Antofagasta. Q3 production and costs better than forecast. Q313 production ahead of forecast. FY13 EPS forecast upgraded

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1 Antofagasta Q3 production and costs better than forecast Production update Metals & mining Antofagasta reported a third successive decline in copper production and a seventh successive rise in cash costs in Q313, in line with expectations. However, Q313 copper production and net cash costs were better than our forecasts, driven primarily by a higher than forecast average copper grade and lower energy prices at Los Pelambres. We have revised our FY13 production and cash costs forecasts and we now expect Antofagasta to achieve FY13 guidance of 700kt copper production and US$1.40/lb cash costs. The revisions result in a 4% upgrade to our FY13 EPS forecast. Our valuation of Antofagasta is materially unchanged at 661p/share at a 10% discount rate and 721p/share at a 9% discount rate. 11 November 2013 Price 836.5p Market cap 8,247m US$1.61/ Net cash (US$m) at 30 June ,508 Shares in issue 985.9m Free float 35% Code ANTO Primary exchange LSE Year end Revenue (US$m) PBT* (US$m) EPS* (US$) DPS (US$) 12/11 6,076 3, /12 6,740 3, /13e 5,680 1, /14e 5,431 1, Note: *PBT and EPS are normalised, excluding intangible amortisation, exceptional items and share-based payments. P/E (x) Yield (%) Secondary exchange Share price performance NYSE Q313 production ahead of forecast Antofagasta reported a third successive decline in group copper production to 174kt and a seventh successive rise in average cash costs to US$1.48/lb in Q313, in line with expectations of lower-grade ore being processed across the operations. However, Q313 copper production and net cash cost were better than our forecasts of 167kt and US$1.66/lb respectively, driven primarily by a higher than forecast average copper grade and lower energy prices at Los Pelambres. FY13 EPS forecast upgraded We have revised our FY13 production and cash costs forecasts to reflect the better than expected Q313 figures. At group level, we forecast a continuing quarterly trend of lower production and higher costs, with Q413 copper production forecast to decline to 165kt and Q413 net cash costs forecast to rise to US$1.59/lb. However, we now forecast that Antofagasta will achieve management s group-level guidance for FY13 of 700kt copper production and US$1.40/lb cash costs, rather than marginally undershooting. The production and cash costs forecast revisions result in a 4% upgrade to our FY13 EPS forecast. Valuation: Materially unchanged We have not made any material revisions to our production and cash costs forecasts beyond FY13 and our commodity price assumptions are unchanged. Consequently, our valuation is materially unchanged, affected only by the increase to FY13 earnings forecasts. Our valuation of Antofagasta is 661p/share at a 10% discount rate and 721p/share at a 9% discount rate, which could be justified by Antofagasta s lower risk profile compared to peers. % 1m 3m 12m Abs 0.4 (4.6) (33.9) Rel (local) (4.6) (7.1) (44.1) 52-week high/low 1,381.0p 784.5p Business description Antofagasta is a major Chile-based copper mining group with interests in transport and water distribution. Its mining operations produce over 700ktpa copper and it has a number of major growth projects, predominantly in Chile, as well as several international exploration partnerships. Next event Q313 financial results 14 November 2013 Analysts Gavin Wood +44 (0) Charles Gibson +44 (0) mining@edisongroup.com

2 Q313 production and cash costs better than forecast Antofagasta reported a third successive decline in group copper production to 174kt and a seventh successive rise in average cash costs to US$1.48/lb in Q313, in line with expectations of lower grade ore being processed across the operations. However, quarterly production and cash cost figures were ahead of our forecasts, primarily due to Los Pelambres, which benefited from a higher than forecast average copper grade as well as lower energy prices in the Chilean central grid. Exhibit 1: Q313 production and cash costs compared to Edison estimates Edison estimate Q313e Actual Q313 Actual vs Edison estimate Group Payable copper production kt % Payable molybdenum production kt % Payable gold production koz % Gross cash costs US$/lb % Net cash costs US$/lb % Los Pelambres Payable copper in concentrate production kt % Payable molybdenum in concentrate production kt % Payable gold in concentrate production koz % Gross cash costs US$/lb % Net cash costs US$/lb % Esperanza Payable copper in concentrate production kt % Payable gold in concentrate production koz % Gross cash costs US$/lb % Net cash costs US$/lb % El Tesoro Total copper cathode production kt % Gross & Net cash costs US$/lb % Michilla Total copper cathode production kt % Gross & Net cash costs US$/lb % Source: Antofagasta, Edison Investment Research Esperanza produced a higher than forecast 41kt copper in Q313, but saw a sharp rise in cash costs due to a lower-grade phase of the pit being mined throughout the quarter as well as localised geotechnical issues, which resulted in lower-grade stockpiles being processed. Cash costs remained stable at El Tesoro as mining continued through to September at the higher-grade Mirador pit, three months later than planned. Lower throughput at Michilla resulted in lower production and stable cash costs despite fewer waste tonnes being moved at the Lince pit. FY13 EPS forecast upgraded We have revised our FY13 production and cash costs forecasts to reflect the better than expected Q313 reported figures. These revisions result in a 4% upgrade to our FY13 EPS forecast. We have made no material changes to our production and cash costs forecasts for FY14 and future years, as the Q313 differences represent short-term variations that are to be reasonably expected rather than fundamental changes that affect longer-term mine plans. Our commodity price assumptions for FY13 and future years are also unchanged. Antofagasta 11 November

