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FOURTH QUARTER REPORT 2014 28 JANUARY 2015
FOURTH QUARTER REPORT 2014 28 JANUARY 2015
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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 their 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 therefrom, or otherwise arising in connection with it.
Some statements in this presentation are forward-looking statements within the meaning of the US securities laws. Such statements include, but are not limited to, statements with regard to 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 Minerals’ 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 and 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 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.
All figures are expressed in Australian dollars unless stated otherwise.
This presentation should be read in conjunction with the Quarterly Report released today.
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HIGHLIGHTS FOR 2014
Carrapateena • Quality PFS released for Carrapateena –
successfully demonstrating viability.
• Released a maiden Resource for the Khamsin deposit.
• Continued to discover significant mineralisation at the Fremantle Doctor prospect including more than a kilometre of mineralisation at 0.6 percent copper.
Cost performance • Efficiency improvements in the open pit drove
lower costs.
• C1 unit costs of US$90.7/lb, lower than guidance.
• Positive cash flow from operations in second half of 2014 – cash balance at 31 December 2014 of $219 million.
• $60 million returned to shareholders as dividends.
Safety • The TRIFR increased from 7.69 in 2013 to 8.18 in 2014
after a strong downward trend in previous years. OZ Minerals continues to focus on improving the safety of our employees and contractors.
Prominent Hill • Prominent Hill returned to 100,000 tpa copper
production run rate. • Copper and gold production targets exceeded. • Improved efficiency of operations in the open pit. • Consistent performance at Ankata Underground. • First production from Malu Underground mine. • Open pit Reserves maintained apart from
depletion. • Underground Reserves increased at Ankata and
Malu.
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Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14
LTI F
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TRI F
requ
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OZ Minerals TRIFR OZ Minerals LTIFR
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PROMINENT HILL KEY PRODUCTION STATISTICS
Prominent Hill Production Statistics Sep 14 Qtr
Dec 14 Qtr
Dec 14 Full year
Mined (Tonnes) Malu Copper Gold Ore 2,222,443 2,077,955 8,509,036
Malu Gold only Ore 1,821,155 1,477,373 5,849,908
Ankata Ore 322,124 292,532 1,208,835
Waste 16,004,448 14,036,393 67,956,871
Mined Grade Malu Copper Gold ore Cu grade (%) 1.08 1.14 1.04
Malu Copper Gold ore Au grade (g/t) 0.44 0.41 0.45
Malu Gold only ore Cu grade (%) 0.11 0.09 0.11
Malu Gold only ore Au grade (g/t) 0.78 0.74 0.86
Ankata ore Cu grade (%) 2.24 2.25 1.99
Ankata ore Au grade (g/t) 0.43 0.56 0.48
Ore Milled (Tonnes) 2,755,848 2,598,466 9,870,853
Milled Grade Copper (%) 1.06 1.11 1.04
Gold (G/T) 0.68 0.56 0.60
Recovery Copper (%) 90.0 89.9 89.9
Gold (%) 78.4 77.0 77.7
Copper Conc. Produced
Tonnes 49,375 47,860 176,519
Contained Metal In Conc.
Copper (Tonnes) 26,249 26,002 92,615
Gold (Oz) 47,376 36,288 148,191
Total Conc. Sold (DM Tonnes) 38,883 68,317 182,109
Total Malu Open Pit movement in 2014 of 82Mt exceeded expectations due to higher productivity levels.
Ankata continuing to be a reliable and high grade producer.
Improvement in grades mined from both Malu Open Pit and Ankata over the second half of 2014.
Decrease in ore milled in Q4 due to inclusion of shut down.
Copper production above guidance.
Gold production above guidance with strong second half. Lower gold production in Q4 due to reduction in gold ore in blend.
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PROMINENT HILL MINED GRADE AND MILLING PERFORMANCE
ORE MILLED PER QUARTER HIGHEST ANNUAL THROUGHPUT FOR THREE YEARS
2.5Mt
• Consistently strong performance from the processing plant continues with highest annual throughput since 2011. − Ability to extend shut downs has proven
effective and time between shuts will continue to be monitored.
− Additional flotation cleaner stage commissioned.
