Mmg Ltd. · HKEX:1208
Mmg — Minmetals Resources — MInES Sydney 2011
32 slides from Mmg's conference presentation, 2011
Slide 1: Building a Major International Diversified Upstream Base Metals Company
Minmetals Resources Limited (HK: 1208) Building a Major International Diversified Upstream Base Metals Company Michael Nossal EGM Business Development MInES Sydney 2011
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is intended solely for your personal reference and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organisation/firm) or published, in whole or in part, for any pu
Slide 3: Contents
Contents 01 THE THE STORY STORY SO SO FAR FAR 02 FINANCIAL FINANCIAL STRENGTH STRENGTH 03 OPERATIONAL OPERATIONAL PERFORMANCE PERFORMANCE 04 STRATEGY STRATEGY AND AND GROWTH GROWTH 05 CONCLUSION CONCLUSION 3
Slide 4: The Story So Far
01 THE STORY SO FAR R Die RA PRA al
Slide 5: Mines take a long time to find and develop
THE STORY SO FAR Mines take a long time to find and develop... §§ CMN CMN bids bids for for Oz Oz Minerals, Minerals, FIRB FIRB application application denied denied 2009 §§ Deal Deal restructured restructured toto asset asset purchase, purchase, MMG MMG formed formed §§ Strong Strong operating oper
Slide 6: MMR in Mid-2011
MMR in Mid-2011… 1 An international diversified upstream base metals company 2 Strong financial and operational performance 3 Commitment to growth: organic, exploration and discovery, M & A 4 Divestment of non-core trading and downstream assets 5 China Minmetals commits to be a supportive majority s
Slide 7: Financial Strength
02 FINANCIAL STRENGTH R Die RA PRA al
Slide 8: 2010 Financial Highlights
2010 Financial Highlights § EBITDA of US$878.5 million on revenues of US$3,582.1 million § US$323.2 million invested in capex – US$170.8 million for growth/development capex – US$152.4 million for sustaining capex § US$50.9 millionSegmental investedEBITDA in exploration EBITDA (US$ million) 1,200 60
Slide 9: MMR's balance sheet is strong and getting stronger
MMR’s balance sheet is strong and getting stronger At 31 December 2010 MMR had circa $1.5b in net debt. This position has or will further improve through: § $500m raised in April equity placement § proceeds from the sale of 4.2% stake in Equinox (>$300m) § Proposed sale of non core assets (expected
Slide 10: Operational Performance
03 OPERATIONAL PERFORMANCE 10
Slide 11: March quarter highlights
March quarter highlights Safety §§ TRIFR TRIFRdown downfrom from4.8 4.8to to4.5 4.5 §§ Sepon Seponcopper copperoutput outputrose rose7% 7%following followingcompletion completionof ofexpansion expansionto to80ktpa 80ktpa Production / §§ Total Totalzinc zincand andlead leadproduction productionincrea
Slide 12: Significant Upgrade of Ore Reserves and Mineral Resources
Significant Upgrade of Ore Reserves and Mineral Resources Change in ore reserves (contained metal) Jun 10 vs. June 09 30% 19.3% 20.2% 21.2% 20% 10.1% % change 10% 0% -3.6% -10% Zinc (Mt) Copper (Mt) Lead (Mt) Gold (Moz) Silver (Moz) Change in mineral resources (contained metal) Jun 10 vs. Jun 09 10%
Slide 13: Century Operations
Century Operations Location Mining operations Open-pit mine Karumba port and dewatering facility 13
Slide 14: Segmental Performance – Century
Segmental Performance – Century 2010 2H 2010 1H 2010 2H 2009 Key developments Financial (US$ million) § Current mine plan shows Revenue 711.4 454.3 257.1 221.1 production to mid-2015 EBITDA 356.2 227.0 129.3 74.2 § Study underway for further cutback to access additional EBIT 136.9 87.9 48.8 (1.2) re
Slide 15: Sepon Operations
Sepon Operations Location Mining operations Processing facility Copper cathode products 15
Slide 16: Segmental Performance – Sepon
Segmental Performance – Sepon 2010 2H 2010 1H 2010 2H 2009 Key developments Financial (US$ million) § Copper Expansion complete; Revenue 596.7 288.0 308.7 241.9 ramping up to nameplate capacity EBITDA 358.6 167.0 191.6 146.8 of 80kpta EBIT 343.8 161.7 182.0 130.5 § Cu reserves increased by 10% in Se
Slide 17: Golden Grove Operations
Golden Grove Operations Location Mining operations Processing facility Flotation Cells 17
