Volcan Compania Minera S.A.A. Class A · BVL:VOLCAAC1
Volcan Compania Minera S.A.A. Class A — Investor Presentation (May 2012)
20 slides from Volcan Compania Minera S.A.A. Class A's investor presentation, May 8, 2012
Slide 1: Corporate Presentation 2012
Corporate Presentation 2012
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: General Company Highlights
General Company Highlights Zinc metal contained mt (thousands) • Started operations in Ticlio and 4x 336 Carahuacra in 1943 299 318 • Acquired Mahr Tunel in 1997 and Cerro de Pasco in 1999, through privatization of 91 important government assets. Acquired Empresa Administradora Chungar in 1998 2000
Slide 4: Top global producer of zinc, silver and lead
Top 10 global producer of zinc, silver and lead Zinc production vs. global peers–2010 Silver production vs. global peers–2010 Lead production vs. global peers1–2010 production (000 mT) production (mm Oz) production (000 mT) 1,107 46.6 257 2 1,091 38.6 239 696 37.3 187 2 648 24.3 162 442 23.0 114 346
Slide 5: Diversified operational base and logistical network
Diversified operational base and logistical network Key highlights Map of operations • 3 mining units Location in Peru Volcan’s mine or subsidiary Third party mine – Cerro de Pasco, Chungar and Yauli Volcan’s prospect Concentrator plant • 8 mines Town – Largest mine accounts for only 23% of Volcan’s
Slide 6: Diversified operational base and logistical network (cont’d)
Diversified operational base and logistical network (cont’d) Yauli Chungar Cerro de Pasco • 4 underground mines • 2 underground mines • 1 underground mine, 1 open pit • 3 concentrate plants (9,600 tons per mine • 1 concentrate plant (4,200 tons per day aggregate capacity) day capacity) • 2 concentra
Slide 7: Robust life of mine and resources and 76% of concession area unexplored
Robust life of mine and resources and 76% of concession area unexplored Evolution of reserves and resources (mm mT)1 Significant untapped potential Breakdown of concession area by type of activity 2 Reserves Resources 360 Production 12% 310 310 279 256 No activity 224 76% 162 Exploration 203 170 12%
Slide 8: World-class operating standards and strong labor / community relations
World-class operating standards and strong labor / community relations Commitment to world-class operating standards and Attractive labor relations situation international oversight ISO 14001 Workforce by Type of Employee (Environmental OHSAS 18001 Mining Unit Management) (Operational Safety) Annu
Slide 9: Among the lowest cost producers in the industry
Among the lowest cost producers in the industry First quartile, low-cost zinc producer 2 C1 cash cost (C1)(c/lb) 2010 Zinc Mine, Composite, C1 Cash Cost 140 Grouped by company and ranked by cash cost Southern Copper (ex SPCC) Yunnan Metallurgical Group China State Enterprise 120 Chihong Zinc & Germa
Slide 10: Strong financial and operating position
Strong financial and operating position Revenues (US$mm) EBITDA (US$mm) and EBITDA margin (%)1 1,212 52% 52% 981 44% 629 39% 509 627 663 245 294 2008 2009 2010 2011 2008 2009 2010 2011 Net income (US$mm) 329 253 177 170 2008 2009 2010 2011 Source: Company filings 1 As from January 1, 2011, employees
Slide 11: Sustained cashflow generation
Sustained cashflow generation Cashflow breakdown (US$mm) 2008 2009 2010 2011 Net cash provided by operating activities 175 256 354 469 Net cash used in investing activities (242) (143) (217) (327) Net cash (used in) provided by financing activities 109 (174) (126) (124) Dividends (82) (56) (76) (121
Slide 12: Growth Perspectives: Summary
Growth Perspectives: Summary ILLUSTRATIVE 2011 2016E2 (2011 Prices) Au 4% Zn Ag Zn 24% 48% 42% Pb Ag 5% 49% Cu 18% Cu Pb 3% 7% Sales (2011 prices) 1 US$1,212 mm US$2,103 mm 1 Average prices 2011: Zn 2,200 US$/mt, Pb 2,402 US$/mt, Cu 8,820 US$/mt , Ag 35.17 US$/oz & Au1570 US$/oz 2 Adding projects in
Slide 13: Key Growth Projects
Key Growth Projects Additional Investment value Project Timing production (US$mm) Oxides (Ag) 3.0 – 5.0 mm oz Q2 - 2013 90 Mining projects Pyrites (Ag) 3.0 – 6.0 mm oz Q2 - 2015 90 – 105 Silver Alpamarca – Rio Pallanga (Ag) 1.5 – 3.5 mm oz Q3 - 2013 75 - 90 Chungar (Ag) 1.5 – 2.0 mm oz Q4 - 2012 7 -
Slide 14: Cerro de Pasco – Silver Oxides
Cerro de Pasco – Silver Oxides • Operations expected to start in 2013 • Environmental Impact Assessment (EIA) approved, concession beneficiation / construction permits imminent • Basic Engineering complete, equipment is being purchased • Reserves in stockpiles & mineral in situ of 9 mm mT • Plant ca
Slide 15: Cerro de Pasco – Silver Pyrites
Cerro de Pasco – Silver Pyrites • Reserves & Resouces Stockpiles: 20.4 mm mT of 5.4 oz/mT of Ag Low mining cost In situ: 107 mm mT of resources, potential Cu-Ag mineral in the West wall of the Raul Rojas pit • Two parallel projects Flotation (San Expedito Plant): 2,000 tpd, 1.2 mm oz produced in 201
Slide 16: Alpamarca – Río Pallanga
Alpamarca – Río Pallanga • Alpamarca Plant • Operations expected to start 3Q 2013 • Government approvals: Environmental Impact Assessment, beneficiation concession & construction permits • Basic Engineering 70% advanced, equipment being purchased • Plant capacity 2,000 tpd with possibility of expans
Slide 17: Chungar Expansion
Chungar Expansion • Plant expansion scheduled for completion November 2012. Estimated CAPEX of US$ 10 mm • Increase plant capacity by 25%, from 4,200 tpd to 5,200 tpd • Authorization of expansion of beneficiation concession imminent. Civil engineering work initiated (earthworks) and key equipment is
Slide 18: Rondoní
Rondoní • Conceptual Engineering by Ausenco during 2011 • 98,000 meters of diamond drillings performed as of December 20111 • Resources as of December 2011: 60 mm mT; Cu equivalent grades: 0.60% (30 mm in 2010) • Depth Geophysics confirmed resource potencial in Acejar • Semi-detailed Environmental I
Slide 19: Other Growth Initiatives: Hydroelectric projects
Other Growth Initiatives: Hydroelectric projects 2011 2012 Capacity # Capacity # Capacity Hydroelectric 10 13 MW 12 42 MW Power Consumption MW % MW % Total Consumption 76 100 79 100 Auto - Generation 13 17 42 53 1 Purchaser from SEIN 63 83 37 47 Cents Cents Cost US$/kWh US$/kWh Hydroelectric Generat
Slide 20: Stock Market Highlights
Stock Market Highlights • Class A shares: • 2010 dividends: – Number of shares: 1,362,307,564 – March: US$ 52.6 mm – With voting rights – November: US$ 26.1 mm • Class B shares • 2011 dividends: – Number of shares: 2,037,653,026 – April: US$ 54.2 mm – 5% premium on dividends – October: US$ 63.5 mm •
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