OZ MINERALS ASIAN ROADSHOW · 2015. 9. 15. · OZ MINERALS • PAGE 2. DISCLAIMER. This presentation has been prepared by OZ Minerals Limited (“OZ Minerals”) and consists of written

September 2011WWW.OZMINERALS.COM

OZ MINERALSASIAN ROADSHOW

OZ MINERALS • PAGE 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 its 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 there from, or otherwise arising in connection with it.

Some statements in this presentation relate to the future and are forward looking statements. Such statements may include, but are not limited to, statements with regard to intention, 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 Mineral’s 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, 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 and intentions 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.

OZ MINERALS • PAGE 3OZ MINERALS • PAGE 3

SNAPSHOT


OZ MINERALS

Market capitalisation:

~A$4 billion

Prominent Hill: Open-pit copper and gold operation.

Underground development underway.

Underground ore mining in Q1 2012.

Carrapateena: New copper growth project.

Exploration: Priority area –

Prominent Hill.

Business Development:

Pursuing global opportunities in copper -

$750 million earmarked.

A$905.6 million: Cash at 30 June 2011.

Capital management:

First half distributions to shareholders of $1.60/share ($518 million).

On-market buy-back of up to $200 million underway.

Dividends: Interim 2011 –

30c/share.

Equity investments:

42.5% of Toro Energy, 12.9% of IMX Resources, 18.9% of Sandfire

Resources and others.


FINANCIAL OVERVIEW


H1 2011 FINANCIAL OVERVIEW

•

Prominent Hill record revenue of $632.7 million.

•

Prominent Hill EBITDA of $384.2 million.

• OZ Minerals’

underlying NPAT of $189.1 million (excluding

impairment & litigation settlement).

• OZ Minerals’

NPAT of $113.9 million, a reduction on 2010 due to

• Foreign Exchange

• Litigation settlement expense

• Toro impairment

• Impairment reversal in 2010

•

Record cash flow from Prominent Hill operations $388.3 million.

• Cash balance of $905.6 million

at 30 June 2011.


INCOME STATEMENT –

CONTINUING OPERATIONS

•

Consistent good production and cost performance from Prominent Hill.•

Appreciation of the A$/US$ negatively impacted US$ denominated cash balances.•

Increase in exploration spend in line with strategy to increase life of Prominent Hill operations.

A$M H1 2011 H1 2010

Revenue 632.7 589.9 Cost of goods sold (210.8) (190.7)Net foreign exchange (loss)/gain (32.7) 40.8 Exploration expense (33.6) (18.2)Other expenses (24.5) (23.6)

Underlying EBITDA 331.1 398.2 Litigation settlement expense (60.0) -Impairment (15.2) 190.4 EBITDA 255.9 588.6

Depreciation and amortisation (83.3) (66.8)EBIT 172.6 521.8

Net financing income 20.7 10.2 Income tax expense (79.4) (160.4)NPAT from continuing operations 113.9 371.6 Underlying NPAT from continuing operations 189.1 230.5

Includes raw materials, consumables, direct employee costs, movements in inventory,

freight and royalties

Regional and near mine exploration, excludes capitalised

resource development

Corporate and site G&A

Impairment of investment in Toro

Statutory tax charge, utilisation of losses results in no cash tax

payable in relation to the first half result


Cash flow for the half year - June 2011

700

900

1,100

1,300

1,500

1,700

1,900

2,100

1,334.2 669.3 (267.2) (44.2) (33.6) (7.4) 13.8 1,664.9 (241.2) (129.5) (388.6) 905.6

OpeningCash

Receipts from

Customers

Payments tosuppliers

andemployees

PP&Eand

capitalisedexploration

Exploration

FXon cashbalances

Other Operatingcash

balance

AcquisitionsDisposals

Dividend CapitalReturn

ClosingCash

(A$M)

CASH FLOW 2011


BALANCE SHEET

•

Balance sheet remains strong with significant cash holdings and no debt.

•

Post balance date OZ Minerals entered into US$200 million debt facility with four relationship banks, facility provides prudent financing flexibility in short to medium term.

Decrease in cash balance from December due to payments for Carrapateena and distributions

to shareholders

Includes investment in Carrapateena and Sandfire

shareholding

Includes class action settlement and GST on Carrapateena

Increase due to utilisation of losses.

