ANNUAL GENERAL MEETING 24 November · PDF fileProxy VotesProxy Votes ... ¾Free cash...

ANNUAL GENERAL MEETING24 November 2009

Board Members

Non-executive ChairmanM Zh Sh iji• Mr Zhang Shuijian

Managing Director & CEOg g• Mr Paul Arndt

N ti Di tNon-executive Directors• Mr Patrick O’Connor (Deputy Non-executive Chairman)• Mr Minzhi Han• Mr Peter Harley• Mr Wang Wen

Today’s proceedings

• Chairman’s Introduction• Formal Business ItemsFormal Business Items

1. Consider and receive the annual financial statements

2 Ad ti f th R ti R t2. Adoption of the Remuneration Report

3. Re-election of Mr Peter Harley

4 Approval of the Employee Share Option Plan4. Approval of the Employee Share Option Plan

5. Appointment of Auditors

• Close of Formal Business

• Business Overview by Managing Director & CEO

• Questions

• Refreshments

Chairman’s addressby Mr Zhang Shuijianby Mr Zhang Shuijian

Formal Business

Annual Report 30 June 2009

“To consider and receive the 2008 Annual Report and the To consider and receive the 2008 Annual Report and the report of the directors and auditor.”Proxy Votes no vote requiredProxy Votes – no vote required

Resolution 1: Approval of Remuneration Report

“That the Remuneration Report for the Financial Year ended That the Remuneration Report for the Financial Year ended 30 June 2009 be adopted”Proxy VotesProxy Votes

For 250,326,564

Against 2,440,050

Open 1,025,428

For - 98.64%

Against - 0.96%

Open - 0.4%

Resolution 2: Re-election of Mr Peter Harley

“To re appoint Mr Peter Harley who retires by rotation as a To re-appoint Mr Peter Harley, who retires by rotation, as a director of the Company.”Proxy VotesProxy Votes

For 251,953,652

Against 924,604

Open 1,020,452For - 99.24%

Against - 0.36%

Open - 0.4%

Resolution 3: Approval of Employee Share Option Plan

“To approve, for the purposes of ASX Listing Rule 7.2 Exception 9(b) the issue of options under the Employee Exception 9(b), the issue of options under the Employee Share Option Plan.”Proxy VotesProxy Votes

For 250,418,180

Against 2,558,732

Open 184,010

For - 98.88%

Against - 1.01%

Open - 0.07%

Resolution 4: Appointment of Auditors

“To appoint PricewaterhouseCoopers as the Company’s Auditors ”Auditors.

Proxy VotesProxy Votes

For 239,534,326

Against 883,736

Open 800,966

For - 99.3%

Against - 0.37%

Open - 0.33%

Managing Director Presentation

Safety Performance

Operational Performance

Financial Performance – FY 2009

Metal Price Trends (since July 08)Metal Price Trends (since July 08)

Exploration and Development Pipeline

Rationale of the Silver Transaction

R ti l f th Ri ht IRationale of the Rights Issue

Our performance relative to Peers

Safety Performance600

700 Safety Lead Indicators

Key Highlights

L t d d i d 200

300

400

500

– Longest recorded period without lost time injury

L t ti i j f t

0

100

200

Nov-08

Dec-08

Jan-0

9

Feb-0

9

Mar-09

Apr-09

May-09

Jun-0

9

Jul-0

9

Aug-0

9

Sep-0

9

Oct-09

– Lost time injury frequency rate well below the industry average

D M A S

Safety Meetings Safety InteractionsTask Observations InspectionsHazards & Near Miss Reports

g

– All injury frequency rate the lowest in Perilya’s history at 5

6

Number of Incidents

758595105

Frequency Rates– All Injury – Incidents and Frequency Rate

y yBroken Hill

– Operating at our highest level 1

2

3

4

152535455565

p g gof positive safety indicators 0

1Nov-

08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

-55

All Injuries All Inj. FR

Operating PerformanceCost / Tonne Ore Milled

140

160 (A$)

Cost / t Payable Metal

2,500

3,000 (A$)

40

60

80

100

120

1,000

1,500

2,000

,

0

20

Nov-07

Dec-07

Jan-0

8Feb

-08Mar-

08Apr-

08May

-08Ju

n-08

Jul-0

8Aug

-08Sep

-08Oct-

08Nov

-08Dec

-08Ja

n-09

Feb-09

Mar-09

Apr-09

May-09

Jun-0

9Ju

l-09

Aug-09

Sep-09

Oct-09

Actual Linear (Actual)

