corporate presentation june 2011
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June, 2011
MMX: Creating choices in seaborne iron ore supply
Disclaimer
This presentation relating to MMX Mineração e Metálicos S.A. (“MMX”) includes “forward-looking statements”, as that term is defined in thePrivate Securities Litigation Reform Act of 1995, in Section 27A of the Securities Act of 1933 and Section 21E of the U.S. Securities ExchangeAct of 1934. All statements other than statements of historical facts are statements that could be deemed forward-looking statements andare often characterized by the use of words such as “projects”, “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, “may”,“will”, or “intends”, or by discussions or comments about our objectives, strategy, plans or intentions and results of operations. Forward-looking statements include projections regarding our operating capacity, operating expenditures, capital expenditures and start-up dates.
By their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general andspecific. The risk exists that these statements may not be fulfilled or, even if they are fulfilled, the results or developments described in suchstatements may not be indicative of results or developments in future periods. We caution participants of this presentation not to placeundue reliance on these forward-looking statements as a number of factors could cause future results to differ materially from thesestatements.
Forward-looking statements may be influenced in particular by factors such as the ability to obtain all required regulatory approvals on aForward-looking statements may be influenced in particular by factors such as the ability to obtain all required regulatory approvals on atimely basis or at all, exploration for mineral resources and reserves, difficulty in converting geological resources into mineral reserves, andchanges in economic, political and regulatory conditions. We caution that the foregoing list is not exhaustive. When relying on forward-looking statements to make decisions, investors should carefully consider these factors as well as other uncertainties and events.
MMX does not undertake to update our forward-looking statements unless required by law. This presentation is neither an offer to sell(which can only be made pursuant to definitive offering documents) nor a solicitation of an offer to buy any securities in the United States,or any other jurisdiction. The securities referred to herein have not been registered in any jurisdiction, and in particular, will not be registeredunder the U.S. Securities Act of 1933, as amended, or any applicable state securities laws and may not be offered or sold in the UnitedStates absent registration or an applicable exemption from such registration requirements.
This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in partwithout MMX’s prior written consent.
Investor Relations
Roger Downey – CEO & IRO
Camila Anker– IR Manager
Rafaela Gunzburger – Analyst
Beatriz Yoshinaga - Assistant
Tel. + 55 21 2555-6197/ 6338
ri@mmx.com.br
2
A Unique Story
Ingredients for a successful iron ore business
Strong Resource 1.5 billion tons of mineral resources certified by SRK, and further
Guaranteed
Logistics100% owned Sudeste Superport at 50 Mtpy, expandable to 100 Mtpy,provides gateway to seaborne markets.
Competitive
Cost StructureIntegrated infrastructure, with the existing MRS railway providing an efficient link between mine and port
4
Strong Resource
Base
Secured Offtake
1.5 billion tons of mineral resources certified by SRK, and further mineral potential of up to 1.4 billion tons
Operational
Track Record
63% of future production already committed through long-termcontracts.
Experienced management team with brownfield start-up expertise.Current production rate of 10 Mtpy (Serra Azul and Corumbá sites)
Solid Financial
Position
Strong balance sheet and project fundamentals to attract competitive fundingCurrent operations provide strong FCF
The only one of its kind
MMX uniquenessLocation Map
• Production committed to important global
consumers – China and South Korea – through
long-term contracts.
• Brownfield start up
• Expanding beyond 50 million tpy in Brazil and Chile,
through fully integrated systems: own deep water
Chinamax enabled superports and pipelines.
• Unique port location and strong balance sheet
leverage significant value creation through
consolidation of stranded iron ore resources in the
Southeast of Brazil.
• Strong cash generation.
