70
Prominent Hill Site Visit 11 and 12 November 2015
Prominent Hill Site Visit
1 1 a n d 1 2 N o v e m b e r 2 0 1 5
Head of Corporate Affairs
Damon Hunt
Introduction and
housekeeping rules
Head of Legal and Company Secretary
Robert Mancini
Continuous Disclosure
Disclaimers
P A G E 4 /
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.
Other Disclosures
P A G E 5 /
Carrapateena Mineral Resource estimate
The information in this presentation that relates to Carrapateena Mineral Resource estimate is extracted from the announcement entitled „Carrapateena Update‟
released to the market on 6 October 2015 and available at http://www.ozminerals.com/Media/docs/151006-Carrapateena-High-Grade--Explanatory-notes-
1503c513-d142-485c-8a51-52b3c24ad7bc-0.pdf. The company confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical
parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that
the form and context in which the findings of the Competent Person (Stuart Masters) are presented have not been materially modified from the original market
announcement.
There is a low level of geological confidence associated with inferred mineral resources. There is no certainty that further exploration work and studies will result
in the conversion of the mineral resources into ore reserves or that the production targets will be realised.
The Prominent Hill Ore Reserve and Mineral Resource estimates underpinning the production targets were prepared by Competent Persons in accordance with
the JORC Code 2012. The production targets are the result of detailed studies based on the actual performance of our existing mines and processing plant.
These studies include the assessment of mining, metallurgical, ore processing, marketing, government, legal, environmental, economic and social factors.
Prominent Hill Mineral Resources and Ore Reserves Further information on Prominent Hill Mineral Resources and Ore Reserves is available in the Annual Resource and Reserve Update for Prominent Hill released on
4 November 2015 which is available on the OZ Minerals website at
http://www.ozminerals.com/uploads/media/151104_ASX_Release_Prominent_Hill_Mineral_Resources_and_Reserves_Statement..pdf
OZ Minerals confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement
and, in the case of estimates of Mineral Resources and Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the
relevant market announcement continue to apply and have not materially changed. OZ Minerals confirms that the form and context in which the findings of the
Competent Person (Colin Lollo in relation to the Mineral Resource estimates and Justin Taylor in relation to the Ore Reserve estimates) are presented have not
been materially modified from the original market announcement.
Production Targets Cautionary Statement
The production targets referred to on slide 18 is based on:
Proved Reserves 36%
Probable Reserves 58%
Measured Resources outside Reserves 1%
Indicated Resources outside Reserves 1%
Inferred Resources 4%
Other Disclosures
P A G E 6 /
Khamsin Mineral Resource estimate
The information in this presentation that relates to the Khamsin Mineral Resource as at 23 March 2014 (on page 14) is extracted from the report entitled
“Initial 202 million tonnes at 0.6 percent Copper Resource for Khamsin and Khamsin Mineral Resources Statement as at 23 March 2014” which was
released to the market on 26 May 2014 and is available to view on www.ozminerals.com/operations/resources--reserves.html The Company confirms
that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case
of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the original market
announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person‟s
findings are presented have not been materially modified from the original market announcement.
Fremantle Doctor Exploration Results
The information in this presentation that relates to Fremantle Doctor Exploration Results (on page 14) is extracted from the report entitled the “OZ
Minerals 2014 September Quarterly Report” released 14 October 2014 and is available to view on http://www.ozminerals.com/uploads/media/ASX-2014-
Sep-Quarterly-Report-b7eed6fb-ed79-4514-9aec-13dc2c3af87b-0.pdf The Company confirms that it is not aware of any new information or data that
materially affects the information included in the original market announcement. The Company confirms that the form and context in which the
Competent Person‟s findings are presented have not been materially modified from the original market announcement.
Managing Director and CEO
Andrew Cole
Introduction
Strategy
P A G E 8 /
Progress update
• Safety – Safe work above all else, strive for a workplace
with no injuries
• Values – Integrity and strong governance in all aspects of
the way we work
• Capital discipline – Commitment to reliably and
predictably deliver with disciplined capital deployment
How we‟re working:
• Lean business – Fit for purpose today with an agile and
flexible approach to opportunity
• Customer focus – Preferred supplier of mineral products
to customers
• Copper core – Foundation built on copper with base
metals and gold opportunistically pursued
• Multiple assets – Build and maintain a portfolio of
valuable, risk managed, cash generating assets
Continuing to focus on:
Safe
P A G E 9 /
OZ Minerals safety performance
• TFIFR now down to 5.96, which is an improvement
• No risk appetite to place employees and
contractors in harm‟s way
• All activities must have appropriate controls in
place with strong leadership present
• Safety performance vs our peers demonstrates
room for improvement
• Program of actions focused on:
Site safety acceleration program
Mental health awareness
Leadership development
Focus on significant incidents
Increased risk awareness
Performance vs. Peers – 2014
Safety performance
0
2
4
6
8
10
12
Peer 1 OZ
Minerals
Peer 2 OZ
Minerals
Q3 2015
Peer 3 Peer 4 Peer 5 Peer 6
TR
IFR
*
* CY or FY 2014 comparison, Source: Company data. Selection of peers includes PanAust, Sandfire, Illuka,
Newcrest, Fortescue, BHPBilliton.
