Minera Frisco El Coronel Unit Investor Presentation - 2Q16
Overview A mining company dedicated to the exploration and production of gold, silver, copper, lead and zinc Created in 1962 and acquired by Grupo Carso in 1985 More than 50 years of mining experience On January 2011, GCarso spin-off Minera Frisco and has been trading independently in the Mexican Stock Exchange (MFRISCO) since then 9 operating mines and 1 project under development 8,691 employees (includes contractors) 2
Geographic Footprint Maria Location: Sonora Tayahua - Cobre Primario Stage: Operating Location: Zacatecas Metals: Cu Stage: Construction Metals: : Au/ Ag/ Cu/ Pb/ Zn San Felipe Tayahua Location: Baja California Norte Stage: Operating Location: Zacatecas Metals: Au / Ag Stage: Operating Metals: Au/ Ag/ Cu/ Pb/ Zn Concheño El Coronel Location: Chihuahua Location: Zacatecas Stage: Operating Metals: Au / Ag Stage: Operating Metals: Au / Ag Ocampo El Porvenir Location: Aguascalientes Location: Chihuahua Stage: Operating Stage: Operating Metals: Au / Ag Metals: Au / Ag Asientos San Francisco del Oro Location: Aguascalientes Stage: Operating Location: Chihuahua Metals: Au/ Ag/ Cu/ Pb/ Zn Stage: Operating Metals:Au/ Ag/ Cu/ Pb /Zn Operating Mines Expansion Projects 3
Operating Mines: open pit & underground Concheño San Felipe Ocampo Location: BCN, Mex. Location: Chihuahua, Mex. Location: Chihuahua , Mex. Exploitation Type: Open Pit & Exploitation Type: Open Pit & Exploitation Type: Underground Underground Underground Process: Dynamic Process: Heap and Process: Dynamic Leaching Dynamic Leaching Leaching Start of Operations: 2006 1994 Start of Operations: Start of Operations: 2013 Project expansion start-up: 2013 Capacity: 3,000 TPD Capacity: 13,500 TPD Capacity: 37,000 TPD Main Metals: Au / Ag Main Metals: Au / Ag Final Product: Dore Bars Metals: Au / Ag Final Product: Dore Bars Final Product: Dore Bars 4 TPD (tonnes per day)
Operating Mines: open pit El Porvenir El Coronel Maria Location: Aguascalientes, Location: Zacatecas , Mex. Location: Sonora, Mex. Mex. Exploitation Type: Open Pit Exploitation Type: Open Pit Exploitation Type: Open Pit Process: Heap Leaching Process: Heap Leaching Process: Heap Leaching Start of Operations: 2008 Start of Operations: 2004 Start of Operations: 2013 Capacity: 55,000 TPD Capacity: 27,000 TPD Capacity: 8,500 TPD Metals: Au / Ag Final Product: Dore Bars Metals: Cu Metals: Au / Ag Final Product: Copper - Final Product: Dore Bars Cathodes 5 TPD (tonnes per day)
Operating Mines: underground Asientos Tayahua* San Francisco del Oro Location: Zacatecas, Mex. Location: Aguascalientes, Location: Chihuahua , Mex. Mex. Exploitation Type: Underground Exploitation Type: Underground Process: Flotation Circuit Exploitation Type: Underground Process: Flotation Circuit Process: Flotation Circuit Start of Operations: 1917 Start of Operations: 2004 Start of Operations: 2008 Capacity: 5,500 TPD Capacity: 3,800 TPD Capacity: 4,000 TPD Metals: Au/Ag/Cu/Pb/Zn Final Product: Concentrates Metals: Au/Ag/Cu/Pb/Zn Metals: Au/Ag/Cu/Pb/Zn Final Product: Concentrates Final Product: Concentrates *Expansion project under development TPD (tonnes per day) 6
Projects under development During 2010, MFrisco initiated an aggressive growth program which consisted in the development of 2 new mining • units (Concheño and Porvenir) and the expansion 3 operating units (Coronel, San Felipe and Tayahua). As a result, output capacity grew from 82,700 to 157,300 Tn / day. • Nominal installed milling/crushing capacity (tonnes/day) 167,300 157,300 82,700 2012 2015 2016E 90.2% 6.4% growth % Tayahua – Primary copper project This is the only project still under construction and is expected to begin operations early on 2017. • Current Additional Expected Exploitation Name Location Metals Process milling/crushing Description installed installed Status type installed capacity* capacity* capacity* Expansion projects Primary copper: access ramp Au, Ag, Milling and Under - Tayahua Zac. Pb, Zn, Cu Underground 5,500 of 6 km, crushing, grinding and 10,000 15,500 flotation construction flotation plant 7
