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Q1 2013 kghmi - final
Q1 2013 kghmi - final
Q1 2013 kghmi - final
Q1 2013 kghmi - final
Q1 2013 kghmi - final
Q1 2013 kghmi - final
Q1 2013 kghmi - final
Q1 2013 kghmi - final
Q1 2013 kghmi - final
Q1 2013 kghmi - final
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Q1 2013 kghmi - final

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  • 1. Company Results forQ1 2013May 22, 2013
  • 2. Confidentiality and DisclaimerThese materials have been prepared by KGHM International Ltd. (the “Company”) solely for its own use during its presentation to you andmay not be taken away, reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outsideyour organization/firm) or published, in whole or in part, for any purpose. By attending this presentation, you are agreeing to be boundby the restrictions set out in this notice and to maintain absolute confidentiality regarding the information disclosed in these materials.Neither the Company, nor any of its affiliates, make any representation or warranty express or implied as to, and no reliance should beplaced on, the accuracy, completeness or correctness of the information contained herein. It is not the intention to provide, and youmay not rely on these materials as providing, a complete or comprehensive analysis of the Company’s financial or businessprospects. The information contained in these materials should be considered in the context of the circumstances prevailing at thetime and has not been, and will not be, updated to reflect material developments which may occur after the date of the presentation.Neither the Company, nor any of its affiliates, shall have any liability whatsoever (in negligence or otherwise) for any loss or damagehowsoever arising from any use of these materials or their contents or otherwise arising in connection with these materials.These materials include forward-looking statements. Forward-looking statements include, but are not limited to, the Company’s estimatesfor mineral resources, future production, sales, cash flow, business and financial prospects, production growth profile, mine lives,costs, capital cost expenditures, plans, objectives and expectations, including with respect to future projects, progress in thedevelopment of the projects, demand and market outlook for commodities, future commodity prices, and other statements that are nothistorical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential,""should," and similar expressions are forward-looking statements. Although the Company believes that the expectations reflected inthese forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be giventhat actual results will be consistent with these forward-looking statements.This document does not constitute an offer or invitation to purchase or subscribe for any securities of the Company or any of its affiliatesand no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision inrelation thereto.For more information about the Company and its parent KGHM Polska Miedź S.A., including financial statements and other reports, go towww.kghminternational.com or www.kghm.pl.All figures are in US$ unless otherwise stated or unless the context requires otherwise.1
  • 3. KGHM International Q1 2013 Results Highlights• Operations:• Cu production:• Q1 2013 vs. Q1 2012 increased to 65Mlbs (30kt) from 55Mlbs (25kt)• Cu sold:• Q1 2013 vs. Q1 2012 decreased to 50Mlbs (23kt) from 55Mlbs (25kt)• C1 cost:• Q1 2013 vs. Q1 2012 decreased to $1.99/lb from $2.38/lb• Financial highlights:• Adjusted EBITDA:• Q1 2013 vs. Q1 2012 no change at $80M• Growth pipeline:• Sierra Gorda highlights:• 41% complete & On track for start up in 2014• Updated capital cost• Victoria: Continuing engineering and First Nations consultation2
  • 4. Financial Results for KGHM International (US$M)3• Adjusted EBITDA is a non-IFRS measures which is calculated as income from mining operations plus amortization,depreciation and depletion, inventory write down and stock-based compensation, minus general and administrative andexploration and evaluation costs. Management believes that these measures provide investors with ability to better evaluateunderlying performance.• Net revenues in Q1 2013decreased 13% to $272Mcompared to Q1 2012.• Copper production Q12013 up 18% to 65Mlbs .• Copper sales lower at50Mlbs vs 55Mlbs in Q12012 due to inventorytiming.• Net earnings affected byone-off $26M investmentwrite-down31280332728015Revenue Adjusted EBITDA NetEarningsQ1 2012 Q1 2013
  • 5. KGHMI’s Positive Production & Adjusted EBITDA4Main Operations as Percentage of Adjusted EBITDARobinsonMorrisonOtherDMCAdjusted EBITDA (US$M)80 80Q1 2012 Q1 2013
  • 6. Higher production of copper and TPM in Q1 2013Copper productionk tonnesNickel productionk tonnesTPM (Total Precious Metals)k ozs2012 Copper equivalent amounts are based on previously announced LOM commodity prices: Cu at $2.75/lb, Ni at $8/lb, Pt at$1600/oz, Pd at US$500/oz, Au at $1000/oz and Mo at $12/lb and excludes the impact of the Franco Nevada Agreement. Total copper equivalent production in Q1 2013 increased to 38k tonnes* (83Mlbs) compared to 33ktonnes (72Mlbs) in Q1 2012 Highest production growth in Q1 2013 was recorded in Robinson (+51%) Continuous improvement in mill operating practices at Robinson mine have boosted productionrates, especially by increasing copper recovery rates and increase in mill throughput.5+27%+18% -29%25.129.5Q1 2012 Q1 20131.41.0Q1 2012 Q1 201322.328.3Q1 2012 Q1 2013
  • 7. C1 unit cash cost decreased due to higher production with similar costsUnit cash costC1 – US$/lb Higher production volumes at Robinson has a positive impact on overall unit cash cost in Q1 2013. Robinson achieved $1.47/lb unit cost in Q1 2013 compared to $2.75/lb in Q1 2012 due toexceptional performance at the mill. Better TPM credits offset lower Nickel credits62.381.99Q1 2012 Q1 2013
  • 8. Key KGHM International Operations7RobinsonMorrison• Cu production 51% higher vs. Q12012 - higher recoveries andincreased milling rates• C1 cost significantly lower than Q12012 at $1.47/lb Cu• The remainder of 2013production will be transitioningto include the Kimbley andLiberty pits• Improvement initiatives continuearound the mill performance• Increased haulage fleet to allowfor accelerated strippingOutlook• Production 30% lower vs. Q1 2012 -decreased volumes due tosubstantial remedial work at theCraig Shaft and lower grades• Lateral development continued• C1 cost higher on lower productionvolumes and lower by productrevenues• Higher production volumes areexpected as remediation work iscompleted in May 2013• Diamond drilling on the lowerportion of the Morrison orebodyhas re-commenced in Q2 2013Outlook
  • 9. Sierra Gorda project• Detailed engineering phase largely complete and themajority of the major procurement moved into the mainconstruction phase• Overall progress as of March at 41%• ~1/4 of the Plant Construction complete• Construction of the seawater pipeline and tailing storagefacility began• DCE completed with a revised initial CAPEX of $3.9B,of which $3.1B has been committedNAJWAŻNIEJSZE OSIĄGNIĘCIA W 2012 ROKUSIERRA GORDAMine under construction,processing plantconstruction and pre-stripping, constructioncompletion 41%.StatusOpen pitMine55% KGHM International,45% SMM and SCOwnership~ 1,3 bn t @ 0,42% Cu,0,0025% MoReservesQ1 2013 KEY ACCOMPLISHMENTSCu Au Mo8

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