Antofagasta Plc · LSE:ANTO
Antofagasta — Merrill Lynch CEO Conference 2002
24 slides from Antofagasta's conference presentation, May 2002
Slide 1: Investor Presentation May 2002
Investor Presentation May 2002 1
Slide 2: Important notice
Antofagasta plc Important notice Statements in this presentation include "forward-looking statements" that express expectations of future events or results. All statements based on future expectations rather than on historical facts are forward-looking statements that involve a number of risks and u
Slide 3: Group Overview
ANTOFAGASTA @ PLC Group Overview
Slide 4: Key Investor Information
Group Overview Key Investor Information • Copper mining 91% of 2001 revenues • Total assets US$2.5 billion at 31 December 2001 • Market cap US$1.69 billion at 9 May 2002 (share price: 589p) 35% free float • Listing London Stock Exchange - ANTO.L United States Level 1 ADR - ANFGY 4
Slide 5: Brief History
Group Overview Brief History • 1888 Antofagasta Railway incorporated and listed in London • 1979 Luksic Group gains control and invests in mining, financial and industrial sectors in Chile • 1996 Non-core assets restructured • 1997 Large-scale mining projects developed • 2000 Low-cost copper product
Slide 6: Operations
Group Overview Operations Copper mining Los Pelambres (60%) : 330,000 tpy in concentrates El Tesoro (61%) : 85,000 tpy of cathodes Michilla (74%) : 52,000 tpy of cathodes Exploration programmes in Chile and Peru Transport Chile (FCAB-100%) and Bolivia (FCA-50%) Record 3.9 million tons carried in 200
Slide 7: Mining Operations and Exploration
Group Overview Mining Operations and Exploration Northern Chile Peru Michilla Tesoro Lima Port of Magistral Cuzco Antofagasta Esperanza Proyecto Sur Port for Los Pelambres Los Pelambres 7
Slide 8: Value Drivers
ANTOFAGASTA @ PLC
Slide 9: Key Strengths
Value Drivers Key Strengths • High quality assets • Ability to develop projects • Record of operating efficiently • Financial strength • Growth potential 9
Slide 10: High Quality Assets: Los Pelambres
Value Drivers High Quality Assets Los Pelambres • World’s 6th largest copper mine (1) • 3.1 billion tonnes sulphide resource • Open pit • 30 year mine plan • Lowest cash cost in the Chilean copper industry 2001 (2) (1) Source: Brook Hunt. Ranked by 2001 copper production 10 (2) Ranked by C1 cash cos
Slide 11: High Quality Assets: El Tesoro
Value Drivers High Quality Assets El Tesoro • 188 million tonnes oxide resource • Open pit • 21 year mine plan • Cash costs of 40 c/lb first five years 11
Slide 12: High Quality Assets: FCAB Railway
Value Drivers High Quality Assets FCAB Railway • Transport network for world’s largest copper mining region • 13% growth rate sustained annually since 1994 • Long term contracts with major mining clients (Codelco- (Codelco-Chuquicamata, Escondida, El Abra, Zaldivar, Mantos Blancos, Alto Norte, Tesor
Slide 13: Ability to Develop Projects
Value Drivers Ability to Develop Projects Two major copper mines Antofagasta Capex 1997-2001 developed between 1997-2001 700 600 – Ahead of schedule 500 US$ million – Under budget 400 – Design capacity exceeded 300 200 • Los Pelambres 100 – US$1.36 bn.; 330,000 tpy 0 • El Tesoro 1997 1998 1999 2000
Slide 14: Record of Operating Efficiently: Cash cost curve
Value Drivers Record of Operating Efficiently Cash cost curve of the Antofagasta copper copper industry 2001 production and cash cost 80 500 80 445 450 70 400 71 60 351 60 Production (tonnes) 350 62.6 Cash cost (c/lb) Cash cost (c/lb) 300 55.4 50 40 250 40 Antofagasta: 38.8 c/lb 200 39.2 38.8 30 20
Slide 15: Los Pelambres optimization process (2000-2002)
Value Drivers Record of Operating Efficiently Los Pelambres optimization process (2000-2002) Throughput Production and cash costs 140 copper production cash cost Plant throughput (000's tonnes per day) 120 70 payable copper ('000 tonnes) 100 60 100 80 cash cost (c/lb) 50 80 60 40 60 30 40 40 20 20 2
Slide 16: El Tesoro: production and cash costs since start up
Value Drivers Record of Operating Efficiently El Tesoro: production and cash costs since start up 8,000 70 2001 2002 7,000 60 6,000 Design 50 capacity Production (tonnes) Cash cost (c/lb) 5,000 40 4,000 30 3,000 20 2,000 1,000 10 0 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Production Cash co
Slide 17: Michilla: production and cash costs 2001-2002
Value Drivers Record of Operating Efficiently Michilla: production and cash costs 2001-2002 14,000 75.0 12,000 70.0 10,000 65.0 Production (tonnes) Cash cost (c/lb) 8,000 60.0 6,000 55.0 4,000 50.0 2,000 45.0 0 40.0 2001 Q1 2001 Q2 2001 Q3 2001 Q4 2002 Q1 Production Cash cost Cost reduction program
Slide 18: Financial Strength
Value Drivers Financial Strength 400 50% 46% 350 40% 300 37% US$ million 250 30% 200 150 20% 18% 100 10% 50 0 0% 1999 2000 2001 EBITDA Net interest + debt repayment EBITDA Margin % (cents per pound) 1999 2000 2001 Average LME copper price 71.3 82.3 71.6 Group average total cost 68.8 62.7 57.1 Group
Slide 19: Financial Strength: Net Debt
Value Drivers Financial Strength Consolidated net debt – Dec 2001 Attributable net debt – Dec 2001 1,200 1,200 1,057.4 1,000 1,000 808.7 800 800 248.7 615.8 600 600 396.3 400 400 219.5 200 200 - - Total Loans Cash Net Debt Attrib. Loans Attrib. cash Attrib. Net Debt Net Debt Attributable Net Debt =
Slide 20: Growth Potential: Los Pelambres
Value Drivers Growth Potential : Los Pelambres Current stage Total resource 3.1 billion tonnes • Expand throughput to 120,000 tpd in 2003 (114,000 tpd over mine life) • US$ 24 million investment 30 year mine plan 1.4 billion tonnes Next steps (2002 - 2003) • Develop basic engineering and environment
Slide 21: Growth Potential: Projects in Chile's Second Region
Value Drivers Growth Potential Projects in Chile’s Second Region - Conceptual study stage Esperanza - Exploration stage Telégrafo Sur Polo Sur Centinela Buey Muerto Conchi 21
Slide 22: Growth Potential: Esperanza - Chile
Value Drivers Growth Potential : Esperanza - Chile • Drilling programme of 13,900 metres completed in 2001 • Total mineable reserves (70% proven & probable): – Sulphides: 295 million tonnes, 0.66% copper, 0.31 g/t gold (equivalent copper grade of 0.81%) – Oxides: 73 million tonnes, 0.41% copper • Av
Slide 23: Large scale, low cost copper producer with growth opportunities
“Antofagasta is a large scale, low cost copper producer with good opportunities for growth” 23
Slide 24: Antofagasta contacts
Antofagasta contacts London Santiago de Chile (Antofagasta plc) (Antofagasta Minerals S.A.) Philip Adeane Managing Director Jean-Paul Luksic Chief Executive Officer Hussein Barma Chief Financial Officer Alejandro Rivera Chief Financial Officer Sebastian Gil Head of Investor Relations Tel: +44 20 738