INVESTING IN SUSTAINABLE GROWTH 2007 annual general meeting CEO - - PowerPoint PPT Presentation

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INVESTING IN SUSTAINABLE GROWTH 2007 annual general meeting CEO - - PowerPoint PPT Presentation

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INVESTING IN SUSTAINABLE GROWTH 2007 annual general meeting CEO business overview Slide 15 - Total shareholder Basic EPS & dividends per share (cents)

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SLIDE 1

GROWTH INVESTING IN SUSTAINABLE

2007 annual general meeting – CEO business overview

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SLIDE 2

Slide 15

35.6

  • 3.6

43.3 11 5 FY2005 FY2006 FY2007 Basic earnings per share Dividends per share

Basic EPS & dividends per share (cents) Formal business Broken Hill Flinders Mount Oxide Growth Corporate

  • Total shareholder

return 87%

  • Record $82.5m

net profit after tax – up 23 %

  • Over $200m in

cash & receivables

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SLIDE 3

Slide 16

6 7

  • Fatality at Broken Hill
  • Development of third source of
  • re at Broken Hill
  • Development of Flinders stage 1
  • Broken Hill reserves sustained

above that acquired five years ago

  • Independent share register
  • Lead late mover in base metal

complex

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 4

Slide 17

8-(6

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 5

Slide 18

Perilya share price versus zinc & lead price (LME Spot) 100 200 300 400 500 600 Oct 2006 Jan 2007 Apr 2007 Jul 2007 Oct 2007 (CENTS/SHARE) 1000 2000 3000 4000 5000 6000 (US$/TONNE)

1-

ASX: PEM Shares on issue: 196M Options: 4.3M Market capitalisation: A$760M

(Undiluted at $3.88 per share)

Average daily turnover: 1.1%

(12 month undiluted average)

KEY SHAREHOLDERS: AXA Group: 11.4% Barclays Global Investors: 9.0% Alliance Bernstein: 7.6% Delta Partners: 5.5% Board & Employees: 2.1%

Perilya share price vs zinc & lead price (LME Spot)

LEAD ZINC PEM

Geographic analysis of Share Register (28 Sep 2007)

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

15 30 45 60 75 90 Australia UK North America Europe (ex UK) Asia New Zealand Unknown

Shares (m)

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SLIDE 6

Slide 19

Corporate Tim Carstens Non exec Karen Field Exploration Bruce Hooper Non exec Evert van den Brand Sustainability Peter Eggleston Non exec Phil Lockyer Flinders Wayne Loxton Non exec Peter Harley Broken Hill Rob Scargill CEO & MD Len Jubber Finance Tim Manners Chairman Patrick O’Connor CEO Len Jubber

Board of directors Executive management

%9 7!

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 7

Slide 20

:'6

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

LME stock piles (RHS) vs Zinc price (LHS)

tonnes US$ per tonne

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SLIDE 8

Slide 21

&'9 !

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

  • 25,000

50,000 75,000 100,000 125,000 150,000 175,000 200,000

Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07

  • 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

LME stock piles(RHS) vs Lead price (LHS)

tonnes US$ per tonne

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SLIDE 9

Slide 22

%

37!

Broken Hill – 13th largest zinc mine Near term exposure through the Flinders project Low capex growth path to top 10 zinc producer status Broken Hill – 6th largest lead mine :

  • resource upside as

focus in recent decades has been on zinc

  • leverage to upside

through put options, down side protection Mount Oxide:

  • resource open in all

directions

  • potentially low

development threshold Tampang:

  • Proven Cu/Ag

porphry system

25 50 75 100 125 O c t 4 O c t 5 O c t 6 O c t 7

LME Stockpiles (kt)

1,000 2,000 3,000 4,000

Lead Price (US$/t)

Lead

150 300 450 600 750 Oct 04 Oct 05 Oct 06 Oct 07

LME Stockpiles (kt)

1,000 2,000 3,000 4,000 5,000

Zinc Price (US$/t)

Zinc

50 100 150 200 250 Oct 04 Oct 05 Oct 06 Oct 07

LME Stockpiles (kt)

2,000 4,000 6,000 8,000 10,000

Copper Price (US$/t)

Copper

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 10

Slide 23 Note : Cu as at 2007/08 Zn, Pb as at 2006/07

Operating Operating Projects Projects Exploration Exploration

Tampang (Cu, Au) Tampang (Cu, Au)

Mount Oxide (Cu) Mount Oxide (Cu)

Beltana (Zn) Beltana (Zn) Broken Hill (Zn, Pb, Ag) Broken Hill (Zn, Pb, Ag)

