Mmg Ltd. · HKEX:1208
Mmg — Minmetals Resources — FY2011 Earnings Presentation
25 slides from Mmg's earnings presentation, March 2012
Slide 1: Minmetals Resources Limited 2011 Annual Results Presentation
MINMETALS RESOURCES LIMITED 2011 ANNUAL RESULTS ~ PRESENTATION
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: 2011 Highlights
2011 Highlights Strong operating results and higher commodity prices contribute to solid financial performance in 2011. Annual production and costs within revised guidance at all operating mines. Safety anchors our performance. Significant progress on business transformation. Anvil acquisi
Slide 4: 2011 Financial highlights
2011 Financial highlights Foreign Exchange and Commodity EBITDA1 of US$1,063.8 million, an increase of 30%. Price performance Indexed, 2010 =100 Operating profit (EBIT)1 of US$755.3 million, an increase of 45%. 112 A$ / US$ Net Profit After Tax attributable to equity holders of 100 the Company
Slide 5: EBIT variance analysis – continuing operations
EBIT variance analysis – continuing operations EBIT variance 1000 US$ million Volume FX 49.7m (95.4m) 900 Price Growth Net 235.3m initiatives Acquisition (57.7m) Contractors, write back 800 energy & 23.9m inventory Business (119.1m) 700 acquisition 2011 EBIT Business expense 755.3m .model 86.4m Othe
Slide 6: 2011 Financial dashboard
2011 Financial dashboard Revenue by commodity Revenue by customer location 31% 42% Zinc Australia Copper Europe 5% Gold 5% 18% China Minmetals Silver 34% Lead Other China 8% 40% 11% Other Asia 6% EBITDA by asset C1 operating costs 23% People 3% 27% Century External services Sepon 21% 10% Stores Gold
Slide 7: Century – The world's third largest zinc mine
Century – The world’s third largest zinc mine Highlights Financials 2011 Production and C1 costs within revised annual guidance. US$ million 2011 2010 % Significant production impacts in 1Q11 following Revenue 750.4 711.4 6 severe weather conditions. EBITDA 293.0 356.2 (18) Life of mine extend
Slide 8: Golden Grove – Current focus on copper
Golden Grove – Current focus on copper Highlights Financials 2011 Production and C1 costs within annual guidance. US$ million 2011 2010 % Higher costs in 2011 due to the Scuddles mine restart and higher mining costs. Revenue 388.5 391.3 (1) First production from the copper open pit development
Slide 9: Rosebery – Celebrating 75 years of operation
Rosebery – Celebrating 75 years of operation Highlights Financials 2011 Production and C1 costs within annual guidance. US$ million 2011 2010 % Mineral Resource at Rosebery at its highest in the history of operations following further acquisitions of Revenue 272.5 220.5 24 nearby tenements. EBIT
Slide 10: Sepon – High quality resource in close proximity to customers
Sepon – High quality resource in close proximity to customers Highlights Financials 2011 Production and C1 costs within annual guidance. US$ million 2011 2010 % Copper cathode production exceeded nameplate capacity in the second half of 2011 following successful Revenue 816.9 596.7 37 commission
Slide 11: Cost management remains a priority in 2012
Cost management remains a priority in 2012 Century C1 costs1 Golden Grove C1 costs USc / lb zinc USc / lb zinc USc / lb copper 65 25 325 20 60 275 15 55 225 FY12 guidance: 58 – 62 USc / lb zinc 10 FY12 guidance: 15 – 20 USc / lb zinc 285 – 300 USc / lb copper 50 5 175 FY10 FY11 FY12 FY10 FY11 FY12 R
Slide 12: Identification and delivery of new projects
Identification and delivery of new projects Capital expenditure1 Significant investment at Dugald River 1,200 US$ million Sustaining & Other pending final environmental and 1,000 Mine Development Board approvals. A$157 million was 800 Growth approved in 2011 to advance the 600 project. 400 200 2
Slide 13: Our business will grow from our existing assets and projects
Our business will grow from our existing assets and projects Minmetals Resources zinc and copper production 1 Kinsevere ramp-up to installed Copper equivalent units 2, indexed, 2011 = 100 nameplate capacity of 60kt in 2012. Understand and reduce production bottlenecks at Sepon. Leverage operat
