Group 1 - The core point of the news is that Minmetals Resources (01208.HK) announced the acquisition of Anglo American's nickel business in Brazil for up to $500 million, expected to be completed in Q3 of this year [1][2] - The target company, Anglo American Níquel Brasil Ltda., operates two active mines and two greenfield development projects in Brazil, producing nickel iron primarily for high-quality stainless steel and heat-resistant steel [1][2] - The acquisition aligns with Minmetals Resources' strategy to expand revenue, regional coverage, and the variety of base metal commodities, marking its first investment in Brazil and adding nickel to its mineral resources and ore reserves [2] Group 2 - The target company is one of the largest and lowest-cost nickel iron producers globally, with an annual nickel production of approximately 40,000 tons from its Barro Alto and Codemin mines, generating positive operational earnings and cash flow even at current nickel price levels [2] - The nickel resource of the target company is about 5.2 million tons, making it the third-largest nickel resource globally, providing a unique opportunity for Minmetals Resources to establish a large regional platform with significant production growth potential [2] - Anglo American's recent strategic actions include rejecting a $39 billion all-stock acquisition proposal from BHP, focusing on divesting non-core businesses, and planning to split its platinum business for independent listing [3]

Investment Rating - The report assigns an "Outperform" rating for the company [3]. Core Views - The company is expected to see significant growth in copper production due to the recovery of its core Las Bambas copper mine, which is projected to increase production from 32.3 thousand tons in 2024 to over 40 thousand tons in 2025 [1][31]. - Financial pressure is gradually decreasing as the company has implemented measures to reduce interest-bearing debt, with total loans decreasing from 76.92 billion USD in 2019 to 47.48 billion USD in 2023 [2]. - The company anticipates a substantial increase in copper production over the next five years, with total copper output expected to exceed 600 thousand tons [2]. Summary by Sections Company Overview - The company, MMG Limited, is a rapidly growing international mining company primarily engaged in the extraction of copper, zinc, and other base metals, with a significant focus on copper, which accounted for 76% of its revenue in 2023 [10][19]. Revenue and Profit - The company's revenue is heavily reliant on copper, which has consistently contributed over 70% to total revenue. The projected revenues for 2024 and 2025 are 4.36 billion USD and 5.65 billion USD, respectively, reflecting a growth of 29.7% in 2025 [4][19]. Business Analysis - Las Bambas copper mine is the company's core asset, contributing approximately 70% of total revenue and over 80% of EBITDA. The mine is expected to return to an annual production of over 400 thousand tons, significantly impacting the company's overall performance [23][25]. Financial Forecast and Valuation - The company forecasts net profits of 258 million USD, 457 million USD, and 623 million USD for 2024, 2025, and 2026, respectively, indicating a dramatic increase of 2768% in 2024 [3][4]. - The estimated fair valuation of the company is between 3.20 and 4.40 HKD, with a dynamic P/E ratio of approximately 11-13 times for 2025, suggesting a potential upside of 15%-57% compared to the current stock price of 2.81 HKD [3][4].

Summary of Conference Call Notes Company and Industry - The conference call discusses the mining industry, specifically focusing on the company involved in the Las Bambas mine in Peru and its operations. Key Points and Arguments 1. Removal of Obstacles - **Production Obstacles Removed**: The Las Bambas mine faced significant production and transportation disruptions due to community issues, with nearly 400 days of shutdown over the past five years. Since March 2023, normal production has resumed due to support from the new Peruvian government and improved community relations through long-term agreements [1] - **Financial Obstacles Removed**: The company faced a financial burden from the $2 billion Chucapaca project. However, by bringing in strategic investors in July, financial constraints have been fully alleviated, with expectations of reduced debt levels and leverage by year-end [2] - **Tax Obstacles Removed**: Following the acquisition of Las Bambas for nearly $6 billion, the Peruvian tax authority demanded approximately $2.5 billion in fines. After an appeal, it was determined that $1.7 billion of this was not owed, with a positive outlook on the remaining $900 million, effectively resolving tax issues [3] 2. High Growth Potential - **Production Growth**: The company is projected to be one of the fastest-growing in terms of production within its sector, with copper output expected to reach 490,000 to 540,000 tons, representing a 40% to 56% increase from 2023. The Chucapaca mine is expected to expand to a maximum of 610,000 tons, with significant contributions from the Las Bambas second pit starting in Q2 2024 [4] - **Cost Reduction**: Significant cost reductions are anticipated at Las Bambas, with the first half of 2024 expected to see costs above industry averages, dropping below average in the second half, potentially increasing net profits by approximately $60 million. Costs are also expected to decrease at the Kiva mine and during the ramp-up at Chucapaca [5] - **Financial Expense Savings**: The company plans to reduce financial costs through debt restructuring, with expected savings of several million. With the Federal Reserve's interest rate cuts, a reduction of 100 basis points could save $34 million in financial expenses, with further reductions anticipated next year. Overall, financial expenses are expected to decrease by about $100 million, a 30% reduction [6] 3. Undervaluation - **Dynamic Valuation Low**: Although the static PE valuation appears high, the dynamic PE for next year is expected to be around 7-8 times, significantly lower than peers like Zijin at 12-13 times and Luoyang at 10 times. By 2026, as costs decrease, the PE is projected to drop to 5-6 times [7] - **Relative Valuation Low**: The company’s valuation is lower compared to peers in terms of resource valuation and EV/EBITDA metrics. The static valuation for 2024 is impacted by acquisition costs and interest expenses, but with capacity releases and cost reductions, the company’s performance and valuation are expected to improve significantly [8]

Summary of Conference Call Notes Company and Industry Overview - The discussion primarily revolves around the mining industry, specifically focusing on copper resources and the company's operations in this sector [1][2][5]. Key Points and Arguments 1. **Copper Price Outlook**: The company anticipates a tightening supply in the copper market, which is expected to drive copper prices upward. The global copper production distribution is heavily concentrated in three countries: Chile, Peru, and China [2][5]. 2. **Capital Expenditure Trends**: Over the past 10 to 15 years, capital expenditures peaked around 2011-2012. Since then, new copper mining projects have become increasingly scarce, compounded by declining ore grades and unforeseen disruptions [3]. 3. **Demand Dynamics**: The primary demand for copper is driven by the electricity sector, which accounted for 47% of copper usage last year. The transition in global energy structures is projected to increase overall demand for copper [4]. 4. **Future Supply Deficits**: The company forecasts global copper supply deficits of 250,000 tons in 2024, 240,000 tons in 2025, and 240,000 tons in 2026, supporting a bullish outlook on copper prices [5]. 5. **Company Acquisitions**: The company has enhanced its market position through acquisitions, including the purchase of the Potomac mining project and the Paramas competitor in 2014 [6][7]. 6. **Resource Growth**: The company reported significant growth in its resource base, attributed to the acquisition of the Potomac project and new resources from the Babas project [7]. 7. **Production Challenges**: The company faced production challenges due to community issues at the Abas project, impacting profitability. However, there is potential for improvement if production and sales increase [8]. 8. **Production Estimates**: The Babas project produced approximately 300,000 tons last year, with expectations for this year ranging between 280,000 to 320,000 tons, indicating a potential increase in output [9]. 9. **New Projects**: The company is advancing several new projects, including the Gansville project, which is expected to increase electrolytic membrane production to 80,000 tons, although initial costs may limit profit contributions [10][11]. 10. **Profit Projections**: The company projects net profits of $260 million in 2024, $365 million in 2025, and $467 million in 2026, reflecting a positive outlook on production and earnings growth [14]. Additional Important Content - **Risks**: The company faces risks associated with overseas projects, including potential force majeure events, safety and environmental concerns, and geopolitical risks that could impact production [14].

Investment Rating - The investment rating for the company is "Buy" [4][6]. Core Insights - The company reported a strong production performance in Q3 2024, achieving copper production of 114,700 tons, a year-on-year increase of 22% and a quarter-on-quarter increase of 26%. Zinc production was 46,400 tons, showing a year-on-year decline of 22% and a quarter-on-quarter decline of 8%. The growth in copper production, combined with an upward price cycle for copper, indicates strong momentum for the company's performance [6][4]. - The forecasted net profit attributable to the parent company for 2024-2026 is projected to be $260 million, $365 million, and $467 million, representing year-on-year growth rates of 2793%, 40.35%, and 27.81% respectively. The earnings per share (EPS) are expected to be HKD 0.17, HKD 0.23, and HKD 0.30, with corresponding price-to-earnings (PE) ratios of 15.9, 11.4, and 8.9 times [6][4]. Summary by Sections Production Performance - In Q3 2024, the company achieved a copper concentrate production of 90,600 tons from the Las Bambas mine, marking an 11% year-on-year increase and a 29% quarter-on-quarter increase. This is the highest quarterly production since 2021. The commencement of operations at the Chalcobamba mine has contributed to optimizing resource utilization and maximizing copper output [6][4]. - The Kinsevere expansion project began production in September 2024, with Q3 2024 electrolytic copper production reaching 13,000 tons, a 6% year-on-year increase and a 12% quarter-on-quarter increase [6][4]. Financial Forecasts - The company's revenue is projected to grow from $4.35 billion in 2023 to $4.48 billion in 2024, with a growth rate of 3.1%. The EBITDA is expected to increase from $1.46 billion in 2023 to $1.75 billion in 2024 [7][11]. - The net profit for 2024 is forecasted at $260 million, a significant recovery from $9 million in 2023, with a projected net profit margin improvement [7][11]. Valuation Metrics - The current market capitalization is approximately HKD 32.26 billion, with a total share capital of 12,129 million shares. The book value per share is HKD 1.37, and the debt-to-asset ratio stands at 68.28% [4][6]. - The company’s price-to-book (P/B) ratio is projected to decrease from 2.0 in 2023 to 1.2 in 2024, indicating an improvement in valuation metrics [7][11].