0

500

Nov-07

Dec-07

Jan-0

8Feb

-08Mar-

08Apr-

08May

-08Ju

n-08

Jul-0

8Aug

-08Sep

-08Oct-

08Nov

-08Dec

-08Ja

n-09

Feb-09

Mar-09

Apr-09

May-09

Jun-0

9Ju

l-09

Aug-09

Sep-09

Oct-09

Actual Linear (Actual)Actual Linear (Actual)

Tonnes Hoisted per Employee

400450

(t)


Employee Manpower Trend 2008 - 09

800

–9 day poweroutage

100150200250300350

200300400500600700

050

Nov-07

Dec-07

Jan-0

8Feb

-08Mar-

08Apr-

08May

-08Ju

n-08

Jul-0

8Aug

-08Sep

-08Oct-

08Nov

-08Dec

-08Ja

n-09

Feb-09

Mar-09

Apr-09

May-09

Jun-0

9Ju

l-09

Aug-09

Sep-09

Oct-09


0100

Jan-0

8Feb

-08Mar-

08Apr-

08May

-08Ju

n-08

Jul-0

8Aug

-08Sep

-08Oct-

08Nov

-08Dec

-08Ja

n-09

Feb-09

Mar-09

Apr-09

May-09

Jun-0

9Ju

l-09

Aug-09

Sep-09

Oct-09

Actual 2 per Mov Avg (Actual)Actual Linear (Actual) Actual 2 per. Mov. Avg. (Actual)

Operating Performance (cont)

HighlightsQ t l t d d t

H1 H2 Sept QtrDec 08 Jun 09 2010

PRODUCTION STATISTICS

OreT t l O Mi d (kt) 788 9Quarterly costs reduced to

US$0.38/lb payable zinc

Free cash increased from $36 9

Total Ore Mined (kt) 788.9 737.6 349.7Total Ore Treated (kt) 839.1 750.9 345.0

ZincGrade (%) 5.3 5.4 5.4Concentrate (kt) 81.5 72.8 33.9 Free cash increased from $36.9

million to $46.2 million (after payment of $7 million being the net payment for the silver buy back) Positive

Contained Zinc (kt) 40.1 35.2 16.4 Payable Zinc (kt) 33.6 29.4 13.7

LeadGrade (%) 3.0 4.4 4.2 Concentrate (kt) 28.7 40.2 17.9for the silver buy-back). Positive

cashflow of $16.3 million net of one-off silver buy-back payment

( ) 28.7 40.2 17.9 Contained Lead (kt) 20.4 27.7 12.5 Payable Lead (kt) 19.4 26.4 11.8

Silver Grade (g/t) 30.7 49.5 53.8Contained Silver (Moz) 0 607 0 908 0 419

Broken Hill cash & earnings positive in current environment

Contained Silver (Moz) 0.607 0.908 0.419

CASH COST & OPERATING MARGIN (US$/lb zinc)

Average Price Received 0.73 0.57 0.82

Direct Cash Costs 1.11 0.85 1.01 (*)

Silver sale termination completed during quarter

By-product credits(*) (0.25) (0.51) (0.90)Zinc treatment charges 0.22 0.24 0.27 Net Cash Cost 1.08 0.58 0.38

Cash Operating Margin (0.35) (0.01) 0.44(*) Silver and Lead production net of treatment charges freight handling and realised lead/silverhedging gainsand lossesSilver and Lead production net of treatment charges, freight, handling and realised lead/silver hedging gains and losses

Financial Performance – FY 2009SUMMARY OF FINANCIAL AND OPERATING

PERFORMANCE 2008‐09 Financial Year

2007‐08 Financial 1 July – 31 Dec 1 Jan ‐ 30 June Financial Year Year TotalH1 H2 Total

Financial Revenue ($Million) 113.0 98.5 211.5 273.1Net (loss)/profit after tax ($Million) (77.2) 2.1 (75.1) (140.2)Cash flow from operations ($Million) * (46.6) (12.9) (59.5) (9.9)Cash flow from operations ($Million) (46.6) (12.9) (59.5) (9.9)Total assets ($Million) 135.5 160.8 160.8 307.7Shareholders equity ($Million) 39.6 83.7 83.7 147.6

Highlights* Before income from closure of hedge book which realised $60.3 million

HighlightsSignificant turnaround in performance in the 2nd half of the year to post a $2.1 million profit.

A move to positive cashflow and earnings from Broken Hill and Beltana in the June A move to positive cashflow and earnings from Broken Hill and Beltana in the June quarter.