OPEN PIT MATERIAL MOVEMENT DECREASING PROFILE REDUCING CASH SPEND
• Productivity increasing. − 87Mt of material moved in 2013 at $5.70/t
with 5 excavators. − 82Mt of material moved in 2014 at $5.17/t
with 3.5 excavators. • Total waste movement requirements in the pit
falling. − Demobilisation in January 2015. − Lower fuel usage and fuel price.
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-
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
60.5 7.4 26.1 (25.8) 23.9 (9.7) 0.6 83.0
Q3 Actual 2014 Gold price Payable goldvolume
Volume(Cost Driver)
Costs FX Payable coppervolume
Q4 Actual 2014
(US c/lb) Unit Cost C1 - Q4 2014 vs Q3 2014
C1 COSTS
8% reduction
in gold price.
Lower gold production
due to lower milled
tonnes and grade.
Lower tonnes mined
from both Malu Open
Pit and Ankata.
Higher unit mining costs from Malu
Open Pit with slightly lower
excavator productivities due to space limitations.
Average A$/US$
rate was 7 US cents
below Q3.
• Q4 C1 costs US$83.0c/lb, higher Q on Q due to lower gold production, gold price and higher unit mining costs.
• FY 2014 C1 costs US$90.7c/lb lower than guidance with higher gold production, lower open pit costs and lower A$.
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COMMODITY PRICING
Both copper and gold pricing in A$ similar when comparing first and second halves of 2014.
COPPER PRICE STRONG A$ RESULT IN H2 BUT LARGE SELL OFF IN JAN
2015
GOLD PRICE RECOVERY IN H2 2014 HAS CONTINUED INTO 2015
• Average A$ Copper price H1 $3.43/lb.
• Average A$ Copper price H2 $3.47/lb.
• Average A$ Gold price in H1 $1,411/oz.
• Average A$ Gold price in H2 $1,396/oz.
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WORKING CAPITAL AND CASH
* Subject to audit
H2 WORKING CAPITAL ANALYSIS WORKING CAPITAL FLAT IN SECOND HALF • Cash balance as at 31 December 2014
of $219 million, a $64 million increase from June 2014.
• Underlying operation cash flow positive.
• Working capital at normal operating levels.
• Increased sales and reduction in concentrate stocks as compared to June.
• Reduction in trade receivables as compared to June.
• Increase in ROM stocks.
A$m Jun'14 Dec '14* Change
Trade receivable 163 128 (35)
Trade payables (95) (79) 16
Ore inventory 142 192 50
Concentrate 67 34 (33)
Working capital 277 275 (2)
Cash on hand 155 219 64
Working capital and cash 62
Total working capital movement pre Dividend 92
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CARRAPATEENA: FREMANTLE DOCTOR Q4 SIGNIFICANT INTERSECTIONS (PLAN VIEW)
737,000 mE 741,000 mE
Residual Gravity
N
1 km
Main Copper Mineralised Zone at
Carrapateena
6,546,000 mN
6,543,000 m
N
CAR037
FDR007 FDR010
Holes for which results were received during the quarter and significant intersections from DD14FDR005W2, DD14FDR011, DD14FDR013 and DD14FDR014:
Hole Number From (metres)
Interval (metres)
Copper (%)
Gold (g/t)
*DD14FDR005W2 1220.0 1053.3 0.56 0.38 ***Including 1445.0 577.0 0.84 0.60
*DD14FDR011 709.0 70.0 1.00 0.58 **Including 738.0 24.5 1.60 1.03
*DD14FDR011 1116.0 499.0 0.23 0.11
*DD14FDR013 611.0 47.0 0.70 0.21 *DD14FDR013 982.25 133.75 0.70 0.41 *DD14FDR013 1181.0 590.0 0.21 0.08
*DD14FDR014 718.0 1105.8 0.33 0.24 **Including 1336.0 39.0 1.55 1.42
CAR011
CAR038
FDR009 FDR011 FDR012
FDR013
FDR008
FD002
FD001
FDR004
FDR005W2 FDR005 FDR005W1
FDR006 FDR014
FDR003
Current Drilling Previous Drilling
. FD001 and FD002 was drilled in 2007 by Teck Cominco Australia.
CAR011, CAR036, CAR037 and CAR038 were drilled in 2006 by Teck Cominco Australia. DD12FDR003 was previously released in 2012 ASX Q4. DD12FDR004 was previously released in 2012 ASX Q4. DD13FDR005 was previously released in 2013 ASX Q2.
