Mmg Ltd. · HKEX:1208
Mmg — Minmetals Resources — FY2010 Earnings Presentation
42 slides from Mmg's earnings presentation, Mar 30, 2011
Slide 1: Clarification Announcement - 2010 Financial Results Presentation
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in relia
Slide 2: Media enquiries
Media enquiries: Martin McFarlane Head of Investor Relations T +1 778 373 5601 M +1 778 987 1800 E [email protected] Bruce Loveday Investor Relations T +61 3 9288 0956 M +61 447 596 590 E [email protected] Kathleen Kawecki Communications Coordinator T +61 3 9288 0996 M +61 400 481 868 E ka
Slide 3: Minmetals Resources Limited 2010 Financial Results Presentation
Minmetals Resources Limited (HK: 1208) 2010 Financial Results Presentation
Slide 4: 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 5: The new MMR
The new MMR… Re-positioning MMR post acquisition of MMG assets on 31 December 2010 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 Experienced board and management team 5 Ch
Slide 6: Our strategic and financial re-positioning
Our strategic and financial re-positioning Organic growth Resource replenishment and extension Attractive project pipeline Strategic divestment Capital committed to upstream growth Focused on upstream base metals projects M&A Intended divestment of non-core downstream assets during 2011
Slide 7: Contents
Contents 01 FINANCIAL FINANCIAL HIGHLIGHTS HIGHLIGHTS 02 OPERATIONAL OPERATIONAL PERFORMANCE PERFORMANCE AND AND GUIDANCE GUIDANCE 03 STRATEGY STRATEGY AND AND GROWTH GROWTH 04 POTENTIAL POTENTIAL CAPITAL CAPITAL RAISING RAISING 05 CONCLUSION CONCLUSION 06 APPENDIX: APPENDIX: ADDITIONAL ADDITIONAL I
Slide 8: Financial Highlights
01 FINANCIAL HIGHLIGHTS A) Dik AR AIR a
Slide 9: Financial highlights
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$50.9 million invested in exploration Net profit after tax and minority interests US$
Slide 10: Consolidated income statement
Consolidated income statement (US$ million)(1) 2010 Continuing Dis-continuing Unallocated Businesses Businesses (VSA costs) Revenue 3,582.1 1,919.9 1,662.2 - EBITDA 878.5 904.3 60.6 (86.4) EBIT 560.1 604.8 41.6 (86.4) Net interest expenses (40.9) (38.6) (2.3) - Equity-accounted profits 41.0 - 41.0 -
Slide 11: Consolidated statement of financial position
Consolidated statement of financial position December 2010 December 2009 (US$ million) (restated) Cash 398.2 471.1 Property, plant and equipment 1,671.5 1,600.8 Working capital (net) 380.1 384.5 Available-for-sale financial assets 164.1 – Taxation (net) (46.9) 10.0 Intangible assets 132.0 140.0 Othe
Slide 12: Consolidated financial performance: Cash flow statement
Consolidated financial performance: Cash flow statement (US$ million) 2010 2009 EBITDA from operations: Continuing operations 853.4 337.7 Non-continuing 60.6 69.6 914.0 407.3 Exploration expenditure (50.9) (10.1) Other items 15.4 20.2 878.5 417.4 Net interest paid and tax (114.9) (65.0) Capex (323.2
Slide 13: Operational Performance and Guidance
OPERATIONAL PERFORMANCE AND GUIDANCE 11
Slide 14: Operational highlights
Operational highlights TRIFR TRIFRdown downfrom from6.3 6.3to to4.7 4.7 Safety LTIFR LTIFRdown downfrom from1.0 1.0to to0.3 0.3 Production Productionlevels levelswithin withinor orahead aheadof ofguidance guidance Production / Completion Completionof ofsignificant significantcapex capex
Slide 15: Significant upgrade of ore reserves and mineral resources
Significant upgrade of ore reserves and mineral resources Ore reserves – June 2010 Mineral resources – June 2010 Contained Metal Contained Metal Zinc Copper Lead Silver Gold Mineral Zinc Copper Lead Silver Gold Nickel Ore Reserves (Mt) (Mt) (Mt) (Moz) (Moz) Resources (Mt) (Mt) (Mt) (Moz) (Moz) (Mt)
