Southern Copper Corporation November, 2011

Transcription

1 Southern Copper Corporation November, 0 0

2 I. Introduction

3 Management Presenters Presenter Raul Jacob Title CFO - Peruvian Operations & Company Comptroller

4 Corporate Structure 00.0% (*) AMERICAS MINING CORPORATION 80.9% (*) Public Float 9.% (*) 99.9 % % SCC Peru Branch Minera México (*) As of September 30, 0 3

5 Copper The Best Fundamental Story in Commodities Solid Fundamentals Copper Consumption by Region Short-term macroeconomic concerns regarding the US and Europe. Together, they represent over 50% of world s economy and 3% of copper demand. Fundamentals are still excellent for copper: Asia represents over 60% of world demand (China=37% and could reach 45% in 5 years) Asia Ex China 0% All Other 7% Japan 5% Europe % China and EM countries will continue growing, at a lesser pace, but still substantial. USA 0% Limited production upside and falling grades result in a deficit market going forward. Estimated 0 deficit of 300 K. CRU June 0 China 37% LME Copper Cash Price vs. Inventories Copper Consumption by End-use , , ,000 Industrial Machinery 3% Consumer Products 8% Transport Equipment 3% , , ,000 00,000 00,000 Electrical 33% Jan-09 6-Feb-09 3-Mar-09 7-Apr-09 -May-09 5-Jun-09 9-Jul-09 -Sep-09 5-Oct-09 6-Nov-09 0-Dec-09 5-Jan-0 8-Feb-0 4-Mar-0 8-Apr-0 -Jun-0 6-Jul-0 9-Aug-0 0-Sep-0 4-Oct-0 7-Nov-0 -Dec-0 LME COMEX shanghai LME Cash 4-Jan- 5-Feb- 3-Mar- 4-May- 8-Jun- -Jul- 5-Aug- 6-Sep- 0-Oct- 3-Nov- Brook Hunt June 0 Building 33% 4

6 Southern Copper Strengths Highest copper reserves in the mining industry Excellent organic growth projects Low cost, fully integrated operations Experienced management team Strong financial performance / investment grade Outstanding dividend history Good long-term copper & molybdenum fundamentals 5

7 II. Overview of Operations 6

8 Company Overview Copper Reserves : 59.7 mmt Mexico 0 Estimates: Copper Production: Sales: EBITDA: YTD Cash Cost: 630 kt $ 6.8 B $ 3.8 B 56% of Sales $ 0.37/lb. Buenavista La Caridad San Martin Peru Santa Eulalia Santa Barbara Charcas San Luis Potosi Taxco # copper company by reserves #6 copper producer 3 #7 copper smelter 3 #9 copper refined 3 Key Copper open pit mines Underground mines Smelters and Refineries Cuajone Source: Company Filings Notes: Copper contained in reserves based on US$.80 per pound of copper as of December 3, 00 Based on available companies reports 3 Brook Hunt information for March 0 + Buenavista at full capacity Ilo Toquepala 7

9 World s Largest Copper Reserves Support Substantial Organic Growth Potential Copper Reserves as Reported SCC Highlights # position in reported copper reserves # mine life among copper producers Copper Reserves (Mt) #6 world s largest producer of mined copper Highly diversified geographical presence Four large-scale open-pit mines Mine Life 0 SCC Codelco Freeport BHP Billiton Anglo American Xstrata Rio Tinto VALE Antofagasta Source 0K Annual Rep. 0K 0F Annual Rep. Reserve Rep. 0F 0F Annual Rep. Period /3/0 /3/0 /3/0 06/30/0 /3/0 06/30/0 /3/0 /3/0 /3/0 Cu Price $.80 N/A $.00 $.90 N/A N/A N/A $.97 $ SCC Anglo Codelco Freeport BHP American Billiton Rio Tinto Xstrata 8

10 Geographic Footprint & Product Diversification 9 months 0 Revenue by Product 9 months 0 Revenue by Market Silver 7% Other Zinc 3% 3% Acid % Asia 9% Europe 8% Molybdenum 8% Other Latin American % Peru 4% United States 3% Copper 77% Mexico 9% Chile 8% Brasil 9% 9