Capital Discipline Capital will be deployed in the most valuable manner
• Internal and external growth options must compete for capital vs. shareholder distributions
• Strong balance sheet must be engaged to facilitate growth options and reward shareholders
• Capital Discipline
Cost culture being embedded yielding 3 quarters of consecutive strong operational performance
• Complete overhaul of procurement and contract management processes commenced
• Internal Growth
Attractive Carrapateena high-grade option progressed
Hydromet process to de-risk Gawler Craton copper resources demonstrated
• Prominent Hill underground capability improving
• Prominent Hill underground 2nd access being considered
• Prominent Hill underground resource extensions to be reviewed in 2016
• External Growth
Innovative Minotaur partnership deal struck to explore Prominent Hill surrounds
• Due diligence activities underway, no value-accretive acquisitions identified to date
• Market conditions generating more opportunities as over-leveraged companies struggle
• Shareholder Distributions
Interim dividend of 6cps paid
Total shareholder return improved since strategy launch
• Dividend policy clear and will be executed at year-end
P A G E 1 0 /
Values
P A G E 1 1 /
Four core values of OZ Minerals
Major company-wide restructure complete to facilitate values
Decentralised business model
Corporate focussed on strategy and governance
Asset on cash generation
New organisational structure to facilitate clear accountability
LEAN Visual Management implemented tools to ensure clear
KPI and performance tracking
RESPECT RESULTS
ACTION INTEGRITY
Lean business
P A G E 1 2 /
Earning the potential to grow
Co
mp
lete
d
Un
derw
ay
New strategy and new targets
Relocated Corporate office
Restructured business to devolved asset model
Divested Sandfire
Suspend Fremantle Doctor exploration
Revised mine plan
New Adelaide corporate team
Further de-risk Malu Open Pit
Grow concentrate „toolbox‟
• Improve safety performance
• Strengthen and embed lean accountability
• Supplier optimization and value extraction
• Aim to reduce costs by 15 per cent in 2016
LEAN BUSINESS
Copper Core
P A G E 1 3 /
Significant resource base to leverage
• South Australia is a favourable mining
jurisdiction
• Gawler Craton contains one of the world‟s
largest ore bodies at Olympic Dam and
other significant deposits, including
Prominent Hill
• Supportive State Government
• Strong community support
• Prominent Hill is well located with respect to
road and rail, power and water
• Export route to Asian and European markets
via Adelaide
Copper Core (cont.) Building organic options to create value
0
200
400
600
800
1000
1200
Prominent Hill Carrapateena Khamsin Total
Mt
800Mt
0.8%Cu
202Mt
0.6%Cu
179Mt
1.0%Cu
1.2Bt
0.8%Cu
• Freemantle Doctor does not yet have a resource
• Drilling results for hole DD14FDR005W1 – 1188m at
0.4% Cu and 0.21g/t Au including 44m at 1.95% Cu
and 1.3g/t Au*
• Our priority and focus is to generate cash flow from
these resources
• Once commenced we will re-initiate exploration and
resource development in the Gawler Craton
*Refer to OZ Minerals 2014 September Quarterly Report released 14 October 2014 which is available at
http://www.ozminerals.com/uploads/media/ASX-2014-Sep-Quarterly-Report-b7eed6fb-ed79-4514-9aec-13dc2c3af87b-0.pdf Resource
Statements can be found at the OZ Minerals website by clicking on the links below: Carrapateena Resource Statement as at 30 June 2013
Carrapateena High Grade Resource Statement as at 25 September 2015
Khamsin Resource Statement as at 23 March 2014
FREEMANTLE DOCTOR
Including
High Grade Core
61Mt @ 2.9% CuEq
Multiple Assets
P A G E 1 5 /
• Focus on organic and inorganic growth option development
• Organic growth options progressing well (Prominent Hill
& Carrapateena)
• All decisions based on value and risk, considering long
term fundamentals and short term sensitivities
• Inorganic opportunities focused on copper, base metals
and gold
• Aim to leverage our skills in marketing, processing, and
balance sheet strength
• Investment decisions made on a case-by-case basis
• zero tolerance for safety or personnel risk
• zero tolerance for values or governance risk
