Slide 1: Antamina: Overview & Peruvian Context
Antamina: Overview & Peruvian Context September 2010 http://www.antamina.com
Slide 2: Agenda
Agenda Antamina Overview Peruvian Context Operations & Operational Excellence Value Creation & Expansion 2
Slide 3: Senior Management
Senior Management Ian Kilgour President & CEO Abraham Chahuan VP Operations Pablo De la Flor VP Corporate Affairs Dave Splett VP Finance Allan Brownrig Expansion Director 3 Safety Briefing – Andino Hotel
Slide 4: Forward Looking Information
Forward Looking Information These slides and the accompanying oral presentation contain certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and comparable legislation in other jurisdictions. Forward-looking statements can be ide
Slide 5: Competent persons
Competent persons The Mineral Resource information pertaining to Antamina referenced on Slide 13 in this document is based on information compiled by Jhon Espinosa who is a Member of the AusIMM and a full-time employee of Compania Minera Antamina. Mr. Espinoza has sufficient experience which is rele
Slide 6: Shareholders and Structure
Shareholders and Structure ¾ Peruvian Company incorporated in 1996 ¾ Shareholders BHP Billiton 33.75% Xstrata 33.75% Teck Resources 22.50% Mitsubishi 10.00% ¾ Operated as joint venture company with shareholders’ approval 6
Slide 7: Antamina Location
Antamina Location ¾ 270 kilometres NE of Lima in Ancash region ¾ 4,200 to 4,700 metres elevation ¾ 302 km concentrate pipeline to Port Punta Lobitos ¾ Port near Huarmey, 300 km north of Lima ¾ Excellent Infrastructure 7
Slide 8: Key Corporate Value: Management of Risks
Key Corporate Value: Management of Risks ¾ Emphasis on risk management; policies, systems, controls, and performance measures through SIGRA system (Enterprise Wide) ¾ Risk administration is integrated into operating processes and business practices: Risk Management Leader, Risk Governance Committee
Slide 9: Key Corporate Value: Health and Safety
Key Corporate Value: Health and Safety 20.0 19.5 18.0 16.0 15.5 14.0 12.0 10.0 8.8 8.0 6.8 6.0 4.6 4.0 3.3 3.4 2.9 2.9 2.0 2.75 2.56 1.15 1.53 1.38 1.19 0.92 1.75 0.98 0.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Recordable Injuries LTI Health & Safety Focus: • Visible leadership & behaviour
Slide 10: Mining Stability Agreement
Mining Stability Agreement ; The Mining Stability Agreement - investment initiative established under the laws of Peru. In August 1998 Antamina was guaranteed ‘stability’ until 2016 and Agreement cannot be unilaterally amended. ; No restrictions on sales, exports, or currency limitations Specific ec
Slide 11: Voluntary Social Contribution
Voluntary Social Contribution ¾ Antamina’s participation in a “voluntary contribution” program began in 2006 and runs through 2010. ¾ 3.75% of after-tax profits (tax book) to go into a development fund for Ancash province ¾ The agreement is in effect for each year that the LME copper price is over U
Slide 12: After the Stability Agreement (2016+)
…After the Stability Agreement (2016+..) ¾Corporate Income tax rate of 30% (no change) ¾Mining royalty rate of up to 3% on gross sales less, TC’s/transport/other (new) ¾Customs rates at 0%, 9% & 17% applied to machinery, equipment and supplies (> 50% are subject to 0%) (Improvement) ¾A 19% Value Add
Slide 13: Antamina Operations – Vast Resources
Antamina Operations – Vast Resources A Major skarn deposit: Cu, Zn, Ag, Mo, Pb, Bi ¾ World Class Resource ¾ Mine plan extends past 2030 ¾ Extensive mineralogy in, and around pit 13
Slide 14: Antamina's Mineral Resources
Antamina’s Mineral Resources (100% Basis) Cu Zn Ag Mo New Reserves - Jul 1/08 Ore (MMt) (%) (%) (g/t) (%) Pit Vertical View Proven Copper Ores 100 1.14 0.17 8.7 0.036 Proven Copper Zinc Ores 42 0.99 2.30 19.5 0.009 Probable Copper Ores 454 1.05 0.17 9.7 0.031 Probable Copper Zinc 149 1.05 2.07 17.9
Slide 15: Antamina Operations - Mine
Antamina Operations - Mine ¾ 4 shovels, 4 loaders, 54 Trucks (CAT 793) ¾ ~ 400,000+ tonnes moved per day ¾ Gyratory crusher in base of pit 8 ore types and simplified into 3 basic clasifications: ¾ Cu only ores (M1, M2, M2A) ¾ Cu/Zn ores (M4A) ¾ Bornite (M5, M6) Material moved: 150+ mmt / yr 15
Slide 16: Antamina Operations - Concentrator
