2015 Results Presentation Diego Hernández – CEO IvánArriagada – Mining CEO Alfredo Atucha -CFO
Cautionary statement ThispresentationhasbeenpreparedbyAntofagastaplc.Byreviewingand/orattendingthispresentationyouagreetothefollowingconditions. This presentation contains forward-looking statements. All statements other than historical facts are forward-looking statements. Examples of forward- looking statements include those regarding the Group's strategy, plans, objectives or future operating or financial performance; reserve and resource estimates; commodity demand and trends in commodity prices; growth opportunities; and any assumptions underlying or relating to any of the foregoing. Words such as “intend”, “aim”, “project”, “anticipate”, “estimate”, “plan”, “believe”, “expect”, “may”, “should”, “will”, “continue” and similar expressions identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factorsthatarebeyondthe Group’s control.Given these risks,uncertaintiesand assumptions,actualresultscoulddiffer materiallyfrom anyfutureresults expressed or implied by these forward-looking statements, which speak only as of the date of this presentation. Important factors that could cause actual results to differ from those in the forward-looking statements include: global economic conditions; demand, supply and prices for copper; long- term commodity price assumptions, as they materially affect the timing and feasibility of future projects and developments; trends in the copper mining industry and conditions of the international copper markets; the effect of currency exchange rates on commodity prices and operating costs; the availability and costs associated with mining inputs and labour; operating or technical difficulties in connection with mining or development activities; employee relations; litigation; and actions and activities of governmental authorities, including changes in laws, regulations or taxation. Except as required by applicable law, rule or regulation, the Group does not undertake any obligation to publicly update or revise any forward-looking statements, whetherasaresultofnewinformation,futureeventsorotherwise. Certain statistical and other information about Antofagasta plc included in this presentation is sourced from publicly available third party sources. Such informationpresentstheviewsofthosethirdpartiesandmaynotnecessarilycorrespondtotheviewsheldbyAntofagastaplc. Thispresentation isfor informationpurposes only anddoesnot constitute an offer to sell orthe solicitation of an offer tobuyshares in Antofagastaplc or any other securities in any jurisdiction. Further it does not constitute a recommendation by Antofagasta plc or any other person to buy or sell shares in Antofagastaplcoranyothersecurities. Pastperformancecannotbereliedonasaguidetofutureperformance. 2
Agenda Operations review 2015 Overview Financial review Investment case and growth opportunities 3
2015 Overview 4
Safety First Culture Safety Performance • Unacceptably, a fatality occurred at Michilla during the year Achieved 33% • Committed to zero fatalities 6 reduction in LTIFR • 33% improvement in injury rate 5 5 • New safety and occupational health model 4 3.00 being extended to contractors 3 2.5 1.90 2.0 Focus on: 1.70 2 2 1 1 Early identification of key fatality and o 1 serious injury risks 0 0 2011 2012 2013 2014 2015 Reporting and investigating high- o Fatalities LTIFR potential near misses On-the-ground senior safety o leadership 5
2015 Year’s Highlights The Group’s position in a challenging environment • Strong balance sheet • Competitive operating cost position Position • Re-setting community engagement • Preserving growth projects Optimise our portfolio • Sale of water division Optimise • Bring Antucoya to full production • Purchase of TMM and stake in Zaldívar • Closure of Michilla Maintain our discipline and flexibility Discipline • Cost control without increasing risk • Reduce development capital expenditure without compromising future growth 6