3 Exhibit 2: Summary of revisions to Edison earnings estimates FY13e FY14e Old New Chg Old New Chg Copper price US$/lb % % Gold price US$/oz 1,420 1,420 +0% 1,510 1,510 +0% Copper production kt % % Net cash cost US$/lb % % Revenue US$m 5,670 5,680 +0% 5,431 5,431-0% EBITDA US$m 2,457 2,536 +3% 2,431 2,431-0% PBT US$m 1,849 1,928 +4% 1,783 1,783 +0% EPS c % % DPS c % % Source: Edison Investment Research Q413 and FY13 production and cash costs forecasts At group level, we forecast a continuing quarter-on-quarter trend of lower production and higher costs, with Q413 copper production forecast to decline for a fourth successive quarter and Q413 cash costs forecast to rise for an eighth successive quarter. However, the revisions to our forecasts mean that at group level we now forecast that Antofagasta will achieve FY13 guidance of 700kt copper production and US$1.40/lb average net cash cost. Achievement of FY13 net cash cost guidance would represent a strong performance, supported by an increase in gold production guidance at Los Pelambres from 30koz to 50koz. Initial guidance given with Q412 production was based on US$12.0/lb molybdenum and US$1,700/oz gold, compared to our FY13 forecasts of US$10.3/lb molybdenum and US$1,420/oz gold. Exhibit 3: Quarterly breakdown of Edison FY13 production and cash cost forecasts Q113 Q213 Q313 Q413e Est vs guid Group Payable copper production kt Payable molybdenum production kt Payable gold production koz Gross cash costs US$/lb Net cash costs US$/lb Los Pelambres Payable copper in concentrate production kt Payable molybdenum in concentrate production kt Payable gold in concentrate production koz Gross cash costs US$/lb Net cash costs US$/lb Esperanza Payable copper in concentrate production kt Payable gold in concentrate production koz Gross cash costs US$/lb Net cash costs US$/lb El Tesoro Total copper cathode production kt Gross & net cash costs US$/lb Michilla Total copper cathode production kt Gross & net cash costs US$/lb Source: Antofagasta, Edison Investment Research Antofagasta 11 November

4 Across the operations, we see different dynamics in Q413. At Los Pelambres and El Tesoro, we expect production and cash costs to be affected by a continuing decline in grade, while at Esperanza and Michilla, we expect production and cash costs to benefit from a rise in grade. Los Pelambres Although ore throughput declined to 172.7ktpd in Q313 due to harder ore being processed, we forecast increased throughput of 180ktpd in Q413 due to anticipated less scheduled maintenance. Management had guided for FY13 average copper grade of 0.69% at Los Pelambres. Given the average grade of 0.73% for the first nine months of FY13, this implies a drop in grade to around 0.60% in Q413. With grade having only declined gradually from 0.74% in Q113 to 0.71% in Q313, we assume a less severe decline in grade to 0.64% in Q413, giving an FY13 average grade of 0.70%. Lower grade is the main driver of the forecast sequential decline in production and increase in net cash costs in Q413 at Los Pelambres. Esperanza We assume that the localised geotechnical issues have been resolved and lowergrade stockpiles will not be processed in Q413, resulting in a rise in the processed ore grade from 0.54% in Q313 to 0.62% in Q413. This gives an average copper grade of 0.64% for FY13, slightly below management s guidance of 0.66%. We forecast a slight increase in throughput from 88.4ktpd to 90.0ktpd in Q413. Despite the forecast improvements in grade and throughput in Q413, we expect stable copper production compared to Q313, which benefited from a reduction in copper in process. El Tesoro We forecast an increase in throughput in Q413 to 25.0ktpd from 20.4ktpd in Q313 and a further decline in average ore grade from 1.43% in Q313 to 1.30% in Q413 as mining has ended at the higher-grade Mirador pit and plant feed is coming primarily from the lowergrade Tesoro Central and Tesoro North East pits. Lower grade is the main driver of the forecast sequential decline in production and increase in net cash costs in Q413 at El Tesoro. Michilla We forecast stable throughput of 11.5ktpd in Q413 and a slight improvement in copper grade from 0.93% in Q313 to 1.00% in Q413. Higher grade is the main driver of the forecast sequential increase in production in Q413. Lower forecast cash costs in Q413 are due to higher grade as well as an anticipated reduction in waste stripping compared to Q313. Valuation materially unchanged We have not made any material revisions to our forecasts beyond FY13 and our commodity price assumptions are unchanged. Consequently, our valuation is materially unchanged at 661p/share (previously 659p) at a 10% discount rate, affected only by the increase to our FY13 forecast. Antofagasta 11 November

