Fy2013 financial and operating highlights Rheinland (April 2015) • Definitive Feasibility Study...
Transcript of Fy2013 financial and operating highlights Rheinland (April 2015) • Definitive Feasibility Study...
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Analyst Briefing First Quarter 2015 Results 29 April 2015
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Presentation Outline
(3) Significant Developments
(4) Operating and Financial Highlights
(14) Update on Silangan
(20) Oil and Gas Exploration
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Significant Developments
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• Implementation of 2nd wave of manpower rightsizing program
(February 2015) following Phase 1 in December 2014
• Sale of shares in Indophil Resources (February 2015)
• Declaration of 111M tonnes of additional resources (March 2015)
• Approval of Silangan project DMPF (April 2015)
• Receipt of Integrated Management System (IMS) Certification from
TUV Rheinland (April 2015)
• Definitive Feasibility Study (DFS) in process and expected to be
completed in 2nd half of 2015
• Exploration works within and nearby Padcal ongoing
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OPERATING AND FINANCIAL HIGHLIGHTS 4
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Operating Statistics
1Q2015 1Q2014 Inc (Dec)
Tonnes Milled ('000) 2,221 2,396 -7% Operating Days 88 90 -2%
Ore Grade
Gold - gms/DMT 0.435 0.439 -1% Copper - % 0.204 0.223 -9%
Production
Gold – ozs 25,997 26,442 -2% Copper - lbs ('000) 8,361 9,468 -12%
Prices
Gold (US$/ounce) 1,189 1,371 -13% Copper (US$/pound) 2.71 2.85 -5%
Tonnage affected by lower
operating days and care and
maintenance
Lower grades due
to natural depletion of
higher grade ore
Drop in metal production
attributed to lower tonnage
and ore grades
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6 *excludes insurance gains from business interruption of P427 million
(in PHP million,
unless indicated) 1Q2015 1Q2014 Inc/(dec)
Gross Revenue 2,393 2,913 -18%
Marketing Charges 200 214 -7%
Cost & Expenses 1,887 2,274 -17%
Income from Operations 306 426 -28%
Other Inc / (charges) 110 (49) 324%
Provision for Tax (111) (109) 1%
Net Income 305 267 14%
Core Net Income 214 278 -23%
Reported EPS (Php) 0.067 0.051 30%
Core EPS (Php) 0.043 0.056 -23%
Financial Highlights
Revenue down due to lower
output and depressed metal
prices
Drop in cost & expenses
due to cost containment
Net income boosted by cost
management and sale of non-
core assets
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Revenue Breakdown
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2,913 2,393
1Q2015 1Q2014
Revenue Share per Product (PhP million)
Gold
Copper
Silver
Petroleum & other
1%
2%
38%
59%
40%
55%
1%
4%
PRODUCT BREAKDOWN (PhP million)
1Q2015 1Q2014 Inc (Dec)
Gold 1,423 1,610 -12%
Copper 912 1,178 -23%
Silver 19 22 -12%
Petroleum & others 38 102 -63%
TOTAL 2,393 2,913 -18% 7
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Cost and Expenses
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Decline in production cost
due to: More efficient use of ball
mills and reagents
Reduction in overhead
expenses
48% drop in G&A due to
stringent cost control
measures
(in PHP million) 1Q2015 1Q2014 Inc
(Dec)
Production cost
Materials & Supplies 427 417 2%
Power 431 426 1%
Labor 212 312 -32%
Contracts 65 146 -55%
Others 53 91 -42%
Cash Production cost 1,188 1,392 -15%
Depreciation & Amortization 373 423 -12%
Total Production Cost 1,561 1,815 -14%
Excise Tax & Royalties 114 138 -17%
Operating Cost (Mining) 1,675 1,953 -14%
G&A (Mining) 114 220 -48%
All-in Operating Cost (Mining) 1,789 2,173 -18%
Oil & Gas expenses 98 98 -1%
TOTAL COST AND EXPENSES 1,887 2,272 -17%
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(in PHP million) 1Q2015 1Q2014 Inc/(dec)
Gain on sale of AFS financial assets 107 - -
Foreign exchange gain (losses) 13 (34) -
Interest Expense (Net) (15) (66) (77%)
Provisions - 32 -
Others 5 17 33%
Total 110 (49) -
Breakdown of Other Charges - Net
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Capital Expenditures