Dee Range (Cu, Zn) Dee Range (Cu, Zn)

Potosi (Zn, Pb, Ag) Potosi (Zn, Pb, Ag) North Mine Deeps (Zn, Pb, Ag) North Mine Deeps (Zn, Pb, Ag)

Flinders (Zn) Flinders (Zn)

Operating Operating Projects Projects Exploration Exploration

Tampang (Cu, Au) Tampang (Cu, Au)

Mount Oxide (Cu) Mount Oxide (Cu)

Beltana (Zn) Beltana (Zn) Broken Hill (Zn, Pb, Ag) Broken Hill (Zn, Pb, Ag)

Dee Range (Cu, Zn) Dee Range (Cu, Zn)

Potosi (Zn, Pb, Ag) Potosi (Zn, Pb, Ag) North Mine Deeps (Zn, Pb, Ag) North Mine Deeps (Zn, Pb, Ag)

Flinders (Zn) Flinders (Zn)

Mount Oxide (Cu) Mount Oxide (Cu)

Ore Reserves

0.0 0.2 0.4 0.6 0.8 1.0 Zinc Lead

Contained Metal Mt

Mineral Resources

0.0 0.5 1.0 1.5 2.0 2.5 Zinc Lead Copper

Contained Metal Mt

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 11

Slide 24

Growth platform:

Strong earnings Strong balance sheet. Two year revenue protection Org structure geared for growth

ORGANIC & NEW BUSINESS GROWTH

BROKEN HILL (NSW)

  • Plant and equipment
  • Potosi exploration decline
  • Flying Doctor feasibility

study

  • North Mine Deeps

pre feasibility Study

  • Near mine exploration
  • Regional exploration

MOUNT OXIDE (QLD)

  • Triple Cu resources to

300 kt

  • Pre feasibility study in

March Q 2008 FLINDERS (SA)

  • Stockpile 90 kt zinc at

Beltana by Dec 2007

  • Cultivate off take market
  • Commence direct ore

sales by Dec 2007

  • Reliance feasibility study
  • Regional exploration

COMMODITY & CURRENCY MARKETS

  • Lead and currency
  • ptions

,7!

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 12

Slide 25

  • Fifth anniversary since acquisition
  • 1 millionth tonne of metal in Dec qtr
  • Five year mine life maintained
  • Investing $40 million in new projects

& plant / equipment renewal in 07/08

  • Investing $12 million in exploration in

07/08

! '8 Largest mining lease holder in 127 year Broken Hill history

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 13

Slide 26

'8

  • North Mine Deeps

0.2 – 0.4 Mt per annum North Mine Deeps 0.2 – 0.4 Mt per annum North Mine 0.1 – 0.2 Mt per annum North Mine 0.1 – 0.2 Mt per annum Southern Operations 1.9 Mt per annum Southern Operations 1.9 Mt per annum Potosi 0.2 – 0.4 Mt per annum Potosi 0.2 – 0.4 Mt per annum

evaluating existing

  • re feed

Broken Hill Concentrator

2.8 Mt Capacity

Southern Operations North Mine Potosi & Flying Doctor North Mine Deeps

Satellite open pitable deposits–Henry George? Satellite open pitable deposits–Henry George?

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

Flying Doctor 0.25 – 0.5 Mt per annum Flying Doctor 0.25 – 0.5 Mt per annum

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SLIDE 14

Slide 27

;

5 km

North Mine Southern Operations

City

Potosi

Piesses Knob Flying Doctor Round Hill Southern Ops Extensions

Stirling Vale 1130 Smiths Sam Deeds Henry George Monarch Flat Exploration targets

Mill

Surface projection of ore bodies Perilya Broken Hill Mining Lease Existing Operations

  • A$12M exploration budget 2007/08

−

extend existing resources − identify new satellite ore bodies − major new discovery

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 15

Slide 28

%3*4

5<9=>90=

Potosi Resource

2.36 Mt @ 11.7% Zn, 4.6% Pb, 54g/t Ag

Flying Doctor

0.52 Mt @ 5.4% Zn, 7.1% Pb, 72g/t Ag

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 16

Slide 29

?!

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 17

Slide 30

8@

A

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 18

Slide 31

'8

!