Significant improvements in productivities at Broken Hill, which moves the operation to a more sustainable, lower cost profile.

Positive trend continues into the current financial year; enhanced even more with the buy-back of the silver contract completed in July 2009back of the silver contract completed in July 2009.

Metal Prices Trends (since July 08)

2,400

2,600 AUD Metal Prices ($/tn) (Zn + Pb) Since July 2008

2,000

2,200

e

1,600

1,800

A$/to

nne

1,200

1,400

1,000

Jul-0

8

Aug-

08

Sep-

08

Oct-0

8

Nov-

08

Dec-

08

Jan-

09

Feb-

09

Mar

-09

Apr-0

9

May

-09

Jun-

09

Jul-0

9

Aug-

09

Sep-

09

Oct-0

9

Nov-

09

AUD Zn AUD Pb

Whilst USD metal prices have recovered quite well over the past 6 months (particularly lead), the strong AUD has dampened this increase.Lead and zinc prices are only 9 – 12% higher today than in September 2008, when the re-sizing at Broken Hill occurred, t t t t th i t th t i d d ti iti d t d ti h i th C ’ fi i l lttestament to the impact that improved productivities and cost reductions are having on the Company’s financial results.

Exploration and Development PipelineNew reserve and resource announced for Broken Hill

Ore Reserves– 12.9Mt @ 10.5% Zn/Pb (28% increase y-o-y)

Ore Reserves – Broken Hill

New reserve and resource announced for Broken Hill

@ ( y y)– >10 years with a long history of replacement

(based on US$0.77/lb Zn and US$0.82/lb Pb and AUD/USD rate of A$0.80)

Mi l R

Classification Tonnes ('000)

Zn %

Pb %

Ag g/t

Contained zinc (kt)

Contained lead (kt)

Contained Silver (koz)

Proved 6,234 7.1 5.6 57 442 349 11,424

Probable 6,626 5.0 3.4 40 331 225 8,521

Mineral Resources– 20.9Mt @16.7% Zn/Pb (8% increase y-o-y)– Substantial Resource base for potential

conversion

Total 12,860 6.0 4.5 48 773 574 19,945

conversion to Reserves at a later date

Mine PlanningSupported by mine plan and improved performance

Mineral Resources – Broken Hill

Classification Tonnes ('000)

Zn %

Pb %

Ag g/t

Contained zinc (kt)

Contained lead (kt)

Contained Silver (koz)

– Supported by mine plan and improved performance– Independent review of Ore Reserve and

mine plan for Southern Operations

Holding add-ons

Measured 7,754 10.2 9.5 115 791 737 28,669

Indicated 6,408 9.0 7.3 96 577 468 19,778

Inferred 6,695 8.9 5.0 60 596 335 12,915

T t l 20 857 9 4 7 3 92 1 964 1 540 61 362 Holding add ons– North Mine, Potosi, Flying Doctor and the Pinnacles

region – Can be fast tracked at low capital cost

Total 20,857 9.4 7.3 92 1,964 1,540 61,362

p

Exploration and Development PipelineExample Potosi Extended/Silver Peak potential project

Potosi Pit Silver Peak ShaftVent Rise / Emergency Escape

Example - Potosi Extended/Silver Peak potential project

–Potosi Pit

Escape

PortalSilver Peak Project

Current Development

Current Development

Current Development

Potosi Extended Project

Exploration and Development PipelineE l M t O id C P j t

Current resources (17.9 Mt

Example – Mount Oxide Copper Project

@ 1.3% for 224kt Cu)

Re-initiated exploration in October targeted at October targeted at improving grade and quantity of resource in pit shellshell.

Conducting EM work to assist in investigation of higher grade at depth

Exploration and Development PipelineExample Flinders exploration and Reliance development

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%%%%%%%%%111111111000000000 0.50.50.50.50.50.50.50.50.5

RelianceRelianceRelianceRelianceRelianceRe lianceRe lianceRe lianceReliance

Re liance EastRe liance EastRe liance EastReliance EastReliance EastReliance EastReliance EastReliance EastReliance East

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Reliance EastReliance EastReliance EastReliance EastReliance EastReliance EastReliance EastReliance EastReliance East

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RelianceRelianceRelianceRelianceRelianceRelianceRelianceRelianceReliance

Reliance EastReliance EastReliance EastReliance EastReliance EastReliance EastReliance EastReliance EastReliance EastIn the past 12 months have shipped 121 041

