MMG Ltd. · HKEX:1208
MMG — Maybank Kim Eng Corporate Access Day 2015
21 slides from MMG's conference presentation, Jul 25, 2015
Slide 1: David Lamont, Chief Financial Officer
David Lamont, Chief Financial Officer Maybank Kim Eng - Corporate Access Day 2015
Slide 2: Strong performance and cash generation
Strong performance and cash generation > Annual copper production record of 191,307 EBITDA1 tonnes. US$ million 2014 2013 % > Second year of record copper cathode Sepon 366.5 396.5 (8) production at Kinsevere. Kinsevere 189.3 198.0 (4) Century 323.5 176.5 83 > Last full year of production at Century
Slide 3: Zinc market supply tightening, strong demand
Zinc market supply tightening, strong demand > New mine production won’t offset closures. > Limited zinc exploration when prices low. > New capacity small and higher cost. > China to meet higher environmental standards. Refined zinc supply/demand balance Zinc price actual/forecast 4500 4500 3000 300
Slide 4: Powerful shareholding structure
Powerful shareholding structure Turnover Share Price > Strong share price return. US$ Million HK$ 25 4.00 > Major shareholder CMN: 3.50 - access to low cost capital 20 3.00 - strategic insight to China. > Management aware of limited liquidity. 15 2.50 > Future opportunity to restructure balance 2.00
Slide 5: MMG external debt servicing profile
MMG external debt servicing profile Debt repayment schedule1 US$ million 1,000 750 500 250 0 2015 2016 2017 2018 2019 2020 5 (1) Excludes related party debt which includes US$2.262 billion shareholder loan.
Slide 6: Sustainable copper demand, unsustainable supply
Sustainable copper demand, unsustainable supply 2017 Forecast annual production > Las Bambas to transform MMG into one of the world’s largest copper producers. Escondida Cerro Verde > Copper metal stocks are expected to increase 6% in 2015. Las Bambas > Unexpected short-term disruptions Collahuasi c
Slide 7: Las Bambas - The world's largest copper project in construction
Las Bambas - The world’s largest copper project in construction First concentrate production Main power transmission Mechanical line installed completion 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Fuerabamba relocation Temporary Pre-stripping Primary crusher First concentrate commences commissioned concentrate l
Slide 8: Las Bambas – Site layout
Las Bambas -— Site layout vnc HA LAS BAMBAS tenement 35,000Ha HUAYLLATI | COYLLUROUI TAMBOBAMBA CONEXION PIT LAS BAMBAS CHALCOBAMBA HB PROGRESO PIT PIT SULFOBAMBA. TAILINGS DAM FERROBAMBA raft, Oe, gf tl PROGRESO rr y a CHALLHUAHUACHO CHALLHUAHUACHO
Slide 9: Las Bambas – Concentrator plant
Las Bambas – Concentrator plant Conventional grinding + flotation Coarse Ore Concentrate Stockpile Grinding Thickening Flotation Regrind Moly and Cu Filter Plant Tailings Main Thickening Substation Pebble Crushing Plant 9
Slide 10: Concentrate logistics – Rail
Concentrate logistics – Rail > Perurail S.A. copper concentrate transportation agreement signed for 15 years + 15 year option. > Trucking 430km from Las Bambas to Pillones transfer station, for railing 295 kilometres to Port of Matarani. > Estimate total consideration of fixed and variable costs US$
Slide 11: Las Bambas – Concentrator plant
Las Bambas – Concentrator plant Conventional grinding + flotation 11
Slide 12: Las Bambas - Pebble crushing plant
Las Bambas - Pebble crushing plant 12
Slide 13: Las Bambas – Primary crusher
Las Bambas – Primary crusher 13
Slide 14: Las Bambas – Freshwater intake and fresh water dam
Las Bambas – Freshwater intake and fresh water dam 14
Slide 15: Las Bambas – Exploration
Las Bambas – Exploration Chalcobamba > Jatún Charqui is an area of skarn mineralisation adjacent to a covered porphyry copper target. No drilling has been carried out to date in this area. 15
Slide 16: 2020 objective: One of the world's top mid-tier miners
2020 objective: One of the world’s top mid-tier miners > Complete construction of Las Bambas and first production by 1Q16. > Clear pathway for Dugald River. > Build on presence in two of the world’s most prospective copper belts. > Progressive remediation will not affect future potential use of Cent
Slide 17: We mine for progress
WE MINE FOR PROGRESS
Slide 18: 2015 Guidance
2015 Guidance 2015 Guidance 2014 Actual Sepon Copper – production 80,000 – 87,000 tonnes 88,541 tonnes Copper – C1 costs US$1.10 – US$1.20 / lb US$1.00 / lb Kinsevere Copper – production 67,000 – 72,000 tonnes 69,624 tonnes Copper – C1 costs US$1.60 – US$1.80 / lb US$1.62 / lb Century Zinc – product
Slide 19: Condensed consolidated income statement
Condensed consolidated income statement Year ended 31 December 2014 2013 Variance US$ million Audited Audited and % restated Revenue 2,479.8 2,469.8 - Other income 16.8 0.6 2,700 Expenses (excluding depreciation and amortisation) (1,715.8) (1,719.5) - EBITDA 780.8 750.9 4 Depreciation, amortisation
Slide 20: Condensed consolidated balance sheet
Condensed consolidated balance sheet 31 December 2014 31 December 2013 US$ million Audited Audited and restated Non-current assets 12,280.6 3,849.9 Current assets – cash and cash equivalents 251.2 137.4 Current assets – other 958.2 696.2 Total assets 13,490.0 4,683.5 Total equity 2,974.6 1,816.8 Non
Slide 21: Consolidated financial performance: Cash flow statement
Consolidated financial performance: Cash flow statement Year ended 31 December 2014 2013 Audited Audited and restated US$ million Receipts from customers 2,578.4 2,523.5 Payments to suppliers (1,744.8) (1,786.2) Payments for exploration expenditure (73.0) (71.9) Income tax paid (93.9) (110.9) Net ca