• A portfolio of many small or a few large assets is
equally acceptable
Recent partnerships announced with Minotaur and
PepinNini show creative preferred deal structures
Market conditions offer further opportunities
MULTIPLE OPERATIONS
Un
derw
ay
• Expand pipeline of opportunities
• Add new assets/operations to portfolio
• Prominent Hill Malu Deep study
• Carrapateena value adding studies
• Disciplined exploration activities
Recognised favorable external
market
New investment criteria defined
Commenced active due diligence
Customers Customer focus a priority
Diversified and expanded customer base
OZ Minerals builds concentrate parcels customized to each customer
– this is a niche and competitive advantage in the market place
P A G E 1 6 /
Weakening A$ supportive
P A G E 1 7 /
A$ copper pricing remains strong
• A$ copper price relatively stable over the last 12 months
• US$ copper price has declined 24% over the same period
• Over 80% of costs incurred in A$
2.00
2.50
3.00
3.50
4.00
4.50
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
$Cu/lb 2010 - Present
AUD USD
2.00
2.50
3.00
3.50
4.00
Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15
$Cu/lb September 2014 - Present
AUD USD
ITEM Q1 Q2 Q3
Contained Copper produced (t) 31,160 32,991 33,518
Contained Gold produced (oz) 32,873 24,790 23,817
C1 costs USc/lb 63 75 74
Making the most from our current asset has been our first priority
Quarterly copper production 28 per cent
above the previous corresponding period
Q3 copper production of 33,518 tonnes
2015 copper production guidance revised upwards
to 126-131kt; future year production guidance
unchanged¹
2015 C1 unit cost guidance revised downwards
to US70-80c/lb
Open pit unit mining cost (inc. geology) guidance
reduced to $5.60 - $5.80/t
2015 PRODUCTION GUIDANCE RAISED
• Carrapateena high grade resource identified,
scoping study commenced
• Positive first results from the Hydromet
Demonstration trial
• Multiple external growth options under active
consideration
• Efficiency focus continuing to push costs down
MULTIPLE OPTIONS FOR INCREASED SH VALUE
Unfavorable to guidance Favorable to guidance
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Tonnes
CONTAINED COPPER PRODUCED
1 These production targets must be read in conjunction with the cautionary statement on slide 5.
Value Creation – 2015
P A G E 1 8 /
Value Creation – PH through 2028
P A G E 1 9 /
Prominent Hill Base Case
2019 2020 2021 2022
High grade ore from PH Underground (to 2028)
<2
.8M
t 6
-8M
t
Cu and Au ROM ore processing
Mill at capacity of 9-11Mt p.a.
through early 2022
• Copper ore is priority milled due to highest value
• Multiple ore sources allow mill to remain at
or near capacity through early 2022
• Integrated underground mine creates significant
economic benefit with decreasing development
costs in later years
• Low-risk ROM stocks provide further significant
cash flows as current working capital investment
is realised
• ROM stock cash realised 2019-2022
• Mill has proven capability to process high 50%+
levels of gold ore
• Opportunities to change base case include;
• 2nd UG decline access to increase UG annual
volume
• Resource drilling to extend UG life
“Low risk cash generation from current
underground operations and stockpiles. High
throughput levels reduce fixed cost allocations.”
2016 2017 2018
OP ore
2028
Summary
P A G E 2 0 /
Key Messages
• Clear strategy embedded throughout organisation –
starting to see signs of success
• Many changes made in 2015 to enable future
successes
• Capital and operating discipline being embedded
across the business
• Focused on being best in class in;
• Building custom concentrate parcels – a
leading market differentiator
• Safe leadership and safe work
• Contract establishment and management
• OP and UG operations
• Creativity and thinking outside the square emerging
• Creating organic and inorganic growth options
-
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15
TS
R P
ee
r In
de
x
YTD Peer Group TSR*
OZL
* Selection of peers includes: Hudbay Minerals, Ivanhoe Mines, Sandfire, Lundin Mining,
Nevsun Resources, KAZ Minerals, Taseko Mines, Katanga Mining, Capstone Mining, MMG.