A$M

Consolidated

Jun'11

Consolidated

Dec '10

AssetsCash 905.6 1,334.2 Receivables 172.7 180.9 Inventories 259.7 259.5 Other 14.4 8.0 Investments & exploration assets 513.3 316.2 Property plant & equipment 1,245.1 1,288.1 Total Assets 3,110.8 3,386.9

LiabilitiesCreditors 147.4 64.6 Net deferred tax liability 94.2 14.8 Provisions 18.6 16.5 Total Liabilities 260.2 95.9 Net Assets 2,850.6 3,291.0


OPERATIONS OVERVIEW


SOUTH AUSTRALIA


PROMINENT HILL SITE

TAILINGS DAM

MALU PIT

ROM PAD

PROCESSING PLANT

VILLAGE

ANKATA DEPOSIT AREA

NORTHERN WASTE DUMP

SOUTHERN WASTE DUMP


PROMINENT HILL PRODUCTION

Product: High grade (~50% Cu), high quality, copper concentrate.

Production H1 2011: 53,725t contained copper, 86,129oz gold.

Production Guidance: Contained copper 100,000t to 110,000t. Optimising

gold production while ensuring

maximum copper production.

Mine and Plant: Open pit, mine, crush, grind, flotation.

Cash costs: Competitive C1 cash costs US62.9c/lb for H1 2011.

Estimated C1 costs 2011: <US70c/lb.

Workforce: Approximately 800 (including contractors).


Inte

rim D

eclin

e

Ankata Decline

VR2A

FinalPortal

VR4A

PROMINENT HILL -

ANKATA UNDERGROUND• Ankata

underground will enable production of 100,000t to 110,000t copper to be maintained.

• The portal was accessed in November and decline advanced to 1,300 meters in August 2011.

• First ore to be produced from stoping by Q1 2012.

• Full mining rates (1.2Mtpa) by Q3 2012.

August 2011


GROWTH


NEAR MINE EXPLORATION

•

Now drilling from underground.

•

Munda

zone drill out 2011.

•

Decline extension to provide access beneath pit in 2012.

•

Under pit resource drilling 2012/2013.

•

Aim to add 1-3 years mine life from immediate near mine program.

•

Deeper infill drilling to follow with access.


UNDERGROUND DRILLING -

CONCEPTUAL TIMING OF DRILL PROGRAMS

Plan view

ANKATA

MALU

MUNDA

Remaining Resource tested beyond 2013

2013

2012

2011-12

2012-13

2012-2013


REGIONAL EXPLORATION –

NEW MINERAL PROVINCE

•

Sizeable exploration program.

•

Large, approximately 7,000km2

tenement area-

4,000km2

OZ Minerals-

3,000km2

IMX JV

•

$17 million spent on regional exploration in H1.

•

Detailed geophysical surveys undertaken, more in progress.

•

Three drill rigs dedicated to the OZ Minerals regional program and two rigs for IMX JV exploration.

•

Many holes have intersected IOCG alteration.

•

Some wide intervals of low-grade copper mineralisation.

•

Program continues.

EL4390

EL3387

EL4446

EL3730

EL3730

EL3518

EL3729

EL3445

EL3830

EL4390

EL4025

EL4429

EL4429

EL4132

EL3795

EL4283

EL4429

Gravity

OZ Minerals tenements

IMX tenements

Coober

Pedy

20km

Airborne Magnetic Surveycompleted in Q4

Hallifax

Danae HillMetis

NeptuneCressida

Epsilon

Rouse

Taurus

ArapilesShadwell

IP Surveys in Progress

Near Mine

Future OZ Minerals Prospects

IMX JV target areas

PerseusBlue Duck

Bluebird

Prominent Hill


ACQUISTION OF THE CARRAPATEENA COPPER – GOLD DEPOSIT IN SOUTH AUSTRALIA

• Acquired in May 2011.

• Large IOCG deposit –

similar to Prominent Hill.

• An initial Inferred Resource of 203Mt at 1.31% copper, 0.56g/t gold and 270ppm U3

O8

in the southern area of the Carrapateena deposit reported by OZ Minerals.

• Scoping studies underway –

mining, deposit access, underground infrastructure.

• Drilling to continue to upgrade resource.