Financial Performance - MMG reported a net profit after tax of $79.5 million for the first half of 2024, compared to a net loss of $24.9 million in the same period of 2023[22]. - Total revenue for H1 2024 was $1,918.2 million, a 1% increase from $1,896.2 million in H1 2023[36]. - EBITDA totaled $779.0 million, a 23% increase from the first half of 2023, supported by higher production and sales at Dugald River and Rosebery[22]. - EBITDA for H1 2024 increased by 23% to $779.0 million, up from $635.8 million in H1 2023[36]. - The net profit for H1 2024 was $79.5 million, a significant turnaround from a loss of $24.9 million in H1 2023, marking a 419% improvement[37]. - Las Bambas contributed $100.3 million in net profit for H1 2024, a 79% increase from $56.1 million in H1 2023[38]. - Kinsevere's revenue increased by 6% to $188.3 million in H1 2024, while EBITDA improved significantly to $41.4 million from a loss of $13.8 million[42]. Production and Sales - Las Bambas produced 126,198 tons of copper in H1 2024, a decrease of 10% compared to H1 2023, primarily due to lower ore grades from the Ferrobamba pit[24]. - Kinsevere produced 21,278 tons of copper, a 2% decrease year-over-year, attributed to mining sequence changes and reduced reliance on high-cost third-party ores[24]. - Dugald River produced 79,284 tons of zinc and 10,799 tons of lead, representing increases of 38% and 65% respectively compared to H1 2023[24]. - Total sales volume of copper decreased by 14% to 157,503 tons, while zinc sales volume increased by 29% to 92,464 tons, and lead sales volume rose by 82% to 23,961 tons compared to 2023[49]. - Revenue for Las Bambas was $1,256.0 million, down 15% from $1,480.4 million in 2023, attributed to decreased sales volumes of copper, gold, silver, and molybdenum[61]. - Revenue for Dugald River increased by $93.4 million (70%) to $226.1 million, driven by higher sales volumes of zinc and lead concentrates[80]. Costs and Expenses - Operating expenses decreased by $193.9 million (15%) to $1,063.2 million, mainly due to changes in inventory at Las Bambas[54]. - Depreciation and amortization expenses increased by $22.0 million (5%) to $467.9 million, primarily due to increased mining volumes at Kinsevere[55]. - Financial costs decreased by $12.3 million (7%) to $168.0 million, mainly due to a reduction in debt balance[55]. - Income tax expenses increased by $29.1 million, reflecting an increase in pre-tax profits compared to the same period last year[55]. - The company experienced a significant increase in administrative expenses, rising by $12.9 million (391%) to $16.2 million due to higher employee benefits and restructuring costs[54]. Development Projects - The company is focused on advancing key development projects, including the expansion of Kinsevere and the Chalcobamba project at Las Bambas[10]. - The Kinsevere expansion project is expected to produce approximately 80,000 tons of electrolytic copper and 4,000 to 6,000 tons of cobalt hydroxide once fully operational[113]. - The Chalcobamba project aims to increase production to 350,000 to 400,000 tons, enhancing local community relations and economic contributions[112]. - MMG aims to increase Khoemacau's annual copper production to 60,000 tons by 2026, with a long-term goal of 130,000 tons by 2028[114]. Financial Strategy - MMG raised $1,152.2 million through a rights issue, with approximately 2.8 times oversubscription, to repay existing debt and finance the Khoemacau acquisition[31]. - The rights issue on June 4, 2024, involved issuing 3,465,432,486 shares at a subscription price of HKD 2.62, representing a discount of approximately 31.41% from the last trading price[106]. - Funds from the rights issue are allocated for debt repayment, including up to $611 million for Khoemacau acquisition financing and $200 million for MMG South America Company Limited shareholder loans[108]. Safety and Community Engagement - The total recordable injury frequency (TRIF) for MMG was 2.44 per million hours worked, an increase from 1.97 in 2023, but showed a decreasing trend with a July TRIF of 1.70[21]. - MMG is committed to creating wealth for employees, shareholders, and local communities through constructive dialogue and business agreements with local stakeholders[14]. - Las Bambas established new agreements to optimize production and development, focusing on local community participation as suppliers[119]. Exploration and Drilling - The company reported a significant focus on underground drilling in the first half of 2024, particularly around the K North, H, Z, and P veins, as well as resource testing in the U and T veins[136]. - The company has commenced surface drilling at the South Hercules deposit, located 9 kilometers south of Rosebery, achieving significant discoveries[136]. - The company is continuing its exploration plans for zinc-lead-silver targets at Dugald River, with ongoing geological interpretation improvements based on drilling results[135]. Risks and Compliance - The group faces interest rate risk primarily through interest-bearing loans and cash investments, with current risk mainly from non-derivative financial assets and liabilities[151]. - The group is currently facing tax audits in Australia, Peru, Zambia, Laos, and the Democratic Republic of the Congo, which may impact its financial position[162]. - The group has not violated any covenants related to its loans as of June 30, 2024, ensuring sufficient liquidity management[156].

Summary of Conference Call Company or Industry Involved - The conference call involves a listed company, although the specific name is not mentioned in the provided content. Core Points and Arguments - The company expresses gratitude to investors for attending the meeting, indicating a focus on investor relations and communication [1]. Other Important but Possibly Overlooked Content - No additional significant details or data points are provided in the content, limiting the analysis to the introductory remarks of the conference call [1].

[Summary](index=2&type=section&id=Summary) MMG Limited achieved significant financial improvement in H1 2024, with profit after tax of **$79.5 million**, reversing last year's loss, driven by a **21%** increase in operating cash flow and **23%** EBITDA growth, while successfully integrating Khoemacau and strengthening its balance sheet. - In H1 2024, MMG recorded a Total Recordable Injury Frequency (TRIF) of **2.44** per million hours worked, an increase from **1.97** in FY 2023, and a Significant Event Energy Exchange Frequency (SEEEF) of **1.22** per million hours worked, up from **1.14** in 2023, both under close monitoring[6](index=6&type=chunk) - The company completed the acquisition of the Khoemacau mine on March 22, 2024, and established the Khoemacau Joint Venture (MMG 55% stake) in May, followed by a successful rights issue in July that raised **$1,152.2 million** (net of transaction costs), projected to reduce gearing to approximately **45%**, the lowest since the Las Bambas acquisition[6](index=6&type=chunk) H1 2024 Key Financial Data | Indicator | H1 2024 (million USD) | H1 2023 (million USD) | Change % | | :--- | :--- | :--- | :--- | | Revenue | 1,918.2 | 1,896.2 | 1% | | EBITDA | 779.0 | 635.8 | 23% | | EBITDA Margin | 41% | 34% | - | | Profit/(Loss) after Income Tax | 79.5 | (24.9) | 419% | | Net Cash Flow from Operating Activities | 515.3 | 425.6 | 21% | | Basic Earnings/(Loss) Per Share | 0.23 US cents | (0.64) US cents | - | - Total EBITDA was **$779.0 million**, a **23%** increase from H1 2023, primarily due to improved profitability at Dugald River, Rosebery, and Kinsevere, and the inclusion of Khoemacau's EBITDA since March, partially offset by lower sales volumes at Las Bambas[6](index=6&type=chunk) - Las Bambas' 2024 annual production is expected to be at the upper end of the previously guided range of **280,000 tonnes** to **320,000 tonnes**, with the C1 cost guidance lowered to between **$1.55/lb** and **$1.75/lb**[9](index=9&type=chunk) - Kinsevere's 2024 C1 cost guidance has been raised to between **$3.00/lb** and **$3.35/lb**, mainly due to lower cobalt by-product credits, accelerated operations at the Sokoroshe II pit, and changes in the mining sequence[9](index=9&type=chunk) - Total capital expenditure for 2024 is projected to be between **$850 million** and **$950 million**, with Las Bambas maintaining **$400-$450 million**, Kinsevere's guidance lowered by **$50 million** to **$200-$250 million**, and Khoemacau expected to be **$100-$150 million**[9](index=9&type=chunk) [Chairman's Review](index=5&type=section&id=Chairman%27s%20Review) Chairman Mr. Xu Jiqing reviewed MMG's solid H1 2024 performance, emphasizing safety, prudent capital management, and operational efficiency, while advancing key projects and expressing confidence in long-term metal prospects. - Safety is MMG's foremost value, with the company committed to improving safety performance, striving for a harm-free workplace, and proactively managing risks, with contractor management being a core area for improvement[13](index=13&type=chunk) - Mr. Li Liangang resigned as interim Chief Executive Officer and Executive Director, and Mr. Cao Liang was appointed Chief Executive Officer and Executive Director, effective April 24, 2024; Mr. Wei Jianxian resigned as Executive General Manager – Americas Operations, and Mr. Zhao Jing (Ivo) was appointed interim Executive General Manager – Americas Operations[14](index=14&type=chunk) - MMG's production performance remained stable, with a focus on growth drilling and advancing key development projects, including the Khoemacau acquisition and the Chalcobamba development project at Las Bambas, while the Kinsevere expansion project progressed smoothly and Australian mines contributed significantly[16](index=16&type=chunk) - The company's mission is to create wealth for its employees, shareholders, and local communities, maintaining constructive dialogue with Las Bambas stakeholders and signing commercial agreements with several community companies