Southern Copper Corporation November, 2013

Transcription

1 Southern Copper Corporation November, 013 0

2 I. Introduction 1

3 Management Presenters Presenter Raul Jacob Title Vice President of Finance & CFO

4 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. 3

5 Corporate Structure 100.0% (*) AMERICAS MINING CORPORATION 81.8% (*) Public Float 18.% (*) 99.9 % % SCC Peru Branch Minera Mexico (*) As of October, 013 4

6 Copper The Best Fundamental Story in Commodities Solid Fundamentals Copper Consumption by Region Copper has the best fundamentals in the basic materials space: Asia represents over 60% of world demand (China=41% and could reach 45% in 5 years) China and EM countries will continue growing, at a lesser pace, but still substantial. Additional production expected by , will be partially offset by restocking in US and Europe and ore grade decay. Improving view on macroeconomic concerns regarding the US and Europe. Together, they represent over 50% of world s economy and 7% of copper demand. CRU Jan 013 LME Copper Cash Price vs. Inventories Copper Consumption by End-use ,000, , , , ,000 Industrial Machinery 13% Consumer Products 9% Transport 13% , , , Jan-09 8-May-09 9-Sep-09 1-Jan May Sep Jan May Sep Jan-1 LME COMEX shanghai LME Cash -May-1 0-Sep-1 -Jan-13 4-May-13 5-Sep-13 00, ,000 - Brook Hunt Dec. 01 Construction 31% Electrical & Electronic Products 34% 5

7 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 Outstanding dividend history Good long-term copper & molybdenum fundamentals 6

8 II. Overview of Operations 7

9 Company Overview Copper Reserves 1 : 67.1 mmt Mexico 013 Estimates: Copper Production: 630 kt Sales: $ 5.8 B EBITDA: $.9 B 50% of Sales 9M Cash Cost: $ 0.99/lb. Buenavista La Caridad San Martin Peru Santa Eulalia Santa Barbara Charcas San Luis Potosi Taxco #1 copper company by reserves #5 copper producer 3 #11 copper smelter and refinery 3 Key Copper open pit mines Underground mines Smelters and Refineries Cuajone Source: Company Filings Notes: 1 Copper contained in reserves based on US$.00 per pound of copper as of December 31, 01 Based on available companies reports 3 Wood Mackenzie Limited 01 Ilo Toquepala 8

10 World s Largest Copper Reserves Copper Reserves (Mt) SCC Copper Reserves as Reported 63.6 Codelco 41.3 Freeport 34.5 BHP Billiton Anglo American Source 10K Annual Rep. 10K 0F Annual Rep. Reserve Rep. 0F 0F Annual Rep. Period Dec.31, 01 Dec.31, 01 Dec.31, 01 Jun.30, 01 Dec.31, 01 Dec. 31, 01 Dec. 31, 01 Dec. 31, 01 Dec. 31, 01 Cu Price $.00 N/A $.00 $3.6 N/A N/A N/A $3.67 $.75 Xstrata Rio Tinto VALE Antofagasta SCC Highlights #1 mine life among copper producers #5 world s largest producer of mined copper Highly diversified geographical presence Four large-scale open-pit mines Mine Life SCC Anglo American Codelco Freeport BHP Billiton Rio Tinto Xstrata 9

11 Geographic Footprint & Product Diversification 9M 013 Revenue by Product 9M 013 Revenue by Market Molybdenum 6% Acid Zinc 3% 3% Other 3% Other % Peru 5% Mexico 8% Silver 7% Chile 6% Copper 78% Brasil 8% United States 0% Asia 14% Europe 17% 10

12 Low Cost Operations Cash Cost per Pound of Copper Produced Net of By-Products Low Cost Drivers.0 Fully integrated low cost operations (US$/lb) World class assets Significant SX-EW production Strong by-product credits Management focus on cost efficiency Q13 Q13 3Q13 9M13 Operating Cash Cost per Pound of Copper Produced Cost Structure (1) (US$/lb) Maintenance 16% Other 15% Operating Materials 18% Fuel 15% Q13 Q13 3Q13 9M13 (1) 9M 013 Labor 16% Power 0% 11

