Southern Copper Corporation · NYSE:SCCO
Southern Copper — Investor Presentation (November 2016)
19 slides from Southern Copper's investor presentation, November 2016
Slide 1: Southern Copper Corporation November, 2016
Southern Copper Corporation November, 2016 0
Slide 2: I. Introduction
I. Introduction 1
Slide 3: Management Presenter
Management Presenter Presenters Title Raul Jacob Vice President, Finance & CFO 2
Slide 4: Safe Harbor Statement
Safe Harbor Statement This presentation contains certain statements that are neither reported financial results nor other historical information. These estimates are forward-looking statements within the meaning of the safe-harbor provisions of the Mexican securities laws. These forward-looking esti
Slide 5: Corporate Structure
Corporate Structure 100.0% (*) AMERICAS MINING CORPORATION 88.9% (*) Public Float 11.1% (*) 99.29 % 99.96 % SCC Peru Branch Minera Mexico (*) As of September 30, 2016 4
Slide 6: Copper – The Best Fundamental Story in Commodities
Copper – The Best Fundamental Story in Commodities Solid Fundamentals Copper Consumption by Region ► Copper has the best fundamentals in the basic materials space: ― 2016 demand driven by US and EU markets. ― China: Expect 3% demand growth due to housing market recovery (tier 1 and 2 cities), state
Slide 7: Southern Copper Strengths
Southern Copper Strengths ►Highest copper reserves of the industry ►Excellent organic growth projects ►Low cost, fully integrated operations ►Experienced management team ►Strong financial performance / investment grade since 2005 ►Outstanding dividend history ►Good long-term copper & by-product fund
Slide 8: II. Overview of Operations
II. Overview of Operations 7
Slide 9: Company Overview
Company Overview Copper Reserves 1: 70.1 mmt Mexico Buenavista 3Q 2016 Cash Cost $ 0.96/lb. El Pilar La Caridad Santa Eulalia El Arco Santa Barbara 2016 Estimates (@ $2.17 x Lb of Cu): San Martin Charcas San Luis Potosi Copper Production: 906 kt Taxco Sales: $ 5.3 B Peru EBITDA: $ 2.3 B 43% of Sales
Slide 10: World’s Largest Copper Reserves
World’s Largest Copper Reserves Copper Reserves as Reported SCC Highlights ► #1 mine life among copper producers 80 ► #5 world’s largest producer of mined copper 70.1 70 ► Highly diversified geographical presence 60 56.7 ► Four large-scale open-pit mines Copper Reserves (Mt) 50 ► Two world class cop
Slide 11: Geographic Footprint & Product Diversification
Geographic Footprint & Product Diversification 9M16 Revenue by Product 9M16 Revenue by Market Other Acid 5% Mexico 27% Zinc 2% 4% Molybdenum Peru 5% 5% Chile 2% Silver Brasil 3% 6% Europe 18% Copper 78% Asia 23% Other American United States 2% 20% 10
Slide 12: Low Cost Operations
Low Cost Operations Cash Cost per Pound of Copper Produced Low Cost Drivers Net of By-Products 1.2 Fully integrated low cost operations 1.12 1.07 World class assets 1.00 0.98 Significant SX-EW production (US$/lb) 1.0 0.96 0.91 Strong by-product credits Management focus on cost efficiency 0
Slide 13: 2015 Copper Production Cash Cost by Company
2015 Copper Production Cash Cost by Company Source: Wood Mackenzie Copper Mine Cost Model, WMQ42015 12
Slide 14: III. Financial Overview
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Slide 15: SCC Financial Summary
SCC Financial Summary (US$ MM) 2014 2015 2016E Copper Price (LME) US$ per pound 3.11 2.50 2.17 Income Statement: Net Revenues $5,788 $5,046 $5,286 EBITDA 2,728 1,945 2,295 EBITDA Margin 47% 38% 43% Net Income 1,333 736 842 Dividends paid per share 0.46 0.34 0.15 Balance Sheet Statement: Cash, Equiva
Slide 16: Solid Financial Performance
Solid Financial Performance Top Tier Margins and Conservative Leverage for Increased Financial Flexibility 2016E EBITDA Margin (%) 2016E Total Debt / EBITDA (x) Amortization Schedule SCC 43% Antofagasta 2.1 2020 $400 2022 $300 BHP 36% Rio Tinto 2.4 2025 $500 Antofagasta 33% SCC 2.6 2028 $51 Rio Tint
Slide 17: Investment Program to Significantly Increase Production
Investment Program to Significantly Increase Production Board approved Other projects 2013-15 2016-20 MEXICO PERU Buenavista Molybdenum Plant 3Q13 - Buenavista: Buenavista Zinc Conc. - $332M Los Chancas. - $1.2B - 100K $38M - 2K Tons Mo - Concentrator Plant 1Q16 - $1.4B - 16K Tons Cu - 55K Tons Zn T
Slide 18: Best-in-class Mining Projects Reaching Completion
Best-in-class Mining Projects Reaching Completion Providing Competitive Cash Costs and Increased Production Levels Key Differentiators to Achieve Project Capital Intensity at SCCO Projects Lower Capital Intensity SCCO Project Pipeline • Use of less capital intensive and Initial Capex % of Total Incr
Slide 19: SCC’s Major Strengths
SCC’s Major Strengths SCC is the Premier Copper Play • World class assets in investment grade countries • #1 in reserves of any company with various exploration prospects - Increasing copper production • Capacity to deliver projects through flexible capital structure and significant cash generation
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