Corporate Presentation - August 2014


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Corporate Presentation - August 2014

  1. 1. MMX MINERAÇÃO August | 2014
  2. 2. DISCLAIMER 2 This presentation relating to MMX Mineração e Metálicos S.A. (“MMX”) includes “forward-looking statements”, as that term is defined in the Private Securities Litigation Reform Act of 1995, in Section 27A of the Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All statements other than statements of historical facts are statements that could be deemed forward-looking statements and are often characterized by the use of words such as “projects”, “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, “may”, “will”, or “intends”, or by discussions or comments about our objectives, strategy, plans or intentions and results of operations. Forward-looking statements include projections regarding our operating capacity, operating expenditures, capital expenditures and start-up dates. By their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. The risk exists that these statements may not be fulfilled or, even if they are fulfilled, the results or developments described in such statements may not be indicative of results or developments in future periods. We caution participants of this presentation not to place undue reliance on these forward-looking statements as a number of factors could cause future results to differ materially from these statements. Forward-looking statements may be influenced in particular by factors such as the ability to obtain all required regulatory approvals on a timely basis or at all, exploration for mineral resources and reserves, difficulty in converting geological resources into mineral reserves, and changes in economic, political and regulatory conditions. We caution that the foregoing list is not exhaustive. When relying on forward-looking statements to make decisions, investors should carefully consider these factors as well as other uncertainties and events. MMX does not undertake to update our forward-looking statements unless required by law. This presentation is neither an offer to sell (which can only be made pursuant to definitive offering documents) nor a solicitation of an offer to buy any securities in the United States, or any other jurisdiction. The securities referred to herein have not been registered in any jurisdiction, and in particular, will not be registered under the U.S. Securities Act of 1933, as amended, or any applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without MMX’s prior written consent.
  4. 4. 4 MMX Corumbá Mineração MMX Sudeste 100%94,52% 5,48% EBX CONTROLLING SHAREHOLDERS 57,42% WISCO 10,5% SK NETWORKS 8,8% OTHERS 23,28% Serra Azul Bom Sucesso SHAREHOLDING STRUCTURE 35% Porto Sudeste do Brasil 65%
  5. 5. 5 Operating system: Serra Azul; Current Capacity: approximately 7 Mtpy; Mining rights in traditional iron ore districts: Brazil (Minas Gerais and Mato Grosso do Sul); Production committed with strategic consumers – China and South Korea – through long-term contracts; Brownfield start up in Brazil; Strategic port location. Sudeste System | MG Serra Azul Unit Corumbá System | MS* Porto Sudeste | RJ Sistema Sudeste MMX INTRODUCTION *MMX entered into agreements with Vetria Mineração for the lease of mining rights in Corumbá.
  6. 6. 6 RESOURCE BASE SRK and Coffey Mining certifications (Serra Azul, Pau de Vinho e Bom Sucesso): 3,6 billion tons of mineral resources. Reserves of 1 billion tons in Serra Azul. COMPETITIVE PRODUCTION COST STRUCTURE Low stripping ratio; Competitive scale; Energy supply contract with MPX; Infrastructure with integrated logistics. GUARANTEED LOGISTICS Porto Sudeste at 50 Mtpy, expandable to 100 Mtpy, provides gateway to seaborne markets; Long Term Railway Contract with MRS. SECURED OFF- TAKE 64% of future production already committed through long-term contracts. OPERATIONAL TRACK RECORD Main operations located in the traditional Serra Azul mining region, in Minas Gerais Iron Ore Quadrangle. HIGHLIGHTS