to commence work at the Chalcobamba pit[17](index=17&type=chunk) - The Board remains confident in the medium to long-term prospects for copper, zinc, and cobalt, believing that global trends such as urbanization, decarbonization, electrification, and the rapid development of clean technologies and artificial intelligence will ensure strong demand for base metals[19](index=19&type=chunk) - Ms. Chen Ying was appointed as an Independent Non-Executive Director of the MMG Board, and a member of the Audit and Risk Management Committee and the Governance, Remuneration, Nomination and Sustainability Committee, effective July 29, 2024, advancing senior management diversity[19](index=19&type=chunk) [CEO's Report](index=7&type=section&id=CEO%27s%20Report) CEO Mr. Cao Liang reported MMG's H1 2024 financial and operational performance, highlighting safety as a core value, improved net profit, strong cash flow and EBITDA, stable mine production, and successful capital structure strengthening. - In H1 2024, MMG recorded a Total Recordable Injury Frequency (TRIF) of **2.44** per million hours worked, an increase from **1.97** for the full year 2023, though the TRIF decreased to **1.70** in July, showing a downward trend[24](index=24&type=chunk) H1 2024 Financial Performance Summary | Indicator | H1 2024 (million USD) | H1 2023 (million USD) | Change % | | :--- | :--- | :--- | :--- | | Profit/(Loss) after Tax | 79.5 | (24.9) | 419% | | Net Cash Flow from Operating Activities | 515.3 | 425.6 | 21% | | Total EBITDA | 779.0 | 635.8 | 23% | - The Khoemacau mine contributed **$33.5 million** to EBITDA during the period; Las Bambas' EBITDA was **$590.3 million**, an **8%** decrease year-on-year, primarily due to lower sales volumes, partially offset by higher copper, gold, and silver prices[25](index=25&type=chunk) H1 2024 Key Mine Production | Mine | Product | H1 2024 Production | H1 2023 Production | YoY Change % | | :--- | :--- | :--- | :--- | :--- | | Las Bambas | Copper | 126,198 tonnes | 139,594 tonnes | -10% | | Kinsevere | Cathode Copper | 21,278 tonnes | 21,641 tonnes | -2% | | Khoemacau | Copper in Concentrate | 9,982 tonnes | - | Not Applicable | | Dugald River | Zinc in Concentrate | 79,284 tonnes | 57,374 tonnes | +38% | | Dugald River | Lead in Concentrate | 10,799 tonnes | 6,540 tonnes | +65% | | Rosebery | Zinc in Concentrate | 30,263 tonnes | 23,102 tonnes | +31% | | Rosebery | Lead in Concentrate | 10,970 tonnes | 8,637 tonnes | +27% | - MMG is committed to driving growth across its asset portfolio, with growth projects at Las Bambas and Kinsevere progressing smoothly; MMG plans to increase Khoemacau's annual copper production to **60,000 tonnes** by 2026[29](index=29&type=chunk) - The company successfully raised **$1,152.2 million** (net of transaction costs) through a rights issue, used to repay existing debt and complete the Khoemacau acquisition financing plan, and established a joint venture for the Khoemacau mine with China Reform Holdings[30](index=30&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) This section details MMG's H1 2024 financial and operational results, covering revenue, EBITDA, mine performance, cash flow, liquidity, acquisitions, development projects, risk management, and outlook, showing significant profit growth and capital structure strengthening. [Results Overview for the Six Months Ended June 30, 2024](index=9&type=section&id=Results%20Overview%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202024) MMG achieved a significant financial turnaround in H1 2024, with profit after tax of **$79.5 million**, reversing last year's loss, primarily driven by improved operating performance and non-controlling interests. H1 2024 Consolidated Income Statement Summary | Indicator | H1 2024 (million USD) | H1 2023 (million USD) | Change % | | :--- | :--- | :--- | :--- | | Revenue | 1,918.2 | 1,896.2 | 1% | | Operating Expenses | (1,063.2) | (1,257.1) | 15% | | EBITDA | 779.0 | 635.8 | 23% | | Profit Before Income Tax | 143.1 | 9.6 | 1,391% | | Profit/(Loss) for the Period after Income Tax | 79.5 | (24.9) | 419% | | Attributable to Equity Holders of the Company | 21.1 | (58.8) | 136% | | Attributable to Non-Controlling Interests | 58.4 | 33.9 | 72% | - Profit attributable to equity holders of the company turned from a **$58.8 million** loss in H1 2023 to a **$21.1 million** profit in H1 2024, while profit attributable to non-controlling interests increased to **$58.4 million**, primarily from Las Bambas (**62.5%** equity) and Khoemacau (**55.0%** equity)[35](index=35&type=chunk)[37](index=37&type=chunk) [Operating Performance Overview](index=10&type=section&id=Operating%20Performance%20Overview) Group revenue slightly increased by **1%** to **$1,918.2 million** in H1 2024, driven by higher commodity prices, while EBITDA significantly grew by **23%** to **$779.0 million** due to strong performance from Australian mines and Khoemacau's inclusion. H1 2024 Revenue and EBITDA by Segment | Segment | H1 2024 Revenue (million USD) | H1 2023 Revenue (million USD) | Revenue Change % | H1 2024 EBITDA (million USD) | H1 2023 EBITDA (million USD) | EBITDA Change % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Las Bambas | 1,256.0 | 1,480.4 | (15%) | 590.3 | 643.0 | (8%) | | Kinsevere | 188.3 | 178.4 | 6% | 41.4 | (13.8) | 400% | | Khoemacau | 90.2 | - | Not Applicable | 33.5 | - | Not Applicable | | Dugald River | 226.1 | 132.7 | 70% | 80.2 | (26.4) | 404% | | Rosebery | 152.7 | 103.2 | 48% | 68.3 | 35.6 | 92% | | Other | 4.9 | 1.5 | 227% | (34.7) | (2.6) | (1,235%) | | **Total** | **1,918.2** | **1,896.2** | **1%** | **779.0** | **635.8** | **23%** | - Revenue increased by **$22.0 million (1%)** to **$1,918.2 million**, primarily due to higher commodity prices (**$185.0 million**), partially offset by lower sales volumes (**$163.0 million**)[40](index=40&type=chunk) H1 2024 Revenue by Commodity | Commodity | H1 2024 (million USD) | H1 2023 (million USD) | Change % | | :--- | :--- | :--- | :--- | | Copper | 1,373.0 | 1,432.0 | (4%) | | Zinc | 224.2 | 145.0 | 55% | | Lead | 50.0 | 25.2 | 98% | | Gold | 89.0 | 104.3 | (15%) | | Silver | 112.2 | 87.5 | 28% | | Molybdenum | 68.5 | 102.2 | (33%) | | Cobalt | 1.3 | - | - | H1 2024 LME Average Cash Prices | Commodity | H1 2024 (USD/tonne or ounce) | H1 2023 (USD/tonne or ounce) | Change % | | :--- | :--- | :--- | :--- | | Copper (USD/tonne) | 9,097 | 8,704 | 5% | | Zinc (USD/tonne) | 2,641 | 2,835 | (7%) | | Lead (USD/tonne) | 2,121 | 2,129 | (0%) | | Gold (USD/ounce) | 2,205 | 1,933 | 14% | | Silver (USD/ounce) | 26.11 | 23.37 | 12% | | Molybdenum (USD/tonne) | 45,994 | 59,730 | (23%) | | Cobalt (USD/tonne) | 27,174 | 36,033 | (25%) | H1 2024 Payable Metal in Products Sold | Commodity | H1 2024 Sales Volume | H1 2023 Sales Volume | Change % | | :--- | :--- | :--- | :--- | | Copper (tonnes) | 157,503 | 182,831 | (14%) | | Zinc (tonnes) | 92,464 | 71,680 | 29% | | Lead (tonnes) | 23,961 | 13,201 | 82% | | Gold (ounces) | 39,311 | 53,793 | (27%) | | Silver (ounces) | 4,245,706 | 3,852,971 | 10% | | Molybdenum (tonnes) | 1,635 | 2,039 | (20%) | | Cobalt (tonnes) | 92 | - | - | - Total operating expenses decreased by **$193.9 million (15%)** to **$1,063.2 million**, primarily due to favorable inventory movements at Las Bambas in 2023, and favorable inventory movements at Kinsevere and Dugald River[48](index=48&type=chunk) - Administrative expenses increased by **$12.9 million (391%)** to **$16.2 million**, mainly due to higher employee benefits expenses and increased redundancy costs related to internal restructuring[49](index=49&type=chunk) - Net finance costs decreased by **$12.3 million (7%)** to **$168.0 million**, primarily due to lower debt balances and reduced interest receivable from SUNAT following a favorable judicial ruling, partially offset by interest on the Khoemacau acquisition loan[49](index=49&type=chunk) [Mine Operations Analysis](index=13&type=section&id=Mine%20Operations%20Analysis) This section analyzes the production and financial performance of MMG's key mines in H1 2024, showing varied results with Las Bambas copper output down, Kinsevere EBITDA up, Khoemacau contributing, and strong zinc/lead performance from Dugald River and Rosebery. [Las Bambas](index=13&type=section&id=Las%20Bambas) Las Bambas' copper production decreased by **10%** YoY to **126,198 tonnes** in H1 2024 due to lower-grade ore, resulting in a **15%** revenue reduction, while EBITDA declined **8%** despite a **25%** decrease in operating expenses. Las Bambas H1 2024 Production and Financial Data | Indicator | H1 2024 | H1 2023 | Change % | | :--- | :--- | :--- | :--- | | Copper in Concentrate (tonnes) | 126,198 | 139,594 | (10%) | | Copper Sold (tonnes) | 125,668 | 160,764 | (22%) | | Revenue (million USD) | 1,256.0 | 1,480.4 | (15%) | | Total Operating Expenses (million USD) | (645.0) | (854.5) | 25% | | EBITDA (million USD) | 590.3 | 643.0 | (8%) | | EBITDA Margin | 47% | 43% | - | | C1 Cost (USD/lb) | 1.81 | 1.60 | - | - Copper production decreased mainly due to mining lower-grade ore (**0.57%** compared to **0.64%**) at the Ferrobamba pit, partially offset by ore supply from the Chalcobamba pit starting in Q2[52](index=52&type=chunk) - Total production expenses decreased by **3%**, primarily due to increased deferred capitalized costs from Chalcobamba pre-stripping activities (**$57.5 million**) and reduced expenses for mitigating social conflict risks (**$22.5 million**)[53](index=53&type=chunk) - Las Bambas' 2024 annual copper production is expected to be at the upper end of the previously guided range of **280,000 tonnes** to **320,000 tonnes**, with the C1 cost guidance lowered to between **$1.55/lb** and **$1.75/lb**[54](index=54&type=chunk) [Kinsevere](index=14&type=section&id=Kinsevere) Kinsevere's cathode copper production slightly decreased by **2%** to **21,278 tonnes** in H1 2024 due to mining sequence adjustments and reduced reliance on third-party high-grade ore, but revenue grew **6%** and EBITDA surged **400%** to **$41.4 