Key Operating Data Silver ('000 Oz) Gold ('000 Oz) 8,855 9,331 423 412 7,523 269 4,434 202 2,165 2,429 104 98 2013 2014 2015 1H16 2Q15 2Q16 2013 2014 2015 1H16 2Q15 2Q16 - - 57% -3% - -6% - 18% 5% - - -11% Copper (tonnes) growth % growth % 26,296 25,823 20,871 Lead (tonnes) 9,401 5,198 4,629 Zinc (tonnes) 21,642 2013 2014 2015 1H16 2Q15 2Q16 71,628 18,914 18,275 63,675 58,913 - - -11% -2% -19% - growth % 10,956 36,506 5,852 5,881 17,899 18,051 2013 2014 2015 1H16 2Q15 2Q16 2013 2014 2015 1H16 2Q15 2Q16 38% 1% - - 18% 1% 22% - - - -7% -3% 8 growth % growth %
Key Operating Data 2Q16 Gold Silver Lead Zinc Copper Unit (Oz) (Oz) (tonnes) (tonnes) (tonnes) 2Q16 - Revenues by product - - - 27,130 4,355 El Coronel - - - 26,638 291,185 San Felipe Gold 4% 1,206 239,484 1,667 6,461 202 Asientos 10% 1,937 343,296 1,369 5,675 3,085 Tayahua Silver 9% San Francisco 1,123 396,725 2,845 5,915 578 Copper del Oro 60% 18% - - - 1,442 20,754 Porvenir Zinc - - - Ocampo 6,132 165,980 Lead - - - 32,768 703,476 Concheño - - 763 María - - It does not include hedging effects. Total 98,376 2,165,254 5,881 18,051 4,629 9
Key Financial Data 37% EBITDA (million pesos) Revenues (million pesos) 13,611 4,521 4,648 4,332 12,398 10,305 3,376 3,374 1,152 1,093 2Q15 2Q16 2013 2014 2015 2Q15 2Q16 2013 2014 2015 - 0% - 20% 10% 34% 42% 36% 34% 32% margin % growth % Capex Gold & Silver Price (million pesos) 6,027 1,350 25 Ag- average price (usd/Oz) Au- average price (usd/Oz) -14 % 1,300 20 6% -8 % 1,250 15 -4% 2% 1,200 1,797 10 1,150 746 528 -18% 5 1,100 2013 2014 2015 1H16 1,050 - - -58% - - 70% 2Q15 2Q16 2013 2014 2015 10 growth % Au (Oz) Ag (Oz)
Key Financial Data Indebtedness Indebtedness Variation 2Q16 2Q15 (USD million) 2Q16/2Q15 Short terms marketable notes - 64 -100% Long term bonds 264 321 -18% Syndicated loan 1,060 1,100 -4% Debt 1,324 1,485 -11% Exchange rate (pesos per dollar) 18.91 15.57 On June 30th, 2016 the Company’s debt was composed of a syndicated loan of US$1,060 MM and $5,000 MM Ps in long term bonds. On June 14th, the first amortization of the syndicated loan was made, reducing debt in $40 MM USD. At the end of 2Q16, the syndicated loan decreased by 4% and total debt decreased 11%, reaching US$1,324 MM vs. US$1,485 MM. Derivative Financial Instruments At June 30 th , 2016, the company continued with its metal hedging strategy and it covers most of the production estimated for the remainder 2016 year. Also, a metal hedging strategy started for 2017. 11
Contact Investor Relations: Trading Symbol: Lizbeth Munguia Samperio MSE: MFRISCO lmunguias@minerafrisco.com.mx OTC: MSNFY T. +52 (55) 2122.2624 www.minerafrisco.com Corporate Office: Plaza Carso Lago Zurich #245 Presa Falcon Building, 17th Floor Granada Ampliación 11529 México DF Certain statements in this presentation may be related to expectations about future events of Minera Frisco. The phrases "will allow," "will," "estimate," "expect," "intend," "might," "should" and similar expressions generally indicate comments based on financial information, operating levels and conditions of the market to date. These statements are subject to factors such as volatility in metals prices, energy inputs and other inputs, the possibility of cyclical or seasonal business or consumer slowdown risks that are detailed in the Company's annual report and may cause actual results to differ materially from current expectations. Minera Frisco undertakes no obligation to publish a review on these forward-looking statements to reflect events or circumstances occurring after the date of publication of this release. 12
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