Antofagasta Plc · LSE:ANTO
Antofagasta — FY2021 Earnings Presentation
40 slides from Antofagasta's earnings presentation, Feb 22, 2022
Slide 1: Developing mining for a better future: 2021 Preliminary Results
Developing mining for a better future 22nd February 2022 2021 Preliminary Results
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: Agenda
Agenda 1 Overview 2 Financial review 3 Sustainability performance 4 Growth opportunities 3
Slide 4: Overview
Overview 2021 Preliminary Results Iván Arriagada | Chief Executive Officer 4
Slide 5: The Antofagasta investment case
The Antofagasta investment case A reliable producer with embedded growth High quality assets Four mines in two “world-class” districts in Chile Production growth Large and growing resource base Sustainability Strict safety and health Financial position controls Strong balance sheet Create economic v
Slide 6: Developing mining… 2021 Highlights
Developing mining… 2021 Highlights Safety Operations Financial Our first priority Reliable performance Record EBITDA • In July, regrettably a contractor • Main challenges: COVID-19 and • Revenue of $7.5 billion, reflecting suffered a fatal accident drought in central Chile the high copper price • Re
Slide 7: … for a better future: 2021 Highlights
… for a better future 2021 Highlights Environment Communities Growth opportunities Climate change Key stakeholders Creating value • Copper is part of the solution • Dialogue based engagement, not • Continued to advance the growth • New emission reduction (-30% transactional projects which will come
Slide 8: 2022 Guidance: Drought impact continues at Los Pelambres
2022 Guidance Drought impact continues at Los Pelambres Copper production guidance Group production (kt) Los Pelambres Assumptions Guidance 178 722 168 162 164 660-690 147 • Copper production is expected to 44 115 increase quarter on quarter 79 53 0.70 0.70 throughout the year 0.66 0.65 0.66 0.63 78
Slide 9: Copper market
Copper market Fundamentals are strong and supportive of future prices Supply outlook Copper price and exchange stocks • Expected to grow just in line with demand during 2022 c/lb Thousand Tonnes • Continued falling grades and increasing ore hardness 550 1,000 Thousands • Scarcity of major new projec
Slide 10: Current political and fiscal events in Chile
Current political and fiscal events in Chile Providing a basis for greater social cohesion New government elected Proposed new mining royalty Constitutional Convention • Takes office on 11 March • Chamber of Deputies proposal • Established July 2021 • Gabriel Boric elected President May 2021 • Have
Slide 11: Financial review
Financial review 2021 Preliminary Results Mauricio Ortiz| Chief Financial Officer 11
Slide 12: 2021 financial highlights
2021 financial highlights Record EBITDA and strong shareholder returns Revenue Net cash costs EBITDA EBITDA margin1 $7.5 bn $1.20/lb $4.8bn 65% ↑ 46% ↑ 5% ↑ 77% ↑ 11 ppt Underlying earnings Balance sheet ROCE Dividends per share Net cash 142.5 c/share 142.5 c/share 33% ↑ 161% $540m ↑ 17 ppt ↑ 161% ↑
Slide 13: Production and cash costs
Production and cash costs Cost pressure offset by by-products credits Copper production -12.5 kt (-2%) 734.0 kt 12.7 2.9 721.5 kt (3.7) (0.3) (24.1) FY 2020 Grades Throughput Recovery Work-in-progress ROM/Others FY 2021 & inventories Cash costs +$0.06/lb (+5%) 0.10 0.05 0.02 $1.79/lb $1.56/lb 0.10 (
Slide 14: EBITDA and margin
EBITDA and margin Underpinned by higher commodity prices 2 $ million and % 53% + 11.3 ppt 65% +$2,097m 2,303 77 6 $4,836m (277) (18) (11) $2,739m 17 2020 FY1 Sales volumes Realised Mining costs Exploration Corporate Associates Transport 2021 FY 1 EBITDA and TC/RCs prices & evaluation costs & non & J
Slide 15: Net cash