5 Exhibit 4: Revised valuation summary Total NPV (US$m) Per share (p) NPV (% of total) Core projects attributable NPV Los Pelambres 5, % Esperanza 1, % El Tesoro % Michilla % Corporate & other mining (1,117) (70) (11%) Railway & transport % Water % Total core projects attributable NPV 7, % Attributable net cash/(debt) 1, % Base attributable NPV 8, % Growth projects attributable NPV Antucoya % Esperanza - 30 yr LoM extension % Encuentro Oxides - El Tesoro expansion % Los Pelambres - 30ktpd expansion % Twin Metals % Total growth projects attributable NPV 1, % Total attributable NPV 10, % Source: Edison Investment Research Antofagasta s lower risk profile compared to peers could justify a lower discount rate; our valuation would increase to 721p/share at a 9% discount rate. Antofagasta 11 November

6 Exhibit 5: Financial summary US$m e 2014e Year end 31 December IFRS IFRS IFRS IFRS PROFIT & LOSS Revenue 6,076 6,740 5,680 5,431 EBITDA 3,646 3,868 2,536 2,431 Operating Profit (before amort. and except.) 3,214 3,374 1,999 1,833 Intangible Amortisation Exceptionals (141) (500) 0 0 Other 24 (21) (8) (8) Operating Profit 3,097 2,853 1,991 1,825 Net Interest (21) (91) (71) (50) Profit Before Tax (norm) 3,193 3,283 1,928 1,783 Profit Before Tax (FRS 3) 3,076 2,762 1,920 1,775 Tax (946) (1,022) (549) (474) Profit After Tax (norm) 2,271 2,240 1,371 1,302 Profit After Tax (FRS 3) 2,130 1,740 1,371 1,302 Average Number of Shares Outstanding (m) EPS - normalised (US$) EPS - normalised fully diluted (US$) EPS - (IFRS) (US$) Dividend per share (US$) EBITDA Margin (%) Operating Margin (before GW and except.) (%) BALANCE SHEET Fixed Assets 6,921 7,045 7,977 8,649 Intangible Assets Tangible Assets 6,511 6,622 7,580 8,252 Investments Current Assets 4,679 5,656 4,162 4,046 Stocks Debtors Cash 3,280 4,292 2,939 2,810 Other Current Liabilities (985) (1,295) (1,142) (1,068) Creditors (683) (848) (629) (554) Short term borrowings (302) (447) (514) (514) Long Term Liabilities (2,913) (2,764) (2,274) (2,274) Long term borrowings (1,838) (1,442) (1,056) (1,056) Other long term liabilities (1,074) (1,322) (1,218) (1,218) Net Assets 7,703 8,642 8,722 9,352 CASH FLOW Operating Cash Flow 3,553 3,826 2,739 2,343 Net Interest (48) (63) (47) (50) Tax (1,018) (901) (806) (474) Capex (671) (874) (1,604) (1,269) Acquisitions/disposals (28) 5 (2) 0 Financing (0) Dividends (1,923) (1,140) (1,313) (679) Net Cash Flow (135) 853 (1,033) (129) Opening net debt/(cash) (1,345) (1,140) (2,403) (1,369) HP finance leases initiated Other (71) 410 (1) 0 Closing net debt/(cash) (1,140) (2,403) (1,369) (1,241) Source: Antofagasta, Edison Investment Research Antofagasta 11 November

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