Source: Bloomberg
Head of Human Resources
Mark Rankmore
Human Resources
P A G E 2 2 /
Overview
Corporate Office Transition
• Refresh of Executive Leadership
• Adelaide Corporate Office transition
• Right sizing workforce
Organisation Capability
• Securing future confidence
• Capability build
Other People related matters
• Stable Industrial Relations environment
Executive Committee
P A G E 2 3 /
New Management Team
Andrew Cole
Managing Director & CEO
Luke Anderson
Chief Financial Officer
Bob Fulker
EGM Operations
Australia
Americas
Asia
EMEA
Australia
North America
Asia
Industrial Minerals,
Mining (Gold, Copper, Zinc)
Strategic Leadership
Corporate Development
Accounting, Tax & Treasury
Sales & Marketing
Strategic Leadership
Corporate Development
Exploration & Geology
Mining Operations
Operational Excellence
Safety Leadership
Expansion Projects
Asset Integration
Glo
bal
exp
eri
en
ce
Key S
kills
In
du
stri
es
Mining (Diamonds, Titanium,
Gold, Copper, Zinc, Coal)
Australia
South America
Africa
Mining (Copper, Silver, Lead,
Zinc, Coal, Gold, Iron Ore)
Glo
bal
exp
eri
en
ce
Key S
kills
In
du
stri
es
Executive Committee
P A G E 2 4 /
New Management Team
Australia
United Kingdom
Asia
Oil & Gas, Aviation,
Government
Corporate Affairs
Strategic Communications
Reputation Management
Crisis Management
Project Development
Technical Operations
Mineral Processing
Optimisation
Corporate Governance
Legal Compliance
Commercial Negotiation
M&A
Mining (Copper, Lead,
Zinc , Gold)
Australia
North America
Asia
Africa
Mining, Engineering,
Utilities, Oil & Gas
Damon Hunt
Head of Corporate Affairs
Brett Triffett
Head of Project Services
Robert Mancini
Head of Legal
Mark Rankmore
Head of Human Resources
Australia
North America
Australia
North America
EMEA
Asia
Organisation Capability
Change Management
Industrial Relations
Acquisition Integration
Mining, Engineering,
Industrial Services,
Manufacturing
Executive Committee
P A G E 2 5 /
New Leadership
• Relevant & Global Experience
• Depth of experience
• Coverage of major mining jurisdictions globally
• Strong execution focus – growth & operational excellence
• Broad Skills Base
• Multi-skilled team with broad experience
• Positioned for growth
• Diverse Industries & Background
• Strong experience in mining & adjacent industries
• Divergent thinking, aligned execution
Corporate office transition
P A G E 2 6 /
People and infrastructure
Finalise
Corporate
Centre
structure
Agree Adelaide
office
accommodation
option
2016 Mar Apr Jul
Commence
role
appointment
/ recruitment
Role and
function
handover (documentation)
Commence
people
relocation /
onboarding
Adelaide office
requirements (e.g.
layout, meeting
rooms etc.)
Office setup
complete
(exc. ICT)
ICT relocation
complete
Melbourne
office closed Office set up
people ready
Complete
people
relocation /
onboarding
May Jun
Peo
ple
In
frast
ructu
re
Transition completed < 6 months
Rightsizing Lean organisation structure
• Rightsizing activity continues to occur across the business according to plan
• On track for 21% reduction in headcount by end 2015 and forecast 23%
overall reduction at completion of Corporate office transition
• Overall female representation at 19% - above industry norms but plans to improve
• Improved workforce planning activity as part of 2016 budget process will
give better line of sight to forward looking headcount
P A G E 2 7 /
Organisational Capability
P A G E 2 8 /
Quality of Management
• Culture of execution
• Smart strategy
• Succession planning
Strength of OZ Minerals Culture
• Intellectual leadership
• Culture of accountable results
• Introduction of LEAN visual management
• Building differentiating capabilities
Effective Performance & Reward
• Culture of performance
• Clearer link between performance and reward
Intangible to tangible
Head of Project Services
Brett Triffett
Carrapateena
P A G E 3 0 /
Significant resource base to leverage
• Carrapateena is a copper district
• Two resources* plus significant
mineralisation at Fremantle Doctor
• 2014 Block Cave PFS outcomes
• +$1bn NPV
• ~$3bn initial capital build
• ~24 year mine life
Challenge: how to maximise value from the Carrapateena Resource base?
Resource Statements can be found at the OZ Minerals website www.ozminerals.com/operations/resources-reserves or by clicking on the links below:
Carrapateena Resource Statement as at 30 June 2013
Carrapateena High Grade Resource Statement as at 25 September 2015
Khamsin Resource Statement as at 23 March 2014
Carrapateena
P A G E 3 1 /
Maximising Value
Timeline to unlock Carrapateena’s value Three options under consideration
1. BASE CASE OPTIMISATION
Potential to lower upfront capital by ~$200m
2. GAWLER CRATON STRATEGY - RAIL
Potential to lower upfront capital by ~$1bn and
phase costs over mine life
3. HIGH GRADE
Potential for a lower cost, lower risk start up
project which can expand over time to
maximise value
Progress update
Cultural heritage clearance near completion
Scoping study well advanced
Carrapateena
P A G E 3 2 /
Maximising Value – Base Case Optimisation
Rationale:
Potential to lower upfront capital by ~$200m
• Reviewing up front capital cost of base case
block cave
• Rationalising layout
• Investigating low cost engineering options
Current status:
Discussion with low cost engineering
providers continuing
Assessment to be complete Q1 2016
Carrapateena
P A G E 3 3 /
Maximising Value – Gawler Craton Strategy - Rail
Rationale:
Potential to lower upfront capital by ~$1bn and phase costs over mine life
• Undertaking a study examining the potential for railing ore from Carrapateena to the existing Prominent Hill
processing plant
• Potentially significant upfront capital savings with increased operating costs over the life of mine
• Rail volumes of circa ~12Mtpa with ability to expand
Current status:
Engineering of Prominent Hill expansion complete
Revised Carrapateena infrastructure complete
Rail engineering to be completed Q1 2016
Discussions continuing with Stakeholders, State Government and potential Build Own Operate Maintain
(BOOM) providers.