13 III. Financial Overview 1

14 SCC Financial Summary (US$ MM) LTM 013 9M 013 Copper Price (LME) US$ per pound Income Statement: Net Revenues $6,819 $6,669 $6,069 $4,418 EBITDA 3,910 3,773 3,116,1 EBITDA Margin 57% 57% 51% 50% Net Income,336 1,935 1,744 1,1 Dividends paid per share Balance Sheet Statement: Cash & Equivalents $848 $,459 $1,795 $1,795 Total Assets 8,063 10,384 10,936 10,936 Total Debt 1,746 4,14 4,10 4,10 Total Liabilities 4,06 5,595 5,56 5,56 Total Shareholders' Equity 4,015 4,765 5,383 5,383 Cash Flow Statement: Capital Expenditures $613 $1,05 $1,576 $1,190 Free Cash Flow 1, Dividends paid to common shareholders,080 3,140, Total Debt / EBITDA 0.7x 1.1x 0.8x 1.4x 13

15 Solid Financial Performance Top Tier Margins and Conservative Leverage for Increased Financial Flexibility 9M 013 EBITDA Margin (%) 9M 013 Total Debt / EBITDA (x) No Amortizations Until SCC 50% 1 Freeport $5 Antofagasta 46% Antofagasta $00 Vale 45% BHP $400 BHP 43% 1 SCC $300 Rio Tinto 37% Vale $51 1 Freeport 35% Rio Tinto $1,000 Anglo 9% Anglo $1,100 GlencoreXstrata 0% Glencore Xstrata $1,00 Source: Company Reports 1 9M 013 1H 013 Source: Company Reports 1 9M 013 1H

16 Investment Program to Significantly Increase Production Board approved Other projects and on Buenavista Molybdenum Plant 3Q13 - $38M - K Tons Mo Cuajone: Variable Cut-off Grade + HPGR H13 - $158M - K Tons Cu, 0.7K Tons Mo Buenavista SX/EW III Q14 - $444M 10K Tons Cu Buenavista: - Concentrator Plant 1H15 - $1.4B - 188K Tons Cu,.6K Tons Mo - Mine equipment $505M Toquepala Concentrator Expansion 4Q15 - $1.05B - 100K Tons Cu, 3.1K Tons Mo Angangueo Polymetallic Mine 1H15 - $175M K Tons Cu, 7K Tons Zn, 4K Tons Pb,.4M Oz Ag Pilares Cu Mine 1H15 - $189M - 40K Tons Cu (under review) Tía María SX/EW 4Q16 $1.B - 10K Tons Cu Buenavista Zinc Conc $33M 16K Tons Cu - 55K Tons Zn Los Chalchihuites $140M, 6K Tons Cu El Arco Conc & SX/EW $.6B 190K Tons Cu, 105K Oz Au Empalme Cu Smelter $81M 350K Tons Cu Cont. Copper Refinery $318M 350K Tons Cu Cont. Zinc Refinery - $600M 10K Tons Zn Los Chancas. - $1.B - 100K Tons Cu, 7.5K Tons Mo Cuajone Concentrator Expansion - $500M 50K Tons Cu, 0.7 Tons Mo Ilo Smelter & Refinery Expansion Capex Program Overview (MM) Copper Production Forecast ( 000 MT Cu),500,50,000 1,750 1,500 1,50 1,600,300 Estimated Capex = $6.B 1,400 1,00 1, ,060 1,145 1, Source: SCC

17 New Molybdenum Plant in Mexico 16

18 SX EW III Mexico Solvent Extraction Area 17

19 Mine in Buenavista Mexico 18

20 New Copper Concentrator in Buenavista 19

21 HPGR Plant in Peru - Cuajone 0

22 Technological Improvement Project - Toquepala 1

23 Ilo 3 Sub Electrical Station

24 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 capability Fully integrated low cost operations - Strategic investments focused on cost competitiveness Outstanding dividend history Experienced management with proven track record (in US$ millions) SCC EBITDA and % Margin $3,910 $3,773 $,59 $,865 $1, % 48.6% 56.0% 57.0% 57.0% Cu price $3.16 $.34 $3.4 $4.00 $3.61 3

25 Southern Copper Corporation November, 013 4