• Proven track record delivering value to
shareholders
5
Corumbá System
Chile System
Sudeste System
Structure
MMXM3: Solid controlling shareholdersHighest levels of Corporate Governance
Bom Sucesso under basic engineering studies
Corumbá System started-up in 2005 (Mining)
28%Free Float
30% EBX Brasil S/A
14%
42%
Controlling Shareholders
16%
70% 100% 100% 92%
100% 100%
Corumbá System started-up in 2005 (Mining)
Assets acquired by MMX (AVG: dec-07; Minerminas: jan-08)
Corporate Governance
• Novo Mercado
• Stringent corporate governance standards
• Single-class of common shares with unrestricted voting rights
• Shareholders have 100% tag-along rights, preemptive rights
• Independent Board Members
• Related-Parties Transaction Disclosure
• Audit Committee
• MMX Policies
• Disclosure and use of information
• Corporate Governance
• Securities Trading 6
� 16 years in the mining industry at Vale , Rio Tinto and Caemi
� Former equity research director of Credit Suisse from 2005 until 2009,
responsible for coverage of mining and steel companies in Latin America
Roger DowneyChief Executive and IR Officer
�
� Approximately 25 years of experience in the mining sector
� Held senior executive and board positions in companies such as Vale ,Caemi
Group and MRS Logística
Guilherme F. EscalhãoChief Financial Officer
Senior Management TeamMore than 135 years of iron ore experience
7
� More than 40 years of experience in the mining sector
� Held senior executive positions in companies such as Vale, S.A Mineração da
Trindade (SAMITRI), Ferteco Mineração, GIIC (Vale subsidiary) and AVG
Mineração
Chequer H. B. HabibChief Commercial Officer
Luciano C. Ferreira Chief Port Operations Officer
� More than 25 years of experience in mining, port and steel sectors
� Held senior executive positions in companies such as Caemi, Vale and
Companhia Siderúrgica Pecém
Antônio A. Schettino FróesChief Operations and ProjectDevelopment and ImplementationOfficer
� Around 30 years of experience in the mining sector
� Held senior executive positions in companies such as Caemi, Odebrecht, CSN
and Votorantim Siderurgia
Financial highlights
Sales (million tons)EBITDA (R$ million)
(23,4)
71,7
39,7
-30
0
30
60
90
0,9
1,7 1,3
0,6
0,3
0,3
0,0
0,5
1,0
1,5
2,0
2,5 Domestic Exports
8
(Net Debt) or Net Cash (R$ billion)Net Profit (R$ million)
1Q10 4Q10 1Q11 1Q10 4Q10 1Q11
(76,1)
72,7 63,8
-80
-40
0
40
80
1Q10 4Q10 1Q11
(289)
926
517
-300
0
300
600
900
1Q10 4Q10 1Q11
Sudeste SystemSerra Azul & Bom Sucesso
Iron ore production connected to Sudeste Superport by MRS Railway
MMX Sudeste: Integrated logistics link brownfield
start up to seaborne markets
10
Growth through consolidation while leveraging existing infrastructure
Serra Azul
11
Serra Azul
Highlights Serra Azul
• Competitive production costs and integrated logistics
• High-quality iron ore to supply the seaborne market
• 65% of production already secured by long-term contracts
• Consolidation opportunities and synergies drive additional
value creation
• Significant growth potential through geographic expansion
• Estimated CAPEX: US$ 79/ton
12
Execution Update
• EIA/RIMA filed in November 2010
• Public Hearing: March 2011
• SRK resources audit update: 919 million tons plus a potential
570 million tons
• Drilling performed: 24 thousand meters
• Equipment procurement underway
• Basic engineering phase complete
12
Current Sinter Feed Quality
• Estimated CAPEX: US$ 79/ton
Fe: 64.5% P: 0.06%
SiO2: 4.5% Mn: 0.02%
AL2O3: 1.20% H2O: 8.5%
Future Pellet Feed Quality
Fe: 67.0% P: 0.03%
SiO2: 3.5% Mn: 0.05%
AL2O3: 0.5%
Geological Section
Friable Itabirite
Serra Azul
13
Compact Itabirite
Serra Azul Expansion Project
Serra Azul
New Plant
Pit
14
Long distance beltconveyor, transmissionline and water pipelines
Stockyard and LoadingTerminal
Serra Azul
Production Capacity (Mtpy) *CAPEX (R$ Million)
2,960
21.7
25.3 25.3 25.324
* Time adjusted
CAPEX 79 USD/ton
15
49
539