Carrapateena
P A G E 3 4 /
Maximising value – High Grade
Rationale:
A lower cost, lower risk, high performance project with the potential to expand over time to maximise value
• Mine the high grade core of the deposit using Sub Level Open Stoping or Sub Level Caving for early cash
flow and lower start up capital
• Does not preclude larger project including rail later on if appropriate
• Scoping study considering potential mining rates between 1Mtpa at 3.0% Cu, 0.9g/t Au and 3Mtpa at 2.3%
Cu, 0.9g/t Au
• Scoping study is targeting a start up capital between $0.5bn and $1.0bn depending on project scale
• Resource is very robust - only a small drilling program required to test conversion to Measured
Current status:
• AMC mine designs and GRES surface infrastructure engineering underway
• AECOM mine access trade-off study underway comparing drill and blast, TBM and shaft access
• Metallurgical test work complete
High Grade
P A G E 3 5 /
Potential high value starter project with later expansion
2015 INDICATED AND INFERRED MINERAL RESOURCES
61 Mt @ 2.4% Cu, 0.9 g/t Au (at A$120/t NSR cut-off)
Bornite
Chalcopyrite
Other (Hematite)
LEGEND
PLAN
SECTION (view west)
* These wireframes show the interpreted limits of the hematite
breccia, chalcopyrite-dominant and bornite-dominant domains.
These domains contain the entire Mineral Resource.
High Grade
P A G E 3 6 /
Grade vs. tonnage curve – multiple mining options
• High grade resource contains zones of
+4% copper equivalent material
• Mine planning will prioritise this material
for early cash flow
• Potential for a project to extend life and
increase value
• High grade underground development is
expected to be in ore – costs likely to be
covered
*CuEq = Cu (%) + Au (g/t) x 0.424 + Ag (g/t) x 0.00624, based on
assumed recoveries of 91% for Cu and 67% for Au and Ag which
are taken from previous metallurgical test work, and the economic
assumptions listed in Table 2 of the Resource explanatory notes
which can be found at
www.ozminerals.com/operations/resources-reserves. Copper, gold
and silver are all considered to have reasonable potential to be
recovered and sold
High Grade
P A G E 3 7 /
Metallurgy
• Significant test work already completed on high grade
mineralisation
• Performance expected to exceed that of the block cave
due to higher head grades and a greater proportion of
bornite
• Performance depends on head grade and mineralogy:
• Copper recovery from 93 – 95%
• Gold recovery from 73 – 74%
• Concentrate grade from 35 – 45% Cu
• Concentrate can be upgraded further and impurity
elements removed via hydromet
High Grade
P A G E 3 8 /
Conceptual Timeline
• Timeline is conceptual only. Next decision point is in Q1 2016 when all options are complete and can be
assessed together
• Potential for first high grade production in 2019
• Project proceeding will be contingent on a successful outcome to the Scoping Study, Board Approval and
Regulatory Approvals including Traditional Owner and Community consultation
Brett Triffett
Hydromet
Carrapateena
P A G E 4 0 /
Maximising value - Hydromet
Rationale:
Create world class concentrate: open project up to Asian partners looking for
20+ year mine with low political risk
• Partnering with South Australian Government to develop this process
• Technical support from Orway Mineral Consultants
• Potential to increase Carrapateena copper concentrate grade to 60%
• Reduce impurity elements to very low levels
• Savings in transport logistic and increased payability have potential to
offset capital costs
Current status:
Demonstration plant underway
Discussion with potential customers has commenced
Complete Q1 2016
Hydromet
P A G E 4 1 /
Introduction to Hydromet
What is Hydromet?
• Hydromet uses existing technology to remove impurities
from copper concentrate
• By using an autoclave, chalcopyrite and bornite are
changed into chalcocite and covellite in leaching process
that removes iron
• Process removes other impurities as well
• Developed in collaboration with Orway Minerals
Consultants
Benefits of Hydromet
• Impurities are removed (opens up new markets)
• Minimal copper lost
• Concentrate has significantly higher copper and gold
content (which increases payability)
• Concentrate is reduced in mass (slashing transport costs
by up to 40 percent)
• Autoclaves already used in the copper industry –
technology is tried and tested
Autoclave photo courtesy of SNC Lavalin
Hydromet
P A G E 4 2 /
How does it work?
