P.O. Box 68861, Riyadh 11537 Kingdom of Saudi Arabia Tel: +966 011 874 8123 Fax: +966 011 874 8134 www.maaden.com.sa 02 May 2018 Saudi Arabian Mining Company (Ma'aden) reports a strong start to 2018 Financial highlights Ma aden delivered a strong set of financial results on all measures, driven by higher production, a generally positive market environment, and a sustained focus on cost control: SAR 3,564 million of revenues, up by 32% y-o-y SAR 1,412 million of gross profit, up by 53% y-o-y SAR 1,947 million of EBITDA, up by 36% y-o-y SAR 754 million of net profit up by 121% y-o-y Production highlights Ma aden s focus on operational excellence continued and delivered production gains across the business: - 118K ounces of gold, up 69% y-o-y - 233K tonnes of primary aluminium, up 2% y-o-y - 753K tonnes of ammonium phosphate fertilizer ( APF ), up 4% y-o-y - 389K tonnes of alumina, up 5% y-o-y Project highlights - The Wa ad Al Shamal Phosphate Project is progressing well towards reaching full commercial operation. - An investment decision on Ma aden s largest ever gold mine, the Mansourah- Massarah project, is expected in the second quarter.
Page 2 of 6 The Saudi Arabian Mining Company (Ma aden) today issued its interim financial and operating results for the first quarter of 2018. The Company reported a strong increase in profitability yearon-year and quarter on-quarter attributed mainly to increased production and sales, tight cost control, and a sustained improvement in the prices of its key products. The first quarter s results highlight the strength of Ma aden s business model. By continuing to generate greater production from our assets whilst maintaining pressure on costs, we were able to capitalize on the generally positive commodity price environment, said Ma aden President and CEO, Eng. Khalid Al Mudaifer. These factors enabled us to deliver EBITDA growth of 36% year-on-year to reach over SAR 1.9 billion in the quarter. Our gold production continued to climb from the record high achieved in 2017 with quarterly production of over 118,000 ounces, our highest ever quarterly figure. Ramp-up of our most recent mega-project, the Wa ad Al Shamal Phosphate project, is progressing well and we are now looking forward to progressing our next phase of growth with our largest ever gold mine, the Mansourah- Massarah project. Commodity price volatility is expected to be a feature of 2018 but as the first quarter results show, we are well placed to deliver strong profitability built on the basis of strong underlying trends in our core commodities. Financial Our healthy financial performance in the first quarter of 2018 reflects the quality of our diversified assets and the ability of our operations to deliver production growth, improved efficiency and significant cash generation when market conditions are favourable. The first quarter saw a drop in the price of aluminium but the price trend remains favourable compared to 2016 and 2017 and we continue to believe in the long term fundamentals for this metal. Phosphate prices remained robust as did gold and copper although the latter dropped slightly in the quarter after a year of solid gains in 2017. Sales revenue in Q1 2018 increased by 32% compared to the same quarter of 2017 driven by an increase in the realized prices of aluminum, fertilizers, alumina and gold. Ma aden also achieved increases in the sales volumes of aluminium, gold and APF. The only headwind faced was the effect of a decrease in sales volumes of ammonia compared to Q1 2017 due to the utilization in MWSPC plants which are ramping up production of phosphate fertilizers. Net profit for Q1 2018 was SAR 754 million an increase of 121% compared SAR 341 million of Q1 2017 mainly driven by higher volumes and sales prices although these positive effects were offset partially by increased raw material prices. Our Q1 2018 EBITDA reached SAR 1,947 million; an increase of 36% compared to the same quarter last year mainly driven by higher sales and a limited increase in operating costs. Cash generated from operations was SAR 543 million; a decrease of 28% compared to Q1 2017 primarily due to increased working capital requirements. Ma aden s liquidity position remains strong with cash and equivalent of SAR 6,046 million.
Page 3 of 6 Operations Phosphate During Q1 2018, Ma aden produced 753K tonnes of ammonium phosphate fertilizer, a 4% increase on the quantities produced in the same quarter last year. Fertilizer exports commenced at the Wa ad Al Shamal Phosphate Company s facilities in July 2017 and production ramp-up is progressing well. Once fully operational, our total production capacity will reach almost 6 million tonnes per year of phosphate fertilizers. In Q1 2018, Ma aden produced a record 598K tonnes of consistent ammonia production from both the units. Ammonia sales were lower than the corresponding quarter last year due to internal consumption in MWSPC DAP production. Aluminium During the Q1 2018, 233K tonnes of primary aluminium produced, an increase of 2% compared to the same quarter last year. During the quarter, Ma aden produced 389K tonnes of alumina, an increase of 5% compared to same quarter last year. Ma aden continues to focus on increasing production from the alumina refinery which will enable us to benefit from the sale of excess alumina production. The aluminium rolling mill operation continues to ramp up production and having established a solid base in the market for can sheets in the greater Middle East region, it is continuing to grow its customer base both in Asia and in the United States. Gold and copper Production of gold during the first quarter 2018 increased to 118k ounces, an increase of 69% compared to the same quarter last year. This was mainly due to increased volumes from the Ad Duwayhi mine, Ma aden s largest gold mine. During the year, we produced 6.2k tonnes of copper concentrate from our Jabal Sayid mine.
