Company Overview & Highlights
April 2017
1 Presenter:
RAUL JACOB
Vice President, Finance & CFO
Southern Copper Corporation
2 Corporate Structure
3 Remarkable • Record production of 900 ktons of Year for copper in 2016, 21% YOY growth.
SCC- New • Highest margin major copper producer globally: US$0.95 cash Production cost per pound in 2016. Record • Proven Strong Track-Record of Transformational Organic Growth: Delivered 448 ktons of copper in Buenavista (vs 180 ktons in 2012)
• We have best-in-class low cost operations, coupled with a large, high-quality reserve base in investment grade jurisdictions
4 Cost Leader in the industry with fully integrated operations and unparallel organic growth projects
Largest copper reserves of the industry
Southern Copper Good long-term copper & by-product fundamentals Strengths
Strong balance sheet & financial performance
Experienced Management Team
5 Year after year, SCC becomes a more competitive organization .
We remain committed to ensure sustained growth to always generate greater value for our investors.
By 2021, we will become the fourth largest copper producer worldwide .
Continuous Value Creation 2,000 1,861 1,737 and Returns 1,800 1,600 1,400 1,275 over the years 1,150 1,148 1,200 1,000 900 800 578 545 600 487 483 420 400 200 0 SCC Vale KGHM Codelco Rio Rio Tinto Glencore SCC2021e Antofagasta BHP Billition BHP First Quantum First Freeport- McMoran Freeport- 6 Company Overview
7 #1 Copper Mining Company in Mexico, #1 in Peru, and #3 in USA
Company Overview
Fully integrated low-cost operations in Investment Grade countries . 8 Copper Reserves as Reported
80 71.4 70
60 56.7
50
40 36.6 33.7 31.8 30 27.0 20.7 Copper Reserves (Mt) Reserves Copper 20 13.0 10.7 10
0 SCC
World´s VALE Anglo Xstrata Codelco Freeport RioTinto Glencore American BHPBilliton Largest Copper Antofagasta
Reserves Mine Life 100 94
80
63 60
40 34 34 25 21 21 18 20
0 SCC SCC after Anglo Codelco Freeport BHP Rio Tinto Xstrata 2015 expansion American Billiton 9 2016 Revenue by Copper ReservesOther as Reported Acid 5% Zinc 2% Product 4% Molybdenum 5%
Silver 6%
Copper 78%
Geographic Footprint & 2016 Revenue by Market Product Mine MexicoLife 26%
Diversification Peru 5%
United States Asia 23% 20%
Other American 7% Europe 19% 10 This year, we concluded our $3.5 billion investment program in Mexico and all of the projects of this program will be in full operation in 2017.
We had a copper production of 447k tons in Buenavista . This is a 57% increase when compared to 2015, and a 160% hike when compared with 2011 (172k tons).
Delivering Growth: Buenavista Mine
11 Cash Cost per Pound of Copper Produced Net of ByBy---- Products
1.2 1.12 1.07 1.00
1.0 0.95 (US$/lb)
0.8
2013 2014 2015 2016 Low Cost Operations
• Fully integrated low cost operations • World class assets • Significant SX-EW production • Strong by-product credits • Management focus on cost efficiency
12 Copper Production Cash Cost Per Company
400
350
300
250
200
150 Global
C1+Sust C1+Sust Cash Cost Cu) (c/lb Weighted scc Avg. 125 100 c/lb
50
0 10 10010 20010 30010 Cumulative Production (Paid Mlbs Cu) Source Wood Mackenzie Copper Mine Cost model , WMQ42015
13 Solid Financial Performance
Infrastructure Division: Positioned for Growth Investment Program to Significantly Increase Production
Infrastructure Division: Positioned for Growth SCC’sSCC’s Major Major Strenghts Strengths
SCC is the Premier Copper Play • World class assets in investment grade countries • #1 in reserves of any company with various exploration prospects - Increasing copper production • Capacity to deliver projects through flexible capital structure and significant cash generation capability. Investments focused on cost competitiveness • Fully integrated low cost operations • Outstanding dividend history • Experienced management with proven track record
SCC EBITDA and % Margin (in US$ millions) $3,910 $3,773
$2,945 $2,865 $2,728 $2,829 $2,212 $1,945 57% 57% 56% 49% 47% 38% 41% 47%
2010 2011 2012 2013 2014 2015 2016 2017 E
Cu price$3.42 $4.00 $3.61$3.32 $3.11$2.50 $2.21$2.50 16 This presentation contains certain statements that are neither reported financial results nor other historical information.
These estimates are forward-looking statements within the meaning of the safe-harbor provisions of the Mexican securities laws. These forward-looking estimates are subject to risk and uncertainties that could cause actual results to differ materially from the expressed in the forward-looking statements.
Many of these risks and uncertainties relate to factors that Safe Harbour are beyond Grupo Mexico’s ability to control or estimate Statement precisely, such as future market conditions, commodity prices, the behavior of other market participants and the actions of governmental regulators.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation.
Grupo Mexico does not undertake any obligation to publicly release any revision to these forward- looking estimates to reflect events or circumstances after the date of this presentation.
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