1.0t of Flotation Concentrate
35% copper
350kg copper metal
0.6t of Super concentrate
60% copper
350kg copper metal
HYDROMET
Chalcopyrite
70%
Bornite
15%
Chalcocite
5%
Other
Minerals
10%
By leaching out iron and upgrading the copper, the weight of the concentrate is reduced.
In this example, 1.0 tonne of Carrapateena concentrate produces about 0.6 tonnes of
Super Concentrate. There is minimal copper lost.
Chalcocite
Covellite
80%
Other
Minerals
20%
Hydromet
P A G E 4 3 /
The process
Flotation Concentrate
Co
pp
er
Su
lph
ate
NONOX Site Water
• Flotation Concentrate slurry is fed to an Autoclave
• This stage is called NONOX because conditions are not strongly oxidative unlike typical
Autoclaves
• The Autoclave is also fed with copper sulphate slurried in site water which drives the
concentrate upgrade and impurity removal.
• NONOX is the main process, where metathesis occurs .The other stages just support what
happens in NONOX
1
Hydromet
P A G E 4 4 /
The process (cont.)
FILTER
Flotation Concentrate
Super Concentrate
Co
pp
er
Su
lph
ate
NONOX
Leach
Solution
Site Water
• The slurry from NONOX is filtered to separate the solid Super Concentrate from the
Leach Solution
• The Super Concentrate now contains 55-60 percent copper
2
2
Su
per
Co
n
Slu
rry
Hydromet
P A G E 4 5 /
The process (cont.)
FILTER
Flotation Concentrate
Super Concentrate
Co
pp
er
Su
lph
ate
Pre
cio
us
Meta
ls
NONOX
POX
Leach
Solution Super Con
Recycle
Oxygen
& Acid
Site Water
3 • Some of the Super Concentrate is recycled into a second, smaller Autoclave called POX
• This smaller Autoclave has oxygen injected into it and some of the Super Concentrate
dissolves producing the required copper sulphate
• The copper sulphate is recycled to NONOX to drive the concentrate upgrade via a crystaliser
• From POX a low mass precious metals slurry is also recycled to NONOX for capture
3
Su
per
Co
n
Slu
rry
Hydromet
P A G E 4 6 /
The process (cont.)
FILTER COPPER
PRECIPITATION
Flotation Concentrate
Super Concentrate
Co
pp
er
Su
lph
ate
Pre
cio
us
Meta
ls
Co
pp
er
Su
lph
ide
Slu
rry
NONOX
POX
Leach
Solution Super Con
Recycle
Oxygen
& Acid
Sodium
Hydrosulphide
Site Water
• The Leach Solution from the filter contains a small amount of copper and silver which is
recovered in a simple copper precipitation stage.
• A copper sulphide slurry is produced, which is recycled to NONOX
4
4
Su
per
Co
n
Slu
rry
Su
per
Co
n
Slu
rry
Hydromet
P A G E 4 7 /
The process (cont.)
Tailings Storage 5
• After copper precipitation the Leach Solution is sent to the tailings storage facility
• The solution contains iron and impurities which are neutralised by the flotation tailings
5
FILTER COPPER
PRECIPITATION
Flotation Concentrate
Super Concentrate
Co
pp
er
Su
lph
ate
Pre
cio
us
Meta
ls
Co
pp
er
Su
lph
ide
Slu
rry
NONOX
POX
Leach
Solution Super Con
Recycle
Oxygen
& Acid
Sodium
Hydrosulphide
Site Water
Hydromet
P A G E 4 8 /
What is an autoclave?
• A pressurised, agitated vessel that allows processes to be run at temperatures greater than
100oC
• Hydromet NONOX runs at approximately 215oC
• Hydromet POX runs at above 145oC
• Autoclaves are often run with oxygen injection for Pressure Oxidation or “POX”.
• POX is a very aggressive form of leaching, often leading to significant mineral alteration
• By comparison NONOX is less aggressive
Existing equipment
P A G E 4 9 /
New circuit and chemistry
What is the application? What is the benefit of this
application? Where is this being done?
POX of copper flotation
concentrates to completely dissolve
them followed by SXEW to recover
copper cathode
Introduced on sites that often have
existing oxide copper leach and
SXEW capacity
Morenci (Freeport-McMoran)
Bagdad (Freeport-McMoran)
Kanshansi (First Quantum)
POX of nickel smelter matte
containing low levels of copper
sulphide
Recovery of copper and nickel
Stillwater (Stillwater Mining)
Harjavalta (Boliden)
Hartley x2 (Zimplats)
Northam (Northam Plats)
Various (Angloplats)
Mooinooi (Lonplats)
Springs (Implats)
WHAT IS NEW ABOUT HYDROMET?
