TIQ Latin America Mining - METS

Latin America Overview

Latin America Overview

Mining Investments in Latin America

Source:

Latin America – Mining and Energy Consensus Forecast

Trade Mission – October 2015

• 2 weeks of mission through 2 countries (Peru & Chile) and 4 cities (Arequipa, Lima, Santiago & Rancagua)

• 4x mine site visit – Cerro Verde (Freeport), El Brocal (Buenaventura), Rio seco (Buenaventura) and El Teniente (Codelco)

• Over 30 new leads appointed

• Over 20 personalized meetings

• TIQ presence consolidated at ALL TIER 1 mining in Peru

• Possibility of over AUD 5.000.000 in new business

• One success cases achieved during the Mission (Diamond Grid – USD 250k)

Trade Mission – Press Release

• Hosted by Minister Lynham, Queensland Minister of Natural Resources & Mines, and State Development

• Attended: Rio Tinto, Freeport-MacMoran Cerro Verde and Milpo Mining

Round table with Cerro Verde, Rio tinto and Milpo Mining

Round table with Cerro Verde, Rio tinto and Milpo Mining

First mine site - Cerro verde

Cerro Verde (operated by Freeport-McMoRan) is an open-pit copper and molybdenum mining complex with a large-scale $4.4B expansion advancing toward completion in late 2015. This expansion will treble concentrator facilities taking annual production to 600 million pounds of copper.

First mine site - Cerro verde

Second Mine visit - El Brocal

Compañía de Minas Buenaventura S.A.A. is a Peruvian miner engaged in the exploration, mining, development and processing of gold, silver and other precious metals. The company is the largest locally owned precious metals producer and operates several mines in Peru (Orcopampa, Uchucchacua, Poracota, Tantahuatay, La Zanja, Rio Seco, Julcani, Antapite and Mallay) and has controlling interest in mining companies Cedimin and El Brocal. Buenaventura, through a JV with Newmont Mining Corp., also owns 43.7% of Yanacocha, Latin America's largest gold mine, and 19.6% of copper producer Cerro Verde. The mission visited the Tajo Norte mine that is an open pit operation that exploits content polymetallic ores, sulfides mainly comprised of silver, lead, zinc and copper.

For project website visit: http://www.buenaventura.com/

Second Mine visit - El Brocal

Third mine visit - Rio seco - Buenaventura

Third mine visit - Rio seco - Buenaventura

Lima event Bussines meeting with all Tier 1 mining companies in Peru - Volcan, Rio Tinto, Buenaventura, Chamber of Commerce, Grana Montero, Souther Copper and Antamina

*Adam and Roque Benavides – CEO of Buenaventura

Fourth mine visit – Coldeco

Fourth mine visit – El Teniente - Coldeco

Fourth mine visit – El Teniente - Coldeco

Connect – TIQ in Latin America

Connect – TIQ in Latin America

CHILE - Why do business in Chile?

• Stable democratic government • 22 Trade Agreements – 60 countries • Free Trade Agreement with Australia • Double Taxation Treaty with Australia • Unemployment is low • Port of entry to Latin America • Prudent fiscal policies - Public debt is approximately 10% of GDP • Solid business practices - Rule of law • Low corruption - Chile ranks #23 of 177 on Transparency

International’s 2015 Corruption Perceptions Index;

Mining in Chile

• Chile’s mining industry generates large demand for imports.

• Mining industry has been and will continue to be a key driver in the development of Chile.

• Chilean copper reserves represent 25% of world total reserves and produces 34% of copper sold in the world.

• Production of 6 million tons of fine copper/year.

• Chilean mining consists primarily of open pit, hard rock mining.

• Mining Equipment. Total imports: USD 4.2 billion.

• Estimated USD 80 billion in new investment over next 10 years.

Chile - Projects

Companies Projects Commodities

Anglo American Los Bronces - 65kms from Santiago - 400.000

tons/year - USD 2.8 billion Copper

Collahuasi Doña Inés de Collahuasi - Tarapaca region Copper

BHP Escondida - Atacama Desert in the North of

Chile – World’s largest copper producer Copper

Pan Pacific

Copper, Mitsui,

SCM Minera Caserones - Located in Copiapo region - USD

4.2 billion Copper

Codelco Chuquicamata underground mine Copper

Codelco New level in El Teniente Mine - Rancagua -

415.000 tons/year - USD 3.5 billion Copper

Antofagasta

Minerals Antucoya - Construction Copper

KGHM

International Sierra Gorda - Antofagasta region - USD 3.9

billion Copper

Opportunities for METS in Chile Mining equipment that requires regular replacement (i.e. grinders, off-road trucks (240-440), scoop shovels, excavators, cranes, crushers, etc.), underground mining technology services and engineering services. − Processing plants − Exploration & Exploitation − Infrastructure − Training − Drilling − Water and Energy Management − Community engagement − Air pollution and dust abatement − Mine closure Cooperative Agreement with Asociación de Industriales de Antofagasta (AIA) Main trade shows: Expomin, April 2016 (www.expomin.cl) Santiago Exponor, May 2017 (www.exponor.cl) Antofagasta

ENABLING ELEMENTS /RESOURCES

What is Chile doing to stay competitive?