Antamina Operations - Concentrator ¾ Batch processing of Cu and Cu/Zn ores – Design feed rate of 70,000 tpd, recent records of 130,000 tpd ¾ SAG mill and 3 ball mills, with sequential flotation of Bulk Cu and Zn concs. ¾ Bulk Cu concentrate is further treated to produce a Mo. Conc or Pb/Bi conc. Pro
Slide 17: Antamina Operations - Port
Antamina Operations - Port ¾ 302 km pipeline feeds to storage tanks ¾ Pressure filtration – Larox filters ¾ Water treatment produces clean water for 177 Ha forest project ¾ Storage for 160,000 tons of dewatered concentrate ¾ Ship loader with 1,400 tph capacity on continuous basis ¾ 28 metre docking
Slide 18: Sales Profile - 2009
Sales Profile - 2009 ¾ ~ 75% of sales to 12 Long-term customers ¾ Remaining tonnes sold under spot and short-term Contracts ¾ Long-term Sales contracts expire in 2014 (will not be renewed) Cu concs (dmt’s) Zn concs (dmt’s) 65,509 20,968 6% 410,070 China 29,096 85,285 3% 505,354 3% China 8% 36% Germa
Slide 19: Community & Political Overview
Community & Political Overview 21
Slide 20: Political & Economic Overview
Political & Economic Overview Economy has resumed rapid growth • GDP growth expected to reach 7.5% this year (vs. 1% growth in 2009). • Low inflation (below 2%), but some fears of overheating • (growth in July was close to 10%) • Fiscal stimulus measures will be rolled back in second half of the yea
Slide 21: Political & Economic Overview
Political & Economic Overview Social conflicts & political mobilizations…an on-going concern… • Social conflict continues to be the most important challenge for the implementation of mining projects • Other operations impacted by social issues • However, two EIA consultation processes successfully c
Slide 22: Antamina's Area of Influence
Antamina’s Area of Influence
Slide 23: Social Responsibility Structure
Social Responsibility Structure Antamina Management and Employees • Local employment & Training • Local Purchasing Asociación Ancash Community Relations (Antamina and external & Environment Departments directors) SOCIAL Operational area Local and regional area RESPONSIBILITY • Communication • Touris
Slide 24: Antamina's Mining Fund
Antamina’s Mining Fund "Mining Program of Solidarity with the People” created in Dec 2006 for 5yr life 3.75% of after-tax profits – tied to copper prices 9 Antamina’s contributions ($208 million) represents ~40% of industry total Program Committed % Disbursed % $US mm $US mm 9 Managed by Antamina as
Slide 25: Health / Nutrition: Achievements
Health / Nutrition: Achievements • Alli Micuy (Caritas-Adra): reduced chronic malnutrition 6.9% in 31,000 children in 129 districts. Increased vaccination from 76% to 96% and childbirths in health establishments from 59% to 83% • Mama-Wawa (CARE): trained 725 professionals in emergency neo-natal pro
Slide 26: Education: Achievements
Education: Achievements • 160 schools repaired or rebuilt, 12 new pre-schools, 88,000 student desks manufactured locally, & 2,000 teachers trained through various FMA programs. • Trained 119 youth in technical careers, and improved education in 65 technical schools • Hatun Yachay (CARE), Right to Pl
Slide 27: Productivity & Infrastructure: Achievements
Productivity & Infrastructure: Achievements • PARA (co-financed by Clinton-Giustra): 4,200 jobs created and $9mm in sales • Alli Allpa (CARE): 2,000 jobs created and 35% increase in sales of select produce • Small Business Competition: & 2,000 new jobs created in 62 initiatives and sales of $4mm 9 1
Slide 28: Antamina: Operations, Expansion & Value Creation
Antamina: Operations, Expansion & Value Creation September, 2010
Slide 29: Mine Operations - Pit status end 2010
Mine Operations - Pit status end 2010 Extensive Pit and Dump development activities Tucush Dump Phase 6 East Dump Pioneering Phase 4 Phase 5 Phase 3 Phase 7 Pioneering Crusher Antamina Work commenced July 2009 32 Valley
Slide 30: Pit status end of 2011
Pit status end of 2011 Tucush Dump Phase 5 East Dump Phase 6 Phase 4 Phase 3 Phase 7 Crusher Antamina 33 Valley
Slide 31: Mine Operations
Mine Operations Mine Production Records: 2009 Tonnes Moved in a year 147.5 mmt 2009 Avg tonnes moved per day 404 kmt 2010 (May, Aug) Tonnes moved in a month 13.7 mmt 420 404 160,000 393 400 388 147,453 376 150,000 143,704 368 141,971 380 370 140,000 135,094 137,109 134,406 348 360 127,036 125,948 34
Slide 32: Mill Feed & Concentrate Tonnes
