Slide 1: 2018 Annual Results
2018 Annual Results 6 March 2019
Slide 2: Disclaimer
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Slide 3: Overview
Overview Geoffrey Gao, CEO 2018 full year highlights Ross Carroll, CFO Financial results Geoffrey Gao, CEO Strategy and outlook Questions and Answers 3
Slide 4: 2018 in review
2018 in review Geoffrey Gao Chief Executive Officer
Slide 5: 2018 Annual Review
2018 Annual Review Continued injury reduction, however fatal incident at Sepon mine Safety Focus in May Underlying EBITDA* of US$1,751.2m, NPAT attributable to equity Solid Earnings holders of US$64.8 million Stronger Balance Net debt reduced by US$733.4 million in 2018. Stronger balance Sheet sheet
Slide 6: Safety, Environment and Social Performance
Safety, Environment and Social Performance Safety performance ▪ Safety – our first value 4.5 4.5 4.7 ▪ Fatality at our Sepon mine. We continue to strive 4.3 4.1 towards an injury and incident free workplace 3.9 ▪ In 2017, MMG’s TRIF was the lowest of all 3.0 International Council on Mining and Metal
Slide 7: Fundamentals remain strong
Fundamentals remain strong Mined copper supply gap and requirement for new capacity Attractive fundamentals and insights from major shareholder support commodity outlook 28 Base Case Production 26 Capability ▪ Supply risks growing – social, political, grade 24 Primary Demand and under-investment 22
Slide 8: Logistics Update
Logistics Update Las Bambas ▪ Outbound concentrate transport remains blocked approximately 136km from the Las Bambas mine in Peru. The illegal blockade occurs on a stretch of public national road in the Cusco Region. ▪ The blockade relates to a claim for compensation for a pre-existing easement that
Slide 9: Strategy and objectives
Strategy and objectives MMG’s objective is to be valued as one of the world’s top mid-tier miners by 2020 and, in the longer term, as one of the world’s top miners. To achieve this objective, we deliver value through four strategic drivers: People and ✓ We provide a safe, healthy and secure workplac
Slide 10: Financial results
Financial results Ross Carroll Chief Financial Officer
Slide 11: Financial performance
Financial performance 2018 Key Financial Metrics (US$ million) 2018 2017 v 2017 Income Statement (continuing operations)1 Revenue 3,670.2 3,751.3 (2%) Underlying EBITDA2 1,751.2 1,912.2 (8%) Profit After Tax 136.6 346.1 (61%) Attributable to: Equity holders 64.8 144.0 (55%) Non-controlling interests
Slide 12: EBITDA waterfall FY18 v FY17
EBITDA waterfall FY18 v FY17 1. Underlying EBITDA 2017 excludes gain on divestment of US$178.6m. 12
Slide 13: Underlying profit to MMG equity holders
Underlying profit to MMG equity holders 2018 NPAT attributable to equity holders (US$m) 2018 2017 v ▪ MMG remains focused on improving 2017 financial and operational performance Profit After Tax - Las Bambas 62.5% interest 119.6 336.8 (64%) in FY19 and driving returns to Profit After Tax - Other ope
Slide 14: Earnings sensitivity
Earnings sensitivity ▪ High earnings and cash flow leverage to copper and zinc prices Estimated impact on FY19 underlying EBITDA from changes in commodity prices and currency Sensitivity EBIT Impact (US$m) Copper US$/lb $0.10/lb / ($0.10/lb) 99/(99) Zinc US$/lb $0.10/lb / ($0.10/lb) 52/(52) Lead US$
Slide 15: Free cash flow sensitivity to copper and zinc
Free cash flow sensitivity to copper and zinc Illustrative Free Cash Flow (US$ million) for FY19 at different copper and zinc prices* Copper Price – US$/lb 2.70 2.80 2.90 3.00 3.10 3.20 0.90 288 386 484 582 680 778 1.00 Zinc Price – US$/lb 335 433 531 629 727 825 1.10 382 480 578 676 774 872 1.20 42
Slide 16: Net debt reduced by US$733 million in 2018
Net debt reduced by US$733 million in 2018 ▪ MMG has developed and commissioned two of the largest greenfield copper and zinc projects globally over the past 4 years ▪ Growth has been largely debt funded ▪ Since commercial production at Las Bambas, net debt has been reduced by US$2.7b ▪ In FY18 FCF
Slide 17: Debt maturity profile
