Slide 1: 2014 Jefferies Copper Summit
2014 Jefferies Copper Summit Diego Hernández – CEO, Antofagasta Minerals 20 March 2014
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 o 2013 Overview o Operational Review o Cost Management o Growth Opportunities o 2014 Priorities and Investment Case o Questions 3
Slide 4: Overview
Overview High o Competitive cash costs quality o Strong production and resource base assets Cost o Focus on operating and project cost control control o Strong operating margins and capital efficiency Capital o Return of capital to shareholders discipline o Prioritising brownfield projects Investing
Slide 5: Financial highlights
Financial highlights 2013FY 2012FY Variance Revenue ($m) 5,971.6 6,740.1 (11.4)% EBITDA ($m) 2,702.2 3,864.4 (30.1)% Net earnings ($m) 659.6 1,037.2 (36.4)% Operational cash flow ($m) 2,659.2 3,826.0 (30.5)% Total dividend (cents/share) 95.0 98.5 (3.6)% Copper production (tonnes) 721,200 709,600 1.6
Slide 6: Operational overview
Operational overview
Slide 7: Los Pelambres – expansion moving into feasibility
Los Pelambres – expansion moving into feasibility 2013 2014 o Large sulphide deposit with extensive resource base actual guidance Copper production 405,300 390,000 o Solid 2013 operational and cash cost performance, (tonnes) ahead of guidance Moly production 9,000 7,500 (tonnes) Gold production o Ca
Slide 8: Esperanza – expansion from 2015
Esperanza – expansion from 2015 o Sulphide deposit with significant gold by-product o Strong 2013 operational performance, 7.2% higher production than 2012 o 2013 net cash costs impacted by lower realised gold prices and additional mine movement as mine entered new phase o Initial scope of project t
Slide 9: El Tesoro and Michilla
El Tesoro and Michilla El Tesoro 2013 2014 actual guidance o Solid 2013 operating performance following extended mining activities at high grade, low cost Mirador pit El Tesoro Copper production 102,600 95,000 (‘000 tonnes) o 2014 guidance impacted by lower grade ore feed from Cash cost ($/lb) 1.36
Slide 10: Cost management
Cost management
Slide 11: Group cash costs
Group cash costs 2013FY Group net cash costs: $1.36/lb o Group well positioned on the cost curve o Working to control costs further Source: Wood Mackenzie Limited, Dataset: 2013 Q4 11
Slide 12: Cost reduction initiatives
Cost reduction initiatives Work Contract Owner’s Water Renewable Labour Supply chain practices management team consumption energy productivity Centralised, further Increased Redesign contract Use of larger Increased water Signing long-term, Use of automation, economies of scale, procurement of model
Slide 13: Growth opportunities
Growth opportunities
Slide 14: Investment priorities and portfolio roadmap
Investment priorities and portfolio roadmap In periods of lower prices: o Focus on higher return, lower risk brownfield, debottlenecking/ expansion projects o Advance greenfield projects steadily, ready for future development 2014 2015 2016 2017 2018 2019 2020 Key Antucoya 85,000 tonnes per year Fea
Slide 15: Production profile delivering sustainable growth
Production profile delivering sustainable growth Group Production Profile (‘000s tonnes) 1,000 800 600 400 200 - 2013FY 2014E 2015E 2016E 2017E 2018E Base Case (Incl. Esperanza 105ktpd) Antucoya Encuentro Oxides Los Pelambres Expansion o Brownfield expansions provide medium term production growth o
Slide 16: Antucoya – on track for 2015 ramp-up
Antucoya – on track for 2015 ramp-up Delivering growth o 85,000 tonnes per annum of production o Commence production first half 2015 o First full year of production 2016 o Synergies with Esperanza water pipeline Current status o Remains on-time and on-budget o 60% overall project progress (design, p
Slide 17: Focus on brownfield expansions
Focus on brownfield expansions Esperanza o Debottlenecking project to reach 105ktpd daily throughput o Project completion in 2015, 10-12ktpa additional copper production El Tesoro Los Pelambres o Encuentro Oxides will ensure maximum o Expansion from current 175ktpd to utilisation of existing SX-EW f
Slide 18: Longer term growth in Chile: CMD
Longer term growth in Chile: CMD o Centinela Mining District includes a portfolio of projects for longer term growth o Esperanza Sur and Encuentro Sulphides combined into single project to reduce capital intensity and maximise value o Currently in pre-feasibility stage, set for completion in late 20
Slide 19: Longer term growth options: Los Pelambres
Longer term growth options: Los Pelambres o A world class deposit o Current resource base triple the size of the current 23 year mine plan o A full expansion of Los Pelambres could see doubling in current throughput capacity o Full evaluation and permitting will take some time o Critical factors - w
Slide 20: Twin Metals and exploration
Longer-term growth opportunities: Twin Metals and exploration Twin Metals o Twin Metals project in Minnesota is the Group’s most advanced international opportunity o 2.2 billion tonne resource containing copper, nickel and PGMs o Pre-feasibility study to be completed mid-2014 o Timing of the project
Slide 21: 2014 priorities and investment case
2014 priorities and investment case
Slide 22: 2014 Priorities – delivering on the strategy
2014 Priorities – delivering on the strategy Existing Core Business 2014 o Safety guidance o Constant focus on cost control Copper production 700,000 (tonnes) o Delivery of production and cash cost guidance Moly production 7,500 (tonnes) o Continue to get the best possible performance from Gold prod
Slide 23: Investment case
Investment case High o Competitive cash costs quality o Strong production and resource base assets Cost o Focus on operating and project cost control control o Strong operating margins and capital efficiency Capital o Return of capital to shareholders discipline o Prioritising brownfield projects In
Slide 24: Questions?
Questions?