2015 overview Reducing costs and building a platform for long-term growth 2015 (1) vs. 2014 • Lower realised copper prices (24% decline), Revenue (34.0)% $3,394.6m disruptions to production in Q1 and heavy rains in the Atacama Desert in Q2 • Revenues declined and lower production lead to EBITDA (58.4)% $890.7m higher unit costs • Lower realised copper price and sales, partly offset by Net earnings per share (98.6)% 0.6c lower tax payable • Operations continue to generate significant cash Operating cash flow (65.8)% $858.3m despite the fall in revenue • Lower production at Los Pelambres due to disruptions Copper production (10.6)% 630.3kt in Q1 as well as lower grades. Lower production at Centinela and delayed ramp-up at Antucoya • Lower gold production and lower realised Net cash costs 4.9% $1.50/lb molybdenum prices 1. FY 2015 financials and comparatives for continuing operations 7
Investment Case Responding to uncertain times High quality Cost Capital Robust assets control discipline platform • • • • Strong and flexible Continuing to Strong and growing Focus on operating optimise mines production efficiencies through balance sheet innovation and • • • Large resource base Manageable debt Lowering cost base exploiting synergies levels for future upturn • Low costs and long- • Cost and • • Disciplined life assets Consistence pay- Competitiveness approach to capital out ratio dividend • Programme Four mines in two policy allocation ‘world - class’ mining districts in Chile Creating value for shareholders 8
Copper market outlook • LME copper price averaged $2.50/lb 2015 (2014: $3.11/lb) China • Price remains under pressure as mine supply grows modestly • Small surpluses expected in 2016 and 2017 “New Normal” in China? • Market tightens from 2018 onwards o Consumption led economy • Cost curve pushed down and flattened as producers cut costs o Slower sustained growth • external factors (FX and Oil) provide additional relief o Investment in power grid • Benchmark TC/RCs set lower 9% than in 2015 o Spending to support geopolitical • Optimistic in medium and long term, supported by copper ambitions fundamentals o One Belt, One Road Global Supply and Demand o Resources to prevent a hard landing 40 13 th five-year plan – limited fiscal o Base Case Production Capability Highly Probable Projects 35 stimulus Probable Projects 30 Possible Projects Primary Demand 25 Mt 20 Our Experience 15 10 First hand experience suggests China demand growth 5 has slowed, but we still see meaningful increases of copper imports into China 0 1992 1997 2002 2007 2012 2017 2022 2027 Source: Wood Mackenzie Q4 2015 Copper Outlook 9
Operations review and growth opportunities 10
Strategy Existing core business • Constant focus on cost management and compliance • Delivery of production and cash cost guidance • Continue to get the best possible performance from existing assets • Proactive new approach with community and other stakeholders Organic & sustainable growth of the core business • Complete Antucoya on budget • Complete Centinela 105 ktpd expansion • Progress Encuentro Oxides • Complete Centinela Second Concentrator and Los Pelambres Incremental Expansion feasibility studies and advance permitting Growth beyond the core business • Progress international exploration activities • Continue optimisation of Twin Metals Minnesota pre-feasibility study • Monitor potential acquisition opportunities 11
Operations overview Los Pelambres 2014 2015 Centinela 2014 2015 266,600t Cu 221,100t Cu 391,300t Cu 363,200t Cu C1 $1.63/lb C1 $1.85/lb C1 $1.18/lb C1 $1.23/lb Lower throughput due to harder Lower grade ore zone of the mine Throughput expansions progressing Highest molybdenum production since 2012 Protests in Q1 2015 Michilla 2014 2015 Group 2014 2015 47,000t Cu 29,400t Cu 704,800t Cu 630,300t Cu (1) C1 $2.38/lb C1 $2.14/lb C1 $1.43/lb C1 $1.50/lb Lower production at Los Placed on care and maintenance at Pelambres and Centinela the end of 2015 Completed construction of Antucoya, with commissioning in Q2 2016 1. Includes 4.4kt from Zaldívar and 12.2kt from Antucoya 12
Growth opportunities Centinela Second Encuentro Antucoya (1) Concentrator (3) Oxides (1) Cu: 85ktpa (2) Cu: 50ktpa (2) Cu: 140ktpa (2) Capex:$1,900m Capex:$636m Capex:$2,700m 2016 2017 2018 2019 2020+ Centinela Centinela 105ktpd (1) Moly Plant (1) Los Pelambres Phase 1 Los Pelambres Phase 2 Cu: 10-12ktpa (2) Incremental Expansion (3) Incremental Expansion (3) Mo: 2,400tpa (2) Capex:$110m Cu: 60ktpa (2) Cu: 35ktpa (2) Capex:$125m Capex:$1,100m (4) Capex:$500m Ramp-up 1. Feasibility study figures 2. Estimated figures for the first five years Construction 3. Pre-feasibility study figures Feasibility study 4. Including desalination plant 13
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