CAPITAL EXPENDITURE BREAKDOWN
(PhP million)
1Q2015 1Q2014
Padcal & Head Office 310 360
Silangan & Kalayaan 918 979
Other mine exploration 20 39
Oil & gas exploration 5 152
TOTAL 1,253 1,530
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1Q2015 1Q2014
CAPITAL EXPENDITURE PERFORMANCE
Oil & gas exploration
Other mine exploration
Silangan & Kalayaan
Padcal & Head Office
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Financial Position
Sustained investments in
Silangan and Padcal push
deferred exploration costs
higher
Repayment of P705 million
in local bank loans (as of
April 2015) reduced Parent
Company debt to P3.6B
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LIABILITIES AND STOCKHOLDERS’ EQUITY (in PHP million)
As of Mar
31, 2015
As of Dec 31,
2014
Inc
(Dec)
Short-term debt 3,777 4,308 -12%
Others 2,754 3,215 -14%
Current liabilities 6,531 7,523 -13%
Bonds Payable 6,024 5,947 0%
Deferred income tax liability/others 10,593 10,076 5%
Total liabilities 17,124 17,599 -3%
Capital stock, RE & others 23,720 23,599 1%
Non-controlling interest 3,418 3,442 -1%
Total equity 27,138 27,042 0%
Total Liabilities and SHE 44,261 44,640 -1%
ASSETS (in PHP million)
As of Mar
31, 2015
As of Dec
31, 2014
Inc
(Dec)
Cash & cash equivalents 4,105 5,232 -22%
Receivables & others 4,145 4,299 -4%
Current assets 8,250 9,530 -13%
Property, plant & equipment 7,390 7,139 4%
Deferred exploration costs/others 28,621 27,971 2%
Total assets 44,261 44,640 -1%
SELECTED FINANCIAL RATIOS
Current Ratio 1.26:1 1.27:1
Debt-to-equity Ratio 39:61 39:61
Net debt/(cash)-to-equity Ratio 48:52 46:54
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Cash Flows
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(In PHP millions) 1Q2015 1Q2014 Inc/(dec)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax 416 376 10%
Adjustments for:
Depletion and depreciation 393 428 -8%
Gain on sale of asset (107) -
Others 26 76 -65%
Change in working capital (256) 379 -168%
Net cash flows from operating activities 460 1,259 -63%
CASHFLOWS FROM INVESTING ACTIVITIES
Deferred exploration costs/other noncurrent assets (936) (961) -3%
Property, plant and equipment (318) (569) -44%
Net proceeds from sale of AFS financial asset 297 -
Net cash flows used in investing activities (5,462) (4,452) 23%
CASH FLOWS FROM FINANCING ACTIVITIES - -
Payment of loans (527) (35) 1414%
Dividends paid (99) (247) -60%
Net cash from (used in) financing activities (626) (282) 122%
EFFECT OF EXCHANGE RATE CHANGES (6) 99 -106%
NET INCREASE IN CASH AND CASH EQUIVALENTS (1,127) (453) 149%
CASH AND CASH EQUIVALENTS (BEGINNING) 5,232 4,081 28%
CASH AND CASH EQUIVALENTS (END OF PERIOD) 4,105 3,628 13%
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COST STRUCTURE (excluding G&A)
1Q2015 1Q2014 Variance
Cost per Tonne
Cash Production Cost 535 581 -8%
Depreciation 168 176 -5%
Total 703 758 -7%
Operating cost 844 904 -7%
Operating Cost per Metal
Co-production method
Gold ($/oz) 937 956 -2%
Copper ($/lb) 2.18 2.39 -9%
By-product credits method
Gold ($/oz)
Before by-product credits 1,625 1,825 -11%
After by-product credits 737 786 -6%
Copper ($/lb)
Before by-product credits 5.05 5.10 -1%
After by-product credits 1.31 1.21 8%
Breakeven Analysis
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UPDATE ON SILANGAN 14
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* Presented Pre-Feasibility Study
to the Board (August 2014)
Complete Definitive Feasibility Study
Early works/mine development/
project execution
Obtain remaining government
permit approvals
Satisfy requirements of
project financing
Reduce project risks from: Metallurgy: through bulk sample
pilot plant test work program
Hydrogeology: through
continued pumping, monitoring
and modelling
Fieldwork and Engineering:
to support an industry standard
bankable feasibility study
Silangan Timetable
15
2016-
2018 2015/
2016
Q3 2014
-Q4 2015
2018/2019
Production
DMPF
approved in
April 2015
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Next Steps: Finish Bulk Sampling
• Bulk sampling work completed