  7. 7. 7 HIGHLIGHTS 2012 AUGUST 2014 Conclusion of the capital increase in the amount of R$ 1.4 billion; Renewal of the lease contracts for mineral rights with the CEFAR, extending the terms of validity from 2021 to 2034; Conclusion of the contracting of supplementary long term funding for the Sudeste Superport with BNDES, in the sum of R$ 935 million; New certification of mineral resources (SRK and Coffey Mining) totaling 3.6 billion tons considering Serra Azul Unit, Mina Pau de Vinho and Bom Sucesso; Sale of all shares in Minera MMX de Chile S.A. to Inversiones Cooper Mining S.A. Definitive agreements executed by the Company with Trafigura and Mubadala; The merger of MMX Porto Sudeste S.A. by MMX Approval of the business plan’s revision of the Company; Conclusion of the investment operations of Trafigura and Mubadala in Porto Sudeste do Brasil SA.; MMX entered into agreements with Vetria Mineração for the lease of mining rights in Corumbá, which envisage the assumption of certain contracts
  8. 8. 8 FINANCIAL HIGHLIGHTS 237 181 110 0 100 200 300 1Q13 4Q13 1Q14 Net Revenue (R$ million) 140 96 31 0 50 100 150 1Q13 4Q13 1Q14 Gross Profit (R$ million) -131 -501 -600 -500 -400 -300 -200 -100 0 1Q13 4Q13 1Q14 Adjusted EBITDA (R$ million) Adjusted EBITDA
  10. 10. SERRA AZUL UNIT2.1
  11. 11. 11 Mine Porto SudesteRailway Serra Azul unit is near to the MRS railway - 7 km from the mine, a distance currently traversed by trucks. MMX has a long term contract with MRS railway, which connects the mine with the CSN’s port and the Porto Sudeste, both located in Itaguaí. Porto Sudeste will have 50Mtpy iron ore shipping capacity. The Superport will have a depth of 20 meters, enough to handle Capesize vessels. Integrated logistic: Mine > Railway > Port as a factor of Value Creation WISCO Long-Term contract (20 years) to trade iron ore. SK will take-off part of the Sudeste System yearly production equivalent to its participation in MMX Capital (14%). Long-Term contract (20 years). Wisco will off-take at least 50% of MMX Sudeste production. OFFTAKERS (SHAREHOLDERS) SK NETWORKS UNIQUE INTEGRATED LOGISTICS SK and Wisco will together offtake 64% of total production
  12. 12. QUADRILÁTERO FERRÍFERO Iron ore Quadrangle Minas Gerais
  13. 13. RAILWAY Railway access connecting MRS to the Porto Sudeste
  14. 14. Expansion project with integrated logistic and pellet feed iron ore 14 SERRA AZUL Highlights Production target: 15 Mtpy waiting of new partner; 64% of production already committed through long-term contracts; 997.4 million tons of reserves already secured by SRK. Project Status Installation License issued in April, 2012; Beginning of construction of Serra Azul Unit expansion (earth work completed in the beneficiation plant area); Expected Quality – Ouro Preto pilot plant test work Fe: 66,65% P: 0,025% AL2O3: 0,54% SiO2: 3,23% Mn: 0,018% LOI: 0,75%
  15. 15. BR 38 1 Itatiaiuçu Igarapé São Joaquim de Bicas Brumadinho Sarzedo Mario Campos N Growth through consolidation while leveraging existing infrastructure SERRA AZUL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 14 15 15 1 USIMINAS Western 2 3 4 5 6 7 8 9 MRI USIMINAS Central Arcelor Mittal Minerita Ferrous-Santanense USIMINAS Eastern Comisa Emicon 10 11 12 MMX USIMINAS Pau de Vinho Ferrous – Esperança 13 Minera do Brasil 14 Vale Itaminas15 15
  16. 16. Serra azul unit expansion project UNIDADE SERRA AZUL 16 1 Beneficiation Plant 2 Tailings dam, about 40km away from the mine, associated with a tailings pipeline 3 Pipeline with approximately 7km extension 4 Rail terminal connected to the MRS rail network 5 Arch extensions 6 Waste deposit 7 Water supply 8 High voltage power station 9 Access 2 6 9 1 5 7 9 9 8 3 4 Itatiaiuçu Igarapé São Joaquim de Bicas Mario Campos
  17. 17. Serra Azul Expansion Beneficiation Plant
  18. 18. Earthwork SERRA AZUL 1 Pump House, Sump and Thickeners 2 Construction Site 1 1 3 Beneficiation 2 3 4 Grinding 4 5 Substation 6 Grinding 7 Piles 8 Primary Crusher 5 6 7 8 9 Primary Crusher 10 Water Storage Tank 11 Construction Site and Warehouse 12 Water Storage Tank Inc. 9 10 11 12 13 Main Access 14 Administrative Buildings 15 Maintenance Workshop 13 14 15
  20. 20. Overview 20 35% partnership with Trafigura and Mubadala, with significant operational track record and extensive financial capacity. Long term contract with MMX Sudeste for port handling services of 7 Mtpy with an expandable option to increase to 13 Mtpy until 2015. In case of Port expansion to up to 100 Mtpy, MMX’s shipping right can also be increased by 13% of extended Port capacity. The whole internal trading of iron ore will be made through the Porto Sudeste. MMX shall have an option to acquire an additional stake of up to 7.5% in PortCo, for a final stake of up to 42.5%. PORTO SUDESTE Porto Sudeste | Itaguaí (RJ)
  21. 21. 21 Carlos Gonzalez CEO and IRO Adriana Marques Manager Phone + 55 21 2163-6197 + 55 21 2163-6338 E-mail MMX INVESTOR RELATIONS
  22. 22.