Minsur Sa · BVL:MINSURI1
Minsur Sa — Investor Presentation (May 2018)
34 slides from Minsur Sa's investor presentation, May 2018
Slide 1: Minsur Corporate Presentation
Minsur Corporate Presentation May, 2018 1
Slide 2: Agenda
AGENDA 1. General Overview 2. Portfolio of world-class and profitable assets 3. Expansion Projects 4. Financial performance 5. Tin market outlook 6. Closing Remarks 2 Pucamarca, 2012
Slide 3: General Overview
1 General Overview 33
Slide 4: Minsur at a glance
Minsur at a glance ✓ Leading Peruvian mining company with +35 years of continuous operations 2017 ✓ Largest supplier of tin in the Western Hemisphere ✓ Owner of San Rafael, the world’s largest and richest tin mine Revenues US$ 672 M ✓ World´s single largest tin deposit: Pitinga mine * ✓ Diversificat
Slide 5: Part of BRECA Conglomerate, Peru's largest economic Group
Part of BRECA Conglomerate, Peru’s largest economic Group Shareholders Financial Industrial Mining Real Estate Breca Services Entities * 5
Slide 6: Over years of continuous operations / Revenues evolution
Over 35 years of continuous operations Minsur sales 40% of Marcobre to Alxar (Empresas Copec) for US$200M as part of the financial strategy to develop Mina Justa 2018 Minsur consolidates 100% of Marcobre – Mina Justa (Copper) for US$85M 2016 Pucamarca (Gold) begins operations (US$222M capex) Minsur
Slide 7: Global leading Tin Producer
Global leading Tin Producer Global ranking – Top 10 Tin producers (2016, MT) 76,000 26,802 25,445 23,756 20,100 13,111 11,088 10,984 8,541 8,200 Yunnan Tin Malaysia Minsur PT Timah Yunnan EM Vinto Thaisarco Guangxi Metallo Gejiu Zi-Li Smelting Corp Chengfeng China Tin Chimique 7 Source: ITA, 2016
Slide 8: Highly Committed to Sustainability
Highly Committed to Sustainability Safety and health Environment Social Management ✓ Identifying hazards, promoting safe ✓ Identifying, preventing, monitoring and ✓ Maintaining trust relationships with the behaviors to achieve a zero accident work mitigating environmental aspects, efficient stakehol
Slide 9: Minsur added to ICMM (May, 2018)
Minsur added to ICMM (May, 2018) 9
Slide 10: Focused Strategy
Focused Strategy ✓ Maintaining the low-cost nature of our world-class mining assets Focus on Cost- Control Efficiency ✓ Continuing to improve operating efficiencies and Operational Excellence ✓ Maintain the profitability of our operations ✓ Secure sustainability of our assets: commitment to world cl
Slide 11: Our Operations
2 Our Operations 11
Slide 12: Portfolio of world-class and profitable assets
Portfolio of world-class and profitable assets San Rafael (Sn) Tin Throughput: 2,900 MT/day Gold Cash-cost*: US$7,045 / MT Peru Smelters Average Grade*: 1.75% Operation: Underground mine Pucamarca (Au) Throughput: 21,000 MT/day Pisco By P. Cash-cost*: US$338 /oz Average Grade*: 0.50 g/MT San Rafael
Slide 13: San Rafael - Pisco
San Rafael - Pisco Overview Cost curve position (US$/MT) 2016 NBP cash cost ▪ Largest and richest ore grade tin mine in the world, producing around 5% of global tin supply ▪ High grade deposit, estimated resources of 11.2 million MT of ore with an average tin grade of 1.99% as of December 2017 San R
Slide 14: San Rafael – Pisco 1Q18 results and 2018 FY Guidance
San Rafael – Pisco 1Q18 results and 2018 FY Guidance 1Q18 vs 1Q17 2014 - 2017 FY & 2018 Guidance Min Max 3.6 3.5 24 20 20 18 Production 17.5 -3% 16.5 (kt Sn) 1Q17 1Q18 2014 2015 2016 2017 2018 [E] 93 143 127 Cash – Cost 62 82 75 (US$/tt) 70 +50% 65 1Q17 1Q18 2014 2015 2016 2017 2018 [E] 4.8 4.5 29 3
Slide 15: Ore Sorting Plant, San Rafael site, Peru
Ore Sorting Plant, San Rafael site, Peru 15 15
Slide 16: Pucamarca
Pucamarca Overview Production kTM Au grade (g/t) ▪ High quality and rich gold deposit 0.96 0.70 0.70 0.60 0.50 0.50 koz ▪ Demonstrates Minsur’s ability to develop, ramp up, and operate a new mine 8500 0.70 150 ▪ Gold production began in Feb/2013, with 116,665 ounces of gold produced 117 121 106 106
Slide 17: Pucamarca 1Q18 results and 2018 FY Guidance
Pucamarca 1Q18 results and 2018 FY Guidance 1Q18 vs 1Q17 2014 - 2017 FY & 2018 Guidance Min Max 29.0 24.2 121 106 106 100 100 Production -17% 90 (koz Au) 1Q17 1Q18 2014 2015 2016 2017 2018 [E] 3.9 4.1 Cash – Cost 6.2 4.2 4.3 5.0 5.0 (US$/tt) +3% 4.5 1Q17 1Q18 2014 2015 2016 2017 2018 [E] 3.8 35 17 C