2010 2011 2012-2016
8.7 8.76.5
0.61.3
1.3
1.3 1.3 1.3 1.3
1.8
20.424 24 24
249.3 10 9.6
Current Capacity GVA Expansion
Usiminas Agreement
Sudeste Superport HandlingPau de Vinho Joint Mining
• Pau de Vinho resources based on Usiminas´s estimates
at 875 M tons
• Pau de Vinho target production: 8 Mtpy
• Significant synergies with current mining operations at
Serra Azul
• 13.5% of production at Pau de Vinho will be delivered to
• Handling fee: USD 12.63/ton adjusted by US-PPI
• Volumes:
• 2012 = 3 Mtpy
• 2013 = 4 Mtpy
• 2014 = 8 Mtpy
• 13.5% of production at Pau de Vinho will be delivered to
Usiminas
• MMX will be responsible for the licensing, CAPEX and
operation for 30 years
• 2015 = 12 Mtpy
• 2016 = 12 Mtpy
• 80% Take-or-Pay
• Usiminas can renew the contract for 1 to 5 years
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Bom Sucesso
Highlights
• High-quality iron ore with magnetite content to supply the
seaborne market
• Production target: 10 Mtpy
• Estimated CAPEX: US$ 81/ton
• 65% of production already committed through long-term
contracts
Bom Sucesso Unit
Execution Update
• Conceptual engineering
• EIA RIMA filed in November, 2010
• SRK resources audit update: 365 million tons plus a
potential of 741 million tons
Expected Quality – Ouro Preto pilot plant test work
Fe: 67.2% P: 0.033%
SiO2: 2.5% PPC: 0.6%
AL2O3: 0.5% FeO: 8.8%
17
Bom Sucesso
Production Capacity (Mtpy) *CAPEX (R$ Million)
1,424
6,5
9,8 10
* Time adjustedCAPEX 81 USD/ton
18
5 38
2010 2011 2012-20162015 2016 2017...
Sudeste Superport
Highlights
• 50 mtpy capacity, expandable to 100 mtpy
• Capesizes handling
• Loading: 2 ship loaders of 25 Mtpy each
• Fully funded (BNDES)
• Start-up forecast: 3Q12
• 100% of equipment already ordered
Sudeste Superport
• 100% of equipment already ordered
• Licensing for 100 Mtpy underway
Execution Update
• Fully licensed to 50 Mtpy
• Navy Approval to 100 Mtpy
• Tunnel: 1200 meters already done as of June 2nd
• Tunnel: average speed of excavation: 7 meters per day
19
The only bulk terminal in the Sepetiba Bay to receive a license since CSN´́́́s iron ore terminal
Sudeste Superport
AdministrativeBuildings Iron Ore Yard El. 32 Iron Ore Yard El. 06
20
Rail LoopRailcar Dumper
Sudeste Superport
Funding: BNDES FINAME - PSI CAPEX (R$ Million)
• Total Amount: R$ 407.1 mm
• Interest Rate per Year: 4.50%
• Amortization: 8 years
• Grace Period: 2 years
1.282
Funding: BNDES FINEM
• Total Amount: R$ 805.1 mm
• Interest Rate per Year: TJLP + 2.18%
• Amortization: 10 years
• Grace Period: 2 years
21
86 40 63
286
2007 2008 2009 2010 2011/2012
Chile
Chile
Project Highlights
• One of the lowest cost additions to seaborne supply
• High-quality iron ore with magnetite content to supply the
seaborne market
• Production target: 10 Mtpy
• 50% of production already committed through long-term
contracts
Chile
contracts
• 290 Mt of iron ore potential already secured
Execution Update
•
• Punta Cachos Port fully licensed
• Drilling performed: 19 thousand meters
• Water permits
Expected Quality: Preliminary tests in Ouro Preto
Fe: 67.50% SiO2: 2.5%
Al2O3: 0.85% P: 0.015%
23
Punta Cachos Port
• EBX has 240,000 ha property in the Atacama region
• Fully Licensed Port
• Deep water port – 28 meter draft: Chinamax vessels
• Water availability with permits
• MPX Thermal Power Plant
Chile
24
BERTH N° 1 – COAL
BERTH N° 2 – IRON ORE
BERTH N° 3 – COPPER
Corumbá
Corumbá
Project Highlights
• Unique high quality lump
• Current Capacity: 2.1 Mtpy
• Long-term contracts signed with local and international
barge operators
• 77% of production already committed through long-term
contracts
Corumbá
contracts
• SRK audit resources report: 244 million tons plus a
potential of an additional 123 million tons
26
Estimated Production Capacity (Mtpy)
Iron ore volume growth by System
27
Pau de Vinho + Consolidation provides further volume potential
THANK YOUTHANK YOU
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