Slide 14: Managing growth
Managing growth Continuously improve existing assets through identification of bottlenecks and efficiency opportunities. Identify, evaluate and develop our suite of growth projects. Target exploration to increase resource base and ultimately maximise asset life. Disciplined approach to M&A -
Slide 15: Attractive major growth projects
Attractive major growth projects Exploration/ Scoping Pre-Feasibility Feasibility Execution Operations Opportunity Rosebery Open Pit Mincenco GG Xantho Extended Sepon Primary Au Izok Corridor Izok Corridor Development Projects Gossan Valley Dugald River Sepon Primary GG Gold Oxide Century Phosphate
Slide 16: Development progress of our major growth projects
Development progress of our major growth projects Dugald River One of the world’s largest and highest grade known undeveloped lead zinc- silver deposits. Expected annual production of 200,000 tonnes of zinc, 25,000 tonnes of lead and 900,000 ounces of silver. Board decision pending final appro
Slide 17: Exploration - a core driver of growth pipeline
Exploration - a core driver of growth pipeline Contained metal Mine District Exploration Zinc, million tonnes 20 Mineral Resources Ore Reserves Current exploration activities around Sepon, 15 Golden Grove, Rosebery, Avebury and our projects in Canada. 10 New Discovery Programs 5 Australia: three
Slide 18: Continuously seeking value accretive M&A opportunities
Continuously seeking value accretive M&A opportunities M&A is necessary to achieve future growth targets. Zinc, Copper Commodities Nickel, bauxite, alumina Careful analysis of political and Geographies operational risk Must be meaningful to current Size scale Producing, or near producing Stage asset
Slide 19: Short-term volatility improving medium-term outlook
Short-term volatility improving medium-term outlook Commodity price forecasts1 Indexed, 2011 = 100 Zinc market in the medium to long-term 200 Zinc will be driven by supply. Copper 150 Nickel Global zinc supply expected to reduce by 1.8 million tonnes through closures and 100 contractions, includ
Slide 20: Creating long-term value for shareholders
Creating long-term value for shareholders Focus – operate our assets in a safe, efficient and cost effective manner. Progress – identify, evaluate and develop our suite of growth projects. Potential – targeted exploration and a disciplined approach to M&A. Mid-tier base metals companies by mar
Slide 21: Focus. Progress. Potential.
Focus. Progress. Potential.
Slide 22: Overview of assets
Overview of assets Operating Assets Sepon (Laos) Copper/gold Century (Australia) Zinc/lead/silver Golden Grove (Australia) Zinc/copper/lead/gold/silver Rosebery (Australia) Zinc/copper/lead/gold/silver Kinsevere (DRC) Copper Development / exploration Legend: Dugald River (Australia) Zinc/lead/silver
Slide 23: Income statement
Income statement US$ million 2011 2010 % (Restated) Movement Revenue 2,228.3 1,919.9 16 EBITDA 1,063.8 820.9 30 Operating profit (EBIT) 755.3 521.3 45 Net finance costs (46.2) (38.5) (20) Profit before income tax 709.1 482.8 47 Income tax expense (225.5) (126.6) (78) Profit from continuing operation
Slide 24: Consolidated statement of financial position
Consolidated statement of financial position US$ million December 2011 December 2010 (Restated) Cash 1,096.5 398.2 Property, plant and equipment 1,754.9 1,671.5 Working capital (net) 224.7 380.1 Available-for-sale financial assets - 164.1 Taxation (net) (52.4) (46.9) Intangible assets - 132.0 Other
Slide 25: Consolidated financial performance: Cash flow statement
Consolidated financial performance: Cash flow statement US$ million 2011 2010 (Restated) Net cash generated from operations before exploration 973.3 901.7 Exploration expenditure (64.0) (55.5) Income tax paid (209.6) (81.6) 699.7 764.6 Acquisition of subsidiaries / capital injection (0.1) (100.0) Ne