Mmg Ltd. · HKEX:1208
Mmg — H1 2022 Earnings Presentation
39 slides from Mmg's earnings presentation, Aug 19, 2022
Slide 1: 2022 Interim Results
2022 Interim Results 19 August 2022
Slide 2: Disclaimer
DISCLAIMER The information contained in this presentation is intended solely for your personal reference and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organisation/firm) or published, in whole or in part, for any pu
Slide 3: Overview
OVERVIEW 2022 First Half Performance Financial Results Strategy and Outlook ? Questions and Answers
Slide 4: 2022 First Half In Review
2022 First Half In Review LI Liangang Interim Chief Executive Officer
Slide 5: Safety: Our First Value
SAFETY: OUR FIRST VALUE Safety Performance 6.00 5.07 5.00 4.70 4.52 4.50 4.26 3.94 4.00 3.41 3.20 2.93 2.94 2.90 3.00 2.35 2.14 2.11 1.90 2.00 1.58 1.49 1.38 1.17 1.09 1.00 1.00 0.00 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 H1 2022 TRIF MMG TRIF ICMM > In 2021, MMG’s TRIF1 was the lowest of
Slide 6: First Half 2022 Summary
FIRST HALF 2022 SUMMARY Profitability in challenging period Targeting operational improvement US$80m NPAT Las Bambas improved productivity ▪ 80% below record profit in 1H21. ▪ Q1 production higher than pcp in the period that ▪ Over 50 days of forced shutdown at Las was not impacted by community acti
Slide 7: Short Term Economic Volatility, Longer Term Support From Energy Transition
SHORT TERM ECONOMIC VOLATILITY, LONGER TERM SUPPORT FROM ENERGY TRANSITION Short term price volatility increases Long term trends unchanged – our commodities are essential for a low-carbon future 5.0 3.0 COPPER IN RENEWABLE ENERGY LME copper and zinc prices – Jan 2022 to July 2022 4.5 2.5 New Electr
Slide 8: Seeking an Enduring Solution to Community Challenges in Peru
SEEKING AN ENDURING SOLUTION TO COMMUNITY CHALLENGES IN PERU > Las Bambas production recommenced on 11 June 2022 > Total historical blockades (2016-Aug. 2022): 519 days > Las Bambas related roadblocks: 437 days > Not related to Las Bambas: 82 days > A government-led dialogue process: > MMG working c
Slide 9: Financial Results
Financial Results Ross Carroll Chief Financial Officer
Slide 10: Financial Performance
FINANCIAL PERFORMANCE Key Financial Metrics (US$M) 1H 2022 1H 2021 1H 2022 vs. 1H 2021 Income Statement Revenue 1,408.0 2,433.5 (42%) EBITDA 651.7 1,498.7 (57%) Profit after income tax for the period 89.8 584.0 (85%) Attributable to: Equity holders of the Company 79.5 400.1 (80%) Non-controlling int
Slide 11: EBITDA Waterfall
EBITDA WATERFALL MMG Interim Results 2022 11
Slide 12: Earnings Sensitivity to Commodity Price and FX
EARNINGS SENSITIVITY TO COMMODITY PRICE AND FX High earnings and cash flow leverage to copper and zinc prices Sensitivity EBIT Impact (US$M) Copper US$/lb $0.10/lb / ($0.10/lb) 65/(65) Zinc US$/lb $0.10/lb / ($0.10/lb) 45/(45) Lead US$/lb $0.10/lb / ($0.10/lb) 10/(10) Gold US$/oz $100/oz / ($100/oz)
Slide 13: Net Debt
NET DEBT Net Debt (US$M) Gearing Ratio Term Debt Repayment Schedule1 (US$M) 12,000 90% 1,600 10,000 79% 80% 74% 74% 1,200 Net Debt (US$m) 72% 73% 8,000 70% 800 6,000 56% 56% 60% 4,000 400 50% 2,000 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 0 40% MLB 18 Yr Project Facility DRM $450m 5
Slide 14: Capital Expenditure Outlook
CAPITAL EXPENDITURE OUTLOOK Capital Expenditure Capital Intensity of Copper Developments1 US$/t CuEq annual production 800 25,000 700 Greenfield development projects US$/t CuEq production 600 20,000 500 US$m 15,000 400 300 10,000 200 5,000 100 0 - 2017 2018 2019 2020 2021 2022e 1990-2000 2000-2010 2
Slide 15: Las Bambas
