Mmg Ltd. · HKEX:1208
Mmg — Investor Presentation (June 2024)
48 slides from Mmg's investor presentation, Jun 4, 2024
Slide 1: Rights Issue Presentation
Rights Issue Presentation 4 June 2024
Slide 2: Disclaimer
Disclaimer NOT FOR RELEASE, PUBLICATION, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA OR JAPAN. THIS DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED TO BE, AND SHALL NOT BE CONSTRUED AS, AN OFFER, INDUCEMENT, INVITATION, SOLICITATION, COMMITMENT OR AD
Slide 3: Transaction overview
Transaction overview • Proposed Rights Issue to raise approximately HK$9,079 million (US$1,164 million)1 Proposed Rights Issue • The Company is expected to issue 3,465,432,486 Rights Shares • HK$2.62 per Rights Share, representing a discount of approximately: − 31.4% to the closing price of HK$3.82
Slide 4: Sources & uses
Sources & uses Reduced gearing and stronger capital base Gearing ratio 60% 55% 50% 44% Sources of funds US$ million Rights Issue 1,164 Pro forma gearing Dec Post Post Post 2023 Khoe- Joint Rights ratio of ~44% macau Venture Issue Uses of funds US$ million Repayment of short term Khoemacau 611 Achiev
Slide 5: Khoemacau Joint Venture Agreement
Khoemacau Joint Venture Agreement Joint venture ownership structure Joint venture transaction overview • As announced on 30 May 2024, MMG and CNIC Corporation Limited (the JV Partner) agreed to establish a joint venture for Khoemacau JV • The transaction aligns with MMG’s commitment to debt reductio
Slide 6: Pro forma capital structure
Pro forma capital structure The Khoemacau acquisition and associated capital structure initiatives reduce gearing to ~44% and maintains MMG’s net debt / EBITDA ratio of ~3.0x MMG1 + MMG Post + MMG Post + MMG Post 31 Dec 2023 Khoemacau Khoemacau Khoemacau JV Rights Rights Issue Acquistion3 JV4 Issue
Slide 7: Summary timetable
Summary timetable Event Date Last day of dealings in Shares on a cum-rights basis Friday, 7 June 2024 First day of dealings in Shares on an ex-rights basis Tuesday, 11 June 2024 Latest time for lodging transfers of Shares and related documents in order to qualify for the Rights Issue Wednesday, 12 J
Slide 8: Investment highlights
Investment highlights • Well positioned to benefit from copper demand growth from decarbonisation and a scarcity of new supply High quality exposure 1 • Copper comprises 70% of Mineral Resources following Khoemacau acquisition to the copper market • On track to become a top-10 global copper producer
Slide 9: Asset base and operations update
Asset base and operations update Kinsevere (100%) Location: DRC Las Bambas (62.5%) 2024 production guidance: Location: Peru Mineral Resources by Commodity 39,000 - 44,000 tonnes of copper 2024 production guidance (CuEq, 100% basis)4 cathode (100% basis): 2024 Copper C1 guidance: 280,000 - 320,000 to
Slide 10: MMG's commitment to debt reduction
MMG’s commitment to debt reduction MMG total borrowings (US$M)2 and gearing ratio MMG debt repayment schedule1 (US$M) 10,000 74% 73% Total borrowings Gearing ratio 80% 1,600 MLB 18 Yr Project Facility 70% US$200m CMN Shareholder ~ 60% 8,000 56% 55% ~ 55% Loan - funded by Rights Issue CMN Shareholder
Slide 11: Q&A
Q&A
Slide 12: Appendix
Appendix
Slide 13: MMG overview
MMG overview Overview Broker Coverage Broker Name Founded in 2009 Headquarters in Melbourne and Beijing Citi Jack Shang and Jimmy Feng HSBC Howard Lau A diversified metals company BOCI Research Lawrence Lau Five operating mines in Australia, Peru, Botswana and DRC Goldman Sachs Joy Zhang Well progre