Debt maturity profile ▪ Gross debt reduced by ~US$1.1b in FY2018 ▪ Average outstanding maturity profile now ~5.3 years Debt repayment schedule1 (US$m) 1,600 1,400 1,200 1,000 800 600 400 200 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 MLB 7 Yr Acquisition Facility MLB 18
Slide 18: Business improvement
Business improvement Right sizing the base ▪ Business improvement is a group wide focus and one of our strategic drivers for value creation ▪ Delivering the right platform to support value creation at existing asset US$30m reduction in base and retain flexibility to grow overhead costs ▪ Portfolio o
Slide 19: Dugald River – top zinc mine, world class ramp up
Dugald River – top 10 zinc mine, world class ramp up ▪ Commercial Production 1 May 2018 ▪ Development capital ~US$550m1 ▪ Early commissioning has resulted in lower net capital expenditure in 2018 ▪ 2018 production of 147kt2 zinc in zinc concentrate, with C1 cost of US$0.58/lb since commercial produc
Slide 20: Las Bambas update
Las Bambas update 2019 outlook ▪ Production guidance of 385-405kt of copper C1 guidance US$1.15-1.25/lb ▪ 2018 Production impacted by localised geotechnical instability in a section of the Ferrobamba pit, major scheduled plant maintenance during 1H18 and the transition to lower grades as we continue
Slide 21: MMG: Focused, Efficient and Delivering Growth
MMG: Focused, Efficient and Delivering Growth Geoffrey Gao Chief Executive Officer
Slide 22: World-class asset base delivering value
World-class asset base delivering value C1 zinc cost curve (2019)1 160 ▪ World class asset base with geographic diversity and track record of delivering operational commitments 140 120 2019 Dugald ▪ Free Cash Generation of ~US$2.7b since Las Bambas commercial C1 cash cost (c/lb) River C1 guidance pr
Slide 23: Focused, Efficient and Delivering Growth
Focused, Efficient and Delivering Growth Growth ✓ Las Bambas then Dugald River – World top 10 copper and zinc mines Operational Excellence ✓ Track record of continuous improvement Shareholder ✓ MMG’s share price has materially outperformed the EMI Global value Base Metals Index over the past one, tw
Slide 24: Appendix
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Slide 25: MMG asset base
MMG asset base We have a globally diversified portfolio of base metals operations and development projects HIGH LAKE IZOK LAKE LAOS HONG KONG VIENTIANE LAS BAMBAS (62.5%) DUGALD RIVER (100%) 2019 production guidance: 2019 production guidance: 385,000 to 405,000 tonnes of DRC 165,000 – 175,00 tonnes
Slide 26: Guidance for 2019
Guidance for 2019 Las Bambas Rosebery Copper – production 385,000 – 405,000 tonnes Zinc – production 85,000 – 95,000 tonnes Copper – C1 costs US$1.15 – 1.25 / lb Zinc – C1 costs US$0.25 – 0.35 / lb Kinsevere Dugald River Copper – production 77,500 - 80,000 tonnes Zinc – production 165,000 – 175,000
Slide 27: 2019 illustrative “spot” EBITDA & FCF
2019 illustrative “spot” EBITDA & FCF Copper Las Bambas Kinsevere Total Copper 3 Total Copper Production (kt) 395,000 78,750 Payable % 2 96.70% 100% Total Copper Payable (kt) 381,965 78,750 Spot Price 1 ($/Ib) 2.97 2.97 Cost Guidance 3 ($/Ib) (1.20) (1.70) Margin ($/Ib) 1.77 1.27 Illustrative Free C
Slide 28: Tax reconciliation
Tax reconciliation ▪ MMG’s prima facie income tax rate FY18 Actual ETR % from its operations is approximately 32%. This broadly reflects the Profit Before Tax 306.2 corporate income tax rates in Peru, Income Tax Expense -169.6 55.4% Australia and the DRC. Tax reconciliation ▪ In FY18, MMG’s Effectiv
Slide 29: Excellence in project delivery and ramp up
Excellence in project delivery and ramp up Ramp up profiles of greenfield copper concentrators1 Ramp up profiles of greenfield zinc concentrators1 140% 120% 120% Mill throughput % of installed Capacity Mill throughput as % of installed Capacity 100% 100% 80% 80% 60% 60% 40% 40% Las Bambas Dugald Riv
Slide 30: Financial dashboard
Financial dashboard1 Revenue by commodity Revenue by customer location 1% China 2% Zinc 4% 10% 9% 5% Copper Japan and 9% Gold Korea Silver Asia (excl. 12% China, Japan Lead and Korean) 58% Australia Molybdenum 12% Other 78% EBITDA by operating segment Operating expenses (sites) 10% 5% 11% 14% 12% Pe