million**. Kinsevere H1 2024 Production and Financial Data | Indicator | H1 2024 | H1 2023 | Change % | | :--- | :--- | :--- | :--- | | Cathode Copper (tonnes) | 21,278 | 21,641 | (2%) | | Cobalt (tonnes) | 1,390 | - | Not Applicable | | Revenue (million USD) | 188.3 | 178.4 | 6% | | EBITDA (million USD) | 41.4 | (13.8) | 400% | | EBITDA Margin | 22% | (8%) | - | | C1 Cost (USD/lb) | 3.14 | 3.53 | - | - Cathode copper production decreased primarily due to the mining sequence at the Sokoroshe II and Kinsevere pits and reduced reliance on high-cost, high-grade third-party ore, leading to a decrease in feed grade from **2.22%** to **2.03%**[58](index=58&type=chunk) - Total production expenses decreased by **1%**, mainly due to reduced consumption of third-party ore (**$48.5 million**), partially offset by new cobalt production costs (**$15.2 million**) and increased mining costs from higher mining volumes (**$13.9 million**)[58](index=58&type=chunk) - The 2024 C1 cost guidance has been raised to between **$3.00/lb** and **$3.35/lb**, primarily due to lower-than-expected cobalt by-product credits, accelerated mining activities at the Sokoroshe II pit leading to increased costs, and changes in the Kinsevere pit mining sequence[60](index=60&type=chunk)[61](index=61&type=chunk) [Khoemacau](index=16&type=section&id=Khoemacau) Acquired on March 22, 2024, Khoemacau produced **9,982 tonnes** of copper in concentrate in H1 2024 (since March 23), generating **$90.2 million** in revenue and **$33.5 million** in EBITDA, with a C1 cost of **$2.65/lb**. Khoemacau H1 2024 Production and Financial Data (since March 23) | Indicator | H1 2024 | H1 2023 | Change % | | :--- | :--- | :--- | :--- | | Copper in Concentrate (tonnes) | 9,982 | - | Not Applicable | | Silver (ounces) | 338,681 | - | Not Applicable | | Revenue (million USD) | 90.2 | - | Not Applicable | | EBITDA (million USD) | 33.5 | - | Not Applicable | | EBITDA Margin | 37% | - | - | | C1 Cost (USD/lb) | 2.65 | - | - | - Khoemacau's silver production is subject to a silver stream agreement that covers **100%** of payable silver production until **40 million ounces** of silver are delivered, and **50%** thereafter[62](index=62&type=chunk) - The 2024 Khoemacau copper production guidance (since March 23) is expected to be between **30,500** and **40,500 tonnes**, with a full-year target of **40,000** to **50,000 tonnes**, consistent with previous guidance[65](index=65&type=chunk) [Dugald River](index=17&type=section&id=Dugald%20River) Dugald River's zinc and lead in concentrate production increased by **38%** and **65%** respectively in H1 2024, benefiting from recovery after a 34-day operational pause last year, leading to a **70%** revenue increase and **404%** EBITDA growth. Dugald River H1 2024 Production and Financial Data | Indicator | H1 2024 | H1 2023 | Change % | | :--- | :--- | :--- | :--- | | Zinc in Concentrate (tonnes) | 79,284 | 57,374 | 38% | | Lead in Concentrate (tonnes) | 10,799 | 6,540 | 65% | | Revenue (million USD) | 226.1 | 132.7 | 70% | | EBITDA (million USD) | 80.2 | (26.4) | 404% | | EBITDA Margin | 35% | (20%) | - | | Zinc C1 Cost (USD/lb) | 0.67 | 1.30 | - | - Revenue growth was primarily due to increased zinc concentrate sales (**$30.1 million**), increased lead concentrate sales (**$24.4 million**), lower treatment charges (**$22.7 million**), and higher realized zinc prices (**$10.6 million**)[68](index=68&type=chunk) - Total production expenses decreased by **1%**, mainly due to lower mining costs resulting from one-off costs incurred in 2023 due to the transition to a new mining contractor[68](index=68&type=chunk) - The Dugald River concentrator experienced unplanned downtime due to bearing pad issues, which resumed operations in late July, with additional maintenance planned for late August; 2024 zinc in concentrate production is expected to be at the lower end of the previously guided range of **175,000 tonnes** to **190,000 tonnes**[69](index=69&type=chunk) [Rosebery](index=18&type=section&id=Rosebery) Rosebery's zinc and lead in concentrate production increased by **31%** and **27%** respectively in H1 2024, driven by stable labor and increased mining faces, resulting in a **48%** revenue increase and **92%** EBITDA growth, with a strong negative C1 cost for zinc. Rosebery H1 2024 Production and Financial Data | Indicator | H1 2024 | H1 2023 | Change % | | :--- | :--- | :--- | :--- | | Zinc in Concentrate (tonnes) | 30,263 | 23,102 | 31% | | Lead in Concentrate (tonnes) | 10,970 | 8,637 | 27% | | Revenue (million USD) | 152.7 | 103.2 | 48% | | EBITDA (million USD) | 68.3 | 35.6 | 92% | | EBITDA Margin | 45% | 34% | - | | Zinc C1 Cost (USD/lb) | -0.42 | 0.18 | - | - Production increased due to stable labor supply, a focus on increasing the number of available mining faces through mine development, and strong concentrator performance with high zinc recovery rates[73](index=73&type=chunk) - Revenue increased primarily due to higher prices for silver, gold, zinc, lead, and copper, as well as increased sales volumes for zinc and lead[73](index=73&type=chunk) - Total production expenses increased by **17%**, mainly due to higher mining costs from increased ore mined and backfill volumes (**$6.8 million**)[73](index=73&type=chunk) - The 2024 C1 cost guidance has been lowered from the previous range of **$0.10/lb** to **$0.25/lb** to between **$0.05/lb** and **$0.20/lb**, with cost improvements primarily driven by strong by-product credits and lower zinc concentrate treatment charges[74](index=74&type=chunk) [Cash Flow Analysis](index=20&type=section&id=Cash%20Flow%20Analysis) MMG reported a net cash inflow of **$174.0 million** in H1 2024, with operating cash flow up **21%** due to higher commodity prices, while investing cash outflow significantly increased by **716%** due to the Khoemacau acquisition, largely financed by a **7,484%** surge in financing cash flow. H1 2024 Net Cash Flow | Indicator | H1 2024 (million USD) | H1 2023 (million USD) | Change % | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 515.3 | 425.6 | 21% | | Net Cash Flow from Investing Activities | (2,464.9) | (302.1) | (716%) | | Net Cash Flow from Financing Activities | 2,123.6 | 28.0 | 7,484% | | Net Increase in Cash | 174.0 | 151.5 | 15% | - Net cash inflow from operating activities increased by **$89.7 million (21%)**, primarily due to higher EBITDA (**$143.2 million**) driven by increased commodity prices (**$185.0 million**), partially offset by higher Peruvian taxes (**$60.2 million**)[75](index=75&type=chunk) - Net cash outflow from investing activities increased by **$2,162.8 million (716%)**, mainly due to the **$2,042.8 million** payment for the acquisition of the Khoemacau copper mine (net of cash acquired) in March 2024[76](index=76&type=chunk) - Net cash inflow from financing activities increased by **$2,095.6 million (7,484%)** compared to 2023, resulting from the drawdown of a **$1,050 million** National Development Bank loan, a **$611 million** shareholder loan, and a **$482.9 million** non-controlling interest contribution for the Khoemacau mine acquisition[76](index=76&type=chunk) [Financial Resources and Liquidity](index=20&type=section&id=Financial%20Resources%20and%20Liquidity) As of June 30, 2024, MMG's total equity increased to **$4,850.2 million**, but the gearing ratio rose to **0.55** due to debt from the Khoemacau acquisition, though the company maintains **$2,785 million** in undrawn debt facilities and no covenant breaches. H1 2024 Financial Position Summary | Indicator | June 30, 2024 (million USD) | December 31, 2023 (million USD) | Change (million USD) | | :--- | :--- | :--- | :--- | | Total Assets | 15,290.3 | 11,900.8 | 3,389.5 | | Total Liabilities | (10,440.1) | (7,588.8) | (2,851.3) | | Total Equity | 4,850.2 | 4,312.0 | 538.2 | H1 2024 Gearing Ratio | Indicator | June 30, 2024 (million USD) | December 31, 2023 (million USD) | | :--- | :--- | :--- | | Net Debt | 6,016.9 | 4,301.1 | | Total Equity | 4,850.2 | 4,312.0 | | Net Debt plus Total Equity | 10,867.1 | 8,613.1 | | Gearing Ratio | 0.55 | 0.50 | - As of the date of this announcement, the Group had **$2,785 million** (2023: **$4,325 million**) in undrawn debt facilities; as of June 30, 2024, the Group's loans were not in breach of any covenant requirements[79](index=79&type=chunk) - The Las Bambas Joint Venture Group has reached agreements with China Minmetals Non-ferrous and CITIC for early payments and prepayments totaling up to **$280.0 million** to support ongoing operations[123](index=123&type=chunk) [Significant Acquisitions and Disposals](index=21&type=section&id=Significant%20Acquisitions%20and%20Disposals) MMG completed the acquisition of the Khoemacau mine for approximately **$1,734.7 million** in H1 2024, followed by establishing the Khoemacau JV (MMG 55% stake) and successfully completing a rights issue that raised **$1,152.2 million** to repay acquisition financing and other debts. - MMG completed the acquisition of the Khoemacau mine on March 22, 2024, for an aggregate consideration of approximately **$1,734,657,000**, and made an upfront payment of approximately **$348,580,000** to settle certain debt balances of the target group[80](index=80&type=chunk) - MMG established the Khoemacau Joint Venture with China Reform Holdings on May 30, 2024, with MMG holding a **55%** interest and Comor (a wholly-owned subsidiary of China Reform Holdings) holding a **45%** interest, effective June 6, 2024[81](index=81&type=chunk) - The company announced a rights issue on June 4, 2024, offering **3,465,432,486** rights shares on a 2-for-5 basis at HK$2.62 per share, representing a discount of approximately **31.41%** to the market price[82](index=82&type=chunk) - The results of the rights issue were announced on July 12, 2024, with approximately **2.8 times** oversubscription, raising **$1,152.2 million** (net of transaction costs), which was used to repay short-term Khoemacau acquisition financing, MMG South America shareholder loans, and revolving credit