CARRAPATEENA DEPOSIT -

INITIAL INFERRED RESOURCE TO SOUTH

0m 250m

Mineralisation not well understood, potential for

extension to the east

Exploration & Inferred Resource

status area

Exploration area

Chalcopyrite shell in yellow

Exploration & Inferred Resource status areaExploration area

Historic drillhole

collar

Historic drillhole

trace

N

0m 250m

Main depositPotential for

extension at depthMineralisation

open to the east

Target range:

25-45Mt @ 1% Cu, 0.4g/t Au, 140ppm U3

O8

, 4g/t Ag

Inferred resource:

203Mt @ 1.31% Cu, 0.56g/t Au, 270ppm U3

O8

, 6g/t Ag


CARRAPATEENA CROSS SECTION –

6543400N LOOKING NORTH –

HIGH COPPER GRADES

• CAR073 –

905m @ 2.17% Cu, 0.89g/t Au from 506m (incl. 82m @ 4.78% Cu, 1.13 g/t Au from 518m)

• CAR031W1 –

410m @ 1.88% Cu, 1.20 g/t Au from 582m (incl. 134m @ 2.85% Cu, 1.48g/t Au from 858m)

±50m clip

Bornite

shell in blue


0.5 –

1% Cu1 –

2% Cu2 –

3% Cu>3% Cu

Cu values

PLAN N

0 200m

-100

-500

-1000

-1500


MINING OPTIONS STUDY

Options:• Block caving.• Inclined sublevel caving.• Selective mining. • Stoping at higher levels, then caving.

Lower mining costs

Lower development costs

<$10/t $10‐20/t $20‐50/t

Block

cavingSublevel

cavingSublevel

open stoping

Visual representation of the Carrapateena deposit


CARRAPATEENA CONCEPTUAL PROJECT SCHEDULE

2011 2012 2013 2014 2015 2016 2017

Exploration drilling to complete initial Inferred Resource, 10,000m

Option studies for mining

Phase II exploration drilling to move to Indicated Resource

Geotechnical drilling

Pre-feasibility

Exploration shaft

Feasibility study

Construction


•

Commodity:

copper or copper with gold.

•

Scale:

50,000t –

150,000tpa production or future production potential.

•

Jurisdiction:

Global “low”

to “medium”

risk countries.

•

Terms:

100% or with partners depending on project.

BUSINESS DEVELOPMENT –

ACTIVELY LOOKING FOR OPPORTUNITIES


SUMMARY• High quality copper asset at Prominent Hill

underground production from Q1 2012

strong performance

competitive cash costs

new underground development

aggressive exploration program at Prominent Hill -

near mine and regional• Significant cash holding

$905.6 million at 30 June 2011• Active business development

clear strategy

disciplined approach

flexibility of cash• Capital management program

Capital return 12 cents per share or $388.6 million completed

Share consolidation completed

Share buyback up to $200 million underway• Dividend stream

Interim dividend of 30 cents per share• Strongly performing commodities

good outlook for copper and gold

APPENDICES


PROMINENT HILL PRODUCTION SUMMARY

•

Increase in mining rates due to increased waste movement under current mine plan.

•

Increase in plant throughput and increase in recoveries, partially offsetting reduction in grade.

'000 tonnes H1'11 H1'10 Var

Waste mined 29,197 25,559 3,638 Ore Mined 6,314 4,131 2,183 Total movement 35,511 29,690 5,821

Ore milled 4,964 4,568 396

Milled grade Cu (%) 1.19 1.48 (0.29)

Recovery Cu (%) 90.7 88.7 2.0

Cu in conc

(tonnes) 53,725 60,145 (6,420)

Au in conc

(ounces) 86,129 90,821 (4,692)


DESIGN OF FINAL PIT

• Geotechnical studies complete.• Re-optimisation

using flatter wall angles to increase stability.

• Additional 30Mbcm over five years.

CROSS SECTION –

NORTH-SOUTH

Complete

August 2012

June 2014

October 2017(Stock piles continue to be processed after mining of open-cut complete)

• Remaining life of mine strip ratio now 5.5:1.• Approximately $150 million extra in NPV terms.• $3/t milled extra mining costs.

NB: Deferred mining provision to be lower than planned due to higher strip ratio.


