SA Mining and Exploration Conference Adelaide Convention Centre 11 DECEMBER 2015

Transcription

1 SA Mining and Exploration Conference Adelaide Convention Centre 11 DECEMBER 2015

2 Disclaimer This presentation has been prepared by OZ Minerals Limited ( OZ Minerals ) and consists of written materials/slides for a presentation concerning OZ Minerals. By reviewing/attending this presentation, you agree to be bound by the following conditions: No representation or warranty, express or implied, is made as to the fairness, accuracy, or completeness of the information, contained in the presentation, or of the views, opinions and conclusions contained in this material. To the maximum extent permitted by law, OZ Minerals and its related bodies corporate and affiliates, and their respective directors, officers, employees, agents and advisers disclaim any liability (including, without limitation any liability arising from fault or negligence) for any loss or damage arising from any use of this material or its contents, including any error or omission therefrom, or otherwise arising in connection with it. Some statements in this presentation are forward-looking statements within the meaning of the US securities laws. Such statements include, but are not limited to, statements with regard to capacity, future production and grades, projections for sales growth, estimated revenues and reserves, targets for cost savings, the construction cost of new projects, projected capital expenditures, the timing of new projects, future cash flow and debt levels, the outlook for minerals and metals prices, the outlook for economic recovery and trends in the trading environment and may be (but are not necessarily) identified by the use of phrases such as will, expect, anticipate, believe and envisage. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and may be outside OZ Minerals control. Actual results and developments may differ materially from those expressed or implied in such statements because of a number of factors, including levels of demand and market prices, the ability to produce and transport products profitably, the impact of foreign currency exchange rates on market prices and operating costs, operational problems, political uncertainty and economic conditions in relevant areas of the world, the actions of competitors and activities by governmental authorities, such as changes in taxation or regulation. Given these risks and uncertainties, undue reliance should not be placed on forward-looking statements which speak only as at the date of the presentation. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, OZ Minerals does not undertake any obligation to publicly release any updates or revisions to any forward looking statements contained in this presentation, whether as a result of any change in OZ Minerals expectations in relation to them, or any change in events, conditions or circumstances on which any such statement is based. Certain statistical and other information included in this presentation is sourced from publicly available third party sources and has not been independently verified. All figures are expressed in Australian dollars unless stated otherwise. PAGE 2 /

3 Other Disclosures Carrapateena Mineral Resource estimate The information in this presentation that relates to Carrapateena Mineral Resource estimate is extracted from the announcement entitled Carrapateena Update released to the market on 6 October 2015 and available at Carrapateena-High-Grade--Explanatory-notes-1503c513-d c-8a51-52b3c24ad7bc-0.pdf. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the findings of the Competent Person (Stuart Masters) are presented have not been materially modified from the original market announcement. Prominent Hill Mineral Resources and Ore Reserves Further information on Prominent Hill Mineral Resources and Ore Reserves is available in the Annual Resource and Reserve Update for Prominent Hill released on 4 November 2015 which is available on the OZ Minerals website at OZ Minerals confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources and Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. OZ Minerals confirms that the form and context in which the findings of the Competent Person (Colin Lollo in relation to the Mineral Resource estimates and Justin Taylor in relation to the Ore Reserve estimates) are presented have not been materially modified from the original market announcement. PAGE 3 /

4 Highly prospective Gawler Craton Unlocking and maximising value South Australia is a favourable mining jurisdiction Gawler Craton contains one of the world s largest ore bodies at Olympic Dam and other significant deposits, including Prominent Hill and Carrapateena Supportive State Government just announced another $20m towards exploration and investment in State s Copper Belt Strong community support Export route to Asian and European markets via Adelaide PAGE 4 /

5 South Australia s Copper discovery gap Mt Cu-eq South Australia, unlike other locations, has a huge gap between the largest and secondlargest known copper deposit suggesting the opportunity exists to more significant deposits here. PAGE 5 / Source: MinEx Consulting March 2012

6 When should companies invest? Market sentiment declining A$ copper pricing remains strong PAGE 6 /

7 Discovery and development takes time All commodities found in the World: Source: MinEx Consulting February 2014 PAGE 7 /

8 Rewarding perseverance Mining and exploration in South Australia Olympic Dam Prominent Hill Carrapateena WMC started exploration 18 YEARS Discovery of Olympic Dam PAGE 8 /

9 Rewarding perseverance Prominent Hill Metals Ex Exploration 11 YEARS Return to orebody Discovery of Prominent Hill PAGE 9 /

10 Prominent Hill value creation 2015 Making the most of our current asset our first priority CONTAINED COPPER PRODUCED ITEM Q1 Q2 Q3 Tonnes 35,000 30,000 25,000 20,000 Contained Copper produced (t) Contained Gold produced (oz) 31,160 32,991 33,518 32,873 24,790 23,817 15,000 10,000 C1 costs USc/lb ,000 Favorable to guidance Unfavorable to guidance - Q Q Q Q Q Q Q Q Q copper production guidance revised upwards to kt; future year production guidance unchanged¹ 2015 C1 unit cost guidance revised downwards to US70-80c/lb PAGE 10 /

