Corporate Presentation - August 2014
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Transcript of Corporate Presentation - August 2014
MMX MINERAÇÃO
August | 2014
DISCLAIMER
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This presentation relating to MMX Mineração e Metálicos S.A. (“MMX”) includes “forward-looking statements”, as that term is defined in the Private Securities
Litigation Reform Act of 1995, in Section 27A of the Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All statements
other than statements of historical facts are statements that could be deemed forward-looking statements and are 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 and specific. The risk exists
that these statements may not be fulfilled or, even if they are fulfilled, the results or developments described in such statements may not be indicative of
results or developments in future periods. We caution participants of this presentation not to place undue reliance on these forward-looking statements as a
number of factors could cause future results to differ materially from these statements.
Forward-looking statements may be influenced in particular by factors such as the ability to obtain all required regulatory approvals on a timely basis or at
all, exploration for mineral resources and reserves, difficulty in converting geological resources into mineral reserves, and changes 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 registered under the U.S. Securities Act of 1933, as
amended, or any applicable state securities laws and may not be offered or sold in the United States 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 part without MMX’s prior
written consent.
MMX INTRODUCTION 1.
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MMX Corumbá Mineração
MMX Sudeste
100% 94,52%
5,48% EBX
CONTROLLING SHAREHOLDERS
57,42%
WISCO 10,5%
SK NETWORKS
8,8%
OTHERS 23,28%
Serra Azul
Bom Sucesso
SHAREHOLDING STRUCTURE
35%
Porto Sudeste do Brasil
65%
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Operating system: Serra Azul;
Current Capacity: approximately 7 Mtpy;
Mining rights in traditional iron ore districts: Brazil (Minas Gerais and Mato Grosso do Sul);
Production committed with strategic consumers – China and South Korea – through long-term contracts;
Brownfield start up in Brazil;
Strategic port location.
Sudeste System | MG
Serra Azul Unit
Corumbá System | MS*
Porto Sudeste | RJ
Sistema Sudeste
MMX INTRODUCTION
*MMX entered into agreements with Vetria Mineração for the lease of mining rights in Corumbá.
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RESOURCE BASE SRK and Coffey Mining certifications (Serra Azul, Pau de Vinho e Bom Sucesso): 3,6 billion tons of mineral resources. Reserves of 1 billion tons in Serra Azul.
COMPETITIVE PRODUCTION
COST STRUCTURE
Low stripping ratio;
Competitive scale;
Energy supply contract with MPX;
Infrastructure with integrated logistics.
GUARANTEED LOGISTICS
Porto Sudeste at 50 Mtpy, expandable to 100 Mtpy, provides gateway to seaborne markets;
Long Term Railway Contract with MRS.
SECURED OFF-TAKE
64% of future production already committed through long-term contracts.
OPERATIONAL TRACK RECORD
Main operations located in the traditional Serra Azul mining region, in Minas Gerais Iron Ore Quadrangle.
HIGHLIGHTS
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HIGHLIGHTS
2012 AUGUST 2014
Conclusion of the capital increase in the amount of R$ 1.4 billion;
Renewal of the lease contracts for mineral rights with the CEFAR, extending the terms of validity from 2021 to 2034;
Conclusion of the contracting of supplementary long term funding for the Sudeste Superport with BNDES, in the sum of R$ 935 million;
New certification of mineral resources (SRK and Coffey Mining) totaling 3.6 billion tons considering Serra Azul Unit, Mina Pau de Vinho and Bom Sucesso;
Sale of all shares in Minera MMX de Chile S.A. to Inversiones Cooper Mining S.A.
Definitive agreements executed by the Company with Trafigura and Mubadala;
The merger of MMX Porto Sudeste S.A. by MMX
Approval of the business plan’s revision of the Company;
Conclusion of the investment operations of Trafigura and Mubadala in Porto Sudeste do Brasil SA.;
MMX entered into agreements with Vetria Mineração for the lease of mining rights in Corumbá, which envisage the assumption of certain contracts
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FINANCIAL HIGHLIGHTS
237 181
110
0
100
200
300
1Q13 4Q13 1Q14
Net Revenue (R$ million)
140 96
31 0
50
100
150
1Q13 4Q13 1Q14
Gross Profit (R$ million)
-131 -501
-600-500-400-300-200-100
0
1Q13 4Q13 1Q14
Adjusted EBITDA (R$ million)
Adjusted EBITDA
SUDESTE SYSTEM 2.