Slide 16: Strong 2010 production performance from all assets
Strong 2010 production performance from all assets Century (Queensland, Australia) Sepon (Laos) One of the world’s largest zinc mines, Australia’s Copper cathode and gold dore largest open pit zinc mine, >500ktpa zinc operation 800 2009 2010 200 2009 2010 600 511 150 Production Production 105 10
Slide 17: Segmental performance – Century
Segmental performance – Century 2010 2H 2010 1H 2010 2H 2009 Financial (US$ million) Revenue 711.4 454.3 257.1 221.1 EBITDA 356.2 227.0 129.3 74.2 EBIT 136.9 87.9 48.8 (1.2) Segment result 122.4 80.8 41.6 (12.4) Operational Key developments Zinc produced (kt) 510.6 272.1 238.5 163.0 Current mine p
Slide 18: Segmental performance – Sepon
Segmental performance – Sepon 2010 2H 2010 1H 2010 2H 2009 Financial (US$ million) ? small photo of site Revenue 596.7 288.0 308.7 241.9 EBITDA 358.6 167.0 191.6 146.8 EBIT 343.8 161.7 182.0 130.5 Segment result 334.2 153.4 180.8 126.3 Operational Copper cathode produced (kt) 64.2 29.9 34.3 34.0 Gol
Slide 19: Segmental performance – Golden Grove
Segmental performance – Golden Grove 2010 2H 2010 1H 2010 2H 2009 Financial (US$ million) Revenue 391.3 209.3 182.0 152.6 EBITDA 192.4 106.8 85.6 68.8 EBIT 155.6 90.1 65.5 54.4 Segment result 147.7 86.5 61.2 44.4 Operational Zinc produced (kt) 73.3 29.5 43.8 36.0 Copper produced (kt) 33.5 19.3 14.2
Slide 20: Segmental performance – Rosebery
Segmental performance – Rosebery 2010 2H 2010 1H 2010 2H 2009 Financial (US$ million) Revenue 220.5 123.6 96.9 122.0 EBITDA 104.5 65.2 39.3 57.9 EBIT 78.8 52.1 26.7 43.9 Segment result 76.8 50.4 26.4 43.3 Operational Zinc produced (kt) 86.3 48.2 38.1 46.0 Lead produced (kt) 28.9 14.9 14.0 14.0 C1 co
Slide 21: Segmental performance – dis-continuing businesses
Segmental performance – dis-continuing businesses(1) (US$ million) 2010 2009 Revenue 1,662.2 769.9 EBITDA 60.6 69.6 Depreciation and amortisation (19.0) (16.7) EBIT 41.6 52.9 Share of net profit of associates and JCE 41.0 4.4 Profit before tax 80.3 53.0 Income Tax Expense (4.0) (6.4) NPAT 76.3 46.6
Slide 22: Strategy and Growth
03 STRATEGY AND GROWTH A) BRA A IRA A)
Slide 23: Strong industry fundamentals underpinned by China's growth engine
Strong industry fundamentals underpinned by China’s growth engine combined with continued revenue shift towards miners 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)
Slide 24: Experienced Chinese and Western Board
Experienced Chinese and Western Board Non-Executive Directors Executive Directors Li Fuli (Chairman – retiring 1 April 2011) Andrew Michelmore (CEO) Wang Lixin (Chairman – from 1 April 2011) David Lamont (CFO) Jiao Jian Hao Chuanfu (Vice Chairman) Xu Jiqing Li Liangang Gao Xiaoyu (
Slide 25: Targeted value-focused acquisition
Targeted value-focused acquisition Creation of shareholder value is paramount in execution of M & A and exploration strategy and management has set clear investment criteria to achieve this objective Copper, Copper,zinc zinc//lead lead Commodities Nickel, Nickel,bauxite bauxite//alumina alumin
Slide 26: Capital re-structuring through potential equity capital raising
Capital re-structuring through potential equity capital raising Specific Shareholders Shareholdershave haveapproved approvedaaSpecific SpecificMandate Mandateto toissue issueup upto to2.7 2.7billion billionnew new Mandate shares sharesto toraise raiseup upto toUS$1.6 US$1.6billion billionbefore b
Slide 27: Major projects development pipeline
Major projects development pipeline (>US$2bn based on known projects) 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
Slide 28: Potential to expand through organic initiatives: Dugald River