  • 25% spare capacity in

concentrator worth:

$150 million in revenue US20 ¢/lb zinc reduction in cash cost

  • Continued incremental

expansion of existing ore bodies:

maintaining longevity maximising throughput

  • Quantum change through

discovery of substantial new

  • re body

Production, Reserves and Resources

10 20 30 40

Mar 02 Mar 03 Mar 04 Mar 05 Jun 06 Jun 07 T o n n e s (M t)

Ore Reserve Remaining Mineral Resource Cumulative Production

Potosi

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 19

Slide 32

*>;B

Existing infrastructure + direct high grade ore shipping + high Zn price = superior IRR

Rail line Tenements Rail line Tenements

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 20

Slide 33

C55)<=:D'

  • Cluster of shallow

deposits

  • Currently mining

Beltana

  • Drilling along strike

Rail Road 5 km Exploration targets Operation Relative scale of current resource Development targets

Leigh Creek

Beltana Mine

Reliance Moolooloo Aristotle Aroona II Tom Thumb Aroona Sundown Wallrider

Leigh Creek

Beltana Mine

Reliance Moolooloo Aristotle Aroona II Tom Thumb Aroona Sundown Wallrider

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 21

Slide 34

>'

Actual Forecast Super high grade 35% above High grade 30 - 35% Mid grade 25- 30% Low grade 18 - 25% Very low grade 10 - 18%

Contained (Zn) tonnes

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

  • 10,000

20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08

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SLIDE 22

Slide 35

Hypogene willemite deposits

  • Giant and high grade deposits
  • Vazante

28.5Mt @ 18% Zn

  • Kabwe

12.3Mt @ 25.2% Zn, 10.7% Pb

  • Franklin

21.8Mt @ 19.5% Zn

  • Can carry metallurgy

Flinders 0.96Mt @ 31% Zn

  • Hampered by episodic exploration campaigns
  • Mostly resource definition
  • Consistent large target exploration required

*B

+EF' 9

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 23

Slide 36

$2;

!!B

  • Mt Isa region
  • Resource 4.0Mt at 2.8 % Cu
  • Close to existing infrastructure
  • $3.5m drilling budget to Dec 2007

Pre-feasibility study Mar Q 2008

  • Excellent drilling results

26m @ 1.5% Cu from 119m 28m @ 1.4% Cu from 9m

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 24

Slide 37

$2;

  • +0.2% Cu

Ivena

Newly identified additional target zone (800m strike)

Existing Resource – 112 Kt Cu

Hematite Breccia Hematite Breccia

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 25

Slide 38

Exploring

Southern Operations North Mine Beltana Potosi Flying Doctor North Mine Deeps Reliance Mount Oxide Tampang

Zinc, Lead Zinc Copper Feasibility Evaluating Developing Operating

%

;E3

Southern Ops North Mine Beltana Potosi Flying Doctor North Mine Deeps Reliance Mount Oxide Tampang

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 26

Slide 39

'8

>7!

  • 50,000

100,000 150,000 200,000 250,000

Contained Zinc (tonnes)

Broken Hill Southern Operations Reserves Broken Hill Southern Operations Resources & Upside Potosi Resource North Mine Deeps Potential Beltana

High Grade & Intermediate Ore

Potosi Upside Broken Hill

North Mine

Flinders Resource Potential 2007 onwards

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 27

Slide 40

>3

  • 200

400 600 800 1,000 1,200 Xstrata Teck Cominco Glencore Zinifex Hindustan Zinc Anglo American New Boliden Minera Volcan Votorantim Industrias Penoles Perilya (including projects) Lundin Mining Corporation BHP Billiton Breakwater Resources Kazakhmys Oxiana HudBay Minerals Yunnan Chihong Metallurgy Perilya (current) Grupo Mexico Shenzhen Zhongjin Lingnan Omnium Nord Africain Annual zinc production ('000 tonnes per annum)

  • 50

100 150 200 250 300 BHP Billiton Xstrata The Doe Run Company Teck Cominco Anglo American Glencore Minera Volcan Perilya Zinifex Hindustan Zinc Western Mining Industrias Penoles New Boliden Ivernia West Lundin Mining Corporation Shenzhen Zhongjin Lingnan Hunan Nonferrous Ind Yunnan Chihong Metallurgy Exxaro Resources ZGH Boleslaw Annual lead production ('000 tonnes per annum)

Annual lead production by company (top 20) Annual zinc production by company (top 20)

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 28

Slide 41 Source: WilsonHTM, IRESS – 22 Aug 2007

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

%

!3

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SLIDE 29

Slide 42

  • Built stable platform for growth
  • Relevant global producer with significant scope for volume and cash

cost enhancement

  • Two operating mines
  • Strong pipe line of advanced, low capital intensive development projects
  • Significant land holdings in world class mineralisation provinces
  • Organisational capability aligned with growth model

Top 20 zinc producer and top 10 lead producer %

!

Formal business Broken Hill Flinders Mount Oxide Growth Corporate

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SLIDE 30

GROWTH INVESTING IN SUSTAINABLE

2007 annual general meeting – close