Slide 18: Segmental Performance – Golden Grove
Segmental Performance – Golden Grove 2010 2H 2010 1H 2010 2H 2009 Key developments Financial (US$ million) § Scuddles re-opening underway Revenue 391.3 209.3 182.0 152.6 § Copper oxide pit approved EBITDA 192.4 106.8 85.6 68.8 – Adds 3 years to mine life to 2018 EBIT 155.6 90.1 65.5 54.4 – Expected
Slide 19: Rosebery Operations
Rosebery Operations Location Mining operations Townsite Concentrate product 19
Slide 20: Segmental Performance – Rosebery
Segmental Performance – Rosebery 2010 2H 2010 1H 2010 2H 2009 Key developments Financial (US$ million) § Ventilation shaft completed Revenue 220.5 123.6 96.9 122.0 § Zn resource increased by 11.5% EBITDA 104.5 65.2 39.3 57.9 in 2010 EBIT 78.8 52.1 26.7 43.9 § Deep drilling continues Segment result 7
Slide 21: Strategy and Growth
04 STRATEGY AND GROWTH R Die RA PRA al
Slide 22: The External Environment
The External Environment Rapid urbanization will drive China’s appetite for commodities to expand further China’s growing consumption of base metals Continued revenue shift towards miners Mt (Copper, Zinc) Mt (Nickel) 80% Rising miners’ share of revenue from zinc price Miners' share of LME zinc pric
Slide 23: MMR's strategy
MMR’s strategy Build a major international upstream base metals group Major §§ Top Top33of ofmid midtier tierresource resourcecompanies companies within within55years years International §§ Outside OutsideChina China §§ Mining Mining Upstream §§ First Firststage processing––not stageprocessing notsm
Slide 24: Organic Growth Pipeline
Organic Growth Pipeline Exploration Scoping Pre-feasibility Feasibility Execution Operations Rosebery Open Pit GG Xantho Extended Izok Slave Regional Dugald Projects River Sepon Expansion Rosebery Sepon Primary Upgrade GG Copper Pit Copper GG Gold Oxide Avebury Restart Sepon Primary Au Century Exten
Slide 25: Dugald River Project
Dugald River Project Overview Location § High grade, world-scale deposit; 53Mt at 16% Zn equivalent grade (12.5% Zn; 1.9% Pb; 36g/t Ag) § Planned 200ktpa Zn for +23 years § Pre-Commitment activities underway § Expect MMR Approval 3Q 2011 § Subject to permitting, first production expected 1H 2014 § I
Slide 26: Dugald River Project
Dugald River Project Exploration drilling Camp accommodation Site offices Core samples 26
Slide 27: Izok Lake
Izok Lake Overview Location § Izok resource: 15Mt at 27% Zn eq. § PFS-level study: – 11-year open pit and u/g mine – 150 ktpa Zn and 30 ktpa Cu § Plan for 2011: – >20,000m of drilling – Final infrastructure study § Target: – Start permitting process by end 2011 – Indicated production 2016 - 2017 27
Slide 28: Izok Lake Project
Izok Lake Project Dugald River plus Izok Lake targeted to replace Century in Zn eq. by 2017 28
Slide 29: Our Exploration Strategy
Our Exploration Strategy § Focused on copper, zinc, nickel and gold (Sepon) § Exploration spending of ~US$60 million per annum in 2011 and 2012 § Target regions: Australia, North America, Asia, Africa 3 Tiered Sub-strategy Mine District – ~ 70% of budget, Short-term value add - <1 year Denver New Di
Slide 30: Disciplined value-focused acquisition
Disciplined value-focused acquisition M&A will be necessary to achieve growth targets §§ Copper, Copper, zinc zinc// lead lead Commodities §§ Nickel, Nickel, bauxite bauxite// alumina alumina §§ Careful Carefulanalysis analysis of of political politicaland andoperational operationalrisk risk Geograp
Slide 31: Material acquisitions can be funded
Material acquisitions can be funded MMR: § has access to considerable Chinese debt facilities § at typically lower cost than Western syndicated debt § with long tenor and high level of security § and has the support of China Minmetals Corporation to borrow at levels beyond those normally available t
Slide 32: Conclusion
CONCLUSION MMR: § is now an international diversified upstream base metals business § has generated strong financial and operational performance § has a strong development and exploration pipeline § is a highly-differentiated investment opportunity on the Hong Kong market § has the support of China