facilities[83](index=83&type=chunk)[84](index=84&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) [Development Projects](index=22&type=section&id=Development%20Projects) MMG is actively advancing several key development projects, including Las Bambas' Chalcobamba to boost copper output, Kinsevere's expansion to extend mine life and increase copper/cobalt production, Khoemacau's plan to significantly raise copper output, and Rosebery's exploration to extend mine life. - The Chalcobamba project, part of Las Bambas' next phase of development, has received regulatory approvals and multiple agreements with the Huancuire community, aiming to increase medium-term annual copper production to between **350,000 tonnes** and **400,000 tonnes**[87](index=87&type=chunk)[88](index=88&type=chunk) - The Kinsevere expansion project is progressing well, with the cobalt plant commissioned in Q4 2023 (producing **1,390 tonnes** of cobalt in hydroxide in H1 2024) and the sulphide concentrator line undergoing commissioning, targeting a mine life extension to 2035 and annual production of **80,000 tonnes** of cathode copper and **4,000-6,000 tonnes** of cobalt in hydroxide[88](index=88&type=chunk) - Khoemacau is committed to increasing annual copper production to **60,000 tonnes** by 2026 through more mining faces, enhanced operational flexibility, and higher mining grades; the company also aims to complete an expansion project by 2028, targeting an annual production of **130,000 tonnes**[89](index=89&type=chunk) - Rosebery is accelerating its exploration efforts (Legacy project) to extend the mine's operational life, having identified several mineralized zones, and continues to investigate safe and viable options to increase the short-term capacity of its existing tailings storage facility[89](index=89&type=chunk)[90](index=90&type=chunk) [Contracts and Commitments](index=23&type=section&id=Contracts%20and%20Commitments) In H1 2024, MMG executed **344 contracts** with an annual operational or capital value of approximately **$608.8 million**, covering production optimization, supply chain, equipment, logistics, exploration, environmental monitoring, and consulting across its mines and corporate functions. - For the six months ended June 30, 2024, **344 contracts** were executed through market interactions or internal renegotiations, involving an annual operational or capital value of approximately **$608.8 million**[92](index=92&type=chunk) - Las Bambas entered into new and revised agreements, including specific contracts for Chalcobamba operations, with a focus on local community participation as suppliers for mining services, fuel supply, and equipment maintenance[93](index=93&type=chunk)[94](index=94&type=chunk) - Kinsevere entered into new and renewed agreements for environmental water quality monitoring services, explosives supply, sulfuric acid supply, and concentrator reagent procurement, with ongoing procurement for equipment and materials required for the expansion project[95](index=95&type=chunk) - Khoemacau's Supply Improvement Program (SIP) was completed in July 2024, aiming to transform the supply chain to world-class standards and integrate with MMG's supply chain standards; agreements have been reached to continue development and production[96](index=96&type=chunk) - Dugald River finalized off-mine logistics contracts and continues to review long-term energy options to increase renewable energy use, while also developing cost reduction plans[97](index=97&type=chunk) - Rosebery entered into new and revised underground and surface drilling contracts, engineering agreements, and copper concentrate container transport services, and successfully delivered the first diesel-electric hybrid loader to the mine[98](index=98&type=chunk) [Employees](index=25&type=section&id=Employees) As of June 30, 2024, MMG Group employed **5,092** full-time employees across Australia, Peru, DRC, Botswana, China, and Laos, with total employee benefits expenses increasing to **$190.4 million** due to the Khoemacau acquisition and updated long-term incentive plans. - As of June 30, 2024, the Group employed **5,092** full-time employees (2023: **4,550**) in its continuing operations, primarily working in Australia, Peru, the Democratic Republic of Congo, Botswana, China, and Laos[102](index=102&type=chunk) - Total employee benefits expenses (including directors' emoluments) for the six months ended June 30, 2024, amounted to **$190.4 million** (2023: **$172.1 million**), with the increase primarily due to the acquisition of Khoemacau and updated performance-based long-term incentive plans[102](index=102&type=chunk) - The Group has established a remuneration policy consistent with market practices, determining employee compensation based on responsibilities, performance, market practices, legal requirements, and the Group's results, and provides targeted training and development programs[102](index=102&type=chunk) [Exploration Activities](index=25&type=section&id=Exploration%20Activities) MMG continued exploration across its mines in H1 2024 to assess mineralization, identify mining methods, and extend mine life, with drilling at Las Bambas (Ferrobamba), Kinsevere (Mashi, Saddle), Khoemacau (Banana, Zone 5), Dugald River (Wallaroo, magnetic targets), and Rosebery (underground/surface, South Hercules discovery). [Las Bambas Exploration](index=25&type=section&id=Las%20Bambas%20Exploration) Las Bambas conducted extensive drilling within and around the Ferrobamba pit, including deep, south, east, and west concentrator targets, to evaluate mineralization and identify potential mining methods like open pit expansion or underground development. - Extensive drilling activities have been conducted at multiple locations within the Ferrobamba pit, specifically targeting Ferrobamba deep, south, east, and west concentrator areas[103](index=103&type=chunk) - The drilling aims to extend mineralization along the southern margin and at depth of the Ferrobamba pit, as well as to explore for mineralization extensions east of the current open pit[103](index=103&type=chunk) [Kinsevere Exploration](index=25&type=section&id=Kinsevere%20Exploration) Kinsevere's exploration focused on resource definition drilling at the Mashi pit northwest extension and the Saddle area between Central and Mashi pits, completing **3,720 meters** of drilling, all intersecting moderate copper (cobalt) mineralization, suggesting continuity of known mineralization at depth. - Exploration activities focused on resource definition drilling at the Mashi pit northwest extension target and the Saddle area between the Central and Mashi pits[104](index=104&type=chunk) - A total of **3,720 meters** of drilling was completed, representing **74%** of the diamond drilling program (**5,000 meters**), with all diamond drill holes intersecting moderate copper (cobalt) mineralization[104](index=104&type=chunk) [Khoemacau Exploration](index=25&type=section&id=Khoemacau%20Exploration) Khoemacau's regional exploration concentrated on the Banana and Zone 5 corridors, testing infill drilling at the southwest fold hinge (Chalcocite deposit) and Zone 9 target to define the width and grade of high-grade areas. - Regional exploration focused on the Banana and Zone 5 corridors, testing infill drilling at the southwest fold hinge (Chalcocite deposit) and the Zone 9 target[105](index=105&type=chunk)[106](index=106&type=chunk) [Dugald River Exploration](index=26&type=section&id=Dugald%20River%20Exploration) Dugald River's surface exploration drilling targeted the Wallaroo copper target and two magnetic targets (M1, M2) to test the southern extension of alteration and disseminated mineralization, with future plans for zinc-lead-silver focused exploration. - Surface exploration drilling focused on the Wallaroo copper target and two magnetic targets, M1 and M2, testing the southern extension of alteration and disseminated mineralization[107](index=107&type=chunk) - Target area development plans are ongoing for future zinc-lead-silver focused Dugald River extension exploration[107](index=107&type=chunk) [Rosebery Exploration](index=26&type=section&id=Rosebery%20Exploration) Rosebery conducted underground and surface drilling in H1 2024, with underground drilling focused on resource definition and growth at various veins, and surface drilling at Jupiter, Snake Gully, North Hercules, Bastyan, and Oak targets, making a significant discovery at the South Hercules deposit. - Underground drilling focused on resource definition around K North, H vein, Z vein, P vein hanging wall, and growth drilling at Y vein, U down-dip extension, U South, T vein, and Z vein[108](index=108&type=chunk) - Surface drilling primarily concentrated on the Jupiter, Snake Gully, North Hercules, Bastyan, and Oak targets, with a significant discovery made at the South Hercules deposit (located 9 km south of Rosebery)[108](index=108&type=chunk) [Events After Reporting Period](index=27&type=section&id=Events%20After%20Reporting%20Period) After the reporting period, MMG completed its rights issue on July 15, 2024, raising **$1,152.2 million** (net) for debt repayment, and Las Bambas made an early repayment of **$800.0 million** in project financing on July 5, 2024. - On July 15, 2024, the company completed its rights issue plan, allotting **3,465,432,486** new shares and raising **$1,152.2 million** (net of approximately **$10.7 million** in transaction costs)[112](index=112&type=chunk) - The proceeds from the rights issue were used to repay **$786.1 million** of the Top Create loan, with the remaining proceeds used to repay other external loans[112](index=112&type=chunk) - On July 5, 2024, Las Bambas made an early repayment of **$800.0 million** in project financing[112](index=112&type=chunk) [Financial and Other Risk Management](index=27&type=section&id=Financial%20and%20Other%20Risk%20Management) MMG faces commodity price, interest rate, liquidity, country, and community risks, managed through hedging, regular monitoring, and close collaboration