MMG Limited (MMG) today released its full year financial results for the period ended 31 December 2021.
Highlights:
- Total recordable injury frequency (TRIF) improved 21% on the prior year.
- Total copper and zinc production of 339,681 tonnes and 249,767 tonnes respectively.
- EBITDA of US$2,725.4 million representing a 98% increase on the prior year driven by higher commodity prices and strong production at Dugald River and Rosebery.
- Net debt decreased by US$1,952.8 million on the back of strong cash flow from operations and the US$299.0 million equity issuance completed in June 2021.
- On 24 March 2022, the MMG Board approved the development of the Kinsevere Expansion Project which involves the mining and processing of Kinsevere’s sulphide ore body and the construction of a roaster and cobalt processing circuit. The project will extend the life of the operation for 13 years from 2022.
- Las Bambas has received regulatory approval from the Peru Ministry of Energy and Mines for the development of the Chalcobamba pit and associated infrastructure. The development of the Chalcobamba deposit is expected to underpin a production increase at Las Bambas to around 380,000-400,000 tonnes of copper concentrate per annum for the medium term.
- Growth remains the focus for the Company with the Kinsevere Expansion Project and the Chalcobamba development expected to add in excess of 150,000 tonnes of annual copper equivalent production by 2025 (from 2021 levels).
Commentary from Liangang Li, interim Chief Executive Officer:
“I am pleased to present MMG’s 2021 annual result, my first as interim CEO.
In January this year we announced that Geoffrey Gao was stepping down as CEO to return to a role with our major shareholder China Minmentals Corporation in Beijing.
Geoffrey and our former Chairman Mr Wenqing Guo have handed over a business in very good health.
After two years of pandemic-induced challenges, we are now able to forge ahead with our growth plans following the Board’s approval of the Kinsevere Expansion Project and the regulatory approval of the Chalcobamba development.”
Safety
“In 2021, we continued to contend with the COVID-19 pandemic and our global teams have worked flexibly to maintain continuous operations.
We continued to focus on eliminating injuries in the workplace and pleasingly delivered a 21% reduction in our full year Total Recordable Injury Frequency (TRIF) to 1.09 for the full year.
We were, however, saddened and shocked by the tragedy which occurred on 27 August 2021, when a vehicle transporting 18 contractors from Cusco to the Las Bambas mine left the road in the Cotabambas province causing the death of 16 people and leaving two injured. This loss has deeply impacted all of us at MMG and Las Bambas and we extend our deepest sympathies to the families and friends of those lost.”
Financial Performance
“Higher commodity prices enabled us to deliver a record net profit after tax result of US$920.5 million. MMG recorded an earnings before tax, depreciation, amortisation and impairment (EBITDA) result of US$2,725.4 million which is 98% higher than in 2020.
During the year we also substantially strengthened our balance sheet and reduced net debt by US$1,952.8 million due to strong cash flow generation from operations and the proceeds from the US$299.0 million equity issuance which was completed in June. This enabled us to substantially reduce our gearing from 73% in 2020 to 56% in 2021.
While total capital expenditure in 2021 was lower than planned, reflecting the delay in advancing key capital projects at Las Bambas and Kinsevere, this will now flow into 2022.”
Outlook
“As the global clean energy transition accelerates, our portfolio is strongly leveraged to the critical materials that will make this transition possible.
As we look ahead to 2022, we have two primary growth projects at Chalcobamba and the Kinsevere Expansion Project.
Together, these projects deepen our commitment to Africa and Latin America, secure a strong and very compelling future for both assets and add a further 150,000 tonnes of annual copper equivalent production per annum by 2025.
We will also continue to evaluate future growth and expansion opportunities across our Australian portfolio and to assess external growth opportunities for our shareholders. “
MMG expects to produce between 345,000-370,000 tonnes of copper at Las Bambas and Kinsevere in 2022. Total zinc production is expected to range between 225,000-255,000 tonnes at Dugald River and Rosebery.
Please download a full copy of the MMG 2021 Annual Results Announcement here.
ENDS