The Construction, Commissioning and Ramp-Up of the Prominent Hill Mine John Nitschke Executive General Manager Projects and Technical Services AUSIMM - Technical Meeting & AGM Tuesday 10th November 2009
OZ MINERALS: CURRENT STATUS Prominent Hill ramping-up to name-plate capacity by end of 2009. Feasibility study on underground expansion at Prominent Hill underway. Cambodia Operation Exploration MARKET STATISTICS ASX-listed (OZL, S&P/ASX 100). 3,121m issued shares. Average turnover; 30m shares/ day. Market capitalisation; A$3.7 billion. Exploration accelerated at Prominent Hill and in Cambodia. Prominent Hill copper-gold operation SHAREHOLDER BASE A$1 billion cash at 30 June 2009. AUSTRALIA US$105m convertible note only debt. Headquarters 115,000 shareholders
COPPER: STRONG OUTLOOK > Chinese and Indian demand for copper has a long way to go. COPPER INTENSITY OF USE > Supply will be a challenge. COPPER SUPPLY/DEMAND FORECAST LONG TERM 22 Copper (Mt) 18 Forecast 14 Refined production Consumption demand 1998 2000 2002 2004 2006 2008 2010e 2012e 2014e 2016e 2018e 2020e Source: World Bank, CRU COPPER MINE PRODUCTION LOSSES FROM PLAN Source: ICSG; Brook Hunt; Citi COPPER PRICE FORECAST BROKER CONSENSUS '000t Source: Brook Hunt, Macquarie Research, June 2009
PROMINENT HILL Initial Discovery Minotaur Resources November 2001
PROMINENT HILL Development Timeline 2003 Oxiana Joint Venture 2005 Oxiana takes over Minotaur 100% ownership 2005 Pre-Feasibility Study Conceptual Development Plan Agreement on approval process with PIRSA 2006 Bankable Feasibility Study MARP approval EPBC Act Approval Woomera Access Deed Native Title Agreement Issue of mining lease Power connection agreement with BHPB Project Board Approval Commence mining on site 2007 Project development and construction First ore achieved October 2008 Project development and construction Operations team build-up 2009 First ore to mill February First domestic sales February First concentrate shipment April
PROMINENT HILL Discovery to Production in 7 years Location: Ownership: 100%. First production: Reserves: Resources: Mine: Product: South Australia, Australia. February 2009, completing ramp up. 72.4Mt @ 1.3% Cu, 0.6g/t Au, 3.2g/t Ag. (0.95Mt Cu, 1.4Moz Au, 7.5Moz Ag) 289Mt @ 0.9% Cu, 0.8g/t Au, 2.5g/t Ag, (2.6Mt copper, 7.6Moz gold, 23Moz silver). Open pit, mining contractor Thiess High grade (+50% Cu), high quality, copper concentrate Estimated mine life: Plant: Production: 2009E C1 costs 2009E: 9 years for Stage 1 open pit. Potential underground capable of supporting mine life and throughput expansion. 8Mtpa crush, grind, flotation. 85,000t to 90,000t contained copper, 60,000oz to 70,000oz gold. US$0.70 US$0.75/lb
OZ MINERALS PROJECT EXPERIENCE Sepon Gold and Copper Plant 2001-2005
LESSONS LEARNT FROM SEPON! Resources and Reserves drive project! Team selection is critical get the best available! Recruit operations team early! Get things right first time and completed as early as possible! EPCM Project Manager is a critical role! Effective systems for Project Controls and material management crucial! Place contracts early! Ensure a good linkage between the home office and the site construction team
CHALLENGES PROMINENT HILL 2005/06 Crusher Delivery 76 Weeks Mills 66 Weeks going to 80 Mining Equipment 60+ Weeks Tyres Not available Intense competition for scarce people resources
STRATEGIES ADOPTED! Target high quality partners! Adelaide base! Early commitment to Mining Contractor and long lead items! Early engagement with potential service providers! Two contractors for key construction contracts! Partner of choice in the wider South Australian Community! Assemble construction, dedicated commissioning and operations teams early! Strategic application of latest technology
HOW DID WE GO
PROMINENT HILL Safety Performance
PROMINENT HILL Construction Peak manpower 1,200 Manhours 4.3 million No of flights/week 37 Trucks/day 23 Meals/day 2,400 Litres of fuel (diesel)/day 113,000 Concrete 23,000 m 3 Tonnes of steel 2,400 t Metres of cable 252,000 m Metres of pipe 43,000 m
PROMINENT HILL Construction Using South Australian Businesses Adelaide ~ $470M! Earthworks! Roads! Tailing storage facility! Structural/mechanical installation! Powerline & substations! Pipelines! Village construction! Waste water treatment plant! Mining truck assembly! Concrete! Steel supply! Freight! Sports facilities South Australia Regional ~ $25M e.g. Whyalla, Mt Gambier, Port August! Village power installation! Fabricated tank supply! Tank installation! Crane hire! Vehicle hire! Powerline installation Coober Pedy ~ $4M! Road watering! Labour hire! Temporary road construction! Fencing! Sign writing! Building! Local procurement, i.e. transport, baker, all local services
PROMINENT HILL Processing Start-up and Ramp-up Performance 2009 Production Performance Q1 Q2 Q3 Ore Mined (mt) 1.86 2.54 1.57 Ore Milled (mt) 0.69 1.82 1.73 Cu recovery 47% 78% 81% Au recovery 47% 59% 65% Cu produced (t) 4,338 27,159 28,316 Au produced 5,567 18,351 21,091 C1 Cash Costs (U$ c/lb 130 69 73.4 Total Recordable Injuries 7 1 6