Slide 14: MMG's leadership team
MMG’s leadership team CEO and Executive Director Appointed EGM Finance EGM – Americas Cao Liang appointed as CEO and Executive Executive accountability for finance and The EGM – Americas role will remain on the Executive Director with effect from 24 April 2024. managing the relationship with China C
Slide 15: Strategic Pathways
Deliver on our strategy Our purpose Our mission Our vision Our ambition Strategy Grow and diversify our We mine to create resource, production We mine for wealth for our people, to create a leading and value, by leveraging host communities international mining company Chinese and international progr
Slide 16: Building a premier diversified copper producer
Building a premier diversified copper producer Proforma portfolio (100% basis) (Proforma) Las Bambas 5% Significant Mineral Dugald River 12% 28% resources by Kinsevere 40% resource base 11% 15.8Mt 6.3Mt 22.1Mt asset Izok Lake added with 56% 4% Rosebery >20 year life (kt CuEq)1 16% 8% Khoemacau 8% 12
Slide 17: MMG growth opportunities
MMG growth opportunities Well progressed growth opportunities to expand exposure to copper and become a Top 10 listed copper producer Near Term Growth Mid Term Growth Further growth options being studied at all of our existing sites and at our Khoemacau Kinsevere Las Bambas Khoemacau Izok project Ac
Slide 18: Capital expenditure outlook
Capital expenditure outlook Capital Expenditure Capital Intensity of Copper Developments1 1,200 US$m Bubble size = Avg. CuEq production = Khoemacau Expansion = KEP 1,000 = Chalcobamba Expansion 800 600 400 200 0 2017 2018 2019 2020 2021 2022 2023 2024e 2024 capital expenditure guidance US$900 M – US
Slide 19: Products for a changing world
Products for a changing world The metals we mine are uniquely positioned with a portfolio of base metals assets that are critical to a low carbon future. Notes: 1. AET: Accelerated Energy Transition 2. Data source: Wood Mackenzie reports and MMG estimates 19
Slide 20: Net zero carbon emissions
Trend toward zero emissions Commitment Commitment to a goal of Net zero carbon emissions net zero carbon emissions by 2050. 2050 Scope 1 and Scope 2 We have set an interim, 2030 target of reducing greenhouse gas (GHG) emissions by 40%, from a 2020 baseline. Scope 3 Further focus on working with our
Slide 21: Further asset information
Further asset information
Slide 22: Safety update
Safety update Driving an increased focus on enhancing the planning and execution of tasks SEEE-F1 TRIF2 TRIF MMG 3 4.7 TRIF ICMM 2019 1.86 4.5 4.5 4.3 3.9 2020 1.68 3.4 3.2 2.9 2.9 2.7 2.7 2021 0.99 2.4 2.3 2.1 2.0 1.9 2022 0.94 1.6 1.4 1.3 1.2 1.1 1.0 2023 1.14 2024 Q1 1.11 2013 2014 2015 2016 2017
Slide 23: Historical production performance
Historical production performance Las Bambas – Copper in Copper Concentrate (kt) Dugald River – Zinc in Zinc Concentrate (kt) 190 178 180 173 175 454 170 320 152 385 383 147 330 311 290 302 280 255 2016 2017 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 Guidance Guidance Kins
Slide 24: Las Bambas
Las Bambas 2023 Copper Production One of the world’s largest copper mines with near term ↑19% organic growth optionality Year Ended 31 Dec Quarter Ended 31 Mar Record high annual mill 2023 2022 2024 2023 throughput Production metrics Ore mined kt 46,429 43,179 9,436 7,072 Ore milled kt 52,872 44,043
Slide 25: Las Bambas: restoring stability and building community partnerships