Example – Flinders exploration and Reliance development

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Reliance EastRe liance EastRe liance EastReliance EastReliance EastReliance EastReliance EastReliance EastReliance East

Emu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu South%%%%%%%%% %%%%%%%%%

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Emu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu South%%%%%%%%% %%%%%%%%%

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Emu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu South

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Emu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu EastEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu SouthEmu South BeltanaOpen-Cut

For Scale

In the past 12 months have shipped 121,041 tonnes of ore at a grade of 30.1%

Excellent potential for additional discoveries

%%%%%%%%%MooloolooMooloolooMooloolooMooloolooMooloolooMooloolooMooloolooMooloolooMoolooloo%%%%%%%%%MooloolooMooloolooMooloolooMooloolooMooloolooMooloolooMooloolooMooloolooMoolooloo%%%%%%%%%MooloolooMooloolooMooloolooMooloolooMooloolooMooloolooMooloolooMooloolooMoolooloo

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%%%%%%%%%MooloolooMooloolooMooloolooMooloolooMooloolooMooloolooMooloolooMooloolooMoolooloo

North Mooloolooand increased resources

We have re-initiated exploration (spending $3M this year) focussed on targets illustrated

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%%%%%%%%%AristotleAristotleAristotleAristotleAristotleAristotleAristotleAristotleAristotle

AnacondaAnacondaAnacondaAnacondaAnacondaAnacondaAnacondaAnacondaAnaconda

HermaeHermaeHermaeHermaeHermaeHermaeHermaeHermaeHermae

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HermaeHermaeHermaeHermaeHermaeHermaeHermaeHermaeHermae Aristotle –Anaconda

Beltana East

this year) focussed on targets illustrated

Success will deliver high-value, low-cost Zn tonnes

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%%%%%%%%%BeltanaBeltanaBeltanaBeltanaBeltanaBeltanaBeltanaBeltanaBeltana

Sundow nSundow nSundow nSundow nSundow nSundow nSundow nSundow nSundow n

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Copper KingCopper KingCopper KingCopper KingCopper KingCopper KingCopper KingCopper KingCopper KingAtlasAtlasAtlasAtlasAtlasAtlasAtlasAtlasAtlas#

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Beltana East

Study is well progressed on the development of the Reliance pit as a first follow on to Beltana

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Atlas-WallriderTrend Copper King

Beltana

#

Rationale of the Silver Transaction

Terminated Silver Sale Agreement with Coeur d’Alene for US$55 million effective from 1 July 2009 (with settlement 31 July)

Provides spot exposure on 11.2 Moz rather than previously committed price (US$2.37/oz Ag).

Face value 11.2 Moz is ~US$145 million (basis US$13.60/oz Ag) at date of completion - now US$195 million (basis US$17.50/oz Ag.

Significant Long Term Significant Long Term Benefits

Unsecured Funding Reduction in Net Cash Costs

(C1) of US$0 10 US$0 12/lbImmediately Cashflow & Ability to re-assess high

silver deposits g(<3%+LIBOR)US$0.10 – US$0.12/lb

(based on prices at time of transaction)

yEarnings Accretive silver deposits.

(North Mine & Potosi)

Rationale of the Rights Issue

On 17 November, Perilya announced a1 for 3 Rights Issue at 42 cents per share to raise approximately $55 million.

The Rights Issue is fully underwritten by both Zhongjin Lingnan and UBS.

Proceeds will be used to evaluate and, if appropriate develop, its organic base metal growth options:

Potosi / Silver Peak underground

Flying Doctor open cut

North Mine (Uppers or Sands projects)North Mine (Uppers or Sands projects)

Reliance deposit in Flinders Ranges; and

Continued exploration program at Mt Oxide

Whilst we are now generating positive cashflow from our operations, these funds will ensure we maintain a very healthy cash position and can comfortably fund these developments if economic to do so.

Very positive feedback from investor community should see the issue being a success.

Offer documents will be mailed on 27th November; deadline for acceptances 14 December.

Our Performance Relative to Peers

Perilya Share Performance

Perilya’s has outperformed its peers over the past 12 months

Our Performance Relative to PeersExposure to zinc lead and silver

60.080,000

Exposure to zinc, lead and silver

50.0

60,000

70,000

30 0

40.0

40 000

50,000

tonn

es)

(tonn

es)

20.0

30.0

30,000

40,000

Silv

er (t

Lead

/Zin

c

10.010,000

20,000

0.00Perilya* CBH* JML* Kagara* Terramin**

Zinc Lead Silver* Basis 2008/2009 annual production** Basis April - June Quarter annualised

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