August 2010WWW.OZMINERALS.COM
OZ MINERALSDIGGERS AND DEALERS
TERRY BURGESS MANAGING DIRECTOR & CEO
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 3
CHARTING OUR COURSE
Today’s Presentation…
• Diggers and Dealers 2009 –
the beginning of the New OZ Minerals journey.
• Diggers and Dealers 2010 –
Our strategy. What have we achieved?
OZ MINERALS • PAGE 4
STRATEGY
ZERO HARM
FOUNDATION BUILT ON GOVERNANCE
SUPERIOR TOTAL
SHAREHOLDER RETURNS
FOCUS ON COPPER
MAXIMISE POTENTIAL OF ASSETS
BUILD A PROJECT PIPELINE
INVEST IN EXPLORATION
DISCIPLINED CAPITAL
MANAGEMENT
OZ MINERALS • PAGE 5
ASIAN COPPER SELF SUFFICIENCY LOW
Asia: largest net importer of cathode and concentrate, basis 2009/10
-
5,000
10,000
15,000
20,000
Mine production Refining Refined consumption
ktpa
Asia Total world
19%
43%
55%
Custom smelting industry – our market
0%
10%
20%
30%
40%
50%
60%
70%
2002 2003 2004 2005 2006 2007 2008 2009
Cu concentrates Pb concentrates
Crude oil Zn concentrates
China’s dependency ratios of selected raw materials
Source: China customs, CNIA, NBS, Barclays Capital Source: Brook Hunt and CRU
OZ MINERALS • PAGE 6
GROWING CUSTOM SMELTING INDUSTRY – OUR MARKET
China, 6
Japan, 4.5
Sth Korea, 1.5
India, 2.1
Philippines, 0.5
Total smelter production in Asia approx 6.6mt contained Cu
Source: CRU 2009
Year 2008: Major custom smelters, Asia. Actual concentrates demand [Millions tonnes pa]
Year 2014: Major custom smelters, Asia. Forecast concentrates demand [Millions tonnes pa]
Total smelter production in Asia approx 9.6mt contained Cu
China, 12
Japan, 4.8
Sth Korea, 1.6
India, 3.2
Philippines, 0.65
OZ MINERALS • PAGE 7
COPPER MARKET TIGHTNESS
Global Refined Copper Supply/Demand (’000 tonnes)
Source: RBC Capital Markets estimates, Bloomberg, Brook Hunt, ICSG
-1,500
-1,000
-500
0
500
1,000
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
(000
sto
nnes
)
5,000
8,000
11,000
14,000
17,000
20,000
23,000
(000
sto
nnes
)
Implied Surplus/Deficit (LS) Total Global Supply (RS) Total Global Demand (RS)
Forecast
OZ MINERALS • PAGE 8
COPPER SUPPLY ROUTINELY FALLS SHORTDisruptions (loss from plan) a key factor
0%
-1%
-2%
-3%
-4%
-5%
-6%
-7%
-8%
-9%2004 2005 2006 2007 2008 2009
SxEwConcsPercentage loss
Source: JP Morgan
-530
-24-982
-206
-762
-250
-832
-346
-1080
-379
-620
-176
OZ MINERALS • PAGE 9
Majority of new projects in riskier domains
Future Copper Production - Jurisdiction Balance
0%
10%
20%
30%
40%
50%
60%
70%
80%
LOW MEDIUM HIGH
Control Risk - Risk Assignment
% o
f Pro
duct
ion
Current Production
New Projects
SUPPLY CHALLENGES -
CHANGING JURISDICTIONS
Source, Control Risk, CRU, Teck
OZ MINERALS • PAGE 10
COPPER OPPORTUNITIES –
SUITABLE SCALE FOR OZ MINERALS−
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
OZ MINERALS • PAGE 11
COPPER OPPORTUNITIES –
PREFERRED JURISDICTIONS
Most copper operations and projects, excluding the FSU, are located in low-moderate risk geographical jurisdictions (green & blue) which is mostly where OZ Minerals will focus.
Source: MinEx, MEG, OZ Minerals
Global distribution of copper resources containing>500 kt of copper
OZ MINERALS • PAGE 12
SANDFIRE RESOURCES NL STRATEGIC EQUITY STAKE
Broome
Port Hedland
Perth
Kalgoorlie
MeekatharraDoolgunna
Geraldton
WESTERN AUSTRALIA
WA
• Acquisition of 19.9% strategic stake in Sandfire Resources for ~$100 million.
• Opportunity to acquire from major shareholders/institutional investors.
• DeGrussa copper discovery highly regarded.
• Aligned with OZ Minerals strategy –
copper, high quality asset, low-risk jurisdiction, production potential in OZ Minerals window of opportunity.
• Current resource: 9.6Mt @ 5.5% Cu, 1.8g/t Au (533,000t Cu, 559,000oz Au).
• Recent results continue to confirm prospectivity with discovery of new zone.
