Global Metals, Mining & Steel Conference Presentation
IMPORTANT NOTICES
THIS PRESENTATION SHOULD BE READ IN CONJUNCTION WITH THE "FINANCIAL RESULTS AND OUTLOOK - HALF YEAR ENDED 31 DECEMBER 2016" ANNOUNCEMENT RELEASED ON 16 FEBRUARY 2017, WHICH IS AVAILABLE ON SOUTH32'S WEBSITE (WWW.SOUTH32.NET).
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SOUTH 32
FORWARD LOOKING STATEMENTS
This presentation contains forward-looking statements, including statements about trends in commodity prices and currency exchange rates; demand for commodities; production forecasts; plans, strategies and objectives of management; capital costs and scheduling; operating costs; anticipated productive lives of projects,
mines and facilities; and provisions and contingent liabilities. These forward-looking statements reflect expectations at the date of this presentation, however they are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond our
control, and which may cause actual results to differ materially from those expressed in the statements contained in this presentation. Readers are cautioned not to put undue reliance on forward-looking statements. Except as required by applicable laws or regulations, the South32 Group does not undertake to publicly update
or review any forward-looking statements, whether as a result of new information or future events. Past performance cannot be relied on as a guide to future performance. The denotation (e) refers to an estimate or forecast year.
NON-IFRS FINANCIAL INFORMATION
This presentation includes certain non-IFRS financial measures, including Underlying earnings, Underlying EBIT and Underlying EBITDA, Underlying basic earnings per share, Underlying effective tax rate, Underlying EBIT margin, Underlying EBITDA margin, Underlying return on capital, Free cash flow, net debt, net operating
assets and ROIC. These measures are used internally by management to assess the performance of our business, make decisions on the allocation of our resources and assess operational management. Non-IFRS measures have not been subject to audit or review and should not be considered as an indication of or
alternative to an IFRS measure of profitability, financial performance or liquidity.
NO OFFER OF SECURITIES
Nothing in this presentation should be read or understood as an offer or recommendation to buy or sell South32 securities, or be treated or relied upon as a recommendation or advice by South32.
RELIANCE ON THIRD PARTY INFORMATION
Any information contained in this presentation that has been derived from publicly available sources (or views based on such information) has not been independently verified. The South32 Group does not make any representation or warranty about the accuracy, completeness or reliability of the information. This presentation
should not be relied upon as a recommendation or forecast by South32.
NO FINANCIAL OR INVESTMENT ADVICE - SOUTH AFRICA
South32 does not provide any financial or investment 'advice' as that term is defined in the South African Financial Advisory and Intermediary Services Act, 37 of 2002, and we strongly recommend that you seek professional advice.
MINERAL RESOURCES AND ORE RESERVES
The information that relates to the Mineral Resource and Ore Reserve estimates of Worsley Alumina, Illawarra Metallurgical Coal, Cannington, South Africa Energy Coal, Australia Manganese, South Africa Manganese, Cerro Matoso and Brazil Alumina was declared as part of South32's Annual Resource and Reserve
declaration in the FY16 Annual Report (www.south32.net). South32 confirms that it is not aware of any new information or data that materially affects the information included in the original announcement. All material assumptions and technical parameters underpinning the estimates and Reserve Life and Resource Life in the
relevant market announcement continue to apply and have not materially changed. South32 confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.
Reserve life is calculated based on the current stated Ore Reserves divided by the current approved nominated production rate as at the end of FY16. Reserve life information is based on the previously disclosed FY16 annual Resource and Reserve statement (pg. 73-84 of the South32 Annual Report 2016).
Resource life is estimated from the FY16 Classified Mineral or Coal Resources (as applicable), and as provided in the FY16 annual Resource and Reserve statement, converted to a run-of-mine basis using historical Mineral or Coal Resources (as applicable) to Ore Reserves conversion factors, divided by the nominated run-
of-mine production rate on a 100 per cent basis. Resource life calculations are indicative only and do not necessarily reflect future uncertainties such as economic conditions, technical or permitting issues. Historical Mineral or Coal Resources to Ore Reserves conversion factors may not be indicative of future conversion
factors. Resource Life is based on the company's' current expectations of future results and should not be solely relied upon by investors when making investment decisions. There is a low level of geological confidence associated with Inferred Mineral resources and there is no certainty that further exploration will result in the
determination of indicated resources.
Weighted average individual operations Mineral or Coal Resources (as applicable) to Ore or Coal Reserves conversion factors and run-of-mine tonnages are as follows:
Worsley Alumina: 0.85, 17.4Mt; Illawarra Metallurgical Coal: Bulli 0.38, 6.9Mt, Wongawilli 0.34, 4.8Mt; Cannington: 0.32, 3.3Mt; South Africa Energy Coal: Khutala 0.36, 5.26Mt, Klipspruit 0.89, 7.7Mt, Wolvekrans-Middelburg Complex (WMC) 0.86, 20Mt, Australia Manganese: 0.71, 8.8Mt;
South Africa Manganese: Mamatwan: 0.72, 3.5Mt, Wessels: 0.6, 0.9Mt; Cerro Matoso: 0.35, 3.2Mt and Brazil Alumina: 0.99, 17.75Mt.
For Brazil Alumina, South32 is not aware of any new information or data that materially affects the information included in the announcements mentioned above and, in the case of estimates of Mineral Resources or Ore Reserves, all material assumptions and technical parameters underpinning the estimates in the relevant
market announcement continue to apply and have not materially changed. In addition, the form and context in which the Competent Persons' findings are presented have not been materially modified.
Competent Persons for Worsley Alumina (G Burnham, AusIMM), Illawarra Metallurgical Coal (M Rose, AusIMM), Cannington (T Curypko, AusIMM and M Readford, AusIMM(CP)), South Africa Energy Coal (P Mulder, SAIMM), Australia Manganese (U Sandilands, AusIMM) and Cerro Matoso (I Espitia, AusIMM) have reviewed
and revised the historical conversion rates and production rates for the operations and revised the information inline with this new information and consent to their publication in the form and context in which it appears.
16 MAY 2017
BANK OF AMERICA MERRILL LYNCH - GLOBAL METALS, MINING & STEEL CONFERENCE
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