Mill Feed & Concentrate Tonnes Mill Production Records: 2009 Throughput - yearly 147.5 mmt 2010 (Jan, May, Jul) Throughput - monthly 3.37 mmt 2010 (Jun, Jul, Jul) Throughput - daily 132,040 mt 2010 Throughput records M1, M4A, M5 35,000 800 Throughput Cu / Zn Production (contained metal) 700 30,000 6
Slide 33: Sales Volumes & C1 Cost
Sales Volumes & C1 Cost ¾ Zinc production tracks well with Cu/Zn ore treatment and head grades ¾ Zinc production volumes track feasibility study - production was to peak in 2008- 2010 timeframe ¾ Moly production increases with pit development & treatment of more Cu only ores $0.40 Historical Sales 2
Slide 34: Demonstrated Performance
Demonstrated Performance Operational Excellence Model g 2010 EBIT impact from current & M ax im iz a r e l v a lo r d e A nta m in a , c o n re su ltad o s po s it ivo s pa ra to do s lo s gru p os d e in teré s past year projects: ~ $50mm Forjando F orjandoRResesultados ultados Estratégicos Estraté
Slide 35: Demonstrated Performance
Demonstrated Performance ¾ Mine to Mill project: modified blast pattern & improved rock fragmentation ¾ SAG bypass feed system & Implementation of pebble crusher ¾ Modifications to grate sizes in SAG, trommel screens, and pulp lifter - further increases throughput reduces recirculation 9 Cumulative
Slide 36: Benchmarking Antamina
Benchmarking Antamina 1st 2Q 3Q 4Q Quartile Ranking KPI Antamina Energy Consumed Quartile Antamina Placement per Lb of Cu 1 Total Cost/lb Cu 1 1st 15 Cost C1P 1 Cost C1 1 Cost C2 2 2nd 15 Cost C3 1 3rd 6 Ranking KPI Antamina 4th 0 Concentrator Milling Costs 2 Total Costs - TOTAL 36 Concentrator 2 Un
Slide 37: Base Metals Assets Cost Position
Base Metals Assets Cost Position Antamina Source: Brook Hunt Q2 2010, 2010 C1 Cash Cost (Normal Costing). Adjusted for Pampa Norte Element Year 2010 Annual Impact ($mm) Copper Price 1¢/Lb $6 Zinc Price 1¢/Lb $6 Thruput (Cu/Zn ore) 100 tph $24 Fx – Sol/$Us 0.1 S/$ $4 41
Slide 38: Antamina's Growing....
LA TANNA Antamina’s Growing.... (7-N
Slide 39: 2007-2008 Geological Survey
2007-2008 Geological Survey ¾ 220 km of drill holes in 07/08 - 50% used for Reserve/Resource increase ¾ Numerous in-pit targets ¾ Various deep targets ¾ Significant # of targets around mine ¾ Continued pit expansion potential ¾ More drilling and survey work required 43
Slide 40: On-going Drill Program Objectives
On-going Drill Program Objectives Planned Drill Program Drill Program Objectives 2011‐15 • Identify/define added resources & extend LOM In‐Pit 40,000+ Deep In‐Pit 10,000+ • Reserves conversion Near Mine 60,000+ • Support & optimize mine production increases • Optimize placement of changing infrastru
Slide 41: Expansion Business Case
Expansion Business Case Mensaje principal no mayor de 45 caracteres § Expansion builds upon demonstrated processes, technologies, and existing infrastructure. Original facility design contemplated a future expansion § Expansion is contained within the existing footprint of the land title § Expansion
Slide 42: Expansion Program - Scope
Expansion Program - Scope Program: 130 K tpd @ 911 MT Expansion LOM Statistics Increase Start Construction: Jan 2010 SAG 02 Commissioning: Q4 2011 Mineral to concentrator tons 86.4% Elements: - Plant/Port Copper Concentrate tons 82.4% - Power Systems - Truck Shop Zinc Concentrate tons 46.6% - Camps
Slide 43: Process Plant – Stockpile, Milling & Flotation
Process Plant – Stockpile, Milling & Flotation 47
Slide 44: Truck Shop & Mine Fleet
Truck Shop & Mine Fleet Truck Shop Mining Fleet 1. Addition of 5 bays and 1 PM bay for Item Quantity Haul Trucks Stripping Shovels 3 2. Ancillary facilities: Haul Trucks 96 • Tire Change and Repair Platform • Wash Bays Electric Drill 5 • Auxiliary equipment bays Wheel Dozer 7 • Lubricant handling ya
Slide 45: Expansion Program Impact
Expansion Program Impact Cu ore feed increases 80%+ over remaining LOM vs. 2007-2009 base Mill Feed 2007‐2009 Yrly Avg 2010‐2011 Yrly Avg Remaining LOM Yrly Avg Cu Only Ore (k dmt) CuZn Ore (k dmt) Bornite Ore (k dmt) 50
Slide 46: Expansion Program Metrics
Expansion Program Metrics ¾ Investment of $1.3 billion ¾ ROP utilized for $900 million of investment ¾ 38% Increase in annual mill throughput ¾ Strong continued by-product credits with increasing moly production (nature of deposit & more Cu ores) ¾ Payback of less than 5 years on project 51
Slide 47: www.antamina.com
LA ANTAMINA www.antamina.com (7-N