MMG Ltd. · HKEX:1208
MMG — Morgan Stanley Asia Pacific Summit 2015
29 slides from MMG's conference presentation, Nov 19, 2015
Slide 1: MMG Limited – Morgan Stanley Asia Pacific Summit
MMG Limited Morgan Stanley Asia Pacific Summit 17 – 19 November 2015
Slide 2: Overview of assets
Overview of assets WE MINE FOR puocness IVEIVIG copper / lead / / NORTH AMERICA Century lead / silver / zinc x Golden Grove copper / gold / lead / silver / zinc Legend: e Operating assets lam sore AMERICA ! 1 1 i / Rosebery copper / gold / lead / silver / zinc r } Development assets ‘._} Exploration
Slide 3: We think safety first
We think safety first TRIF1 TRIF1 of 2.2 per million hours worked up to 3Q15. per one million hours 4.8 4.1 Continuous improvement in safety translates to improved operational discipline. 3.0 2.4 2.3 2.2 Safety is a core value with management incentives directly linked to safety performance. (
Slide 4: Company overview
Company overview Stable revenue 1H15 Higher sales volumes of US$1,113.8 million offset by lower commodities prices. Operating discipline Record YTD copper at 3Q15 151kt up 7% YoY, with strong contribution from Kinsevere and Sepon. Earnings growth 1H15 EBITDA US$375.9 million (3%), margin 34%.
Slide 5: Focus on asset utilisation and operational excellence
Focus on asset utilisation and operational excellence Three strong quarters of copper production Asset Utilisation across MMG assets with 150,728 tonnes produced, due to record copper production at Sepon and Kinsevere. 94% 86% 89% 90% 78% Improved safety performance reducing down- time and incre
Slide 6: Continuous focus on cost management
Continuous focus on cost management Sepon facing higher costs C1 Cost to process harder and US$/lb higher acid consuming 2.00 Type II ore. Kinsevere managed operating costs by 1.50 adjusting the mine plan to draw down from previously built up ore stockpiles. 1.00 Century is being managed to ma
Slide 7: Las Bambas update
Las Bambas update Mechanical construction largely complete, with focus shifted to pre- commissioning, commissioning and the closeout of remaining construction. 97% of community relocated to Fuerabamba town – remaining families do not impact project construction. Commenced preliminary operation
Slide 8: Las Bambas – Primary Crusher
Las Bambas – Primary Crusher 8
Slide 9: Las Bambas – Stacker and Conveyor
Las Bambas – Stacker and Conveyor 9
Slide 10: Las Bambas – Grinding area
Las Bambas – Grinding area 2x Ball mills 2x SAG mills 10
Slide 11: Las Bambas – Plant overview
Las Bambas – Plant overview Concentrate Thickening Grinding Flotation Regrind Coarse Ore Moly and Stockpile Cu Filter Plant Main Substation Tailings Pebble Thickening Crushing Plant 11
Slide 12: Las Bambas – Site layout
Las Bambas - Site layout AA "288232 IMIVIG HUAYLLATI LAS BAMBAS tenement 35,000Ha | CONEXION LAS BAMBAS MB PROGRESO PROGRESO COYLLUROUI! PIT SULFOBAMBA TAMBOBAMBA PIT CHALCOBAMBA PIT TAILINGS DAM FERROBAMBA CHALLHUAHUACHO CHALLHUAHUACHO
Slide 13: Dugald River update
Dugald River update One of the highest-grade undeveloped zinc resources globally. Long life 28 year underground zinc mine. Mine production rate of 1.5Mtpa, producing on average 160,000 tonnes of zinc in concentrate per annum. Significant by-products including 18,000 tonnes of lead and 981,00
Slide 14: Dugald River – Main project scope
Dugald River – Main project scope Mine with production rate of 1.5Mtpa per annum. Development of 500,000 tonne stockpile Concentrator and associated infrastructure. Paste plant for backfill. Mining infrastructure and services. Ancillary equipment; mobile plant and equipment. Installati
Slide 15: Powerful shareholding structure
Powerful shareholding structure Turnover Share Price Strong share price return. US$ Million HK$ 35 4.00 Major shareholder CMN: 3.50 30 - access to low cost capital 3.00 - strategic insight to China. 25 Management aware of limited liquidity. 2.50 20 Future opportunity to restructure 2.00 bala
Slide 16: MMG external debt
MMG external debt Debt is backed by large Chinese government supported financial institutions with a government mandate for long-term stable investment. Debt servicing covered by operational cash generation. Shareholder loan viewed by MMG and external debt providers as subordinated debt provid