Las Bambas: restoring stability and building community partnerships 1 2 3 4 5 Corazon Program Fuerabamba Stable Concentrate Huancuire Development at Implementation Community Transportation Community Progress Chalcobamba starts New social Collaboration Ensured consistent Five contracts with Working a
Slide 26: Las Bambas: Corazon Program Implementation
Las Bambas: Corazon Program Implementation Corazón Program Engagement Social Management Build Leadership Financial Approval Model Governance processes Capacities Social Challenges Processes and Alternatives of Social Investment Land Purchase and Logistics Transport Shared Value Model Agreements Mode
Slide 27: Khoemacau: exceptionally good strategic fit
Khoemacau: exceptionally good strategic fit C1 cost post-expansion1 Near-term expansion2 to US$1.55/lb ~130 ktpa Cu High-grade mine with attractive financial Delivered through increased processing metrics, bottom half of cost curve capacity and additional mining fronts Low-capital intensity3 Long-li
Slide 28: Khoemacau: attractive operating and financial metrics
Khoemacau: attractive operating and financial metrics Post-expansion, Khoemacau is expected to generate significant cash flows at a low cost and high margin Key operating and financial metrics (estimates shown either as a range or average) 2024 guidance (from 23 March onwards) Copper head grade rang
Slide 29: Khoemacau: Large-scale, high-grade resource
Khoemacau: Large-scale, high-grade resource Asset Highlights Geologically consistent PFS complete for High-grade Resource One of the largest Newly built, modern along strike, with all ~130ktpa expansion with 2.0% Cu grade at underground copper underground mine with deposits remaining open project, w
Slide 30: Khoemacau: Low capital intensity, brownfield expansion to ~130ktpa
Khoemacau: Low capital intensity, brownfield expansion to ~130ktpa Khoemacau expansion to leverage off existing infrastructure and proven mining and processing methods Khoemacau ramp-up profile by deposit (100% basis) Roadmap to ~130ktpa copper production (100% basis) 9.0 Low Capital • Low capital i
Slide 31: Khoemacau: 4,040km2 land holding across Kalahari Copper Belt
Khoemacau: 4,040km2 land holding across Kalahari Copper Belt Expansion potential Current exploration and development pipeline Exploration target Discoveries Resource and PEA2 PFS2 Production Full geological potential not yet Initial drilling has intersected High priority targets to feed unlocked int
Slide 32: Kinsevere
Kinsevere Q1 2024 Copper Production Growing to be a ~100kt Copper Equivalent mine once ↓6% vs Q1 2023 expansion project fully ramped up Year Ended 31 Dec Quarter Ended 31 Mar Reducing reliance on 2023 2022 2024 2023 lower margin third- party ore in H2 Production metrics Ore mined kt 1,726 3,100 505
Slide 33: Kinsevere Expansion Project
Kinsevere Photo: Sulphide concentrator in construction Expansion Project Sulphide processing system First Production of Cobalt ongoing Hydroxide Q4 2023 Construction on track Expanded production at full Full ramp up expected 2025 capacity of ~80kt of Cu & 4-6kt and mine life extended to of Co, drivi
Slide 34: Dugald River
Dugald River Q1 2024 Zinc Production A world top 10 producing Zn mine with a >20yr mine life ↑ 114% vs Q1 2023 Year Ended 31 Dec Quarter Ended 31 Mar Q1 2023 operation 2023 2022 2024 2023 suspended 34 Days Production metrics Ore mined kt 1,651 1,873 458 226 Safe return to Ore milled kt 1,660 1,844 5
Slide 35: Rosebery