KEY METRICS Actual Target First Ore to Mill 10 February 2009 1 July 2008 Capital Cost $ 1,150M $ 850M First Concentrate Shipment 26 February 2009
PROMINENT HILL Processing Plant IsaMill and Jameson Cell! IsaMill / Jameson cell - innovative technologies! IsaMill high energy efficiency fine grinding mill required to liberate fluorine and uranium.! Jameson cell high intensity and froth washing to reduce gangue entrainment
WHAT DID WE LEARN! Ensure good linkage between the home office and site construction team! Plan for continuity of critical team members! Don t rely on others for your project controls! Incentives in contracts can drive unwanted behaviour! Need good focus on quality controls! Have clear objectives
PROMINENT HILL Underground Development Concept
DISTRICT EXPLORATION High potential for a new regional discovery! Large under-explored tenement holding, highly prospective for IOCG deposits! Now drilling 22 geophysical targets! Several broad zones of IOCG-style alteration systems intersected
IMPORTANT NOTICE This presentation has been prepared by OZ Minerals Limited ( OZ Minerals ) and consists of written materials/slides for a presentation concerning OZ Minerals. By reviewing/attending this presentation, you agree to be bound by the following conditions. No representation or warranty, express or implied, is made as to the fairness, accuracy, or completeness of the information, contained in the presentation or of the views, opinions and conclusions contained in this material. To the maximum extent permitted by law, OZ Minerals and its related bodies corporate and affiliates, and its respective directors, officers, employees, agents and advisers disclaim any liability (including, without limitation any liability arising from fault or negligence) for any loss or damage arising from any use of this material or its contents, including any error or omission there from, or otherwise arising in connection with it. Some statements in this presentation are forward-looking statements within the meaning of the US securities laws. Such statements include, but are not limited to, statements with regard to capacity, future production and grades, projections for sales growth, estimated revenues and reserves, targets for cost savings, the construction cost of new projects, projected capital expenditures, the timing of new projects, future cash flow and debt levels, the outlook for minerals and metals prices, the outlook for economic recovery and trends in the trading environment and may be (but are not necessarily) identified by the use of phrases such as will, expect, anticipate, believe and envisage. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and may be outside OZ Mineral s control. Actual results and developments may differ materially from those expressed or implied in such statements because of a number of factors, including levels of demand and market prices, the ability to produce and transport products profitably, the impact of foreign currency exchange rates on market prices and operating costs, operational problems, political uncertainty and economic conditions in relevant areas of the world, the actions of competitors, activities by governmental authorities such as changes in taxation or regulation. Given these risks and uncertainties, undue reliance should not be placed on forward-looking statements which speak only as at the date of the presentation. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, OZ Minerals does not undertake any obligation to publicly release any updates or revisions to any forward looking statements contained in this presentation, whether as a result of any change in OZ Minerals expectations in relation to them, or any change in events, conditions or circumstances on which any such statement is based. Certain statistical and other information included in this presentation is sourced from publicly available third party sources and has not been independently verified. Cautionary Note Regarding the Financial Information Included in the Presentation The merger of Oxiana Limited and Zinifex Limited to form OZ Minerals Limited became effective from 1 July 2008. All historical financial information in this presentation is that of Oxiana Limited and Zinifex Limited. No audited historical financial information is available for OZ Minerals Limited as a stand-alone entity. The pro forma financial information for OZ Minerals is based on the assumption that Oxiana and Zinifex had been merged for the whole of the six month period to 30 June 2008. This pro forma information is unaudited and is provided solely for the purposes of providing recipients with a profile of the merged company. It is not necessarily indicative of the consolidated results of operations or financial position that OZ Minerals would have actually obtained during the period presented and is not necessarily representative of the consolidated results of operations or financial position that the company expects in future periods. All figures are expressed in US$ unless stated otherwise.
THANKYOU WWW.OZMINERALS.COM