Professional Documents
Culture Documents
March, 2017
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I. Introduction
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Management Presenter
Presenters Title
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Safe Harbor Statement
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 are beyond Grupo Mexicos ability to control or estimate 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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Corporate Structure
100.0% (*)
AMERICAS
MINING
CORPORATION
88.9% (*) Public Float
11.1% (*)
99.29 % 99.96 %
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Copper The Best Fundamental Story in
Commodities
Solid Fundamentals Copper Consumption by Region
Copper has the best fundamentals in the basic materials space:
Other
2016 demand driven by US and EU markets. 12%
Japan
China: Expect 3% demand growth due to housing market 5%
recovery (tier 1 and 2 cities), state electrical infrastructure
USA
demand, and government stimulus programs. 8% China
46%
Additional production expected for 2016-2017, will be
offset by 850K production cuts, ore grade decay and scrap
scarcity. Europe
17%
No greenfield projects approvals at current prices.
Market copper prices below estimated incentive price of Asia Ex China
$3.00 - $3.50 for greenfield production. 12%
Wood Mackenzie Dec. 2015
700,000
3.00
600,000
2.50 Electrical
500,000 Network
2.00 23%
400,000
1.50
300,000
Industrial
1.00
200,000 Machinery
0.50
10%
100,000
0.00 -
5-Mar-14
3-Jan-12
8-Jun-12
7-Apr-15
10-Sep-15
5-May-16
21-Mar-12
27-Aug-12
13-Nov-12
31-Jan-13
16-Jan-15
24-Jun-15
22-Apr-13
10-Jul-13
26-Sep-13
13-Dec-13
23-May-14
11-Aug-14
27-Nov-15
25-Jul-16
29-Dec-16
28-Oct-14
17-Feb-16
11-Oct-16
Construction
5
31%
LME COMEX shanghai LME Cash
Wood Mackenzie 2015
Southern Copper Strengths
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II. Overview of Operations
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Company Overview
Buenavista
2016 Cash Cost $ 0.95/lb. El Pilar
La Caridad
Santa Eulalia
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Worlds Largest Copper Reserves
VALE
American
SCC
Codelco
BHP Billiton
Freeport
Rio Tinto
Glencore
Antofagasta 59
Xstrata
60
Anglo
40 34 34
25
21 21
18
Source 10K Annual Rep. 10K 20F Annual Rep. Reserve Rep. Annual Rep. 20F 20F 20
Period Dec.31, 2015 Dec.31, 2014 Dec.31, 2014 Jun. 30, 2015 Dec.31, 2014 Dec. 31, 2014 Dec. 31, 2014 Dec. 31, 2014 Dec. 31, 2014
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Cu Price $2.90 N/A $2.00 3.35 N/A N/A N/A $3.10 $3.35 SCC SCC after Anglo Codelco Freeport BHP Rio Tinto Xstrata
2015 expansion American Billiton
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Geographic Footprint & Product Diversification
Other
Acid 5% Mexico 26%
Zinc 2%
4%
Molybdenum Peru 5%
5%
Chile 2%
Silver Brasil 4%
6%
Europe 19%
Copper
78% Asia 23%
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Low Cost Operations
1.11
Fully integrated low cost operations
1.07
1.00 World class assets
(US$/lb)
1.0
0.95 Significant SX-EW production
Strong by-product credits
0.8 Management focus on cost efficiency
2013 2014 2015 2016
1.92 Other
1.89 18% Operating
Materials
20%
(US$/lb)
1.70
1.66
1.45 Fuel
Maintenance 12%
19%
1.20
2013 2014 2015 2016 Power
Labor 18%
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13%
(1) LTM
2015 Copper Production Cash Cost by Company
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SCC Financial Summary
(US$ MM) 2014 2015 2016 2017 E
Copper Price (LME) US$ per pound 3.11 2.50 2.21 2.50
Income Statement:
Net Revenues $5,788 $5,046 $5,380 $6,035
EBITDA 2,728 1,945 2,212 2,829
EBITDA Margin 47% 38% 41% 47%
Net Income 1,333 736 777 1,208
Dividends paid per share 0.46 0.34 0.18 0.08
Balance Sheet Statement:
Cash, Equivalents & Short Term Investments $703 $878 $597 $1,519
Total Assets 11,394 12,593 13,277 14,406
Total Debt 4,181 5,952 5,954 5,954
Total Liabilities 5,557 7,294 7,406 7,327
Total Shareholders' Equity 5,804 5,263 5,832 7,039
Cash Flow Statement:
Capital Expenditures $1,530 $1,150 $1,119 $1,105
Free Cash Flow 1 (174) (270) (195) 918
Dividends paid to common shareholders 381 271 139 62
1 Free Cash Flow defined as net cash from operating activities less capital expenditures. 14
Solid Financial Performance
Top Tier Margins and Conservative Leverage for Increased Financial Flexibility
2016E EBITDA Margin (%) 2016E Total Debt / EBITDA (x) Amortization Schedule
2022 $300
BHP 36% Rio Tinto 2.4
2025 $500
Antofagasta 33% SCC 2.6
2028 $51
2035 $1,000
Anglo
21% First Quantum 6.1 2045 $1,500
American
2016-2021 Capex Program Overview (MM) 2015-2020 Copper Production Forecast (000 MT Cu)
1,800
1,622
1,600
1,400
1,189
1,200 1,118 1,105
1,000
786
800
600 472
400
200
-
2016 2017 2018 2019 2020 2021 16
Source: SCC
Best-in-class Mining Projects Reaching Completion Providing
Competitive Cash Costs and Increased Production Levels
Industry-Wide Capital Intensity Comparison vs. SCCO Projects 2011-2015 Capex Evolution
Weighted Avg. Project Capital Intensity of Existing Projects US$MM
US$ 000 per tonne of Cu Equivalent Annual Incremental Production
25 2,000
21.6
1,703
20 17.7 1,600 1,535
16.5
15 11.9 1,150
11.7 1,200 1,052
9.9 10.1
10
800
4.9 613
5
400
0
Restarts Extensions of Expansions Expansions SCCO Probable Possible SCCO
-
Existing Mine to Existing New Process Brownfield Greenfield
2011 2012 2013 2014 2015
Life Mine/Plant (X) Plant (N)
Brownfield - Industry Greenfield - Industry
Source: Wood Mackenzie (Global Copper Mine Supply Summary, May 2014), SCCO filings and presentations
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SCCs Major Strengths