CARRAPATEENA COMPARABLE WITH OTHER GLOBAL BLOCK CAVES

Cu/Au grades and relative deposit size global block caves (Mt)

Red Chris

Grasberg GBCGrasberg DOZNorthparkes Lift 2

Bingham Canyon SE mine

Grasberg IOZ

Northparkes E48

Northparkes Lift 1

Bingham Canyon NE mineWafi-Golpu

Carrapateena

Ridgeway Deeps

Oyu-Tolgoi Hugo North Lift

Cadia East

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00

Au g/t

Cu %

Source: OZ Minerals research* NB: Carrapateena based on target range not Resource or Reserve

Operating mines

Development project

Size = Reserves Mt


-

10

20

30

40

50

60

70

80

90

EVc/

lb C

uEq

Advanced Projects / Producers

COMPETITIVE ACQUISTION

Exploration / Development Construction / Production

OZ

Min

eral

s/Ca

rrap

atee

na


BLOCK CAVING INCREASINGLY COMMON

Source: New Gold


CARRAPATEENA CROSS SECTION – 6543300N LOOKING NORTH

• CAR051W1 –

903m @ 2.15% Cu, 0.66 g/t Au from 608m (incl. 169m @ 4.30% Cu, 0.74 g/t Au from 1174m).

• CAR050 –

905m @ 2.08% Cu, 0.98 g/t Au from 487m (incl. 75m @ 4.63% Cu, 1.10 g/t Au from 1203m).

±50m view

Bornite

shell in blue


0.5 –

1% Cu1 –

2% Cu2 –

3% Cu>3% Cu

Cu values

PLAN N

0 200m

-100

-500

-1000

-1500


COPPER OPPORTUNITIES -

SIZE & TYPE−

50-150ktpa copper mines are often too small for the major companies

but have significant technical, financial and marketing challenges for smaller companies.

−

50-150ktpa represents a “Window of Opportunity”

for a company of OZ Minerals’

size and capability. Not a lot of other companies compete in this space.

−

Porphyry and IOCG deposits dominate this window and are hence the main exploration and acquisition targets.

Source: OZ Minerals

GLOBAL COPPER DEPOSITS –

EBITDA VS PRODUCTION

Major Companies

OZ MineralsWindow of

Opportunity


Variance Analysis - Underlying NPAT, H1 2011 vs H1 2010

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

230.5 125.8 37.8 (172.0) 222.1 (17.0) (21.4) (10.9) (4.7) 21.0 189.1

H1 2010 CopperPrice

GoldPrice

FX SalesVolume

Cash NonCash

Exploration/Expl. Impair't

IncomeTax

H1 2011

A$M

UNDERLYING NPAT

Increase in copper price

(32%) and gold price (25%).

Increase in A$/US$ 16%.

Decrease in copper sales due

to lower processed

grades.

Increased mining costs due to diesel and increased

volumes partially offset

by interest income.

Reduction in deferred mining

credit and increase in depreciation,

partially offset by increased inventory

adjustment.

MARKET DRIVEN CONTROLLABLE

Increase in exploration activity partially offset by

exploration impairment in 2010.


C1 COST GUIDANCE Q1 2011 –

FOREIGN EXCHANGE IMPACT

Previous C1 cost guidance

<60 US cents

Sensitivity to 1 US cent movement in A$:US$

(12 months) 1.8 US cents

Revised C1 cost guidance

<70 US cents

Sensitivity to 1 US cent movement in A$:US$

(9 months)

1.3 US cents

Previous guidance was issued at analyst consensus rates of A$:US$ 0.96 for FY11, current guidance issued at current consensus A$:US$ 1.01. Current spot rate 1.05.


OZL SHARE PRICE & TSR

•

Eighteen months ended 30 June 2011 saw a 4.7% increase in share price and 19.8% TSR.

•

$611.6 million returned to shareholders over the previous twelve

months*

Source: Bloomberg

$1.90 in total distributions to shareholders over 12 month period.

* Includes: dividends paid in respect of 2010 earnings and capital return paid in 2011


INCOME TAX

• Tax losses fully sheltered first half earnings –

no tax payable for the half.

−

Utilisation of losses in the first half partially offset by upfront deductions on Carrapateena purchase.

• Unrestricted tax losses of $14.8 million (tax effected) remain as at 30 June 2011

−

Unrestricted losses expected to be exhausted in the second half,

resulting in a provision for tax in 2011 and associated tax payment in June 2012.

−

Tax payments in 2012 would allow franking of dividends.


2011 SENSITIVITIES

Sensitivities of EBIT in 2011*

A$/US$ +/-

1c Copper +/-

5% Gold +/-

5%

$5.3 million $23.3 million $5.5 million

Prices as at 30 June 2011

Copper US$4.22/lb

Gold US$1,507/oz

A$/US$ 1.0683* Sensitivities are for remaining 6 months of 2011.