First 70 tons arrived at the Lab in Perth WA Mar 30, 2015
Pilot test work commencing
Second batch of samples (30 Tons) expected to reach Perth on June 2015
Currently securing a caved portion of the OCD
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Next Steps: Complete DFS
• Geology
Final Mineral Resource Model to be completed by July 15
• Mining
Pit optimization and equipment selection ongoing
• Process
Flow sheet selected and throughput optimization ongoing
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Crush Grind Float Acid
Leach
Cyanide
Leach
Float
Con. Cathode Dore
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• Balance of Plant
TSF: Embankment construction planning commenced
Logistics: port options study in progress (construction of own port likely)
Infrastructure: location options planning ongoing
Power: options assessment in progress (MGP and EPC)
• Market Study
Metal/Commodities and TCRC pricing ongoing
• Third Party Audit
Tenders undergoing evaluation
• DFS on schedule for October 2015 completion
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Next Steps: Complete DFS
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Next Steps: Commence Early Works (by June 2015 to meet Q1 2018 first ore)
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Discipline Key Activities
Engineering Detailed design and engineering for civil, mechanical, and electrical
infrastructure/equipment
Procurement Long lead plant equipment (deposits/allocation of build slot)
Enabling
Works
• Tree cutting permit on critical path for early works
(tree-cutting, clearing and grubbing, access pioneering)
• Area preparation for Process Plant, workshops, camp
Social
Preparations
• Community development planning in progress
• Strong support from the Governor and the other Congressmen
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OIL AND GAS EXPLORATION 20
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(in PhP million) 1Q2015 1Q2014 % Inc
(Dec)
Gross revenue 38 102 (63%)
Cost and expenses 81 97 (16%)
Income (loss) from operations (44) 5 -
Other income (charges) (1) 21 -
Reported net income (loss) (44) 26 -
Financial Performance
62% decline in petroleum revenues due to:
Slowdown in Galoc Phase II production
47% drop in crude oil prices
16% decline in cost and expenses due to:
Lower output
Continued cost containment
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Financial Position
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LIABILITIES AND STOCKHOLDERS’ EQUITY (in PHP million)
As of Dec
31, 2014
As of Dec 31,
2013
% Inc
(Dec)
Due to Parent 3,416 3,422 0%
Others 54 65 -17%
Current liabilities 3,470 3,487 0%
Deferred income tax liability & others 1,112 1,112 0%
Accounts payable 227 226 0%
Non-current liabilities 1,323 1,338 -1%
Total liabilities 4,793 4,824 -1%
Capital stock, RE & others 1,700 1,700 0%
Deficit (1,167) (1,146) 2%
Others (5) (8) -38%
Non-controlling interest 3,106 3,127 -1%
Total equity 3,634 3,673 -1%
Total Liabilities and SHE 8,427 8,497 -1%
ASSETS (in PHP million)
As of Dec
31, 2014
As of Dec
31, 2013
% Inc
(Dec)
Cash & cash equivalents 1,852 1,908 -3%
Others 125 153 -18%
Current assets 1,978 2,061 -4%
Deferred exploration costs & other
NCA 6,449 6,436
0%
Total assets 8,427 8,497 -1%
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Strong Management, Corporate
Governance, CSR & IR Platforms • Most Promising Company of the Year
(Corporate Governance Asia) November 2014 Hong Kong
• Best Investor Relations Company
(Corporate Governance Asia) April 2015 Hong Kong
• Corporate Governance Company of the Year
(Asia CEO Awards) November 2014 Manila
• Finalist: CSR Company of the Year
• Gold Award in Financial Performance,
Management, Corporate Governance,
Investor Relations, Environmental and
Social Responsibility
(The Asset Magazine) December 2014 Hong Kong
• Award of Excellence – 2013 Annual Report
(Philippine Quill Awards) March 2015
• Integrated Management Systems (IMS) Certification
(TUV Rheinland) April 2015 Manila 23
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End of Presentation Thank you