Jinchuan Group International Resources Co. Ltd · HKEX:2362
Jinchuan Group International Resources — Investor Presentation (September 2018)
37 slides from Jinchuan Group International Resources's investor presentation, September 2018
Slide 1: Jinchuan Group International Resources Co. Ltd
Jinchuan Group International Resources Co. Ltd 金川集团国际资源有限公司 DATE: SEPTEMBER 2018 RESTRICTED
Slide 2: Table of contents
Table of contents Section 1 Company Overview Section 2 Investment Highlights Section 3 2018 1H Results Update Section 4 Development Strategy Section 5 Q&A Appendix Profile of Mining Assets and R&R Statement 2 RESTRICTED
Slide 3: Section 1 – Company Overview
Section 1 – Company Overview RESTRICTED 3
Slide 4: Overview of Jinchuan Group
Overview of Jinchuan Group Group overview Product portfolio Business overview: Jinchuan Group is a large-scale non-ferrous mining conglomerate with an Nickel Copper Cobalt PGM international presence, primarily engaged in mining, milling, smelting, chemical processing and further downstream proce
Slide 5: Jinchuan International – overview
Jinchuan International – overview Business overview Products & applications Jinchuan Group International Resources (“Jinchuan International”, the Company) is a majority-owned subsidiary of Jinchuan Group and flagship platform for overseas resources development. The Company is listed on Main Board
Slide 6: Jinchuan International – shareholding structure
Jinchuan International – shareholding structure Following Jinchuan Group’s acquisition of controlling stake in Macau Investment Holdings in Nov 2010, Macau Investment Holdings was renamed as Jinchuan Group International Resources Co. Ltd In Sept 2013, Jinchuan International was approved by its s
Slide 7: Jinchuan International – share price performance
Jinchuan International – share price performance LTM share price performance and key events Stock information1 Stock code (HK$/share) (mm shares) 2362.HK GHL, an indirect wholly- Received a conversion 2.5 owned subsidiary of the Announced its full-year notice from multiple 250 Issued shares Compan
Slide 8: Jinchuan International – global presence
Jinchuan International – global presence Shanghai Jinchuan Junhe Economic Development Co., Ltd. Ruashi Mine (Trading arm in mineral and metal products) Location: Lubumbashi, Katanga Province, DRC Ownership: Jinchuan Intl. (60%) Ownership: Jinchuan Intl. (75%), Gecamines (25%) Products: Copper ca
Slide 9: Section 2 – Investment Highlights
Section 2 – Investment Highlights RESTRICTED 9
Slide 10: Jinchuan International – investment highlights
Jinchuan International – investment highlights Extremely rare & mature miner of copper and cobalt on HK market 1 An international copper & cobalt miner with sizable production and high quality resources 2 Top-of-the-class copper & cobalt grades and highly competitive cost profile A strong growth pro
Slide 11: An international copper & cobalt miner with sizable production and high quality resources
1. An international copper & cobalt miner with sizable production and high quality resources A mature international miner with historically stable mined production of Co One of the only two Hong Kong-listed cobalt producers and a top 102 global & Cu... cobalt producer Company’s mined copper producti
Slide 12: Top-of-the-class copper & cobalt grades and highly competitive cost profile
2. Top-of-the-class copper & cobalt grades and highly competitive cost profile Benchmarking of Cu grade against top 51 producing copper mines Highly competitive cash cost position Copper resources grade, % 2018 global copper C1 cash cost curve (USD/lb Cu; post by-product credits) 6.0 5.50% Global to
Slide 13: A strong growth profile supported by an attractive pipeline of mines and projects