• The use of NONOX to produce an upgraded concentrate
• Combining two Autoclaves in a circuit with different duties ie 1 x NONOX and 1 x POX
• The chemistry that is designed to upgrade the concentrate while leaching impurities
Autoclaves are already widely used for copper sulphide leaching:
Demonstration Plant
P A G E 5 0 /
NONOX AUTOCLAVE
FILTERS COPPER PRECIPITATION
NONOX FEED TANKS
• Pilot Plant completed in 2014
had a scale of 1.1kg/hr
• Demonstration Plant has a
scale of 55kg/hr – 50 times
larger than Pilot Plant
• External engineering review
has confirmed Demonstration
scale is sufficient to allow
design of a full scale plant
• Early Demonstration Plant
results; 55% Cu in product and
significant reduction in
impurities - consistent with
Pilot Plant
• Will run continuously until
December with final analysis
complete in April 2016
Photos courtesy of Teck’s CESL Facility, Richmond, BC, Canada
Positive early results
Executive General Manager Operations
Bob Fulker
Prominent Hill
P A G E 5 2 /
Overview
TSF
OPEN PIT SOUTHERN
WASTE DUMP
NORTHERN
WASTE DUMP
Processing Plant
ROM PAD
CONCEPTUAL
2ND DECLINE
Underground
Portal
Safety
P A G E 5 3 /
Site Safety Acceleration Program
• Safety record is improving but must accelerate
positive change
• Key safety focus:
• Translating management intent into safe
behaviours in the workplace
• Achieving risk reduction through a
rigorous critical risk management process
to prevent fatalities
• Strengthen hazard and risk awareness to
prevent injury
Production
P A G E 5 4 /
Open Pit
• Instilled operational discipline and practices,
demonstrated in first quartile equipment usage
against peers
• Targeting to maintain or improve productivities
with increasing pit depth
• Declining production profile reduces cash costs
• Increasing depth (impact on haulage costs)
• Cost discussions with contractor ongoing.
*Source: Australian Mining Consultants Pty Ltd Prominent Hill Open Pit Benchmarking Study 2015
Production
P A G E 5 5 /
Underground
• Areas of first quartile performance
• Improved mine planning and process flow with
integrated mine
• Targeting improved equipment effectiveness:
• Reduced blast re-entry times
• Underground waste disposal
• Increased loading and passing bays
• Surface Remote capability
• Maximising truck fill factors
*Source: Australian Mining Consultants Pty Ltd Prominent Hill Underground Benchmarking Study 2015
Production Processing
• Continued high throughput - record monthly ore tonnes milled in October
• Focus on incremental plant productivity improvement through plant debottlenecking
• Grinding circuit
• Tails thickener performance
• Targeted cost savings through consumables trials
1Mt
P A G E 5 6 /
Prominent Hill Integrated Monitoring, TSF Management and Water Recovery
Real Time Radar Coverage Automated Prism Monitoring Inclinometer / Piezometer
Instrumentation
Stage 9 Water Capture Airwell Pump in Action
• Integrated monitoring program enables
proactive management
• Overburden water pressures are reducing
Depressurisation has significantly reduced
the risk of overburden failure
• Vertical drain hole program - 20
additional depressurisation wells
drilled to supplement the 90 existing
wells
• Horizontal drain hole drilling program-
17 of 21 holes complete
• Step change improvement in water return
from the tails storage facility during CY2015
10
%
201
4
201
5
P A G E 5 7 /
Prominent Hill Proactive Slope Management
Eastern cutback completed October 2014, Hard rock buttress completed February 2015, South
Dump unload completed August 2015.
Stage 9 cutback completed July 2015
Geotechnical mitigation completed:
• South East Rock Buttress
• Stage 9 Cutback and unloading
• South Waste Rock Dump unloading
• Additional Vertical dewatering and
monitoring holes
• Horizontal dewatering holes
• Southern Failure Zone monitoring
and TARP in place
P A G E 5 8 /
Prominent Hill
P A G E 5 9 /
Wall Stability
• Overburden deformation rates are
now the lowest post failure
• South Wall failure is substantially
in the same condition as 2013
• Extensive integrated holistic
monitoring and proactive
management system in place and
working
• Pit stability - now seeing less
movement in the wall when
compared to any other time since
monitoring began
• De-risking initiatives expected to
remain within budgeted
expenditure of $5 million for 2015
Q3 2013
Q3 2015
Malu Open Pit South Wall Failure – Q3 2015
Malu Open Pit South Wall Failure – Q3 2013
Underground
P A G E 6 0 /
2016 Priority Diamond Drill Targeting
• Large Underground Resource Base
• 2016 Target identification nearing
completion
• 2016 drilling is focused on
potential conversion of Inferred
and Indicated Mineral Resource
• 2016 priority diamond drilling
Program is currently in final
design, scheduling and costing
phase
2016 Potential priority diamond drill targets
1 0.3% Cu cut-off; 2 $57 NSR cut-off; 3 0.5g/t Au cut-off Below 0.3% Cu.