Unit Cost C1 - H1 2011 vs. H1 2010

20.00

25.00

30.00

35.00

40.00

45.00

50.00

55.00

60.00

65.00

70.00

49.1 (24.5) 23.4 5.6 1.7 1.7 5.9 62.9

H1 2010 Commodity Price FX Volume (By Product)

Volume (Cost Driver)

Costs Volume (Payable Metal)

H1 2011

(US c/lb)

C1 COSTS 2011

25% increase in gold price

16% increase in

A$/US$

Reduction in payable gold production of

4,400oz

Increase in volume related mining and deferred mining expense, partially offset by

increased inventory credit due to more ore being mined

Higher TC/RC's and site admin

costs

Reduced copper grades


EXPLORATION

•

Exploration program primarily focused on Prominent Hill near mine and regional targets.

•

Carrapateena exploration program to commence in H2 2011.

•

Approval of underground exploration decline, funding to come from existing 2011-2012 budget.

•

Cambodia in fill drilling in progress.

2011 H1 Exploration expense

Prominent Hill - Near mine, $8m

Prominent Hill -

Regional , $13m

IMX - JV, $4m

Cambodia, $3m

Other, $6m

Investor contact:Natalie WorleyHead of Investor & External [email protected]

THE INFORMATION IN THIS PRESENTATION WHICH REFERS TO MINERAL RESOURCES AND EXPLORATION RESULTS AT CARRAPATEENA IS BASED IN INFORMATION COMPILED BY STUART MASTERS WHO IS A MEMBER OF THE AUSTRALASIAN INSTITUTE OF MINING AND METALLURGY (AUSIMM) (108430). STUART MASTERS IS EMPLOYED BY CS-2 PTY LTD AND IS A CONSULTANT TO OZ MINERALS. HE HAS SUFFICIENT EXPERIENCE WHICH IS RELEVANT TO THE STYLE OF MINERALISATION AND TYPE OF DEPOSIT UNDER CONSIDERATION AND TO THE ACTIVITY WHICH HE

IS UNDERTAKING TO QUALIFY AS A COMPETENT PERSON AS DEFINED IN THE 2004 EDITION OF THE ‘AUSTRALIAN CODE FOR REPORTING OF EXPLORATION RESULTS, MINERAL RESOURCES AND ORE RESERVES. STUART MASTERS CONSENTS TO THE INCLUSION IN THE REPORT OF THE MATTERS BASED ON HIS INFORMATION IN THE FORM AND CONTEXT IN WHICH IT APPEARS.WITHIN THIS PRESENTATION REFERENCES TO EXPLORATION RESULTS RELATING TO PROMINENT HILL ARE BASED ON INFORMATION COMPILED BY MR MARCEL VAN ECK MSC WHO IS A FULL-TIME EMPLOYEE OF OZ MINERALS, IS A MEMBER OF THE AUSTRALIAN INSTITUTE OF GEOSCIENTISTS AND HAS SUFFICIENT EXPERIENCE RELEVANT TO

THE STYLE OF MINERALISATION AND TYPE OF DEPOSIT UNDER CONSIDERATION AND TO THE ACTIVITIES UNDERTAKEN TO QUALIFY AS A COMPETENT PERSON AS DEFINED BY THE JORC CODE (2004). MR VAN ECK HAS CONSENTED TO THE

INCLUSION OF THE MATERIAL IN THE FORM AND CONTEXT IN WHICH IT APPEARS.ALL OTHER REFERENCES TO EXPLORATION RESULTS WITHIN THIS PRESENTATION/STATEMENT ARE BASED ON INFORMATION COMPILED BY MR A HOUSTON BSC WHO IS A FULL-TIME EMPLOYEE OF OZ MINERALS, IS A MEMBER OF THE AUSTRALIAN INSTITUTE OF GEOSCIENTISTS AND HAS SUFFICIENT EXPERIENCE RELEVANT TO

THE STYLE OF MINERALISATION AND TYPE OF DEPOSIT UNDER CONSIDERATION AND TO

THE ACTIVITIES UNDERTAKEN TO QUALIFY AS A COMPETENT PERSON AS DEFINED BY THE JORC CODE (2004). MR HOUSTON HAS CONSENTED TO THE INCLUSION OF THE MATERIAL IN THE FORM AND CONTEXT IN WHICH IT APPEARS.

Documents

OZ MINERALS ASIAN ROADSHOW · 2015. 9. 15. · OZ MINERALS • PAGE 2. DISCLAIMER. This presentation has been prepared by OZ Minerals Limited (“OZ Minerals”) and consists of written