3. A strong growth profile supported by an attractive pipeline of producing mines, development projects and advanced exploration projects providing strong foundation to capture future Cu & Co market opportunities Current asset portfolio is reasonably arranged with significant potential … with key de
Slide 14: Highly experienced board and management; strong parent support
4. Highly experienced board and management with exceptional track record 5. A flagship platform for undertaking overseas capital operations with strong support from parent company – Jinchuan Group, a highly-reputed Gansu provincial SOE Highly experienced board and management team with an exceptional
Slide 15: Cu: long term copper price supported by declining production
6. Rapid growth underpinned by strong fundamentals of copper and cobalt markets Cu: long term copper price supported by declining production and higher incentive prices required for new projects A shortage of supply in global Cu market is expected in long term… Mt Cu USD/lb 25 3.50 Base case mines B
Slide 16: Cu: China continues to be a major consumer of copper
6. Rapid growth underpinned by strong fundamentals of copper and cobalt markets Cu: China continues to be a major consumer of Cu and will likely drive future demand growth Asia accounts for the largest proportion of global demand, with China’s grid sector the largest source of copper consumption wit
Slide 17: Cu: production cuts have led to a decline in supply
6. Rapid growth underpinned by strong fundamentals of copper and cobalt markets Cu: production cuts in connection with policies, copper prices and strikes have led to a significant decline in supply, and project Capex continue to lag behind price movements Spend in project Capex continues to lag beh
Slide 18: Co: Market deficit to continue amidst structural supply shortage
6. Rapid growth underpinned by strong fundamentals of copper and cobalt markets Co: Market deficit to continue amidst structural supply shortage DRC is world’s largest cobalt producing country … … while most of cobalt products from DRC are sold to China1 c. 97% of the world’s cobalt is mined as a
Slide 19: Co: Demand driven by EVs & robust other end-uses
6. Rapid growth underpinned by strong fundamentals of copper and cobalt markets Co: Demand driven by EVs & robust other end-uses Battery chemicals to drive cobalt demand growth Global cobalt demand by sector Cobalt consumption has predominantly been used in portable 2016A 2020E batteries, superall
Slide 20: Co: EV penetration rate to reach c.13% by 2030
6. Rapid growth underpinned by strong fundamentals of copper and cobalt markets Co: the penetration rate of EV will reach c.13% by 2030, driven by country policies globally; EV sales estimated to exceed 50 million units which could further strengthen demand for cobalt Global EV sales forecast Expans
Slide 21: Section 3 – 2018 1H Results Update
Section 3 – 2018 1H Results Update RESTRICTED 21
Slide 22: Operational performance
Operational performance Copper production Cobalt production (ton) (ton) 54,060 50,000 47,782 5,000 4,638 42,587 42,512 4,334 3,885 40,000 4,000 3,391 30,521 30,000 3,000 2,579 20,000 2,000 10,000 1,000 0 0 2014 2015 2016 2017 1H2018 2014 2015 2016 2017 1H2018 Copper price & revenue of copper sales f
Slide 23: Financial performance
Financial performance EBITDA & margin Net profit attributable to shareholders & margin (USDm) (%) (USDm) (%) 250 23 25 300 8 7 25 19 2 200 188 20 160 61 5 8 42 20 (15) 150 15 (35) 10 102 (120) (35) 100 10 (62) 66 (260) (55) 4 (231) 50 1 5 (292) 14 (400) (75) 6 2014 2015 2016 2017 1H2018 0 0 2014 201
Slide 24: Financial performance (cont’d)
