Southern Copper Corporation · NYSE:SCCO
Southern Copper — Investor Presentation (March 2017)
19 slides from Southern Copper's investor presentation, Mar 20, 2017
Slide 1: Southern Copper Corporation March, 2017
Southern Copper Corporation March, 2017 0
Slide 2: I. Introduction
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Slide 3: Management Presenter
Management Presenter Presenters Title Raul Jacob Vice President, Finance & CFO 2
Slide 4: 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 Mexican securities laws. These forward-looking esti
Slide 5: 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 December 31, 2016 4
Slide 6: 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: Other ― 2016 demand driven by US and EU markets. 12% Japan ― China: Expect 3% demand growth due to housing market 5% recovery (tier 1 an
Slide 7: 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
Slide 8: II. Overview of Operations
II. Overview of Operations 7
Slide 9: Company Overview
Company Overview Copper Reserves 1: 71.4 mmt Mexico Buenavista 2016 Cash Cost $ 0.95/lb. El Pilar La Caridad Santa Eulalia El Arco Santa Barbara 2017 Estimates (@ $2.50 x Lb of Cu): San Martin Charcas San Luis Potosi Copper Production: 900 kt Taxco Sales: $ 6.0 B Peru EBITDA: $ 2.8 B 47% of Sales Ke
Slide 10: World's Largest Copper Reserves
World’s Largest Copper Reserves Copper Reserves as Reported SCC Highlights ► #1 mine life among copper producers 80 ► #5 world’s largest producer of mined copper 70.1 70 ► Highly diversified geographical presence 60 56.7 ► Four large-scale open-pit mines Copper Reserves (Mt) 50 ► Two world class cop
Slide 11: Geographic Footprint & Product Diversification
Geographic Footprint & Product Diversification 2016 Revenue by Product 2016 Revenue by Market Other Acid 5% Mexico 26% Zinc 2% 4% Molybdenum Peru 5% 5% Chile 2% Silver Brasil 4% 6% Europe 19% Copper 78% Asia 23% Other American United States 1% 20% 10
Slide 12: Low Cost Operations
Low Cost Operations Cash Cost per Pound of Copper Produced Low Cost Drivers Net of By-Products 1.2 1.11 Fully integrated low cost operations 1.07 1.00 World class assets (US$/lb) 1.0 0.95 Significant SX-EW production Strong by-product credits 0.8 Management focus on cost efficiency 2013 20
Slide 13: 2015 Copper Production Cash Cost by Company
2015 Copper Production Cash Cost by Company Source: Wood Mackenzie Copper Mine Cost Model, WMQ42015 12
Slide 14: III. Financial Overview
III. Financial Overview 13
Slide 15: SCC Financial Summary
SCC Financial Summary (US$ MM) 2014 2015 2016 2017 E Copper Price (LME) US$ per pound 3.11 2.50 2.21 2.50 Income Statement: Net Revenues $5,788 $5,046 $5,380 $6,035 EBITDA 2,728 1,945 2,212 2,829 EBITDA Margin 47% 38% 41% 47% Net Income 1,333 736 777 1,208 Dividends paid per share 0.46 0.34 0.18 0.0
Slide 16: Solid Financial Performance
Solid Financial Performance Top Tier Margins and Conservative Leverage for Increased Financial Flexibility 2016E EBITDA Margin (%) 2016E Total Debt / EBITDA (x) Amortization Schedule SCC 43% Antofagasta 2.1 2020 $400 2022 $300 BHP 36% Rio Tinto 2.4 2025 $500 Antofagasta 33% SCC 2.6 2028 $51 Rio Tint
Slide 17: Investment Program to Significantly Increase Production
Investment Program to Significantly Increase Production Board approved Other projects 2013-16 2017-20 MEXICO PERU Buenavista: El Pilar 1Q18 - $310M – 35K Tons Cu El Arco Conc. & SX/EW - $2.8B Los Chancas Conc. & SX/EW - - Molybdenum Plant 3Q13 - $38M - 2K 184K Tons Cu, 105K Oz Au $2.8B - 134K Tons C
Slide 18: Best-in-class Mining Projects Reaching Completion
Best-in-class Mining Projects Reaching Completion Providing Competitive Cash Costs and Increased Production Levels Key Differentiators to Achieve Project Capital Intensity at SCCO Projects Lower Capital Intensity SCCO Project Pipeline • Use of less capital intensive and Initial Capex % of Total Incr
Slide 19: 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 exploration prospects - Increasing copper production • Capacity to deliver projects through flexible capital structure and significant cash generation