11 Prominent Hill underground 2016 priority drilling 2016 Potential priority diamond drill targets Large Underground Resource Base 2016 Target identification nearing completion 2016 drilling is focused on potential conversion of Inferred and Indicated Mineral Resource 2016 priority diamond drilling Program is currently in final design, scheduling and costing phase 1 0.3% Cu cut-off; 2 $57 NSR cut-off; 3 0.5g/t Au cut-off Below 0.3% Cu. * Resource figures are based on Measured, Indicated and Inferred resource classification and Reserve figures are based on Proven and Probable classified material. Full summary of information relating to Prominent Hill Mineral Resources and Reserves is set out in the Annual Resource and Reserve Update for Prominent Hill created on 04 November 2015 and is available at PAGE 11 /

12 Prominent Hill underground 2016 priority drilling Conceptual 2 nd Decline Scoping study underway for the indicative second decline economics Possible 2016/2017 commencement Potential capital spend ~ $10 million Increase throughput with current resource base Further reductions of unit costs with scale Drilling program to unlock the large underground resource to potentially increase life PAGE 12 /

13 <2.8Mt 6-8Mt Prominent Hill value creation Prominent Hill base case High grade ore from PH Underground (to 2028) OP ore Mill at capacity of 9-11Mt p.a. through early 2022 Cu and Au ROM ore processing 2028 Copper ore is priority milled due to highest value Multiple ore sources allow mill to remain at or near capacity through early 2022 Integrated underground mine creates significant economic benefit with decreasing development costs in later years Low-risk ROM stocks provide further significant cash flows as current working capital investment is realised ROM stock cash realised Mill has proven capability to process high 50%+ levels of gold ore Opportunities to change base case include; Low risk cash generation from current underground operations and stockpiles. High throughput levels reduce fixed cost allocations. 2 nd UG decline access to increase UG annual volume Resource drilling to extend UG life PAGE 13 /

14 Prominent Hill exploring potential Identifying new drill targets in SA PAGE 14 /

15 Rewarding perseverance Carrapateena Prospect drilling 16 YEARS Discovery of Carrapateena

16 Carrapateena Maximising value Timeline to unlock Carrapateena s value Three options under consideration 1. BASE CASE OPTIMISATION Potential to lower upfront capital by ~$200m 2. GAWLER CRATON STRATEGY - RAIL Potential to lower upfront capital by ~$1bn and phase costs over mine life 3. HIGH GRADE Potential for a lower cost, lower risk start up project which can expand over time to maximise value Progress update Today Cultural heritage clearance near completion Scoping study well advanced

17 Carrapateena High Grade Potential high value starter project with later expansion SECTION (view west) 2015 INDICATED AND INFERRED MINERAL RESOURCES % Cu, 0.9 g/t Au (at A$120/t NSR cut-off) Grade vs. tonnage curve LEGEND Bornite Chalcopyrite Other (Hematite) *CuEq = Cu (%) + Au (g/t) x Ag (g/t) x , based on assumed recoveries of 91% for Cu and 67% for Au and Ag which are taken from previous metallurgical test work, and the economic assumptions listed in Table 2 of the Resource explanatory notes which can be found at Copper, gold and silver are all considered to have reasonable potential to be recovered and sold

18 Carrapateena High Grade Conceptual timeline Timeline is conceptual only. Next decision point is in Q when all options are complete and can be assessed together Potential for first high grade production in 2019 Project proceeding will be contingent on a successful outcome to the Scoping Study, Board Approval and Regulatory Approvals including Traditional Owner and Community consultation

19 Rewarding perseverance What do we need to help us persevere? Think long-term Be open-minded and continually invest Courageous exploration ventures Enabling user-pays infrastructure Simple and enabling bureaucratic processes Collaboration and partnerships with stakeholders New talent and creative thinking Technical solutions

20 Hydromet Introduction to Hydromet What is Hydromet? Hydromet uses existing technology to remove impurities from copper concentrate By using an autoclave, chalcopyrite and bornite are changed into chalcocite and covellite in leaching process that removes iron Process removes other impurities as well Developed in collaboration with Orway Minerals Consultants Benefits of Hydromet Impurities are removed (opens up new markets) Minimal copper lost Concentrate has significantly higher copper and gold content (which increases payability) Concentrate is reduced in mass (slashing transport costs by up to 40 percent) Autoclaves already used in the copper industry technology is tried and tested Autoclave photo courtesy of SNC Lavalin

21 Hydromet demonstration plant Positive early results NONOX AUTOCLAVE NONOX FEED TANKS Pilot Plant completed in 2014 had a scale of 1.1kg/hr Demonstration Plant has a scale of 55kg/hr 50 times larger than Pilot Plant External engineering review has confirmed Demonstration scale is sufficient to allow design of a full scale plant Early Demonstration Plant results; 55% Cu in product and significant reduction in impurities - consistent with Pilot Plant Will run continuously until December with final analysis complete in April 2016 FILTERS COPPER PRECIPITATION Photos courtesy of Teck s CESL Facility, Richmond, BC, Canada

22 When should companies invest? Market sentiment declining A$ copper pricing remains strong

23 Play the fundamentals, not sentiment Opportunity, quality and long term outlook should drive decisions Copper grade 1 decline will lead to a market in deficit (Mt) (% Cu in the mill) Global Cu demand by country (4) (8) Surplus/deficit (LHS) Cu grade (RHS) Source: Wood Mackenzie.via BHPB 1. Production from current operating mines and committed new projects Source: Wood Mackenzie, September 2013

24 Exploring Potential Partnership with Toro Energy PAGE 25 /

25 Thankyou for listening