Slide 18: Pitinga - Pirapora
Pitinga - Pirapora Cash cost evolution Overview (US$/MT)* 51,979 ▪ World’s single largest tin deposit of contained tin resources, Niobium and Tantalum as by-products 40,869 ▪ Estimated resources of 368 million MT of ore with an 22,868 21,365 17,910 17,604 average tin grade of 0.13% as of December 20
Slide 19: Pitinga – Pirapora 1Q18 results and 2018 FY Guidance
Pitinga – Pirapora 1Q18 results and 2018 FY Guidance 1Q18 vs 1Q17 2014 - 2017 FY & 2018 Guidance Min Max 1.5 6.6 7.0 1.4 5.0 5.5 5.9 Production +5% 6.0 (kt Sn) 1Q17 1Q18 2014 2015 2016 2017 2018[E] 24.2 22.7 18.8 21.0 17.5 18.1 18.6 Cash – Cost 19.0 +38% (US$/tt) 1Q17 1Q18 2014 2015 2016 2017 2018[E
Slide 20: Expansion Projects
3 Expansion Projects 20 20
Slide 21: Mina Justa
Mina Justa Overview ▪ World class, long life copper project ▪ 60% owned by Minsur (Alxar acquired 40% in 2018) ▪ Located at low altitude in Nazca, Peru ▪ Copper oxides & sulfides resources of 374 M MT at an average grade of 0.71% ▪ Feasibility studies approved in 2017, currently undertaking detailed
Slide 22: B2 – Tailings at San Rafael
B2 – Tailings at San Rafael Overview ▪ Process San Rafael’s old high grade tailings ▪ Approximately 5.4 million cubic meters, equivalent to 7.6 million metric tons, of tailings with an ore grade of 1.05% will be available for this process ▪ Feasibility studies approved in 2017, currently in executio
Slide 23: Nazareth
Nazareth Overview • Tin, copper, zinc and silver mineralization • 5km from San Rafael – short development time San Rafael • Extension of San Rafael’s life of mine SANTO NAZARETH DOMINGO • DDH Drilled: • 52k ms of DDH drilled in 2014-2015 • 45k ms of DDH drilled in 2016-2017 • 2018 drilling program:
Slide 24: Santo Domingo
Santo Domingo Overview • 30 km west from San Rafael Mine • Tin mineralization similar to San Rafael • DDH Drilled: • 18k ms of DDH drilled in 2014-2015 • 32k ms of DDH drilled in 2016-2017 • 15k ms of DDH planned for 2018 • Highlights: 5.9m @ 7.2% Sn 24
Slide 25: Financial Performance
4 Financial Performance 25 25
Slide 26: Revenues evolution
Revenues evolution Annual Tin sales Volume (‘000 MT) 43 32 33 30 32 26 25 25 Revenues (US$M) 876 883 893 914 739 619 672 2010 2011 2012 2013 2014 2015 2016 2017 617 Average Tin Price (US$/MT) 2010 2011 2012 2013 2014 2015 2016 2017 27.0 21.7 22.6 22.6 YoY % +1% 19.8 18.0 20.1 -16% 21% +2% -32% -0% 9
Slide 27: EBITDA and FFO evolution
EBITDA and FFO evolution EBITDA FFO (US$M) (US$M) Record volume Record prices 587 419 531 353 359 376 328 238 216 254 167 207 147 27.0 149 121 107 Tin Price 21.7 22.6 22.6 19.8 20.1 18.0 ($000) 16.1 2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017 EBITDA Note: FFO = Ad
Slide 28: Tin Market outlook
5 Tin Market outlook San Rafael mine site 28
Slide 29: SUPPLY: Global tin resources for only 12 more years production
SUPPLY: Global tin resources for only 12 more years production* Total Tin resources CRIRSCO** compliant only China 35% Australia 23% Russia 12% Brazil 16% Australia 8% Kazakhstan 14% Southamerica is a Indonesia 7% Germany 8% highly endowed Tin region (25%)* Brazil 6% Peru 8% Germany 4% DR Congo 6% K
Slide 30: DEMAND: Trends in Tin use
DEMAND: Trends in Tin use Annual demand growth expectation Trends in Tin use (kMT) 372 8% 8% 10% 6% 8% 362 11% 15% 17% 352 5% 22% 5% Others CAGR (2015-2020): 1% 16% Lead batteries 342 5% 15% Chemicals 13% Cu alloys 332 Tinplate Solders 322 49% 47% 40% 312 302 2015 2016 2017f 2018f 2019f 2020f 2013 2
Slide 31: Supply and demand projections
Supply and demand projections 000t 2015 2016 2017f 2018f 2019f 2020f World Refined Production 336 341 348 348 355 361 World Refined Consumption 346 352 355 358 360 359 Global Market Balance -10 -11 -7 -10 -5 2 Reported stocks LME 6 4 3 2 3 5 SHFE 1 2 2 2 1 2 Producers 14 12 8 6 5 5 Consumer/other 11
Slide 32: Closing Remarks
Clo 6 Closing Remarks 32 32
Slide 33: Closing remarks
Closing remarks 1 Global leading Tin producer 2 Portfolio of world-class and diversified assets 3 Investing in long-term growth and competitiveness 4 Strongly committed to maintaining profitability 5 Sustainability 33
Slide 34: Thank you for your interest in Minsur
Closing Remarks Thank you for your interest in Minsur 34