Slide 1: 2002 Results Presentation
2002 Results Presentation 11 March 2003
Slide 2: Important notice
Antofagasta plc Important notice Statements in this presentation include "forward-looking statements" that express expectations of future events or results. All statements based on future expectations rather than on historical facts are forward-looking statements that involve a number of risks and u
Slide 3: Highlights Year 2002
Highlights Year 2002 • Another strong operational performance – Copper production : 460,700 tonnes (2001: 445,000 tonnes) – Cash cost : 38.9 c/lb average (2001: 38.8 c/lb) • Los Pelambres: record low cash cost - under 35 c/lb • El Tesoro: 12% above design capacity in first full year of production •
Slide 4: Financial highlights Year 2002
Financial highlights Year 2002 2002 2001 c/lb c/lb LME copper price 70.7 71.6 (- 1%) Realised copper price 71.6 66.7 + 7% US$m US$m Revenues 863.1 769.5 + 12% EBITDA 349.7 283.1 + 24% Net income 96.8 62.1 + 56% ROCE 9.1% 6.6% + 38% 4
Slide 5: Financial highlights Year 2002
Financial highlights Year 2002 2002 2001 cents cents EPS 49.0 31.4 + 56.1% Dividends: Interim 10.0 7.25 Final 18.0 14.75 Ordinary 28.0 22.00 + 27.3% Special - 10.00 Total 28.0 32.00 5
Slide 6: Group 2002 Overview and Update
Group 2002 Overview and Update 6
Slide 7: Los Pelambres Year 2002 update
Los Pelambres Year 2002 update Plant throughput and copper grade 120 1.10% 1.05% 110.5 • Continuing optimisation with throughput 110 0.98% 104.7 1.00% in 2002 up 19% since first year 000 tonnes per day 100 copper grade 93.1 0.90% • Plant upgrade to be completed in 0.91% 90 2003 H2 0.80% 80 70 0.70%
Slide 8: Los Pelambres Financial performance
Los Pelambres Year 2002 update Financial performance • EBITDA of US$ 256.2m (7% above 2001) 2002 2001 Sales volume (000 tonnes) 318.2 360.9 Realised price (c/lb) 71.2 65.8 LME price (c/lb) 70.7 71.6 • Project debt reduced by US$ 87.3m to US$ 704m - Total repayments of US$ 242m since start-up • US$ 8
Slide 9: El Tesoro Year 2002 update
El Tesoro Year 2002 update Cathode production and cash cost 25 60 2001 2002 50 • Production and cash cost targets 20 achieved in first full year 40 15 tonnes – 84,300 tonnes at 40.8 c/lb c/lb 30 10 20 • Plant operating 12% above design 5 10 capacity 0 0 Q3 01 Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Production
Slide 10: El Tesoro Financial highlights
El Tesoro Year 2002 update Financial highlights • EBITDA of US$ 58.9m • Cash distributions to shareholders of US$ 24.4m in January and US$ 21m in September • Improved refinancing agreements signed in 2002 – Bank senior debt US$ 184.7m – Power line leasing US$ 15.7m • Principal repayments of US$ 12.3
Slide 11: Michilla Year 2002 update
Michilla Year 2002 update Plant throughput and copper grade Cathode production and cash cost 2.5% 60 80 14 13.4 51.1 51.8 49.6 12.2 50 12 11.8 2.0% 000 tonnes per day 70 40 copper grade 10 000 tonnes 1.67% 1.5% 59.8 8 64.5 c/lb 1.49% 1.39% 30 60 61.4 6 1.0% 20 4 50 0.5% 2 10 0 0.0% 0 40 2000 2001 20
Slide 12: Michilla Financial highlights
Michilla Year 2002 update Financial highlights • EBITDA of US$ 13.6m (2001: US$ 4.3m) • Cash distribution to shareholders of US$ 8.1m • Low debt level of US$ 2m maintained 12
Slide 13: Rail and road transport
Rail and road transport Year 2002 update • 6% growth in rail tonnages to 4.1 million tons • Additional volumes from El Tesoro and Zaldívar mines • 49% growth in sales at road subsidiary • Total revenues of US$ 70.4 million * * Represents third party revenues, stated after eliminating sales to Antofa
Slide 14: Other investments: Quiñenco S.A. (33.6%)
Other investments Year 2002 update Quiñenco S.A. (33.6%) • Industrial and financial group, listed in Santiago and New York (LQ) • Market value of Antofagasta’s investment US$ 174m at 31 Dec • US$ 3.2m dividend received in 2002 14
Slide 15: Financial analysis
ANTOFAGASTA @ PLG Financial analysis 15
Slide 16: Profit after tax and minorities - Variances 2002 vs 2001
Financial analysis Profit after tax and minorities - Variances 2002 vs 2001 US$m 160 140 15.0 3.1 120 3.8 44.9 3.5 8.8 96.8 100 19.8 80 62.1 60 40 20 0 2001 Mining Railway Quiñenco Net interest Exceptional Tax Minority 2002 items interest 16
Slide 17: Cash flow 2002
Financial analysis Cash flow 2002 US$m 700 349.7 3.2 600 39.0 500 67.3 400 126.7 300 248.7 252.4 70.0 200 40.7 5.5 100 0 Initial EBITDA Quiñenco Net Net Capex Net debt Group Minority Other Final Cash interest repaid dividends dividends cash paid 17
Slide 18: Group net debt