11 Low Cost Operations Cash Costs per Pound of Copper Produced Net of By-Products Low Cost Drivers 0.7 Fully integrated low cost operations (US$/lb) World class assets Significant SX-EW production Strong by-product credits M -0.3 Operating Cash Cost per Pound of Copper Produced Management focus on cost efficiency Cost Structure () Other 3% Operating Materials 0% (US$/lb) Maintenance 4% Fuel 4% M () 9M 0 Labor 5% Power 4% 0

12 III. Financial Overview

13 SCC Financial Summary (US$ MM) LTM 0 9mos.0 Copper Price (LME) US$ per pound Income Statement: Net Revenues $3,734 $5,50 $6,648 $5,49 EBITDA,84,865 3,860,944 EBITDA Margin 49% 56% 58% 57% Net Income 99,554,9,799 Dividends paid per share Balance Sheet Statement: Cash & Equivalents $77 $,93 $,43 $,43 Total Assets 6,063 8,8 8,000 8,000 Total Debt,80,760,750,750 Total Liabilities,65 4,7 3,870 3,870 Total Shareholders' Equity 3,876 3,890 4,09 4,09 Cash Flow Statement: Capital Expenditures $45 $409 $465 $337 Free Cash Flow 548,5,673,49 Dividends paid to common shareholders 376,48,857,49 Net Debt / EBITDA 0.3x 0.x 0.4x 0.4x Includes short-term and long-term debt Free Cash Flow defined as net cash from operating activities less capital expenditures

14 Solid Financial Performance Top Tier Margins and Conservative Leverage for Increased Financial Flexibility 0 EBITDA Margin (%) 0 Total Debt / EBITDA (x) No Amortizations Until 05 Antofagasta 64% BHP $5 Vale 58% Freeport $0 SCC 56% Antofagasta $0 BHP 5% Rio Tinto $00 Anglo 47% Vale $400 Freeport 46% SCC $5 Rio Tinto Xstrata 35% 45% Xstrata Anglo $,000 $,00 Source: Company Reports 9M Results H Results Source: Company Reports 9M Results H Results 3

15 Investment Program to Significantly Increase Production Board approved Other projects and on Cuajone: Variable Cut-off Grade + HPGR 3Q - $5M K Tons Cu + 0.3K Tons Mo Toquepala Concentrator Exp. 4Q3 - $850M 0K Tons Cu 3.K Tons Mo Buenavista Molybdenum Plant Q3 - $5M K Tons Mo Buenavista SX/EW III H3 - $46M 88K Tons Cu Pilares Mine Cu H3 - $89.5M 40K Tons Tía María SX/EW H4 - $,000M 0K Tons Cu Buenavista Cu Concentrator H5 - $,00M 88K Tons,.6K Moly Angangueo Q5 - $3M 0K Cu, 8K Zn,.M oz Ag. El Arco H7 - $,600M 90K Tons Cu and 05K oz Au Empalme Cu Smelter Q7 - $800M 350K Tons Cap. Empalme Cu Refinery Q7 - $500M 330K Tons Cap. Ilo Smelter and Refinery Expansion Los Chancas Buenavista Zinc Refinery 0-06 Capex Program Overview (MM) 0-06 Copper Production Forecast ( 000 MT Cu),750,500,600, ,000,050,50, , Source: SCC

16 SCC s Major Strengths SCC is the Premier Copper Play World class assets in investment grade countries # in reserves with various exploration prospects - Increasing copper production Capacity to deliver projects through flexible capital structure and significant cash generation capability Fully integrated low cost operations - Strategic investments focused on cost competitiveness Outstanding dividend history Experienced management with proven track record (in US$ millions) $3,85 SCC EBITDA and % Margin $3,860 $,59 6.9% 5.% $, % $, % 58.% LTM 0 5

17 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 estimates are subject to risk and uncertainties that could cause actual results to differ materially from the expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond Grupo Mexico s ability to control or estimate precisely, such as future market conditions, commodity prices, the behavior of other market participants and the actions of governmental regulators. Readers are cautioned not to place undue reliance on these forwardlooking statements, which speak only as of the date of this presentation. Grupo Mexico does not undertake any obligation to publicly release any revision to these forward-looking estimates to reflect events or circumstances after the date of this presentation. 6