* Resource figures are based on Measured, Indicated and Inferred resource classification and Reserve figures are based
on Proven and Probable classified material.
Full summary of information relating to Prominent Hill Mineral Resources and Reserves is set out in the „Annual
Resource and Reserve Update for Prominent Hill‟ created on
04 November 2015 and is available at www.ozminerals.com/operations/resources--reserves.html .
• Scoping study underway for the
indicative second decline economics
• Possible 2016/2017 commencement
• Potential capital spend ~ $10 million
• Increase throughput with current
resource base
• Further reductions of unit costs with
scale
• Drilling program to unlock the large
underground resource to potentially
increase life
Conceptual 2nd Decline
Conceptual Second Decline
Underground
P A G E 6 1 /
Chief Financial Officer
Luke Anderson
Financial Strength
P A G E 6 3 /
Platform for growth
• Cash balance at 30 June 2015 of $409.5
million
• No debt - undrawn US$200 million debt
facility
• Strong cash flow generation
• Significant improvement in financial
performance at H1 compared to comparative
period:
− Increase in revenue by $39.1 million to
$390.1 million
− Increase in underlying EBITDA by $77.9
million to $200.2 million
− Increase in underlying NPAT by $66.1
million to $51.8 million
• Balance sheet strength provides a competitive
advantage in a down cycle to pursue our
growth strategy
Cost curve performance (C1)
P A G E 6 4 /
• Three quarters of lowest quartile cost performance
Lowest Quartile
Cost Control
P A G E 6 5 /
Cost base and procurement review
• A key pillar of our Corporate Strategy is to create a lean business
with a strong cost culture
• Aim to reduce costs by 15 per cent in 2016
• Recently commenced a thorough review of our cost base and
procurement function
• In conjunction with our in-house teams we have engaged ArcBlue
(previously PMMS) to assist in this process
• ArcBlue is a global specialist procurement consultancy and
training group
• 30+ years experience in strategic procurement with
particular expertise in the mining sector
• Work with more than 1000 public and private sector
organisations across the globe
Cost Control
P A G E 6 6 /
Procurement Review
• First time for such a review
• Seeking greater alignment of vendor management
to cost centre responsibility
• What is the scope?
• Annual spend of approximately $700 million
• All 682 suppliers
• 580 suppliers uncontracted (85% by number,
25% by spend)
• Right time in the cycle to be undertaking this
process
Cost Control
P A G E 6 7 /
Procurement Review cont.
Review will focus on four key components:
1. Organisational Development – Ensuring teams are operating at world‟s best practice in
their procurement space
2. Contract Management – Optimising value from our current contracts and supply
agreements and saving money wherever possible
3. Procurement Framework – Developing a series of systems and procedures designed to
ensure that we capitalise on all opportunities when engaging with suppliers
4. Strategic Planning – Taking a forward look at the needs of the business and identifying
the “best fit” procurement practices to deliver value
Reporting Changes under consideration
P A G E 6 8 /
Seeking to provide greater clarity in reporting
Quarterly Reporting
• Benchmarking comparable companies
• Refinement of structure of cost reporting
• Potential for additional guidance
Financial Reporting
• Simplification of the Annual Report
• Greater segment reporting - activity based categorisation
• Improved visibility on corporate costs
Summary
P A G E 6 9 /
Key Messages
• Clear strategy embedded throughout organisation –
starting to see signs of success
• Many changes made in 2015 to enable future
successes
• Capital and operating discipline being embedded
across the business
• Focused on being best in class in;
• Building custom concentrate parcels – a
leading market differentiator
• Safe leadership and safe work
• Contract establishment and management
• OP and UG operations
• Creativity and thinking outside the square emerging
• Creating organic and inorganic growth options
-
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15
TS
R P
ee
r In
de
x
YTD Peer Group TSR*
OZL
* Selection of peers includes: Hudbay Minerals, Ivanhoe Mines, Sandfire, Lundin Mining,
Nevsun Resources, KAZ Minerals, Taseko Mines, Katanga Mining, Capstone Mining, MMG.
Source: Bloomberg
Thank you for listening
Further Information:
Tom Dixon
Investor Relations Advisor
T: +61 (0)8 8229 6628
M: +61 (0)450 541 389