Net cash Strong balance sheet $ million $622m 4,667 (159) (777) 143 (1,778) (53) (53) (605) Subsidiaries’ minorities Antofagasta Shareholders (711) $540m (1,316) (52) $(82)m Net cash/ EBITDA Working Tax Capex Net interest Other Dividends Dividends Others Net cash/ (debt) from capital non-cash from (
Slide 16: Expanded capital allocation framework
Expanded capital allocation framework Integrates climate factors • Economic outlook Macro • Various copper price scenarios Operating Cash Flow Perspective • Future capital expenditures Value Optimisation • Approved projects and those Sustaining Capex & Mine Development under evaluation Committed Div
Slide 17: Robust EBITDA converts into dividends
Robust EBITDA converts into dividends Policy unchanged, record of strong returns to shareholders c/lb and % 65% 55% 53% 49% 4.37 EBITDA Margin 47% 2021 3.00 2.81 2.75 2.98 1.29 65% 1.25 1.22 1.14 1.20 2017 2018 2019 2020 2021 Net cash costs Realised prices Group EBITDA Margin c/share 142.5 100% 100%
Slide 18: 2022 Guidance: Cash costs and capital expenditure
2022 Guidance Cash costs and capital expenditure Cash costs +$0.35/lb • Net cash costs of $1.55/lb 0.10 $1.55/lb • Increase primarily due to: 0.14 0.11 $1.20/lb o lower copper and by-products production at Los Pelambres and Centinela o higher input prices, particularly acid Net cash Copper By-produc
Slide 19: Sustainability performance
Sustainability performance 2021 Preliminary Results René Aguilar| Vice President of Corporate Affairs and Sustainability 19
Slide 20: Safety and health
Safety and health The safety and health of our people is our top priority 316 2021 safety and health performance 217 • In July 2021 regrettably a contractor suffered a fatal accident in the open pit at Los Pelambres 86 • High Potential Incidents decreased by 28% 1.61 1.59 65 1.53 • COVID-19: high va
Slide 21: Communities
Communities Creating shared value EnRed: digital community North: local suppliers Technical Training Centre • Integrates communities in a • Train business people and • Building capacities and process of digital transformation entrepreneurs to boost generating opportunities for • Focus on connectivit
Slide 22: Climate change
Climate change Committed to emissions reduction and efficient water use Climate change strategy GHG emissions management Water • 30% reduction by 2025 compared to 2020 • Completing desalination plant phase 1 at • Carbon neutral by 2050 or earlier Los Pelambres in H2 2022 • Electricity supply: 100% r
Slide 23: Growth opportunities
Growth opportunities 2021 Preliminary Results Iván Arriagada| Chief Executive Officer 23
Slide 24: Reliable and responsible copper producer
Reliable and responsible copper producer With embedded growth portfolio 120 ktpa Cu 50 ktpa Cu Sized to 50 ktpa 35 ktpa Cu for illustrative Zaldívar 15 ktpa Cu purpose only Primary sulphides Centinela 2nd Concentrator Los Esperanza Cachorro Phase 2 Pelambres Sur Pit Potential to Expansion Portfolio
Slide 25: Growth projects update
Growth projects update Los Pelambres Expansion Phase 1 Zaldívar Chloride Leach Centinela Esperanza Sur Pit • 68% complete • Completed in January 2022 on • New source of feed for Centinela • Desalinated water system of budget Concentrator 400 l/s, expected to be • Now being commissioned • Reduces var
Slide 26: Exploration: Cachorro maiden resource declared
Exploration Cachorro maiden resource declared Drilling Inferred resource 142 mt @1.21% Cu • Latest Group discovery generated by our greenfield Camp exploration programme • Potential to become one of the most important manto-type deposits in the coastal metallogenic belt of northern Chile • Estimated
Slide 27: Our priorities for 2022 and beyond
Developing mining for a better future Our priorities for 2022 and beyond • Responsible and reliable copper producer - Zero fatalities - Committed to keeping our people and communities safe and healthy while creating further social value - Embedding climate change and sustainability strategy across a