with stakeholders, while also addressing significant contingent liabilities related to bank guarantees and Peruvian tax assessments. [Commodity Price Risk](index=27&type=section&id=Commodity%20Price%20Risk) MMG manages exposure to fluctuating prices of copper, zinc, lead, gold, silver, molybdenum, and cobalt through commodity hedging instruments like zero/low-cost collars and fixed price swaps, with settlement periods from July 2024 to January 2025. - The Group enters into various commodity transactions to hedge the sales prices of copper and zinc, including zero/low-cost collars and fixed price swaps[114](index=114&type=chunk)[115](index=115&type=chunk) - As of June 30, 2024, outstanding commodity transactions included collar hedges for **37,100 tonnes** of copper (put strike **$9,250-$10,385/tonne**, call strike **$9,725-$10,700/tonne**) and fixed price swaps for **83,900 tonnes** of copper (fixed price **$8,852-$10,235/tonne**)[115](index=115&type=chunk) - As of June 30, 2024, outstanding commodity transactions included collar hedges for **6,700 tonnes** of zinc (put strike **$2,850-$2,900/tonne**, call strike **$3,270-$3,430/tonne**) and fixed price swaps for **51,600 tonnes** of zinc (fixed price **$2,650-$2,960/tonne**)[115](index=115&type=chunk) Sensitivity Analysis of Commodity Price Changes on Profit After Tax and Other Comprehensive Income (H1 2024) | Commodity | Commodity Price Change | Increase in Profit (million USD) | Decrease in Other Comprehensive Income (million USD) | | :--- | :--- | :--- | :--- | | Copper | +10% | 12.5 | (72.6) | | Zinc | +10% | (1.0) | (9.8) | | **Total** | | **11.5** | **(82.4)** | | Copper | -10% | (12.5) | 73.0 | | Zinc | -10% | 1.0 | 9.9 | | **Total** | | **(11.5)** | **82.9** | [Interest Rate Risk](index=29&type=section&id=Interest%20Rate%20Risk) MMG's interest rate risk primarily stems from interest-bearing loans and surplus cash investments, encompassing both cash flow (floating rate) and fair value (fixed rate) risks, which are regularly monitored and reported to the Executive Committee, with a 100 basis point rate increase projected to reduce profit after tax by **$26.2 million**. - The Group's interest rate risk primarily arises from interest-bearing loans and investments of surplus cash, including floating rates (cash flow interest rate risk) and fixed rates (fair value interest rate risk)[119](index=119&type=chunk) - The Group regularly monitors interest rate risk and reports its debt and interest rate positions to the MMG Executive Committee[119](index=119&type=chunk) Interest Rate Sensitivity Analysis (H1 2024) | Indicator | +100 Basis Points (million USD) | -100 Basis Points (million USD) | | :--- | :--- | :--- | | Cash and Cash Equivalents - Floating Rate | 4.2 | (4.2) | | Loans - Floating Rate | (30.4) | 30.4 | | **Total** | **(26.2)** | **26.2** | [Liquidity Risk](index=30&type=section&id=Liquidity%20Risk) MMG maintains sufficient debt facilities to manage liquidity, with no loan covenant breaches as of June 30, 2024, further enhanced by agreements with China Minmetals Non-ferrous and CITIC for early payments and prepayments up to **$280.0 million** for the Las Bambas JV Group. - The Group has sufficient debt facilities to manage liquidity, and as of June 30, 2024, its loans were not in breach of any covenant requirements[123](index=123&type=chunk) - The Las Bambas Joint Venture Group has reached agreements with China Minmetals Non-ferrous and CITIC for early payments and prepayments totaling up to **$280.0 million** to support ongoing operations[123](index=123&type=chunk) [Country and Community Risk](index=30&type=section&id=Country%20and%20Community%20Risk) MMG's global operations expose it to political, economic, policy, currency, licensing, regulatory, and community risks, particularly in developing countries where governments may seek increased revenue through higher taxes, necessitating close collaboration with governments and communities to mitigate social instability. - All of the Group's operations are located outside Hong Kong, exposing it to various degrees of political, economic, and other risks and uncertainties, including changes in regimes or policies, currency exchange rate fluctuations, changes in licensing regimes, and community unrest[124](index=124&type=chunk) - Government policy changes in countries such as the Democratic Republic of Congo and Peru may lead to increased tax burdens for mining companies; Las Bambas in Peru has experienced significant political instability[124](index=124&type=chunk)[125](index=125&type=chunk) - The Group will continue to work closely with relevant government departments and community groups to mitigate the potential risks of social instability and unforeseen events to Las Bambas' operations[125](index=125&type=chunk) [Contingent Liabilities](index=31&type=section&id=Contingent%20Liabilities) MMG's contingent liabilities include **$334.1 million** in bank guarantees and significant Peruvian tax-related contingencies, notably **$1,992.0 million** in income tax assessments for Las Bambas (2016-2018) and **$557.0 million** in withholding tax assessments (2014-2017), which the company is actively appealing despite favorable initial rulings. - As of June 30, 2024, bank guarantees for certain subsidiaries of the company amounted to **$334.1 million** (December 31, 2023: **$310.5 million**), primarily related to the terms of mining leases, concessions, exploration licenses, or major contracting agreements[126](index=126&type=chunk)[127](index=127&type=chunk) - The Peruvian tax authority (SUNAT) assessed MLB for 2014-2017 withholding tax, asserting that MLB and Bank of China are related parties and should be subject to a **30%** withholding tax rate, involving an amount of **$557.0 million**[129](index=129&type=chunk)[131](index=131&type=chunk) - MLB received favorable rulings from the Peruvian Tax Court in June and July 2024, which determined that MLB is not liable for the **30%** punitive withholding tax, thereby revoking the appeal assessments related to the 2014-2017 tax periods[131](index=131&type=chunk) - Las Bambas received assessment notices from SUNAT regarding income tax audits for 2016-2018, with estimated taxes, interest, and penalties totaling **PEN 7,474.0 million** (approximately **$1,992.0 million**)[132](index=132&type=chunk) - Management strongly disputes this interpretation, has notified the Peruvian government of the dispute under the Peru-Netherlands Bilateral Investment Treaty, and is evaluating legal options; the Group has not recognized a liability for any assessed amounts[132](index=132&type=chunk)[133](index=133&type=chunk) [Future Outlook and Capital Expenditure](index=33&type=section&id=Future%20Outlook%20and%20Capital%20Expenditure) MMG aims to be a leading international mining company for a low-carbon future, maximizing existing asset value through safety, competitiveness, cost control, efficiency, community relations, and resource growth, with a 2024 total capital expenditure forecast of **$850-$950 million** supporting development projects. - MMG's vision is to build an international leading mining company for a low-carbon future, achieving growth and diversification in resources, production, and value by leveraging its expertise in Chinese and international markets[137](index=137&type=chunk) - The company focuses on maximizing the value of its existing assets by enhancing safety performance, strengthening competitiveness, controlling costs, continuously improving production efficiency, building successful relationships with local communities and governments, and increasing its resource base[137](index=137&type=chunk) - Las Bambas is expected to achieve medium-term annual copper production of **350,000** to **400,000 tonnes**; the Kinsevere expansion project will extend the mine's life to 2035, with total annual production reaching **80,000 tonnes** of cathode copper and **4,000-6,000 tonnes** of cobalt in hydroxide[138](index=138&type=chunk)[139](index=139&type=chunk) - Khoemacau aims to increase annual copper production to **60,000 tonnes** by 2026 and plans to complete an expansion project by 2028, targeting an annual production of **130,000 tonnes**[141](index=141&type=chunk) - Dugald River is committed to achieving an annual ore mining volume of **2,000,000 tonnes** and approximately **200,000 tonnes** of zinc equivalent production in the coming years, while seeking greener, reliable, and cost-effective energy solutions[142](index=142&type=chunk) - Rosebery is accelerating its resource extension and near-mine exploration drilling programs to support the extension of the mine's life and is actively investigating all viable options to ensure sustainable tailings storage solutions[143](index=143&type=chunk) 2024 Capital Expenditure Plan | Mine/Project | 2024 Capital Expenditure Guidance Range (million USD) | | :--- | :--- | | **Total Capital Expenditure** | **850 - 950** | | Las Bambas | 400 - 450 | | Kinsevere | 200 - 250 (lowered by 50 million USD) | | Khoemacau | 100 - 150 | | Other | 150 - 100 (estimated) | [Other Information](index=35&type=section&id=Other%20Information) This section covers MMG's corporate governance, including adherence to Listing Rules, the absence of a dividend policy, review of interim financial statements by the Audit and Risk Management Committee, compliance with securities dealing codes by directors, and no share repurchases during the period. - The company complied with all code provisions of Appendix C1 of the Listing Rules' Corporate Governance Code for the six months ended June 30, 2024, except for not having a dividend policy[146](index=146&type=chunk) - The Audit and Risk Management Committee comprises six members, including four independent non-executive directors and two non-executive directors, responsible for financial reporting, risk management, and internal controls[147](index=147&type=chunk) - The Audit and Risk Management Committee has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2024, which were also reviewed by