Rosebery Q1 2024 Zinc Production Rosebery continues to deliver after almost 90 years of ↑ 49% vs Q1 2023 operations Year Ended 31 Dec Quarter Ended 31 Mar Q1 2024 and Q4 2023 2023 2022 2024 2023 zinc recovery ↑ highest since 2017 Production metrics Ore mined kt 922 886 249 201 2023 Operating Ore mil
Slide 36: 2023 financial results
2023 financial results
Slide 37: Financial performance
Financial performance Summary Income Statement 2023 2023 YEAR ENDED 31 DECEMBER (US$ M) vs. 2022 Revenue 4,346.5 34% EBITDA 1,461.9 (5%) Profit for the year 122.1 (50%) EBITDA margin 34% Net cash generated 1,849.9 122% from operating activities Basic earnings per share US 0.10 cents 37
Slide 38: EBITDA waterfall
EBITDA waterfall Notes: 1. Other variance includes FX, corporate costs, exploration costs, etc. 2. Operating Expenses including operating costs and stock movements. 3. Price variances include mark-to-market adjustments on open sales contracts and the impacts of commodity hedging. 38
Slide 39: NPAT waterfall
NPAT waterfall Notes: 1. Price variances include mark-to-market adjustments on open sales contracts and the impacts of commodity hedging. 39
Slide 40: Financial dashboard
Financial dashboard Revenue by Commodity Revenue by Customer Discharge Port EBITDA by Operating Segment (US$M) Operating Expenses (by Nature) 11% People Las Bambas 1,396.7 28% 13% Energy Kinsevere (32.0) Consumables Dugald River 33.8 Royalities Rosebery 77.8 Selling Expenses Other (14.4) 18% Externa
Slide 41: Profit to MMG equity holders
Profit to MMG equity holders 2023 NPAT attributable to equity holders (US$M) 2023 2022 vs. Las Bambas NPAT up by 59%: 2022 More copper and molybdenum sales with stable logistics from March 2023 Profit after tax - Las Bambas 62.5% interest 188.6 118.4 59% Profit/(loss) after tax – Other continuing op
Slide 42: Profit & loss statement
Profit & loss statement YEAR ENDED 31 DECEMBER 2023 US$ M 2022 US$ M Change % Fav/(Unfav) Revenue 4,346.5 3,254.2 34% Operating expenses (2,814.1) (1,682.6) (67%) Exploration expenses (49.6) (30.8) (61%) Administration expenses (12.9) (16.0) 19% Net other (expense)/income (8.0) 10.6 (175%) EBITDA 1,
Slide 43: Balance sheet
Balance sheet US$ M AS AT 31 December 2023 US$ M AS AT 31 December 2022 US$ M Non-current assets 10,505.7 10,875.6 Current assets 1,395.1 1,659.9 Total assets 11,900.8 12,535.5 Total equity 4,312.0 4,228.5 Non-current liabilities – other 2,011.8 2,142.1 Non-current liabilities – borrowings 3,075.8 4
Slide 44: Statement of cash flow
Statement of cash flow YEAR ENDED 31 DECEMBER 2023 US$ M 2022 US$ M Receipts from customers 4,605.3 3,402.1 Payments to suppliers and employees (2,621.8) (2,319.9) Payments for exploration expenditure (4) (30.8) Income tax paid (79.1) (268.0) Net settlement of commodity hedges (4.9) 48.7 Net cash ge
Slide 45: 2023 resources and reserves
2023 resources and reserves
Slide 46: Mineral resources
Mineral resources Project Copper (kt) Zinc (kt) Lead (kt) Silver (moz) Gold (moz) Molybdenum (kt) Cobalt (kt) MMG Mineral Resources Contained Metal (100% Asset Basis) as at 30 June 2023 1 Las Bambas 7,600 120 2 200 Kinsevere 1,102 36 Dugald River 76 6,700 900 42 0.03 Rosebery 39 1,400 450 59 0.7 Hig
Slide 47: Ore reserves
Ore reserves Project Copper (kt) Zinc (kt) Lead (kt) Silver (moz) Gold (moz) Molybdenum (kt) Cobalt (kt) MMG Ore Reserves Contained Metal (100% Asset Basis) as at 30 June 20231 Las Bambas 4,900 76 1.0 130 Kinsevere 741 20 Dugald River 2,200 340 26 Rosebery 9 290 120 16 0.18 Sokoroshe II 47 11 Total
Slide 48: Thank you
Thank you