Antofagasta Plc · LSE:ANTO
Antofagasta — Investor Presentation (September 2015)
24 slides from Antofagasta's investor presentation, September 2015
Slide 1: Investor Presentation
Investor Presentation September 2015
Slide 2: Cautionary statement
Cautionary statement This presentation has been prepared by Antofagasta plc. By reviewing and/or attending this presentation you agree to the following conditions. This presentation contains forward-looking statements. All statements other than historical facts are forward-looking statements. Exampl
Slide 3: Agenda
Agenda Overview Operational and financial overview Growth opportunities Investment case 3 3
Slide 4: Overview
Overview Centinela
Slide 5: Overview
Overview Position the Group in a challenging environment • Maintain our financial strength Position • Retain low operating cost position • Strong cash flows and margins Invest in our assets Invest • Focus on delivering Antucoya • Los Pelambres and Centinela operations back to normal • Advance growth
Slide 6: Market environment and outlook
Market environment and outlook • LME copper price averaged $2.60/lb 2015 YTD • Approximately 500,000 tonnes of disruptions (2014: $3.11/lb) so far this year • Copper market largely in balance with small • Suppliers announcing production cuts including surplus now expected for 2015 major producers li
Slide 7: Operational and financial overview
Operational and financial overview Centinela
Slide 8: Operations overview
(1) Operations overview FY 2014 H1 2015 • H1 2015 production and cash costs impacted by lower Los Pelambres 391,300t Cu 169,400t Cu throughput due to protests in Q1 • New solar and coal PPAs now providing some 35% of power C1 $1.18/lb C1 $1.36/lb • Adverse court ruling in Q1 2015 appealed Centinela
Slide 9: H1 2015 overview
H1 2015 overview vs. H1 2014 (%) H1 2015(1) • Lower realised copper prices, disruptions to Revenue (31.4) $1,785.9m production in Q1 • Shipments delayed over period end EBITDA margin (11.0)(2) 31.4% • Strong compared with FTSE 350 miners • Lower realised copper price and sales Net earnings (73.9) $8
Slide 10: Cost-saving initiatives
Cost-saving initiatives • Reducing sustaining capex • Merged Esperanza and El Tesoro • Established common maintenance • Shared mining fleet & waste dumps Centinela Capex practices • Single vision for district • Lower capex estimate for Encuentro Oxides 2014 $80m achieved • Inventory categorisation •
Slide 11: Capex
Capex Capex 2014 - 2016 ($m) $(281)m 1,800 $(350-500)m $1,581m 1,600 1,400 $1,300m 1,200 150 30 ~$800m - $950m Development 1,000 180 capex Development 800 350 $596m 500-650 capex 600 20 Development 91 112 280 400 capex 203 200 ~300 310 170 0 2014 actual H1 2015 actual 2015E 2016 Sustaining capex Ant
Slide 12: Growth opportunities
Growth opportunities Antucoya
Slide 13: Strategy
Strategy 1 Existing core business • Constant focus on cost management and compliance • Delivery of production and cash cost guidance • Continue to get the best possible performance from existing assets • Proactive new approach with community and other stakeholders 2 Organic & sustainable growth of t
Slide 14: Strategy in action
Strategy in action • January 2015 consolidated • June 2015 completed the sale • August 2015 announced the ownership of Twin Metals of Aguas de Antofagasta acquisition of stake in Project (ADASA) to Empresas Públicas Barrick’s Zaldívar mine de Medellín • Acquired all the shares of • 50/50 JV. Antofag
Slide 15: Growth pipeline
Growth pipeline • Focus remains on cost control and efficiency throughout the operations • Focus on higher-return, lower-risk brownfield debottlenecking / expansion projects • Progress greenfield projects steadily for future development Antucoya(1) Encuentro Centinela Second Oxides(2) Concentrator(3
Slide 16: Antucoya – first production Q3 2015
Antucoya – first production Q3 2015 Delivering growth on-budget • First production Q3 2015 • Commissioning issues in the secondary and tertiary crushing circuits caused delay in ramp-up • Approximately 1.6m tonnes of crushed New photo material on the stacked heap as at 31 August 2015 • Expected 2015
Slide 17: Zaldívar acquisition
Zaldívar acquisition • 50% from Barrick for $1.0 billion (expected to close in Q4 2015) • Antofagasta to be operator • Earnings and cash flow accretive immediately • Rare opportunity to acquire good-quality copper ZALDĺVAR asset • Procurement and administrative synergies available • Upside potential
Slide 18: Centinela Mining District
Centinela Mining District Centinela debottlenecking • Debottlenecking concentrates plant to increase throughput to 105 ktpd (2014: 86 ktpd) • Project completion in late 2015 • Installation of tailing thickeners, crushing equipment, flotation cells and mining equipment • Moly plant construction under
Slide 19: Centinela Mining District - Encuentro Oxides
Centinela Mining District - Encuentro Oxides Next stage in development of Centinela District • Commence production late 2016 Oxides • First full year of production 2017 (8-year mine life) Remaining oxides – • Provides feed for existing SX-EW plant mined with Sulphides • Exposes the sulphides below S
Slide 20: Los Pelambres Mining District
Los Pelambres Mining District Los Pelambres Incremental Expansion • Throughput expansion to 205 ktpd from current 175 ktpd • Utilise existing infrastructure • EIA baseline study underway • Feasibility study to be completed once EIA approved • Pre-feasibility study capex estimate of $1.6 billion (inc
Slide 21: Further growth opportunities beyond 2020
Further growth opportunities beyond 2020 Twin Metals Minnesota Project • 2.4 billion tonne resource containing copper, nickel and PGMs • Optimising pre-feasibility study • Consolidated ownership of project • Advancing permitting process Exploration and evaluation • Prioritised exploration and evalua
Slide 22: Investment Case
Investment Case Los Pelambres
Slide 23: Investment case – steady, stable and secure
Investment case – steady, stable and secure High • Strong production, large resource base and long-life assets quality • Focus on two ‘world-class’ mining districts assets • Competitive cash costs • Focus on operating cost Cost • Project cost control control • Strong operating cash flows and margins
Slide 24: Antofagasta plc
A ANTOFAGASTA PLC