independent auditor Deloitte Touche Tohmatsu[147](index=147&type=chunk)[152](index=152&type=chunk) - All directors confirmed that they complied with the Model Code and the Standard Securities Dealing Code during the six months ended June 30, 2024[148](index=148&type=chunk) - For the six months ended June 30, 2024, neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's listed securities[150](index=150&type=chunk) [Group Financial Information](index=37&type=section&id=Group%20Financial%20Information) This section presents MMG Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2024, including the income statement, comprehensive income statement, statement of financial position, statement of changes in equity, and cash flow statement, providing detailed financial performance and position data. [Condensed Consolidated Interim Income Statement](index=38&type=section&id=Condensed%20Consolidated%20Interim%20Income%20Statement) MMG reported **$1,918.2 million** in revenue for H1 2024, a **1%** increase YoY, with EBITDA at **$779.0 million**, up **23%**, and a profit after tax of **$79.5 million**, reversing the prior year's loss. Condensed Consolidated Interim Income Statement Summary | Indicator | H1 2024 (million USD) | H1 2023 (million USD) | | :--- | :--- | :--- | | Revenue | 1,918.2 | 1,896.2 | | EBITDA | 779.0 | 635.8 | | EBIT | 311.1 | 189.9 | | Profit Before Income Tax | 143.1 | 9.6 | | Profit/(Loss) for the Period | 79.5 | (24.9) | | Attributable to Equity Holders of the Company | 21.1 | (58.8) | | Basic Earnings/(Loss) Per Share | 0.23 US cents | (0.64) US cents | [Condensed Consolidated Interim Statement of Comprehensive Income](index=39&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) MMG recorded total comprehensive income of **$52.1 million** in H1 2024, a significant improvement from the prior year's comprehensive loss of **$29.0 million**, primarily due to the turnaround in profit for the period, despite other comprehensive losses from cash flow hedges. Condensed Consolidated Interim Statement of Comprehensive Income Summary | Indicator | H1 2024 (million USD) | H1 2023 (million USD) | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 79.5 | (24.9) | | Other Comprehensive (Loss)/Income | (27.4) | (4.1) | | Total Comprehensive Income/(Loss) for the Period | 52.1 | (29.0) | | Attributable to Equity Holders of the Company | 5.4 | (61.7) | | Attributable to Non-Controlling Interests | 46.7 | 32.7 | - Changes in hedging instruments designated for cash flow hedges resulted in **$44.9 million** of other comprehensive loss, partially offset by **$15.1 million** in income tax credit[157](index=157&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=40&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2024, MMG's total assets increased to **$15,290.3 million**, total liabilities to **$10,440.1 million**, and total equity to **$4,850.2 million**, with significant growth in non-current assets and liabilities primarily driven by the Khoemacau acquisition, and an improvement in net current liabilities. Condensed Consolidated Interim Statement of Financial Position Summary | Indicator | June 30, 2024 (million USD) | December 31, 2023 (million USD) | | :--- | :--- | :--- | | Total Assets | 15,290.3 | 11,900.8 | | Total Equity | 4,850.2 | 4,312.0 | | Total Liabilities | 10,440.1 | 7,588.8 | | Net Current Liabilities | (459.6) | (806.1) | - Property, plant and equipment within non-current assets increased to **$11,805.8 million**, and intangible assets increased to **$1,045.0 million**, primarily due to the Khoemacau acquisition[159](index=159&type=chunk) - Loans within non-current liabilities increased to **$5,319.0 million**, deferred income tax liabilities to **$1,571.0 million**, and deferred revenue to **$326.9 million**, reflecting the financing and accounting treatment related to the acquisition[161](index=161&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=42&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) MMG's total equity increased from **$4,312.0 million** at the beginning of 2024 to **$4,850.2 million** as of June 30, 2024, primarily driven by a **$21.1 million** profit for the period and **$482.9 million** from non-controlling interests' subscription for shares. Condensed Consolidated Interim Statement of Changes in Equity Summary | Indicator | June 30, 2024 (million USD) | January 1, 2024 (million USD) | | :--- | :--- | :--- | | Share Capital | 3,227.8 | 3,224.6 | | Total Reserves | (1,866.1) | (1,855.1) | | Retained Earnings | 770.3 | 753.9 | | Total Attributable to Equity Holders of the Company | 2,132.0 | 2,123.4 | | Non-Controlling Interests | 2,718.2 | 2,188.6 | | **Total Equity** | **4,850.2** | **4,312.0** | - Non-controlling interests' subscription for shares contributed **$482.9 million**, a significant component of the equity growth[164](index=164&type=chunk) - Other comprehensive loss for the period was **$15.7 million**, mainly from changes in the cash flow hedge reserve[164](index=164&type=chunk) [Condensed Consolidated Interim Cash Flow Statement](index=44&type=section&id=Condensed%20Consolidated%20Interim%20Cash%20Flow%20Statement) MMG in H1 2024 achieved a net increase in cash and cash equivalents of **$174.0 million**, ending with **$621.0 million**, driven by **$515.3 million** from operating activities, offset by **$2,464.9 million** in investing outflows (Khoemacau acquisition), and supported by **$2,123.6 million** in financing inflows. Condensed Consolidated Interim Cash Flow Statement Summary | Indicator | H1 2024 (million USD) | H1 2023 (million USD) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 515.3 | 425.6 | | Net Cash Used in Investing Activities | (2,464.9) | (302.1) | | Net Cash from Financing Activities | 2,123.6 | 28.0 | | Net Increase in Cash and Cash Equivalents | 174.0 | 151.5 | | Cash and Cash Equivalents at June 30 | 621.0 | 523.7 | - Net cash outflow from investing activities significantly increased, primarily due to **$2,042.8 million** paid for the acquisition of subsidiaries (Khoemacau)[169](index=169&type=chunk) - Net cash inflow from financing activities significantly increased, mainly from **$482.9 million** from non-controlling interests' subscription for subsidiary shares, **$2,132.1 million** from external loans, and **$991.1 million** from related party loans[169](index=169&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=45&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes to MMG's condensed consolidated interim financial statements, covering general information, basis of preparation, accounting policies, key estimates, segment information, expenses, finance income/costs, income tax, EPS, dividends, balance sheet items, business combinations, and related party transactions. [General Information and Basis of Preparation](index=45&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) MMG Limited, a Hong Kong-registered investment holding company, engages in exploration, development, and mining of various metal deposits globally, with its H1 2024 condensed consolidated interim financial statements prepared on a going concern basis, incorporating the Khoemacau acquisition and joint venture, and consistent accounting policies. - The company and its subsidiaries (the Group) are engaged in the exploration, development, and mining of copper, zinc, gold, silver, molybdenum, and lead deposits worldwide[171](index=171&type=chunk) - The condensed consolidated interim financial statements have been prepared on a going concern basis and in compliance with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants[172](index=172&type=chunk)[173](index=173&type=chunk) - The Group completed the acquisition of Cuprous Capital Ltd (Khoemacau mine) for a consideration of **$1,734.7 million** on March 22, 2024; on June 6, 2024, the Group and China Reform Holdings entered into a subscription and shareholders' agreement for Comor Holdings Corp. Ltd. (a wholly-owned subsidiary of China Reform Holdings) to subscribe for shares in MMG Africa Resources Co. Ltd. (a wholly-owned subsidiary of MMG) for **$482.9 million**[175](index=175&type=chunk) - Key estimates and judgments involve impairment of non-financial assets, the fair value of the Khoemacau mine at the acquisition date, and deferred revenue from the CCL Group's silver stream agreement[189](index=189&type=chunk)[190](index=190&type=chunk) [Segment Information](index=49&type=section&id=Segment%20Information) MMG's reportable segments include Las Bambas, Kinsevere, Khoemacau, Dugald River, Rosebery, and other operations, with the Executive Committee using EBITDA to assess performance and allocate resources, showing Las Bambas as the largest contributor and Khoemacau as a new significant segment in H1 2024. - The Group's reportable segments include Las Bambas (copper, molybdenum), Kinsevere (copper), Khoemacau (copper, silver), Dugald River (zinc, lead), Rosebery (various base metals), and other operations[192](index=192&type=chunk) - Segment results represent the EBIT earned by each segment, which is the measure reported to the chief operating decision maker for the purposes of allocating resources and assessing segment performance[194](index=194&type=chunk) H1 2024 Segment Revenue and EBITDA | Segment | Revenue (million USD) | EBITDA (million USD) | | :--- | :--- | :--- | | Las Bambas | 1,256.0 | 590.3 | | Kinsevere | 188.3 | 41.4 | | Khoemacau | 90.2 | 33.5 | | Dugald River | 226.1 | 80.2 | | Rosebery | 152.7 | 68.3 | | Other Unallocated Items/Eliminations | 4.9 | (34.7) | | **Total** | **1,918.2** | **779.0** | June 30, 2024 Segment Assets and Liabilities | Segment | Segment Assets (million USD) | Segment Liabilities (million USD) | | :--- | :--- | :--- | | Las Bambas | 9,535.7 | 2,874.6 | | Kinsevere | 1,020.3 | 340.0 | | Khoemacau | 3,069.0 | 1,468.7 | | Dugald River | 686.3 | 359.6 | | Rosebery | 276.0 | 197.4 | | Other Unallocated Items/Eliminations | 425.8 | 3,592.4 | | **Total** | **15,013.1** | **8,832.7** | [Expenses and Finance Costs](index=53&type=section&id=Expenses%20and%20Finance%20Costs) 2024上半年，MMG的总费用为1,609.5百万美元，较去年同期有所下降。