Roadmap

TENDENCIES/ DRIVERS

BUSINESS OPPORTUNITIES

TECHNOLOGIES

PROJECTS R&D+i

TAILIN

GS

SMA

RT

MIN

ING

SMELTER

&

REFIN

ING

ENER

GY

&

WA

TER

OTH

ERS

DRIVING CORES

TODAY SHORT TERM MID TERM + 2035

ENABLING CORES

SUPPLIERS DEVELOPMENT

HUMAN CAPITAL

VISION AND OBJECTIVES

US$M 10.000 in

exports

290 world-class suppliers

80% of industrie

in first cost quartiles

Government of Chile - Ministry of Mining 2. Challenges of the Chilean mining industry

Growing Water and Energy Demand

0

5

10

15

20

25

30

35

40

45

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Ene

rgía

(Tw

h)

Base Probable Posible

40 TWH

PROJECTED ENERGY CONSUMPTION

(TWH)

• Increase in electricity demand from 23TWH to 40TWH

• High impact of energy on industry costs: aprox. 20%

• Increase of water consumption (fresh and seawater) of 66% (14,8 m3/s to

24,6m3/s) due decreasing grade of concentrate

• Use of seawater could increase over 40% of costs associated to energy

0

5

10

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20

25

30

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Agu

a m

3/s

Agua Fresca Agua de mar

24,6 m3/s

PROJECTED WATER CONSUMPTION

(m3/s)

SOURCE: FCH (BASED IN COCHILCO’S DATA) Fresh water Seawater

Major Cities: Lima Arequipa, Trujillo, Piura e Cuzco

GDP: USD 200 billion 57% Middle Class 47% Below age of 24 USD 8.2 billion in FDI annually 2nd highest credit rating (BBB+) in Latin America behind Chile

Peru at a glance

Mining in Peru More than 14% of GDP comes from mining.

• Third world producer of copper. 2.8 million tons by 2016.

• More than 61% of the exports are related to mining.

• There are more than 600 active mining sites of which 188 are

underground, and more than 1000 sites under exploration.

• Mining activity is carried out by private companies operating under long-term licences granted by the central government.

• Investment from 2014-2024 – USD 60 billion in copper, gold and silver.

• Copper, gold and iron ore comprise 88% of the production.

Peru at a glance

Peru - Projects

Companies Projects Commodities

China MinMetals Las Bambas acquisition - US$ 5.1 billion copper

Freeport

McMoRan Cerro Verde - Expansion - US$ 4.6 billion copper and gold

Hudbay Minerals Constancia - Expansion (Ausenco) - US$ 1.7

billion copper and gold

Anglo American Quellaveco - Expansion - US$ 3.3 billion copper, molybdenum,

silver

Southern

Copper Tia Maria - US$ 1.3 billion - Start operations in

2017 copper

Buenaventura Chucapaca - US$ 1.0 billion - Start operations

in 2017 gold

Hochschild

Mining Crespo - US$ 111 million gold and silver

Opportunities for METS in Peru

•Processing plant Equipment

• Mining Equipment

• Exploration

• Infrastructure

• Preparation

• Training and skilling the work force

• Water and Energy Management

• Community engagement

Main trade shows: Expomina, Sept 2016 (www.expominaperu.clom) Lima

Perumin, Sept 2017 (www.convencionminera.com) Arequipa

TIQ in Latin America – Antamina Project

• Infrastructure / remote access

• Bureaucratic ineffectiveness, inefficiency & corruption

• Informality

• Customs and Taxes

• Community relations

• Conflicts are linked to use and availability of water or pollution

• Insufficient skilled work force

Challenges

Peru and Chile - Resume

BRAZIL

Brazil

ARGENTINA COLOMBIA

Lithium

Gold

Gold

Coal Emeralds

Manganese

TIPS for success in Latin America • Identify a local representative

• Personal relationships matter

• Language & translate materials

• Establish your plan for post purchase service

• Capitalize on quality of product

• Work with a legal partner

• Conduct due diligence

• Contact TIQ for help!!!

Pacific Alliance

Thank you

Marco Miranda | Senior Business Development Manager for Latin America

Trade & Investment Queensland

Av. Andrés Bello 2777 – Of. 2002, Las Condes, Santiago, Chile

Tel. +56 2 3202 6134 / Mobile +56 9 4277 0392

marco.miranda@tiq.qld.gov.au

www.tiq.qld.gov.au