Page 4 of 6 Sales summary (All numbers are in 000 tonnes except as mentioned) Particulars Q1 2018 Q1 2017 % change Phosphate business Ammonium phosphate fertilizer 728 637 14% Ammonia MPC 125 152-18% Ammonia MWSPC 229 315-27% Aluminium business Alumina 63 30 110% Primary Aluminium 163 176-1% Precious and base metals business Gold ( 000 ounces) 118 70 69% Copper 6.2 3.7 68%
Page 5 of 6 Consolidated statement of income for the quarter ended March 31, 2018 (All numbers are in SAR millions except as mentioned) Quarter ended Quarter ended % Year ended 31-Mar-18 31-Mar-17 change 31-Dec-17 Sales 3,564 2,708 32% 12,086 Cost of sales (2,151) (1,782) 21% (8,153) Gross profit 1,412 926 53% 3,933 Operating expenses Selling, marketing and logistic expenses (120) (98) 23% (531) General and administrative expenses (85) (80) 6% (382) Exploration and technical services expenses (17) (10) 66% (62) Write-off of mine properties (19) (45) Write-off of plant and equipment (16) Impairment of capital work-in-progress (477) Operating profit 1,172 722 62% 2,436 Other income / (expenses) Income from time deposits 22 23-5% 77 Finance cost (364) (363) 0% (1,616) Other (expenses) / income, net (20) (26) -23% (66) Share in net income of joint venture that have been equity accounted 44 11 303% 102 Profit / (loss) before zakat and income tax 853 366 133% 933 Income tax (13) (3) 372% (57) Zakat expense (86) (23) 278% (92) Profit / (loss) for the year 754 341 121% 784 Gain attributable to the remeasurements of employees end of service termination benefits obligation Total comprehensive income / (loss) for the year 754 341 121% 830 66 Earnings per share 0.54 0.23 0.61
Page 6 of 6 For further information, please contact: Ma aden Investors Relations Reem Asaad, manager, Investor Relations Tel: +966 11 874 8311 invest@maaden.com.sa Mohammed Al Jbali, Investor Relations Tel: +966 11 874 8123 invest@maaden.com.sa About Ma'aden Saudi Arabian Mining Company (Ma'aden) was formed by Royal Decree in 1997 to facilitate the development of Saudi Arabia's mineral resources and was originally wholly owned by the Saudi Government before 50% of its shares were floated on the Saudi Stock Exchange (Tadawul) in 2008. Initially Ma'aden's activities focused on expanding its active gold business which now includes five mines and over 15 million ounces gold resources. Ma'aden has also developed its activities beyond gold with the development of Ma'aden Phosphate Company, Ma aden Aluminium Company and Industrial Minerals. A number of projects are underway to make Ma aden the third pillar of Saudi Arabia s economy. For more details visit us at www.maaden.com.sa. Disclaimer This Press release contains statements that are, or may be deemed to be, forward looking statements, including statements about the beliefs and expectations of Saudi Arabian Mining Company (the "Company"). These statements are based on the Company's current plans, estimates and projections, as well as its expectations of external conditions and events. Forward-looking statements involve inherent risks and uncertainties and speak only as of the date they are made. As a result of these risks, uncertainties and assumptions, a prospective investor should not place undue reliance on these forward-looking statements. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements. The Company is not obliged to, and does not intend to, update or revise any forward- looking statements made in this press release whether as a result of new information, future events or otherwise. This communication has been prepared by and is the sole responsibility of the Company. It has not been reviewed, approved or endorsed by any financial advisor, lead manager, selling agent, receiving bank or underwriter retained by the Company. This communication is provided for information purposes only. In addition, because this communication is a summary only, it may not contain all material terms and this communication in and of itself should not form the basis for any investment decision. The information and opinions herein is believed to be reliable and has been obtained from sources believed to be reliable, but no representation or warranty, express or implied, is made with respect to the fairness, correctness, accuracy reasonableness or completeness of the information and opinions. There is no obligation to update, modify or amend this communication or to otherwise notify you if information, opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. You are strongly advised to seek your own independent advice in relation to any investment, financial, legal, tax, accounting or regulatory issues discussed herein. Analyses and opinions contained herein may be based on assumptions that if altered can change the analyses or opinions expressed. Nothing contained herein shall constitute any representation or warranty as to future performance of any financial instrument, credit, currency, rate or other market or economic measure. Furthermore, past performance is not necessarily indicative of future results. The Company disclaims liability for any loss arising out of or in connection with your use of, or reliance on, this communication. These materials may not be published, distributed or transmitted and may not be reproduced in any manner whatsoever without the explicit consent of Ma aden s management. These materials do not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.