Slide 31: Las Bambas 2018 performance
Las Bambas 2018 performance Key highlights: Financials ▪ Revenue of US$2,578.6 million 12% lower, due to the impact on production of localised wall slippages during the first and US$ million 2018 2017 % third quarters as well as a scheduled maintenance shutdown. Revenue 2,578.6 2,936.9 (12%) ▪ Coppe
Slide 32: Kinsevere 2018 performance
Kinsevere 2018 performance Key highlights Financials ▪ Full year production of 79,711 tonnes of copper cathode, US$ million 2018 2017 % reflecting fourth year of stable and consistent production around 80,000 tonnes. Revenue 516.4 500.9 3% ▪ Revenue increased by US$15.5 million (3%) and EBITDA EBITD
Slide 33: Rosebery 2018 performance
Rosebery 2018 performance Key highlights Financials ▪ Revenue increased by 14% to US$328.7 million compared to US$ million 2018 2017 % 2017. Revenue 328.7 288.8 14% ▪ Total production expenses were US$3.4 million (3%) lower EBITDA 171.6 152.1 13% due to a series of initiatives including lower contra
Slide 34: Dugald River 2018 performance
Dugald River 2018 performance Key highlights Financials ▪ Achieved commercial production on 1 May 2018, with results US$ million 2018 2017 % taking into consideration sales revenue, operating expenses Revenue1 247.3 - - and depreciation and amortisation from this date. EBITDA1 87.6 - - ▪ Dugald Rive
Slide 35: Profit or Loss Statement
Profit or Loss Statement 2018 2017 Year ended 31 December US$ million US$ million Revenue 3,670.2 3,751.3 Operating expenses (1,862.8) (1,635.1) Exploration expenses (47.5) (45.1) Administration expenses (35.8) (81.7) Other income / (expenses) 27.1 (77.2) Gains on disposal of subsidiaries - 178.6 EB
Slide 36: Balance Sheet
Balance Sheet US$ million 31 Dec 2018 31 Dec 2017 Non-current assets 11,982.6 13,093.5 Current assets – cash and cash equivalents 601.9 936.1 Current assets – other 670.9 760.0 Total assets 13,255.4 14,789.6 Total equity 2,896.3 2,971.8 Non-current liabilities – other 1,486.8 1,817.1 Non-current lia
Slide 37: Statement of Cash Flow
Statement of Cash Flow Year ended 31 December 2018 2017 US$ million Receipts from customers 4,262.1 4,820.5 Payments to suppliers and employees (2,392.9) (2,318.3) Payments for exploration expenditure (47.5) (45.6) Income tax paid (90.2) (86.8) Net cash generated from operating activities 1,731.5 2,
Slide 38: MMG overview
MMG overview Overview ▪ Founded in 2009, MMG is a diversified base metals company with four operating mines located across four continents Broker Coverage ▪ Headquartered in Melbourne (Australia), with a primary listing on the Broker Name HKEx (1208 HK) and a secondary listing on the ASX (MMG ASX) A
Slide 39: Mineral Resources
Mineral Resources Copper and zinc Mineral Resources of 12.8Mt and 10.9Mt respectively Mineral Resources – Contained Metal (100% asset basis) As at 30 June 2018 Project Copper Zinc Lead Silver Gold Molybdenum kt kt kt moz moz kt Las Bambas 10,649 168 2.4 310 Kinsevere 1,313 Dugald River 99 7,052 1,03
Slide 40: Ore Reserves
Ore Reserves Copper and zinc Ore Reserves of 7.4Mt and 3.8Mt respectively Ore Reserves – Contained Metal (100% asset basis) As at 30 June 2018 Project Copper Zinc Lead Silver Gold Molybdenum kt kt kt moz moz kt Las Bambas 6,882 107 1.7 187 Kinsevere 488 Dugald River 3,336 580 35 Rosebery 11 428 161
Slide 41: MMG Tailings & Water Dam Management
MMG Tailings & Water Dam Management Tailing and Water Dams Risk Management Approach MMG joins International Council of Mining and Metals 2009 ▪ MMG Risk and Assurance Standard (ICMM) – Risk Management Procedure Internal Principal Engineer - Tailings & Water engaged – Functional Technical Assurance 2
Slide 42: Executive team – global experience
Executive team – global experience Chief Executive Officer Chief Financial Officer EGM Business Support EGM Marketing & Risk Geoffrey Gao Ross Carroll Greg Travers Xu Jiqing ▪ Appointed as CEO of the ▪ 25+ years’ experience in the ▪ Executive General Manager ▪ 25+ years’ experience in Company in Aug
Slide 43: “prouress EWEIVIG
MA “prouress EWEIVIG