Southern Copper Corporation · NYSE:SCCO

Southern Copper — Investor Presentation (November 2018)

18 slides from Southern Copper's investor presentation, November 2018

  1. Slide 1: Southern Copper Corporation

    Southern Copper Corporation November, 2018 0

  2. Slide 2: I. Introduction

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  3. Slide 3: Safe Harbor Statement

    Safe Harbor Statement This presentation contains certain statements that are neither reported financial results nor other historical information. These estimates are forward-looking statements within the meaning of the safe-harbor provisions of the securities laws. These forward-looking estimates ar

  4. Slide 4: Corporate Structure

    Corporate Structure 100.0% (*) AMERICAS MINING CORPORATION 88.9% (*) Public Float 11.1% (*) 99.29 % 99.96 % SCC Peru Branch Minera Mexico (*) As of September 30, 2018 3

  5. Slide 5: Copper – The Best Fundamental Story in Commodities

    Copper – The Best Fundamental Story in Commodities Solid Fundamentals Copper Consumption by Region ► Copper has the best fundamentals in the basic materials space: ― Expect 2.8% copper demand growth. 2018 demand driven by strong U. S. economic growth. ― Expect supply growth of 2% due to lack of proj

  6. Slide 6: Southern Copper Strengths

    Southern Copper Strengths ►Highest copper reserves of the industry ►Excellent organic growth projects ►Low cost, fully integrated operations ►Experienced management team ►Strong financial performance / investment grade since 2005 ►Outstanding dividend history ►Good long-term copper & by-product fund

  7. Slide 7: II. Overview of Operations

    II. Overview of Operations 6

  8. Slide 8: Company Overview

    Company Overview Copper Reserves 1: 70.6 mmt Mexico Buenavista 9M18 Cash Cost $ 0.84/lb. El Pilar La Caridad Santa Eulalia El Arco Santa Barbara 2018 Estimates (@ $2.95 x Lb of Cu): San Martin Charcas San Luis Potosi Copper Production: 885 kt Taxco Sales: $ 6.5 B Peru EBITDA: $ 3.3 B 51% of Sales Ke

  9. Slide 9: World's Largest Copper Reserves

    World’s Largest Copper Reserves Copper Reserves as Reported SCC Highlights ► #1 mine life among copper producers 80 70.6 ► #5 world’s largest producer of mined copper 70 ► Highly diversified geographical presence 60 Copper Reserves (Mt) ► Four large-scale open-pit mines 50 47.8 47.4 43.6 ► A strong

  10. Slide 10: Geographic Footprint & Product Diversification

    Geographic Footprint & Product Diversification 9M18 Revenue by Product 9M18 Revenue by Market Other Mexico 30% Silver 3% Zinc 4% 5% Molybdenum 7% United States 12% Asia 37% Copper 81% Peru 5% Other American 8% Europe 8% 9

  11. Slide 11: Low Cost Operations

    Low Cost Operations Cash Cost per Pound of Copper Produced Low Cost Drivers Net of By-Products 1.11  Fully integrated low cost operations 1.1 1.07 1.00  World class assets 0.95 0.92  Significant SX-EW production (US$/lb) 0.9 0.84  Strong by-product credits  Management focus on cost efficiency a

  12. Slide 12: 2017 Copper Production Cash Cost by Company

    2017 Copper Production Cash Cost by Company Global Weighted Avg. 145.3 c/lb Source: Wood Mackenzie Copper Mine Cost Model 2017 11

  13. Slide 13: III. Financial Overview

    III. Financial Overview 12

  14. Slide 14: SCC Financial Summary

    SCC Financial Summary (US$ MM) 2015 2016 2017 2018 E Copper Price (LME) US$ per pound 2.50 2.21 2.80 2.95 Income Statement: Net Revenues $5,046 $5,380 $6,655 $6,517 EBITDA 1,945 2,212 3,292 3,298 EBITDA Margin 38% 41% 49% 51% U.S. Income Tax Reform Adjustment (743) Net Income 736 777 729 1,412 Divid

  15. Slide 15: Solid Financial Performance

    Solid Financial Performance Top Tier Margins and Conservative Leverage for Increased Financial Flexibility 2017 EBITDA Margin (%) 2017 Total Debt / EBITDA (x) Amortization Schedule BHP 54% Antofagasta 1.2 2020 $400 2022 $300 Antofagasta 53% Rio Tinto 0.8 2025 $500 SCC 49% SCC 1.8 2028 $51 Rio Tinto

  16. Slide 16: Investment Program to Significantly Increase Production

    Investment Program to Significantly Increase Production Board approved Other projects 2017-2019 2020-2021 MEXICO PERU Buenavista: El Arco Conc. & SX/EW - $2.8B Los Chancas Conc. & SX/EW - - $3.1B program to increase capacity Pilares 1Q20 - $159M 35K Tons Cu 190K Tons Cu, 105K Oz Au $2.8B - 130K Tons

  17. Slide 17: Best-in-class Mining Projects Reaching Completion

    Best-in-class Mining Projects Reaching Completion Providing Competitive Cash Costs and Increased Production Levels Project Capital Intensity at SCC Projects Initial Capex % of Total Incremental Production Capital Intensity Type (US$ MM) Capex Cu Eq. (kt/y) (US$/tpy Cu Eq.) Brownfield Projects Toquep

  18. Slide 18: SCC's Major Strengths

    SCC’s Major Strengths SCC is the Premier Copper Play • World class assets in investment grade countries. • #1 in reserves of any company with various organic growth prospects. - Copper production heading towards 1.5M Tons by 2025. • Capacity to deliver projects through flexible capital structure and

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