BANK OF AMERICA MERRILL LYNCH GLOBAL METALS & MINING CONFERENCE MAY 10 TH 12 TH, 2011

Transcription

1 BANK OF AMERICA MERRILL LYNCH GLOBAL METALS & MINING CONFERENCE MAY 10 TH 12 TH, 2011

2 FORWARD LOOKING STATEMENT Certain information appearing in this presentation constitutes forward looking information. Forward looking information is subject to known and unknown risks, uncertainties and other factors, including potentially inaccurate assumptions, which may cause the actual results, performance or achievements to be materially different from the results, performance or achievements expected or implied by the forward looking information. The Companies disclaim any intention or obligation to update or revise any forward looking statements whether as a result of new information, future events or otherwise. No invitation to purchase securities is being made. For additional disclosure about the Companies, including a detailed discussion of the risks, assumptions and uncertainties relating to the Companies, please see our respective Annual Information Forms, Financial Statements and other materials available from or our website, All figures except per share amounts are in US$ unless otherwise stated or unless the context requires otherwise. 2

3 WHERE WE ARE NOW Two company transformational growth projects: Sierra Gorda in Chile: home of the largest copper mines and projects in the world Victoria in Canada: some of the highest polymetallic copper projects in the world both located in low political risk jurisdictions both in areas of well established infrastructure both in global copper districts Operations that are delivering: on track to improve performance in 2011 and beyond Robust financial and human resources: we have the balance sheet & people to deliver 3

4 CORPORATE STRATEGY OUR GOAL: MID-CAP TRADING MULTIPLES Growth to 500 M lbs Cu organically & through M & A Diverse production base Diverse geographic base Low political risk Balance sheet & cash to support organic growth 4

5 GROWTH HISTORY ROBINSON ACQUIRED SIERRA GORDA OPTIONSED 2004 IPO SIERRA GORDA 281 DISCOVERY HOLE 2005 MCCREEDY W RE-OPENED CARLOTA ACQUIRED LEVACK RE-OPENED MALMBJERG ACQUIRED CENTENARIO (FRANKE) ACQUIRED PODOLSKY DISCOVERED MORRISON DISCOVERED VICTORIA ZONE 4 DISCOVERY 2010 QUA + FNX MERGER 2011 VICTORIA RESOURCE ADVANCED NEGOTIATIONS AT SIERRA GORDA 5

6 SIERRA GORDA 6

7 SIERRA GORDA: CHILE Key parameters Production: 2014 Years 1-4: ~ 300 M lbs Cu & up to 50 M lbs Mo Year + 4: ~ 500 M lbs Cu & Mo Mine life: + 20 years Capex: ~ $2½ 2¾ Bn used in discussions Status Funding not expected to require equity Partnership discussion and funding strategy well advanced Study in final stages Mining equipment ordered Fluor awarded EPCM contract 7

8 SIERRA GORDA: KEY MILESTONES Fluor Financing Study : May 2011 Partnership Arrangement: Q Feasibility Study: Q EIA permits: end of Q Critical path orders: Q Pre-stripping start: Q Production target: 2014

9 VICTORIA 9

10 VICTORIA: PROJECT LOCATION Toronto Sudbury Levack Fraser Morgan Deposit Onaping Deep McCreedy W Podolsky Garson Mine Victor Deposit Nickel Rim Creighton Mine Thayer-Lindsley Mine Copper Cliff N Mine Blezard Deposit Frood-Stobie Mine QUX Mines Vale Mines Xstrata Mines Totten Mine Victoria Copper Cliff South Mine Kelly Lake Deposit 10 km 10

11 Cu Equivalent Grade (%) VICTORIA: ONE OF THE BEST IN SUDBURY Relative Gross In-Situ Value VICTORIA RESOURCE 1 Totten Victoria Kelly Lake Onaping Depth Nickel Rim South Victor 12.5 M % g/t TPM s Cu Equiv: 3.4 * Bn lbs Ni Equiv: 1.2 * Bn lbs Fraser Morgan In-situ Tonnes (M) VICTORIA REMAINS OPEN 1 Please see Press Release dated April 19 th, 2011 *Cu Equivalent and in-situ value calculation assumes three-month trailing average commodity prices; Cu at US$4.34/lb, Ni at US$12.27/lb, Pt at US$1784/oz, Pd at US$778/oz and Au at US$1426/oz. Onaping Depth and Fraser Morgan resources are as of June 30, Nickel Rim South, Totten, Kelly Lake and Victor resources are as of December 31,