Slide 17: 2020 objective: One of the world's top mid-tier miners
2020 objective: One of the world’s top mid-tier miners Commissioning Las Bambas with expected first production in 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 Centu
Slide 18: We mine for progress
WE MINE FOR PROGRESS A
Slide 19: Sepon – strong production results
Sepon – strong production results Financials Successful transition to harder Type II ore with quarterly milling record US$ million 1H15 1H14 % delivered. YTD production record of 68,694 tonnes Revenue 269.3 304.2 (11) of copper cathode. EBITDA1 154.9 182.9 (15) Maintained stable mining and mil
Slide 20: Kinsevere – half year production record
Kinsevere – half year production record YTD production record of 59,775 tonnes of Financials copper cathode. US$ million 1H15 1H14 % Operational efficiencies, stable electricity, increases to mill throughput. Revenue 222.7 228.9 (3) Lower copper prices marginally offset by EBITDA1 18% increase
Slide 21: Century – strong production and cost performance
Century – strong production and cost performance Production of 314,111 tonnes of zinc despite Financials transition to lower grades in final stages of US$ million 1H15 1H14 % mining. Revenue 390.1 412.1 (5) Mining from single stage of open-pit mine, lower EBITDA1 167.6 147.3 14 strip ratio, redu
Slide 22: Rosebery
Rosebery Production of zinc and lead concentrate Financials was 25% and 1% higher respectively due to higher milling grades and increased US$ million 1H15 1H14 % throughput. Revenue 120.4 118.0 2 Increased cash generation with EBITDA EBITDA1 margin increasing to 47% from 26%. 56.8 30.2 88 Zinc
Slide 23: Golden Grove
Golden Grove Financials Production of zinc 85% higher – zinc focused production in 2015. US$ million 1H15 1H14 % Zinc C1 costs US$0.18/lb. Revenue 111.3 130.5 (15) Copper C1 costs US$2.07/lb. EBITDA1 (0.4) 4.4 (109) EBIT (20.2) (14.4) (40) EBITDA margin (%) n/a 3 C1 costs – copper (US$ / lb) 2
Slide 24: Financial dashboard
Financial dashboard Revenue by commodity Revenue by customer location 21% 36% Zinc Australia Copper 19% Europe 16% Gold Middle East Silver Japan & Korea 7% 50% Lead Other Asia 4% 19% 19% China 3% 6% EBITDA by operating segment Operating expenses (Sites) 8% People 18% Sepon 8% 22% External Services 3
Slide 25: 2015 Guidance
2015 Guidance AA "288232 IMIVIG Current 2015 guidance Previous 2015 guidance 2014 Actual SEPON Copper — production Copper — C1 costs KINSEVERE Copper — production Copper — Cl costs CENTURY Zinc — production Zinc — C1 costs Lead — production ROSEBERY Zinc — production Zinc — C1 costs Lead — productio
Slide 26: Condensed consolidated income statement
Condensed consolidated income statement Six months ended 30 June 2015 2014 Variance US$ million Unaudited Audited % Revenue 1,113.8 1,193.7 (7) Other income 1.5 5.4 (72) Expenses (Excluding depreciation and amortisation) (739.4) (834.4) 11 EBITDA 375.9 364.7 3 Depreciation and amortisation (380.9) (
Slide 27: Condensed consolidated balance sheet
Condensed consolidated balance sheet 30 June 2015 31 December 2014 US$ million Unaudited Audited Non-current assets 12,844.9 12,280.6 Current assets – cash and cash equivalents 613.3 251.2 Current assets – other 960.7 958.2 Total assets 14,418.9 13,490.0 Total equity 3,176.3 2,974.6 Non-current liab
Slide 28: Consolidated financial performance: Cash flow statement
Consolidated financial performance: Cash flow statement Six months ended 30 June 2015 2014 Unaudited Audited US$ million Receipts from customers 1,161.6 1,197.2 Payments to suppliers (865.2) (855.2) Payments for exploration expenditure (17.9) (31.2) Income tax paid (75.8) (80.3) Net cash generated f
Slide 29: Financial resources and liquidity
Financial resources and liquidity Total drawn down of US$5,538.7 million in bank Maturity profile of borrowings borrowings and a US$2,261.3 million in as at 30 June 2015 shareholder borrowings to fund the Las Bambas project. 15% within one year Gearing ratio1 MMG Group (excluding Las 8% one - tw