Antofagasta Plc · LSE:ANTO
Antofagasta — Goldman Sachs Presentation (September 2000)
22 slides from Antofagasta's conference presentation, Sep 6, 2000
Slide 1: Windows on Latin America
Windows on Latin America Jean- Jean-Paul Luksic Director & CEO Mining 6 September 2000 1
Slide 2: Key Investor Information
Key Investor Information • Copper mining 91% of total revenues 2000 H1 167,700 tons total production 2000 H1 • Total Assets: US$ 1.99 bn June 2000 US$ 1.47 bn June 1999 • Market Cap: US$ 1.26 bn (August 29, 440p) Free Float: 35.2% (75% UK investors) • ROCE 2000 H1: 11.8% • London Stock Exchange - AN
Slide 3: Group Overview
ANTOFAGASTA PLC Group Overview
Slide 4: Group overview: Operations and ongoing projects
Group overview Operations and ongoing projects 1. Michilla (74%) Northern 50,000 tpy Chile Copper cathodes 1 Antofagasta 2 3 2. Tesoro project (61%) 3. Railway (100%) 75,000 tpy 3.3 million Copper cathodes Tons carried 4. Los Pelambres (60%) Los Pelambres 4 300,000 tpy port Copper concentrates 4
Slide 5: Group overview: Los Pelambres
Group overview Los Pelambres • Open pit - 3 bn tons total resource • 30 year mine plan - 1 bn tons 0.77% copper • 300,000 tpy copper in concentrates • Expected cash costs around 40 c/lb first five years • 35.4 c/lb 1H 2000 • Planned capacity of 85,000 tpd exceeded • July average 90,000 tpd • Complet
Slide 6: Group overview: El Tesoro
Group overview El Tesoro • Open pit mine - 188 million tons 1.0% copper • 21 year mine plan • 75,000 tpy copper cathodes • Expected cash costs of 40 c/lb first five years • Construction progress above 50% by August • Start up expected on schedule in May 2001 6
Slide 7: Group overview: Michilla
Group overview Michilla • Open pit / underground • 28 million tons @ 1.28% copper • 64 million tons total resource • 50,000 tpy copper cathodes • Life of mine extended to 2007 • Unique SX-EW process - use of sea water in leaching 7
Slide 8: Group overview: Railway operations
Group overview Railway operations • Chile • Provides transportation network for copper mining region • Connected with Bolivia and Argentina • Sales increased 10% in 2000 H1 • Mine expansions planned by important clients • Bolivia • Group controls Andino railway which connects directly to Chilean net
Slide 9: Group overview: Other investments
Group overview Other investments • Quiñenco S.A. (33.6%) – diversified industrial and financial group • Listed in Santiago and New York (LQ) • Market value of Antofagasta share US$ 329 million (August 29) • Book value of US$ 180 million for Antofagasta • Dividend of US$ 31.3 million received in May
Slide 10: Financial highlights first six months 2000
Financial highlights first six months 2000 2000 H1 1999 H1 % Revenues 316.2 70.7 + 347% Profit Before Tax 100.0 18.2 + 449% Operating cash flow 91.4 15.2 + 501% Earnings per share 36.4c 8.0c + 355% ROCE 11.8% 3.8% - 10
Slide 11: Looking ahead
Looking ahead ANTOFAGASTA PLC 11
Slide 12: Looking ahead
Looking ahead • Low cost producer • Significant expansion capacity • High potential exploration areas • Strong financial position • Control of key risks • Growth at the right time 12
Slide 13: Low cost operations
Looking ahead Low cost operations Cash cost curve of the copper industry - 2000 100 90 80 70 Cash Cost (c/lb) 60 50 40 30 Antofagasta 20 10 0 0 2,000 4,000 6,000 8,000 10,000 12,000 000's tons fine copper Expected cash costs around 40 c/lb c/lb next five years 13
Slide 14: Looking ahead: expansion capacity
Looking ahead expansion capacity • Los Pelambres Mine plan Total resource 1 bn tons 3 bn tons • Expansion alternatives under evaluation • Tesoro - new geological resources in surrounding area • Michilla - extensive unexplored mining properties 14
Slide 15: High potential exploration areas: Esperanza
Looking ahead high potential exploration areas Northern Chile Esperanza Esperanzacopper coppergold goldporphyry porphyry •• 150 150million milliontons tonssulphides sulphides Tesoro 0.81% 0.81%CuCu 0.46 0.46g/ton g/tonAu Au Antofagasta Esperanza •• 10 10million milliontons tonsoxides oxides 0.62% 0.
Slide 16: High potential exploration areas: Magistral and Cotabambas
Looking ahead high potential exploration areas Magistral Magistralcopper copper––moly molyskarn skarn •• Drilling Drillingphase phase22completed completed Magistral •• Group Groupcancanacquire acquire51% 51% Peru Antamina after after33years years Cuzco Cotabambas Cotabambas Cotabambas ••Copper Coppe
Slide 17: Strong financial position
Looking ahead strong financial position • Increasing cash flow • Production increase to 425,000 tons in 2002 (1999 - 60,500 tons) tons) • Low cost operations • Decreasing leverage • Peak leverage of 0.7 in 2000 • Expected leverage below 0.3 in 2003 17
Slide 18: Control of key risks
Looking ahead control of key risks • High level of demonstrated reserves • 91.5 % in Los Pelambres • 98.6 % in El Tesoro • Management experience - copper mining country • Commodity price risk - low cost operations • Long term sales contracts - mining and railway • Low risk customers • Long term labo
Slide 19: Growth at the right time: production and copper price
Looking ahead growth at the right time Production and copper price 100 400 95 90 300 85 cents / lb 000 tons 80 200 75 100 70 65 0 60 1998 1999 2000 E 2001 E 2002 E Production Avg Copper Price 19
Slide 20: Growth at the right time
Looking ahead growth at the right time • World copper consumption growing • Estimated growth of 4.5% in 2000 and 3.5% in 2001 • Inventories declining (40% decrease from peak in March) March) • Key drivers • Continued growth in both US and Europe • Asian recovery • Positive outlook in copper prices •
Slide 21: Antofagasta summary
Antofagasta summary • Consolidated position as a low cost copper producer • Proven experience in large scale operations • Significant expansion potential • Well positioned to benefit from an improving copper market 21
Slide 22: Antofagasta contacts
Antofagasta contacts London Santiago de Chile (Antofagasta plc) (Antofagasta Minerals S.A.) Philip Adeane Managing Director Jean-Paul Luksic Chief Executive Officer Hussein Barma Chief Financial Alejandro Rivera Chief Financial Officer Officer Tel: +44 20 7374 8091 Tel: +562 240 5068 (Jean-Paul Luks
Antofagasta — Goldman Sachs Presentation (September 2000) on 6ix