12 VICTORIA: PROJECT OVERVIEW SHAPE Long Section (looking NE) appears amenable to lower cost bulk tonnage mining methods CAPEX Preliminary capital estimate: ~ $ ¾ Bn range over 7 years Zone 1 Conceptual Shaft Infrastructure TIMELINE OPEN Gearing up with DMC for shaft sinking in 2012 Development dependent on First Nation negotiations & permitting Discussions with Vale are ongoing Zone 2 Mini 4000 Level Zone Level OPEN 12

13 IMPACT OF TWO WORLD CLASS GROWTH PROJECTS Cu Equivalent (M lbs) Increase production by 250% Surpasses goal of producing 500 M lb Cu Equiv. pa E >2011E >2014E >2018E Current Asset Base Victoria Sierra Gorda (50%) Note: Cu Equivalent and in-situ value calculation assumes three-month trailing average commodity prices; Cu at US$4.34/lb, Ni at US$12.27/lb, Pt at US$1784/oz, Pd at US$778/oz and Au at US$1426/oz and US$17.26 Mo. Historical production figures include historical production from FNX. Conceptual production from Victoria based on throughput ranges outlined in the April 19, 2011 press release. 13

14 OPERATIONS

15 DIVERSIFIED ASSETS & LOW POLITICAL RISK Robinson Morrison/Levack Carlota McCreedy W Franke Podolsky Sierra Gorda Victoria 15

16 FLAGSHIP ASSETS ~ 150 M LBS PA CU Robinson Mine, Nevada, USA Morrison Deposit, Sudbury, Ont. Outlook 2011 Production back-end weighted Strategies to improve flexibility: completion of mud removal new access ramp bench width increase Outlook Increasing output Negative cash cost Rehab of shaft & ramp development Exploration & depth 16

17 OTHER ASSETS ~ 100 M LBS PA CU Podolsky, Canada McCreedy W, Canada Steady state Potential Ni Restart Franke Mine, Chile Carlota Mine, USA Ramping up Transition to Conveyor Stacking 17

18 OPERATING PROFIT & PRODUCTION PROFILE McCreedy Production Expectations # 240 M lbs +/- 10% of payable Cu 115 k oz of payable TPMs 7 M lbs of payable Ni Morrison 35 Carlota 25 Podolsky 20 Franke 40 Robinson Operating Profit * Q Operating Profit * Morrison 10% Carlota 12% Franke 6% McCreedy W 1% Podolsky 11% DMC 2% Robinson 59% McCreedy W -1% DMC Podolsky 5% 10% Morrison 39% Robinson 42% *Excluding inventory write-downs # Graph illustrates the mid-point of the guidance range Carlota 0% Franke 3% 18

19 FINANCIAL PERFORMANCE

20 ROBUST BALANCE SHEET Strong financial performance + 100% + 100% $958 $ % + 140% + 114% $302 $173 $126 $81 Revenue EBITDA Earnings 2010 $958 M in revenue $ 302 M in EBITDA C1 cost: $1.57 /lb Cu A balance sheet to fund future growth $577 M in cash Zero Debt Note: 2009 & 2010 results are reported under Canadian GAAP 20

21 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 COPPER MARKET OUTLOOK Over the next decade H1 ( ): Lack of supply response supports robust prices H2 (+2015): Supply responds with larger Cu projects coming on stream Implications for corporate strategy Production from Sierra Gorda in 2014 to take advantage of robust Cu prices

22 SUMMARY 2011E EBITDA to 10% Move in Cu price Quadra FNX First Quantum Inmet Hudbay Lundin Teck 0% 5% 10% 15% Cu Focused Platform Two Transformative Growth Projects Operations that are Delivering Robust Financial Platform Highly Leveraged to Cu Price Source: Bank of America 22

23 THANK YOU