Source: CRU Feb 2009 6
Slide 8: Southern Copper Strengths
Southern Copper Strengths Highest copper reserves in the mining industry Excellent organic growth projects Low cost fully integrated operations Experienced management team Strong financial performance / investment grade Outstanding dividend history Good long-term copper & molybdenum fundament
Slide 9: II. Overview of Operations
/ Il. Overview of Operations > *
Slide 10: Company Overview
Company Overview Copper Reserves 1: 55.8 mmt Mexico Production capacity: 650 ktpy Cananea Santa Eulalia La Caridad For 2009 Santa Barbara San Martin Copper Production: 485 kt Charcas San Luis Potosi Sales: $33,734 734 M Taxco EBITDA: $ 1,814 M Peru Cash Cost: $ 0.36 / lb. Key #1 copper company by re
Slide 11: Long Life Reserves
Long Life Reserves World’s largest copper reserves Strong capacity expansion plans - Lower capital needs for reserve replenishment will translate into additional capital to fund growth Reported Copper Reserves SCC Copper Reserves 60 55.8 52.6 50 eserves (Mt) eserves (Mt) 40 37.5 80 70 69.3 30 27
Slide 12: Geographic Footprint & Product Diversification
Geographic Footprint & Product Diversification 2009 Revenue by Product 2009 Revenue by Product & Market Other Acid Zinc 3% 2% 5% Europe Silver Asia 24% 7% 8% Peru 3% Molybdenum y United States 12% 28% Mexico Copper 23% 71% Other Latin American 14% 11
Slide 13: Low Cost Operations
Low Cost Operations Cash Costs per pound of Copper Low Cost Drivers Produced Net of By-Products 0.7 0.55 Fully y integrated g low cost operations p 0.5 0.36 0.42 0.36 World class assets 0.3 (US$/lb) 0.12 Significant SX-EW production 0.22 0.1 -0.1 01 Strong by-product credits -0.25 2007 2008
Slide 14: Operational Update - Cananea Minesite
Operational Update - Cananea Minesite Highlights Operating Capacity Largest mine in Mexico Key Metals: Copper Fourth largest copper mine worldwide in Concentrator Co ce a o Capac Capacity: y 125 5 ktpd pd t terms off reserves ((similar i il tot Escondida) E did ) Recent LOM study shows operati
Slide 15: Expansion Projects
Expansion Projects Ilo (Smel + Ref) Developing Expansion Pipeline Cananea La Caridad SX/EW III Expansion Cananea El Arco B Buenavista i t Toquepala Cuajone Concentrator Mine Tia María Expansion Concentrator Concentrator New Cananea Angangueo SX/EW Expansion Expansion Cananea Concentrator Zinc Moly &
Slide 16: III. Financial Overview
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Slide 17: SCC Financial Summary
SCC Financial Summary 2009 (US$ MM) 2007 2008 2009 1Q 2Q 3Q 4Q Copper Price (LME) US$ per pound 3.23 3.16 2.33 1.56 2.11 2.65 3.02 Income Statement: Net Revenues $6,086 $4,851 $3,734 $622 $825 $1,152 $1,136 EBITDA 3,766 2,546 1,814 225 380 592 616 EBITDA Margin 62% 52% 49% 36% 46% 51% 54% Net Income
Slide 18: Solid Financial Performance
Solid Financial Performance Among the highest EBITDA margins and strongest leverage ratios in the metals & mining industry 2009 EBITDA Margin (%) 2009 Net Debt/ EBITDA (x) 1 Antof agasta 60% 1 Antof agasta 0.3x p Freeport 50% Southern S th 0.3x Copper Southern SCC 4Q09 49% EBITDA Margin Copper BHP B
Slide 19: Capital Expenditure Forecast (US$M)
Capital Expenditure Forecast (US$M) $1,400 $107 $1,200 $199 $1,000 $800 $600 $1,242 $400 $802 $752 $524 $200 $414 $180 $120 $0 2008 2009 2010E 2011E 2012E 2013E 2014E Source: SCC 18
Slide 20: SCC Debt Amortization Schedule
SCC Debt Amortization Schedule Milli Millions off USD as off D December, b 2009 Strong liquidity & no significant amortizations due until 2015 $1 000 $1,000 $200 $56 $10 $10 $10 $10 $10 2009 2010 2011 2012 2013 2015 2028 2035 Mitsui Yankee Bonds 10 & 30 year Bonds 19
Slide 21: SCC's Major Strengths
SCC’s Mayor Strengths World-class reserves and exploration prospects –Increase copper production, reserves and continue exploration –Growth financed with internal cash generation after optimizing the debt structure Fully integrated low cost operations –Strategic investments focused on cost reduct
Slide 22: Safe Harbor Statement
Safe Harbor Statement This presentation contains certain statements that are neither reported financial results nor other historical information. information These estimates are forward-looking for ard looking statements within ithin the meaning of the safe-harbor provisions of the Mexican securitie