销售成本为1,380.4百万美元，经营费用（包括折旧及摊销）为1,521.7百万美元。财务成本净额为181.6百万美元，主要包括银行贷款和关联方贷款的利息费用，以及递延收入折现计息。公司还录得其他外部财务退款23.4百万美元。 H1 2024 Key Expenses | Expense Category | H1 2024 (million USD) | H1 2023 (million USD) | | :--- | :--- | :--- | | Cost of Sales | 1,380.4 | 1,544.3 | | Operating Expenses (including depreciation and amortization) | 1,521.7 | 1,694.4 | | Exploration Expenses | 27.2 | 25.0 | | Administrative Expenses | 16.2 | 3.3 | | Khoemacau Mine Acquisition Transaction and Integration Costs | 20.2 | - | | Total Expenses | 1,609.5 | 1,708.9 | - Total employee benefits expenses amounted to **$190.4 million** (2023: **$172.1 million**), of which **$37.7 million** was recognized in administrative expenses, exploration expenses, other operating expenses, and other expense categories[199](index=199&type=chunk) H1 2024 Finance Income and Costs | Finance Item | H1 2024 (million USD) | H1 2023 (million USD) | | :--- | :--- | :--- | | Total Finance Income | 13.6 | 4.3 | | Interest Expense on Bank Loans | (129.5) | (105.4) | | Interest Expense on Related Party Loans | (70.0) | (51.9) | | Interest on Deferred Revenue Discount | (7.7) | - | | Other External Finance Refunds/(Costs) - Net | 23.4 | (2.6) | | Total Finance Costs | (181.6) | (184.6) | [Income Tax Expense](index=55&type=section&id=Income%20Tax%20Expense) MMG's H1 2024 income tax expense was **$63.6 million**, primarily from overseas current income tax and deferred income tax, with the company adopting a temporary exemption from recognizing Pillar Two deferred tax assets/liabilities and monitoring global minimum tax rules. H1 2024 Income Tax Expense | Income Tax Category | H1 2024 (million USD) | H1 2023 (million USD) | | :--- | :--- | :--- | | Current Income Tax Expense | 55.0 | 44.9 | | Deferred Income Tax (Credit)/Expense | 8.6 | (10.4) | | **Total Income Tax Expense** | **63.6** | **34.5** | - The Group has adopted the temporary exemption provided in HKAS 12 (Amendments), and therefore does not recognize and disclose deferred tax assets and liabilities related to Pillar Two income taxes[205](index=205&type=chunk) - The Group performed transitional Country-by-Country Reporting (CbCR) safe harbor tests for the Netherlands, Switzerland, Canada, and Peru, with these jurisdictions passing at least one of the three tests[206](index=206&type=chunk) - The Hong Kong government plans to submit legislative proposals regarding the "Implementation of Global Minimum Tax and Hong Kong Minimum Top-up Tax" in H2 2024, expected to be effective for fiscal years beginning on or after January 1, 2025[208](index=208&type=chunk) [Earnings/(Loss) Per Share](index=56&type=section&id=Earnings%2F%28Loss%29%20Per%20Share) MMG reported basic earnings per share of **0.23 US cents** in H1 2024, reversing a loss of **0.64 US cents** in the prior year, with diluted earnings per share also at **0.23 US cents**, calculated after adjusting for the dilutive effect of the rights issue. H1 2024 Earnings/(Loss) Per Share | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Equity Holders of the Company (million USD) | 21.1 | (58.8) | | Weighted Average Number of Ordinary Shares (thousand shares) | 9,198,779 | 9,183,612 | | Basic Earnings/(Loss) Per Share | 0.23 US cents | (0.64) US cents | | Diluted Earnings/(Loss) Per Share | 0.23 US cents | (0.64) US cents | - The weighted average number of ordinary shares used for calculating basic and diluted earnings/(loss) per share has been adjusted/restated to reflect the bonus element of the rights issue on shares outstanding[211](index=211&type=chunk) [Property, Plant and Equipment and Intangible Assets](index=57&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Intangible%20Assets) As of June 30, 2024, MMG's net book value of property, plant and equipment increased to **$11,805.8 million**, and intangible assets to **$1,045.0 million**, primarily due to the Khoemacau mine acquisition, with management finding no impairment indicators during the period. H1 2024 Movement in Property, Plant and Equipment | Item | Million USD | | :--- | :--- | | Net Book Value January 1, 2024 | 9,417.1 | | Acquisition of Subsidiaries | 2,425.5 | | Additions | 419.3 | | Depreciation and Amortization | (455.6) | | Net Book Value June 30, 2024 | 11,805.8 | H1 2024 Movement in Intangible Assets | Item | Million USD | | :--- | :--- | | Net Book Value January 1, 2024 | 534.0 | | Goodwill Arising from Acquisition of Subsidiaries | 509.5 | | Additions | 1.5 | | Acquisition of Subsidiaries | 0.6 | | Depreciation and Amortization | (0.6) | | Net Book Value June 30, 2024 | 1,045.0 | - The Group's management has reviewed all cash-generating units for impairment indicators as of June 30, 2024, and determined that no impairment or reversal of impairment indicators were identified during the reporting period[215](index=215&type=chunk) [Significant Non-Controlling Interests](index=58&type=section&id=Significant%20Non-Controlling%20Interests) As of June 30, 2024, MMG's total non-controlling interests amounted to **$2,718.2 million**, primarily from the Las Bambas JV Group and the Khoemacau JV Group, with the latter's non-controlling interest arising from Comor's **45%** subscription in MMG Africa Resources Company Limited. - As of June 30, 2024, the Group's total non-controlling interests amounted to **$2,718.2 million** (December 31, 2023: **$2,188.6 million**), including Las Bambas JV Co. (**$2,234.7 million**) and Khoemacau JV Co. (**$483.5 million**)[219](index=219&type=chunk) - Comor's subscription for a **45%** equity interest in MMG Africa Resources Company Limited created a significant non-controlling interest, measured by its proportionate share of Khoemacau JV Co.'s net asset carrying value[218](index=218&type=chunk) Khoemacau JV Co. H1 2024 Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2024 (million USD) | | :--- | :--- | | Assets | 3,183.0 | | Liabilities | (2,109.8) | | Net Assets | 1,073.2 | Khoemacau JV Co. H1 2024 Condensed Consolidated Statement of Comprehensive Income Summary | Indicator | H1 2024 (million USD) | | :--- | :--- | | Revenue | 90.2 | | Profit for the Period | (9.5) | | Total Comprehensive Income | 2 | | Attributable to Equity Holders of the Company | (0.6) | | Attributable to Non-Controlling Interests | 0.6 | [Business Combinations](index=64&type=section&id=Business%20Combinations) MMG completed the acquisition of Cuprous Capital Ltd (Khoemacau mine) for **$1,734.7 million** on March 22, 2024, accounting for it using the purchase method with provisional fair value assessments of acquired assets and liabilities, resulting in **$509.5 million** in goodwill and a net cash outflow of **$2,042.8 million**. - The Group completed the acquisition of Cuprous Capital Ltd (CCL) and its subsidiaries (Khoemacau mine) on March 22, 2024, for an aggregate consideration of **$1,734.7 million**[235](index=235&type=chunk)[236](index=236&type=chunk) - Provisional fair value assessments were made for the acquired assets and assumed liabilities, and **$509.5 million** in goodwill was recognized[236](index=236&type=chunk)[239](index=239&type=chunk) Khoemacau Acquisition Consideration and Recognized Assets and Liabilities Summary (March 22, 2024) | Item | Fair Value (million USD) | | :--- | :--- | | Consideration | 1,734.7 | | Net Identifiable Assets Acquired | 1,225.2 | | Add: Goodwill | 509.5 | | **Total Consideration Paid** | **1,734.7** | - The net cash outflow from the acquisition of CCL was **$2,042.8 million**[241](index=241&type=chunk) - After the acquisition, the CCL Group became a wholly-owned subsidiary of MMG Africa Resources Company Limited, and on June 6, 2024, a **45%** equity interest was transferred to Comor, without MMG losing control[242](index=242&type=chunk) [Significant Related Party Transactions](index=66&type=section&id=Significant%20Related%20Party%20Transactions) MMG, whose ultimate controlling entity is China Minmetals Corporation, engaged in significant related party transactions with China Minmetals and its group companies in H1 2024, including **$777.2 million** in non-ferrous metal sales, purchases of consumables and services, interest expenses, and commodity derivative losses, alongside substantial related party balances. - **67.5%** of the company's shares are held by China Minmetals Non-ferrous Metals Co., Ltd. through its subsidiary China Minmetals H.K. (Holdings) Limited, with the ultimate controlling entity being China Minmetals Corporation[243](index=243&type=chunk) H1 2024 Transactions with China Minmetals and its Group Companies Summary | Transaction Category | H1 2024 (million USD) | H1 2023 (million USD) | | :--- | :--- | :--- | | Sales of Non-Ferrous Metals | 777.2 | 974.6 | | Commodity Derivative Losses | (23.2) | (28.2) | | Purchases of Consumables and Services | (14.6) | (8.2) | | Interest Expense | (70.0) | (51.9) | June 30, 2024 Significant Related Party Balances | Balance Category | June 30, 2024 (million USD) | Decembe

证券研究报告 公 2024年06月17日 司 报 告 五矿资源(01208) │ 行 业： 有色金属/工业金属 港 投资评级： 买入（首次） 股 当前价格： 2.98港元 - 高成长属性的国际铜资源龙头 公 目标价格： 4.19港元 司 投资要点： 深 基本数据 度 ➢ 国际化矿业翘楚，坐拥世界级矿产资源 研 总股本/流通股本(百万股) 12,129.01/12,129.01 公司主要从事铜、锌采选业务，主要产品为铜、锌和少量包括金、银、铅和 究 流通市值(百万港元) 36,144.46 钼在内的副产品。公司实际控制人为中国五矿，截至 2023年12月31日, 中国五矿持有公司67.55%股份。公司是中国五矿旗下海外上游基本金属资 每股净资产(元) 1.88 源的开发平台，目前公司在南美洲、非洲与澳洲拥有5个运营矿山；其中， 资产负债率(%) 66.98 公司旗舰级资产 Las Bambas 铜矿是世界产量前十五的铜矿之一，Dugald 一年内最高/最低(港元) 4.51/1.75 River则为全球十大锌矿之一。 ➢ Las Bambas铜矿运营改善，贡献公司主要利润 股价相对走势 2023年，公司实现营业 ...

华福证券 铜 2024年05月29日 公 司 五矿资源（01208.HK） 买入（首次评级） 研 究 铜锌巨头拨云见日，铜矿放量扬帆再起 当前价格： 4.18港元 基本数据 投资要点： 总股本/流通股本(百万股) 8,656.05/8,656.05 流通市值(百万港元) 36,182.28  根基深厚，深耕铜锌资源开发。 每股净资产(港元) 1.92 资产负债率(%) 63.77 公司成立以来发展三十余年，始终以矿产资源开发为业务核心， 一年内最高/最低价(港元) 4.51/1.75 目前拥有核心运营矿山四座，分别为位于秘鲁的LasBambas铜矿山、 一年内股价相对走势 位于刚果（金）的Kinsevere 铜矿山、位于澳洲的Rosebery多种基本 金属矿山及DugaldRiver锌矿山。截至2023年6月，公司保有铜资源 公 量969.0万吨，锌资源量1054.6万吨，铅资源量160.9万吨。2024年3 司 月，公司完成收购Khoemacau 铜矿的100%股权，带来铜资源量640 深 万吨。根据各矿山产量指引，预计2024 年铜精矿含铜产量28.0-32.0 度 研 万吨，电解铜产量3.9-4.4万 ...