Slide 28: Appendix
Appendix 28
Slide 29: At a glance
At a glance Group Antucoya • 65% owned by Luksic Group, 35% free float • 70% owned • Market cap: $18.8 billion (February 17th 2021) • Copper production1: 78,600 t • Remaining mine life2: 22 years • FTSE 100 • Reserves3: 746 million t @ 0.32% Cu Mining division1 Centinela • Top 10 copper producer • 7
Slide 30: Revenue
Revenue $ million +$2,341m 256 30 20 $7,470m 2,096 (61) $5,129m 1 1 FY 2020 Copper price Copper sales By-products TC/RC Transport division FY 2021 1 Excludes Zaldívar and JVs Antofagasta plc | 2021 Preliminary financial results 30
Slide 31: Net earnings
Net earnings $ million 119 2,020 55 (33) (787) $1,404m $1,290m (509) (114) $539m 1 2020 EBITDA Depreciation Associates Net Tax Non- 2021 Exceptional 2021 2 Underlying from and and JVs finance costs controlling Underlying items Net earnings net earnings subsidiaries amortisation interests net earning
Slide 32: Cash flow
Cash flow $ million +$40m 4,667 (159) (777) (1,778) (53) 143 (635) $3,673m $3,713m (1,316) (52) Cash at EBITDA from Working Tax Capex Net Net Dividends Dividends Others Cash at 31 1 Jan 2021 Subsidiaries Capital Interest borrowings from Dec 2021 associates Antofagasta plc | 2021 Preliminary financia
Slide 33: 2021 production cost breakdown
2021 production cost breakdown $/lb 0.38 1.96 0.59 1.79 Energy Labour 13% 14% (0.21) Others 7% 1.20 20% Services Other inputs 11% $3,121m 4% Sulphuric acid 7% 12% Fuel and Lubricants 13% Maintenance services Net Cash By-products Gross TC/RC & Mine Production Materials and spare parts Cost FY credits
Slide 34: Production and metals prices
Production and metals prices Group production Metal prices 2018 2019 2020 2021 2022E1 2018 2019 2020 2021 Copper ('000 tonnes) Copper ($/lb) Los Pelambres 357.8 363.4 359.6 324.7 290-300 Realised 2.81 2.75 2.98 4.37 Centinela Concentrates 155.5 195.5 153.5 185.4 LME 2.96 2.72 2.80 4.23 245-255 Centi
Slide 35: Unit cash costs
Unit cash costs Group cash costs 2018 2019 2020 2021 2022E1 Group cash costs ($/lb) Los Pelambres 1.52 1.40 1.27 1.59 1.75 Centinela 1.89 1.83 1.85 1.87 2.30 Antucoya 1.99 2.17 1.82 2.04 2.30 Zaldívar2 1.94 1.75 1.80 2.39 2.20 Cash costs before by-products credits ($/lb) 1.72 1.65 1.56 1.79 2.00 By-
Slide 36: TCFD: Adapting and mitigating transition and physical risks
TCFD Adapting and mitigating transition and physical risks Climate scenario analysis • Used to build our understanding of how climate risks may: o Develop and impact our operations o Inform our investment plans o Enhance our prevention and recovery control measures. • Potential magnitude of our busi
Slide 37: Growth projects and innovation update
Growth projects and innovation update Centinela Second Concentrator Innovation: Cuprochlor-T® • Increases annual production by • Industrial-sized leaching test of 180,000 tonnes of copper 40,000 tonne heap confirms equivalent previous test work • Investment decision expected • Leaches primary sulphi
Slide 38: Reserves and resources as of 31 December 2021
Reserves and resources as of 31 December 2021 Tonnage (millions tonnes) Copper (%) Molybdenum (%) Gold (g/t) Attributable Tonnage (millions tonnes) 2020 2020 2021 2020 2021 2020 2021 2020 2021 2020 Ore reserves Los Pelambres 956.1 1,010.5 0.59 0.59 0.020 0.020 0.05 0.05 573.7 606.3 Centinela Concent
Slide 39: Antofagasta contacts
Antofagasta contacts Andrew Lindsay alindsay@antofagasta.co.uk Rosario Orchard rorchard@antofagasta.co.uk Director, London Office Tel: +44 20 7808 0988 Investor Relations Manager Tel: +44 20 7808 0988 Antofagasta plc | 2021 Preliminary financial results 39
Slide 40: www.antofagasta.co.uk
www.antofagasta.co.uk WN ANTOFAGASTA PLC