SERRA AZUL UNIT 2.1
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Mine Porto Sudeste Railway
Serra Azul unit is near to the MRS railway - 7 km from the mine, a distance currently traversed by trucks.
MMX has a long term contract with MRS railway, which connects the mine with the CSN’s port and the Porto Sudeste, both located in Itaguaí.
Porto Sudeste will have 50Mtpy iron ore shipping capacity. The Superport will have a depth of 20 meters, enough to handle Capesize vessels.
Integrated logistic:
Mine > Railway > Port as a
factor of Value Creation
WISCO
Long-Term contract (20 years) to trade iron ore. SK will take-off part of the Sudeste System yearly production equivalent to its participation in MMX Capital (14%).
Long-Term contract (20 years). Wisco will off-take at least 50% of MMX Sudeste production.
OFFTAKERS (SHAREHOLDERS)
SK NETWORKS
UNIQUE INTEGRATED LOGISTICS
SK and Wisco will together offtake 64% of total production
QUADRILÁTERO FERRÍFERO
Iron ore Quadrangle
Minas Gerais
RAILWAY
Railway access connecting MRS to the Porto Sudeste
Expansion project with integrated logistic and pellet feed iron ore
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SERRA AZUL
Highlights
Production target: 15 Mtpy waiting of new partner;
64% of production already committed through long-term contracts;
997.4 million tons of reserves already secured by SRK.
Project Status
Installation License issued in April, 2012;
Beginning of construction of Serra Azul Unit expansion (earth work completed in the beneficiation plant area);
Expected Quality – Ouro Preto pilot plant test work
Fe: 66,65% P: 0,025% AL2O3: 0,54%
SiO2: 3,23% Mn: 0,018% LOI: 0,75%
BR 381
Itatiaiuçu
Igarapé
São Joaquim de Bicas
Brumadinho
Sarzedo
Mario Campos
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Growth through consolidation while leveraging existing infrastructure
SERRA AZUL
1 2
3 4
5
6
7
8 9
10 11
12
13
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15
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1 USIMINAS Western
2
3
4
5
6
7
8
9
MRI
USIMINAS Central
Arcelor Mittal
Minerita
Ferrous-Santanense
USIMINAS Eastern
Comisa
Emicon
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11
12
MMX
USIMINAS Pau de Vinho
Ferrous – Esperança
13 Minera do Brasil
14 Vale
Itaminas 15 15
Serra azul unit expansion project
UNIDADE SERRA AZUL
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1 Beneficiation Plant
2 Tailings dam, about 40km away from the mine, associated with a tailings pipeline
3 Pipeline with approximately 7km extension
4 Rail terminal connected to the MRS rail network
5 Arch extensions
6 Waste deposit
7 Water supply
8 High voltage power station
9 Access
2 6
9
1 5
7
9 9
8
3 4
Itatiaiuçu Igarapé
São Joaquim de Bicas
Mario Campos
Serra Azul Expansion
Beneficiation Plant
Earthwork
SERRA AZUL
1 Pump House, Sump and Thickeners
2 Construction Site
1 1
3 Beneficiation
2
3
4 Grinding
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5 Substation
6 Grinding
7 Piles
8 Primary Crusher
5 6
7
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9 Primary Crusher
10 Water Storage Tank
11 Construction Site and Warehouse
12 Water Storage Tank Inc.
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13 Main Access
14 Administrative Buildings
15 Maintenance Workshop
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PORTO SUDESTE DO BRASIL 2.2
Overview
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35% partnership with Trafigura and Mubadala, with significant operational track record and extensive financial capacity.
Long term contract with MMX Sudeste for port handling services of 7 Mtpy with an expandable option to increase to 13 Mtpy until 2015.
In case of Port expansion to up to 100 Mtpy, MMX’s shipping right can also be increased by 13% of extended Port capacity.
The whole internal trading of iron ore will be made through the Porto Sudeste.
MMX shall have an option to acquire an additional stake of up to 7.5% in PortCo, for a final stake of up to 42.5%.
PORTO SUDESTE
Porto Sudeste | Itaguaí (RJ)
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Carlos Gonzalez CEO and IRO
Adriana Marques Manager
Phone + 55 21 2163-6197
+ 55 21 2163-6338
E-mail [email protected]
MMX
INVESTOR RELATIONS
www.mmx.com.br