LAS BAMBAS 1H 2022 1H 2021 2022 guidance Production metrics Ore mined (tonnes) 17,925,254 33,327,072 Ore milled (tonnes) 18,038,619 25,120,658 Ore milled grade - Cu 0.64% 0.60% Recovery rate - Cu 86.2% 85.9% Contained Copper in concentrate (tonnes) 101,009 144,642 ~240 kt C1 cost (US$/lb) 1.271 1.08
Slide 16: Kinsevere
KINSEVERE 1H 2022 1H 2021 2022 guidance Production metrics Ore mined (tonnes) 406,571 20,075 Ore milled (tonnes) 1,227,198 1,177,094 Ore milled grade 1.91% 2.25% Recovery rate 96.1% 96.0% Copper cathode (tonnes) 22,090 25,123 45 - 50 kt C1 cost(US$/lb) 2.42 1.81 2.50 – 2.80 Financial metrics (US$M)
Slide 17: Dugald River
DUGALD RIVER 1H 2022 1H 2021 2022 guidance Production metrics Ore mined (tonnes) 851,046 884,758 Ore milled (tonnes) 856,465 900,954 Ore milled grade 10.4% 11.2% Recovery rate 89.0% 88.4% Contained zinc in concentrate (tonnes) 79,587 89,076 170 - 190 kt C1 cost(US$/lb) 0.83 0.63 0.85 - 0.95 Financia
Slide 18: Rosebery
ROSEBERY 1H 2022 1H 2021 2022 guidance Production metrics Ore mined (tonnes) 426,062 505,990 Ore milled (tonnes) 432,036 514,345 Ore milled grade 6.4% 8.6% Recovery rate 85.6% 84.8% Contained zinc in concentrate (tonnes) 23,664 37,640 55 - 65 kt C1 cost(US$/lb) 0.38 0.52 0 - 0.15 Financial metrics (
Slide 19: 2022 Strategy and Outlook
2022 Strategy Li Liangang Interim Chief and Outlook Executive Officer
Slide 20: Pursuit of Growth in a Challenging Circumstance
PURSUIT OF GROWTH IN A CHALLENGING CIRCUMSTANCE • ~290kt of copper. 2022 PRODUCTION • 225 – 255kt of zinc. • Advance Kinsevere Expansion Project (KEP) and Las Bambas development, subject to community engagement and access. DEVELOPMENT • Further develop Dugald River life expansion and copper potentia
Slide 21: KEP and Chalcobamba Development Add >150kt CuEq by 2025
KEP AND CHALCOBAMBA DEVELOPMENT ADD >150KT CuEq BY 2025 KINSEVERE – Annual CuEq Production (kt) 100-110 100 45-50 50 0 2016 2017 2018 2019 2020 2021 2022f 2025f LAS BAMBAS - Annual Cu Production (kt) 500 380-400 400 300 240 200 100 0 2016 2017 2018 2019 2020 2021 2022f 2025f MMG Interim Results 2022
Slide 22: 2022 Interim Results Q&A
2022 Interim Results Q&A
Slide 23: Appendix
Appendix
Slide 24: MMG Asset Base and 2022 Guidance
MMG ASSET BASE AND 2022 GUIDANCE We have a globally diversified portfolio of base metals operations and development projects Operations Development projects Offices HIGH LAKE IZOK LAKE DUGALD RIVER (100%) 2022 production guidance: KINSEVERE (100%) 170,000 – 190,000 tonnes 2022 production guidance: B
Slide 25: 2022 Illustrative Spot EBITDA & FCF
2022 ILLUSTRATIVE “SPOT” EBITDA & FCF Based on Mid-point of 2022 guidance Copper Las Bambas Kinsevere Total Copper Total Copper Sales (kt) 3 260,000 47,500 Payable % 2 96.65% 100% Total Copper Payable (kt) 251,290 47,500 Spot Price1 ($/Ib) 3.62 3.63 Illustrative Free Cash Flow Cost Guidance 3 ($/Ib)
Slide 26: Profit to MMG Equity Holders
PROFIT TO MMG EQUITY HOLDERS 1H 2022 > MMG remains focused on NPAT attributable to equity holders (US$M) 1H 2022 1H 2021 vs. 1H 2021 improving financial and operational performance. Profit after tax - Las Bambas 62.5% interest 17.1 312.4 -95% > MMG will drive returns to Profit/(loss) after tax - Oth
Slide 27: Kinsevere Expansion Project
KINSEVERE EXPANSION PROJECT • Project: The Kinsevere Expansion Project (KEP) includes the mining and processing of the sulphide ore body at Kinsevere as well as the addition of a cobalt recovery circuit. This involves a major plant modification including the installation of a roaster and acid plant
Slide 28: Las Bambas Development