Financial analysis Group net debt US$m Consolidated net debt US$m Attributable net debt 1,200 1,200 965.3 1,000 1,000 800 712.9 800 252.4 568.7 600 600 400 400 333.6 235.1 200 200 0 0 Total loans Total cash Net debt Attrib. loans Attrib. cash Attrib. net debt Dec 02 Dec 01 Dec 02 Dec 01 Net Debt Att
Slide 19: Outlook for 2003
ANTOFAGASTA @ PLG Outlook for 2003 19
Slide 20: Exploration projects Chile 2003
Exploration projects Chile 2003 • Exploration program will be concentrated in Sierra Gorda district (around El Tesoro mine) • US$ 4m budget • Targets – Sulphide ores to complement the Esperanza project – Oxide and leachable sulphide ores 20
Slide 21: Exploration targets - Chile
Exploration targets - Chile Catalina Tesoro NE Sierra Oxidos Llano Gorda Copuchas Tesoro Oxidos Paleocanal Esperanza Telégrafo norte Telégrafo sur Centinela Pilar Polo Sur 21
Slide 22: Exploration projects Peru 2003: Joint Venture with CVRD
Exploration projects Peru 2003 Joint Venture with CVRD • 50-50 joint venture called Cordillera de las Minas • Target 60,000 sq kms target area near Cuzco in Southern Peru • Exploration started in August 2002 • US$ 6.7m budget over 3 years (US$ 0.5m spent in 2002) 22
Slide 23: Outlook and targets for 2003: Los Pelambres
Outlook and targets for 2003 Los Pelambres • Copper production of 325,000 tonnes (payable) • Moly production of 7,500 tonnes • Cash costs around 37 c/lb • Plant upgrade: – Average ore throughput above 115 ktpd (2002: 110 ktpd) – Permanent pebble crusher installed by Q4, further boosting processing l
Slide 24: Outlook and targets for 2003
Outlook and targets for 2003 El Tesoro • Maintain copper production of 85,000 tonnes at 41 c/lb cash cost Michilla • Production target 54,000 tonnes at 64.5 c/lb cash cost • Development work on new reserves in underground mine • Development plan to extend mine life beyond 2007 • Increase recovery of
Slide 25: Group outlook - summary key targets for 2003
Group outlook - summary key targets for 2003 • Focus on operational performance at mines • Maintain steady growth at railway and transport business • Explore high potential areas in Chile and Peru • Take next steps for potential expansion at Los Pelambres 25
Slide 26: Additional information Handout
Additional information Handout 26
Slide 27: Group operations Overview
Group operations Overview Copper mining Los Pelambres (60%) : 325,000 tpy in concentrates El Tesoro (61%) : 85,000 tpy of cathodes Michilla (74%) : 52,000 tpy of cathodes Exploration programmes in Chile and Peru Transport Chile (FCAB-100%) and Bolivia (FCA-50%) 4.1 million tons in 2002 Other investm
Slide 28: Group operations Overview Northern Chile and Peru
Group operations Overview Northern Chile Peru Michilla El Tesoro Lima Port of Cuzco Antofagasta Esperanza Proyecto Sur CVRD joint venture Port for Los Pelambres Los Pelambres 28
Slide 29: Process & Costs: Los Pelambres
Process & Costs: Los Pelambres all numbers refer to year 2002 Mining & Crushing Milling, Flotation & Treatment & Refining (open pit) Shipping (91% recovery) (Abroad) Crushed Ore Copper Concentrate Copper Cathode (avg 0.9% copper) (avg 44% copper) (99.999% copper) plus Moly concent. plus gold and sil
Slide 30: Process & Costs: El Tesoro
Process & Costs: El Tesoro all numbers refer to year 2002 Agglomeration / Heap leaching Mining / Crushing Solvent Extraction / Electrowinning (open pit) (74% recovery) Crushed Ore Copper Cathode (avg 1.5% copper) (99.999% Cu) 50 30.3 40.8 Cash Cost (cents/lb) 40 9.4 12.9 32% 30 20 20.9 10.5 68% 27.9
Slide 31: Process & Costs: Michilla
Process & Costs: Michilla all numbers refer to year 2002 Agglomeration / Heap leaching Mining / Crushing Solvent Extraction / Electrowinning (open pit/underground) (76% recovery) Crushed Ore Copper Cathode (avg 1.4% copper) (99.999% Cu) 70.0 35.2 61.4 60.0 Cash cost (cents/lb) 13.0 50.0 34.5 55% 40.
Slide 32: Provisional pricing mechanism
Provisional pricing mechanism applicable to Los Pelambres 4-month period (from shipping to final settlement) Shipping day 31 Dec Final settlement -Provisional invoice -Mark to market - Final price -Price = Shipping month average (only if price is lower) - Balance is paid -90% of provisional invoice
Slide 33: Antofagasta contacts
Antofagasta contacts London Santiago de Chile (Antofagasta plc) (Antofagasta Minerals S.A.) Philip Adeane Managing Director Jean-Paul Luksic Chief Executive Officer Hussein Barma Chief Financial Officer Alejandro Rivera Chief Financial Officer Sebastian Gil Head of Investor Relations Tel: +44 20 738