Financial performance (cont’d) Interest coverage ratio Debt ratio1 (%) 20.0x 60.0 15.9x 54.3 51.8 51.2 15.0x 48.6 11.8x 10.0x 7.3x 45.0 40.1 5.0x 2.0x 0.9x 0.0x 30.0 2014 2015 2016 2017 1H2018 2014 2015 2016 2017 1H2018 Interest coverage ratio 2014 2015 2016 2017 1H2018 Return on assets Return on eq
Slide 25: Section 4 – Development Strategy
Section 4 – Development Strategy RESTRICTED 25
Slide 26: Development strategy of Jinchuan International
Development strategy of Jinchuan International Development strategy Flagship platform of Jinchuan Group’s dedicated for development of overseas mineral resources Strategic Jinchuan Group’s M&A and capital operation center focusing on overseas resource projects positioning The “Two-wheel drive”
Slide 27: Section 5 – Q&A
Section 5—- Q&A RESTRICTED 27
Slide 28: Appendix – Profile of Mining Assets and R&R Statement
Appendix – Profile of Mining Assets and R&R Statement RESTRICTED 28
Slide 29: Ruashi open-pit mine (DRC)
Ruashi open-pit mine (DRC) Asset overview Reserves and resources summary Ore Grade Contained metals Mt % % kt kt Open-pit mining Cu Co Cu Co Proved 0.1 2.0 0.5 2 0 Probable 8.0 2.1 0.3 168 26 Total reserves 8.1 2.1 0.3 170 26 Measured 0.4 3.1 0.3 11 1 Copper Solvent Indicated 14.0 2.2 0.4 305 46 Ext
Slide 30: Chibuluma South Mine (Zambia)
Chibuluma South Mine (Zambia) Asset overview Reserves and resources summary Contained Mining & processing Ore Grade metals Mt % kt Backfill mining + long-hole stopping Onsite concentrator processing 50ktpm copper Chibuluma South Mine Cu Cu sulphide ore Proved 1.1 2.6 28 Probable - 2.8 1 Total re
Slide 31: Kinsenda Mine (DRC)
Kinsenda Mine (DRC) Asset overview Reserves and resources summary Contained Ore Grade metals Mt % kt Mechanised longitudinal drift and fill, and Cu Cu long-hole stoping with fill mining method Onsite concentrator designed to extract Proved - - - copper from sulfide/oxide ore @ average grade of 4
Slide 32: Musonoi Project (DRC)
Musonoi Project (DRC) Asset overview Resources summary Ore Grade Contained metals Mt % % kt kt Cu Co Cu Co Measured 12.7 3.3 0.9 415 115 Indicated 13.9 2.4 0.9 328 126 Inferred 5.5 2.3 0.8 125 46 Total resources 32.1 2.7 0.9 868 287 Production and sale High-grade sulphide deposit with Up dip mec
Slide 33: Lubembe Project (DRC)
Lubembe Project (DRC) Asset overview Resources summary Contained Ore Grade metals Mt % kt Cu Cu An exploration project located 30km south of Kinsenda Mine Project Low grade, bulk mineable, mixed oxide/sulphide deposit Measured - - - description PFS carried out in 2011 Scoping study completed
Slide 34: Mineral resources
Mineral resources 31 Dec 2017 31 Dec 2016 Tonnage Grade Contained metals Tonnage Grade Contained metals Mt % Copper % Cobalt Kt Copper Kt Cobalt Mt % Copper % Cobalt Kt Copper Kt Cobalt Ruashi Mine (Oxide & sulphide ore) Measured 0.4 3.1 0.3 11 1 0.4 3.0 0.4 13 1 Indicated 14.0 2.2 0.4 305 46 13.6 2
Slide 35: Ore reserves
Ore reserves 31 Dec 2017 31 Dec 2016 Tonnage Grade Contained metals Tonnage Grade Contained metals Mt % Copper % Cobalt Kt Copper Kt Cobalt Mt % Copper % Cobalt Kt Copper Kt Cobalt Ruashi Mine (Oxide & sulphide ore) Proved 0.1 2.0 0.5 2 0 0.1 2.0 0.6 3 1 Probable 8.0 2.1 0.3 168 26 7.4 2.1 0.4 158 2
Slide 36: Disclaimer
Disclaimer Statements in this presentation, other than historical facts, that address exploration activities and mining potential are “forward-looking” statements and are not statements of fact. These statements are generally identified by words such as “believes,” “expects,” “predicts,” “intends,”
Slide 37: Contact information
Contact information • Jinchuan Group International Resources Co. Ltd (02362.hk) • Address: Unit 3101, 31/F, United Centre, 95 Queensway, Admiralty, Hong Kong • Tel.: +852 3919 7268 • Fax: +852 3919 7208 • Email: info@jinchuan-intl.com • Official website: www.jinchuan-intl.com 37 RESTRICTED
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