LAS BAMBAS DEVELOPMENT The current Las Bambas development plan includes Ferrobamba (stages 5, 6, 7 & 8), Chalcobamba and Sulfobamba deposits. Major development initiatives: > Construction of third ball mill (underway); > Construction of a new maintenance facility; > Construction of water management
Slide 29: Financial Dashboard
FINANCIAL DASHBOARD REVENUE BY COMMODITY REVENUE BY CUSTOMER DISCHARGE COUNTRY Chart Title 3% 3% 4% 4% Copper 12% 4% Australia 2% Zinc 7% Chile Lead China 22% 10% Gold Others 64% Japan Silver 65% South Korea Molybdenum EBITDA BY OPERATING SEGMENT OPERATING EXPENSES (SITES) 8% 12% Las Bambas Las Bamb
Slide 30: Las Bambas 1H 2022 Performance
LAS BAMBAS 1H 2022 PERFORMANCE KEY HIGHLIGHTS • 1H 2022 Production: 101,009 tonnes of copper, 30% below 1H 2021 FINANCIALS ▪ Operational shut of more than 50 days due to community protest in Q2 US$M 1H 2022 1H 2021 % ▪ Production at the site recommenced on 11 June 2022 Revenue 805.0 1,790.6 -55% • 1
Slide 31: Kinsevere 1H 2022 Performance
KINSEVERE 1H 2022 PERFORMANCE KEY HIGHLIGHTS • 1H 2022 cathode production: 22,090 tonnes, 12% lower than H1 2021. FINANCIALS ▪ Lower average feed grades in Q1 US$M 1H 2022 1H 2021 % ▪ Feed grades improved in Q2 with resumption of mining activity and supply of higher- Revenue 202.2 225.8 -10% grade o
Slide 32: Dugald River 1H 2022 Performance
DUGALD RIVER 1H 2022 PERFORMANCE1 KEY HIGHLIGHTS FINANCIALS • 1H 2022 zinc concentrate production: 11% lower than 1H 2021 US$M 1H 2022 1H 2021 % ▪ Lower ore mined from January to mid-February when labor availability at Revenue 257.6 235.1 10% the mine was impacted by Queensland’s COVID-19 quarantine
Slide 33: Rosebery 1H 2022 Performance
ROSEBERY 1H 2022 PERFORMANCE KEY HIGHLIGHTS FINANCIALS • 1H 2022 Production: 23,664 tonnes of zinc (-37%) and 9,324tonnes of lead (-32%) US$M 1H 2022 1H 2021 % ▪ Lower workforce availability as a result of COVID-19 impacts and increased competition for skilled mining labour nationally Revenue 142.2
Slide 34: Balance Sheet
BALANCE SHEET US$M 1H 2022 1H 2021 Non-current assets 10,844.7 10,864.7 Current assets 1,661.1 2,159.4 Total assets 12,505.8 13,024.1 Total equity 4,103.1 3,928.0 Non-current liabilities – other 1,918.6 1,828.9 Non-current liabilities – borrowings 4,830.6 5,639.0 Current liabilities – other 768.0 96
Slide 35: Statement of Cash Flow
STATEMENT OF CASH FLOW SIX MONTHS ENDED 30 JUNE 1H 2022 1H 2021 US$M Receipts from customers 1,430.4 2,457.4 Payments to suppliers and employees -1,061.1 -1,054.5 Payments for exploration expenditure -10.8 -11.8 Income tax refunds/(payments) -212.0 -3.2 Net settlement of commodity hedge -11.7 -79.8
Slide 36: MMG Overview
MMG OVERVIEW OVERVIEW BROKER COVERAGE > Founded in 2009, MMG is a diversified base metals company with four operating mines located across three continents. Company Represented Analyst Name Goldman Sachs Joy Zhang > Headquartered in Melbourne (Australia) and Beijing (China), with a primary listing o
Slide 37: Mineral Resources
MINERAL RESOURCES Copper and Zinc Mineral Resources of 10.7Mt and 11.5Mt respectively MINERAL RESOURCES – CONTAINED METAL (100% ASSET BASIS) AS AT 30 JUNE 2021 Project Copper Zinc Lead Silver Gold Molybdenum Cobalt kt kt kt moz moz kt kt Las Bambas 8,500 130 1.8 230 Kinsevere 1,200 43 Dugald River 6
Slide 38: Ore Reserves
ORE RESERVES Copper and Zinc Ore Reserves of 5.6Mt and 2.9Mt respectively ORE RESERVES – CONTAINED METAL (100% ASSET BASIS) AS AT 30 JUNE 2021 Project Copper Zinc Lead Silver Gold Molybdenum Cobalt kt kt kt moz moz kt kt Las Bambas 5,500 78 1.2 150 Kinsevere 840 29 Dugald River 2,500 410 33 Rosebery
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