OZ MINERALS • PAGE 13
PROMINENT HILL HIGH REGIONAL PROSPECTIVITY−
Large, 7,000km2 tenement area, highly prospective for IOCG deposits –
including JV with IMX Resources.
−
$20 million regional exploration budget 2010.
−
Program of geophysics and drilling on-going.
−
Several broad zones of IOCG-style alteration systems have been intersected with low-grade mineralisation.
−
Large new aeromagnetic/gravity survey (as shown on map) complete, to be followed by ground geophysics and drilling.
6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN6,800,000 mN
6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN6,680,000 mN
6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN6,720,000 mN
6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN6,760,000 mN
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20km
EL
ML
EL
ML
OZ Minerals 100%
ML
OZ Minerals mining lease
IMX exploration lease
IMX Mining lease
Planned airborne gravity gradient (AGG) and magnetic survey area
EL4390
EL3795
EL4283 ML6228
EL4429
EL4429
EL4025
EL4132
EL4429
Prominent Hill
OZ MINERALS • PAGE 14
CAMBODIA –
OKVAU LONG SECTION -
605,000oz INITIAL RESOURCE
CAMBODIA
OAnlong
Phnom Sruoch
O Khlek
Khlok
OChhung
OKvau
PHNOM PENH
100m
•
Advanced gold exploration project.•
605,000oz Resource announced in June 2010.•
Drilling to increase Resource to a target of 2Moz by 2011/2012.
OZ MINERALS • PAGE 15
SAN EDUARDO EXPLORATION JOINT VENTURE – PORPHYRY COPPER TARGET
•
Targeting porphyry copper.
•
2010 program –
mapping -
soil sampling -
magnetic survey -
radiometric survey-
IP survey drilling
•
Azure to manage stage 1.
•
2010 –
minimum expenditure US$300,000.
•
If OZ Minerals elects to continue expenditure of $3million over the next three years will earn the Company 51%.
•
Expenditure of a further $10 million to earn a further 19%.
OZ MINERALS • PAGE 16
PROMINENT HILL
TAILINGS DAM
PIT
ROM PAD
PROCESSING PLANT
VILLAGE
WESTERN COPPER ZONE
AREA
NORTHERN WASTE DUMP
SOUTHERN WASTE DUMP
OZ MINERALS • PAGE 17
PROMINENT HILL –
SUCCESSFUL RAMP-UP NOW IN FULL PRODUCTIONStatus: Ramp-up completed.
Budget 10% above Nameplate capacity.Mine: 55Mtpa open pit, mining contractor
Thiess.Strip ratio: 5-6:1 (waste to ore, tonnes basis).Plant: 8.8Mtpa crush, grind, flotation.Product: High grade (+50% Cu), high quality,
copper concentrate.Remaining mine life: 8 years for open pit.Production 2009: 96,310t contained copper, 75,535oz
gold.H1 copper production:
60,145t
H1 gold production: 90,821oz
H1 C1 cash costs: US49.1c/lb
Copper production guidance 2010-2012:
100,000t to 110,000t contained copper.
Gold production guidance 2010:
140,000oz to 150,000oz gold.
Estimated C1 costs 2010:
US$0.70 –
US$0.80/lb.
Workforce: 725 (including contractors).
Open pit reserves : 75.7Mt @ 1.19% Cu, 0.59g/t Au (0.9Mt Cu, 1.4Moz Au).
Western Copper underground reserves :
4.5Mt @ 2.53% Cu, 0.49g/t Au (115kt Cu, 71koz Au).
Copper-gold resources: 189.7Mt @ 1.32% Cu, 0.5g/t Au (2.5Mt Cu, 2.9 Moz
Au).
Gold only resources: 78.8Mt @ 0.06% Cu, 1.4g/t Au (0.05Mt Cu, 3.4Moz Au).
Western copper underground resources:
10.3Mt @ 1.84% Cu, 0.34g/t Au (189kt Cu, 114koz Au).
OZ MINERALS • PAGE 18
WESTERN COPPER UNDERGROUND MINE •
1.2Mtpa mining/processing.
•
5 year mine life expected.
•
Additional 25,000t/a copper, 12,000oz/a gold.
•
Cash costs < $US1.25/lb.
•
Pre-production capital $135m
•
Mine development to commence October 2010.
•
Full production H2 2012.
•
Will address planned decline in production from 2013 –
maintaining production at close to current levels.
•
Facilitates underground exploration.
OZ MINERALS • PAGE 19
Operation
Exploration
•
Strategy -
Focus on Copper.•
Great potential in Prominent Hill−
Underground underway−
Significant exploration potential.•
Growing our pipeline. •
Exploration is a core business. •
A healthy balance sheet. •
Well placed for opportunities.
SUMMARY -
CHARTING OUR COURSE
Headquarters
AUSTRALIA
Prominent Hill copper-gold
operation
CambodiaMexico
Investor contact:Natalie WorleyHead of Investor & External [email protected]