Potential to expand and achieve sustainable growth through organic initiatives focusing on upstream mining operations Dugald River plus Izok Lake targeted to replace Century (in Zn equivalent) by 2017 Dugald River (zinc, lead) overview Location High grade, world-scale deposit; 53Mt at 16% Zn equiv
Slide 29: Organic initiatives: Izok Lake and High Lake
Potential to expand and achieve sustainable growth through organic initiatives focusing on upstream mining operations (cont’d) Izok Lake, High Lake (zinc, copper) overview Location Izok Lake resource: 15Mt at 27% Zn (equivalent) grade – PFS definition of 11-year open pit and underground mine – Ind
Slide 30: Our exploration strategy
Our exploration strategy Focused on copper, zinc, nickel and gold 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 – aggressive near mine exploration and strategic title consolidation ar
Slide 31: Strategic divestments
Strategic divestments MMR is a diversified, upstream base metals mining company The PRC downstream assets are not core to MMR’s strategy going forward – Divestment will be pursued during 2011 – MMR expects full market value – Book value of assets to be divested ~US$620 million – MMR undisturbed
Slide 32: Potential Capital Raising
POTENTIAL CAPITAL RAISING 30
Slide 33: Potential capital raising
Potential capital raising Shareholders have approved a Specific Mandate to raise up to US$1.6 billion by issuing up to 2.7 billion new shares before 31 July 2011 Depending on market conditions, may seek to raise capital, but likely to be no more than US$1 billion – Strong cashflows and planned a
Slide 34: Conclusion
05 CONCLUSION A) Dik AR AIR a
Slide 35: Bigger, Stronger and Ready to Grow
Bigger, Stronger and Ready to Grow 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 p
Slide 36: Appendix: Additional Information
APPENDIX ADDITIONAL INFORMATION 34
Slide 37: Century
Century Overview Open-pit mine Location Queensland, Australia MMG ownership 100% Commodity Zinc, lead, silver Stage Production Mining method Open-pit Reserves and resources (as at June 2010) Ore Reserves and Ore Zn grade Pb grade Ag grade Zn cont. Pb cont. Ag cont. Mineral Resources (Mt) (%) (%) (g/
Slide 38: Sepon
Sepon Overview Mining operations Location Laos MMG ownership 90% Commodity Copper, gold, silver Stage Production Mining method Open-pit Reserves and resources (as at June 2010) Cu Au Ag Cu Au Ag Cu Au Ag Cu Au Ag Ore grade grade grade cont. cont. cont. Ore grade grade grade cont. cont. cont. Ore Res
Slide 39: Golden Grove
Golden Grove Overview Processing facilities Location Western Australia MMG ownership 100% Zinc, copper, lead, Commodity gold, silver Stage Production Mining method Underground Reserves and resources (as at June 2010) Zn Cu Pb Ag Au Zn Cu Pb Ag Au Ore Reserves and Ore grade grade grade grade grade co
Slide 40: Rosebery
Rosebery Overview Mining operations Location Tasmania, Australia MMG ownership 100% Zinc, lead, copper, Commodity gold, silver Stage Production Mining method Underground Reserves and resources (as at June 2010) Zn Cu Pb Ag Au Zn Cu Pb Ag Au Ore Reserves and Ore grade grade grade grade grade cont. co
Slide 41: Dugald River
Dugald River Overview Exploration activities Location Queensland, Australia MMG ownership 100% Commodity Zinc, lead, silver Final stages of feasibility and permitting Stage “Go” decision expected Q1 2011 Mining method Underground First year of 2014 operation Planned mine life 23 years Reserves a
Slide 42: Izok Lake and High Lake
Izok Lake and High Lake Overview Exploration activities A suite of polymetallic base metals and gold assets in the Nunavut Territories of northern Canada Izok Lake – Cu / Zn / Pb / Ag – High geological prospectivity – Pre-Feasibility Study underway High Lake – Cu / Zn / Pb / Ag – Approximately