DD14FDR005W1 was previously released in 2014 ASX Q3. DD14FDR006 was previously released in 2014 ASX Q2. DD14FDR007 was previously released in 2014 ASX Q3. DD14FDR008 was previously released in 2014 ASX Q3. DD14FDR009 was previously released in 2014 ASX Q3. DD14FDR010 was previously released in 2014 ASX Q3.
*Intervals calculated using a 0.1% Cu cut-off grade with unlimited internal dilution.
**Intervals calculated using a 0.7% Cu cut-off grade up to/including 4m internal dilution. ***Interval calculated using a 0.4% Cu cut-off grade with unlimited internal dilution.
CAR036
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STRATEGIC REVIEW SUMMARY
• Strategic whole of business review underway. • Looking at costs, organisational structure, sustainable long-term business
options and safety improvement. • Business as usual while review is underway.
− Assume current production rate from Prominent Hill – specific guidance end Q1.
− Assume all other current activities continue. − As significant decisions are made and approved as part of the review,
they will be announced. • Incentive partnership with South Australian Government on copper project
development. − Partnering on exciting metallurgical testwork and potential
infrastructure solutions. − Early decision made to reduce the size and move location of corporate
office to Adelaide. − Remain a company with global outlook.
APPENDICES
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Long Section looking WNW clipped with a window of +/-125m. FD001 and FD002 was drilled in 2007 by Teck Cominco Australia.
DD12FDR003 was previously released in 2012 ASX Q4. DD12FDR004 was previously released in 2012 ASX Q4. DD13FDR005 was previously released in 2013 ASX Q2.
DD14FDR005W1 was previously released in 2014 ASX Q3. DD14FDR006 was previously released in 2014 ASX Q2. DD14FDR007 was previously released in 2014 ASX Q3. DD14FDR008 was previously released in 2014 ASX Q3. DD14FDR009 was previously released in 2014 ASX Q3. DD14FDR010 was previously released in 2014 ASX Q3.
*Intervals calculated using a 0.1% Cu cut-off grade with unlimited internal dilution.
**Intervals calculated using a 0.7% Cu cut-off grade up to/including 4m internal dilution. ***Interval calculated using a 0.4% Cu cut-off grade with unlimited internal dilution.
CARRAPATEENA: FREMANTLE DOCTOR Q4 DRILLING RESULTS (SECTION VIEW)
Depth from surface to basement ~570m
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JAMAICA: BELLAS GATE PROJECT, CONNORS PROSPECT, Q4 DRILLING RESULTS (PLAN VIEW)
CON14-001 was previously released in 2014 ASX Q2. CON14-002 was previously released in 2014 ASX Q2. CON14-003 was previously released in 2014 ASX Q3.
*Intervals calculated using unlimited dilution.
Note: Copper equivalents are calculated using a US$3.00/lb. copper and a US$1200 per ounce gold price assuming 100% recovery of both metals. Intersections are drilled lengths
only. Too little information is available to estimate actual true widths.
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JAMAICA: BELLAS GATE PROJECT, CONNORS PROSPECT, Q4 DRILLING RESULTS (SECTION VIEW)
Section 1999325mN looking north clipped with a window of +/-25m. CON14-001 was previously released in 2014 ASX Q2. CON14-002 was previously released in 2014 ASX Q2. CON14-003 was previously released in 2014 ASX Q3.
*Intervals calculated using unlimited dilution.
Note: Copper equivalents are calculated using a US$3.00/lb. copper and a US$1200 per ounce gold price assuming 100% recovery of both metals. Intersections are drilled lengths
only. Too little information is available to estimate actual true widths.
Looking North
COMPETENT PERSON’S STATEMENT The information in this report that relates to Exploration Results in respect to the Fremantle Doctor and Connors Prospects is based on and fairly represents information and supporting documentation compiled by Mr Anthony Houston BSc, a Competent Person who is a member of the Australian Institute of Geoscientists. Mr Houston is a full-time employee of OZ Minerals Limited. Mr Houston is a shareholder of OZ Minerals and is entitled to participate in the OZ Minerals Long Term Incentive Plan. Mr Houston has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Houston consents to the inclusion in the Report of the matters based on his information in the form and context in which it appears. Please refer to accompanying Quarterly Report for JORC 2012 Table 1 information.
