2. Confidentiality and Disclaimer
These materials have been prepared by KGHM International Ltd. (the “Company”) solely for its own use during its presentation to you and
may not be taken away, reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside
your organization/firm) or published, in whole or in part, for any purpose. By attending this presentation, you are agreeing to be bound
by the restrictions set out in this notice and to maintain absolute confidentiality regarding the information disclosed in these materials.
Neither the Company, nor any of its affiliates, make any representation or warranty express or implied as to, and no reliance should be
placed on, the accuracy, completeness or correctness of the information contained herein. It is not the intention to provide, and you
may not rely on these materials as providing, a complete or comprehensive analysis of the Company’s financial or business
prospects. The information contained in these materials should be considered in the context of the circumstances prevailing at the
time and has not been, and will not be, updated to reflect material developments which may occur after the date of the presentation.
Neither the Company, nor any of its affiliates, shall have any liability whatsoever (in negligence or otherwise) for any loss or damage
howsoever arising from any use of these materials or their contents or otherwise arising in connection with these materials.
These materials include forward-looking statements. Forward-looking statements include, but are not limited to, the Company’s estimates
for mineral resources, future production, sales, cash flow, business and financial prospects, production growth profile, mine lives,
costs, capital cost expenditures, plans, objectives and expectations, including with respect to future projects, progress in the
development of the projects, demand and market outlook for commodities, future commodity prices, and other statements that are not
historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential,"
"should," and similar expressions are forward-looking statements. Although the Company believes that the expectations reflected in
these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given
that actual results will be consistent with these forward-looking statements.
This document does not constitute an offer or invitation to purchase or subscribe for any securities of the Company or any of its affiliates
and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision in
relation thereto.
For more information about the Company and its parent KGHM Polska Miedź S.A., including financial statements and other reports, go to
www.kghminternational.com or www.kghm.pl.
All figures are in US$ unless otherwise stated or unless the context requires otherwise.
1
3. KGHM International Q2 2013 and H1 2013 Results Highlights
• Financial highlights:
• Adjusted EBITDA:
• Q2 2013 vs. Q2 2012 slightly decreased to $65M from $67M
• H1 2013 vs. H1 2012 slightly decreased to $145M from $147M
• Operations:
• Cu production:
• Q2 2013 vs. Q2 2012 decreased to 56Mlbs (26kt) from 60Mlbs (27kt)
• H1 2013 vs. H1 2012 increased to 121Mlbs (55kt) from 115Mlbs (52kt)
• Cu sold:
• Q2 2013 vs. Q2 2012 increased to 69Mlbs (31kt) from 64Mlbs (29kt)
• H1 2013 vs. H1 2012 remained the same at 119Mlbs (54kt)
• C1 cost:
• Q2 2013 vs. Q2 2012 decreased to $2.23/lb from $2.90/lb
• H1 2013 vs. H1 2012 decreased to $2.13/lb from $2.66/lb
• Other Highlights:
• Victoria Project: Agreement with KGHMI and Vale has been reached for the development of
the Victoria project. KGHMI is the sole owner and operator of Victoria project.
• Corporate Facility: The Company entered into a $200 million Corporate Facility.
2
4. Financial Results for KGHM International (mln USD)
3
• Adjusted EBITDA is a non-IFRS measures which is calculated as income from mining operations plus amortization,
depreciation and depletion, inventory write down and stock-based compensation, minus general and administrative and
exploration and evaluation costs. Management believes that these measures provide investors with ability to better evaluate
underlying performance.
• Net revenues in Q2
2013 decreased 7%
to $314M compared
to Q2 2012 mainly
due to lower metal
prices.
• Copper production
in Q2 2013
decreased 5% to
56Mlbs compared to
Q2 2012. However,
copper sales were
higher at 69Mlbs
compared to 64Mlbs
in Q2 2013 due to
inventory timing.
337
67
-28
314
65
2
Net revenue Adjusted EBITDA Net Earnings / (Loss)
Q2 2012 Q2 2013
5. Financial Results for KGHM International (mln USD)
4
• Adjusted EBITDA is a non-IFRS measures which is calculated as income from mining operations plus amortization,
depreciation and depletion, inventory write down and stock-based compensation, minus general and administrative and
exploration and evaluation costs. Management believes that these measures provide investors with ability to better evaluate
underlying performance.
• Net revenues in H1
2013 decreased 10%
to $586M compared
to H1 2012.
• Copper production
in H1 2013 increased
6% to 121Mlbs
compared to H1
2012. Copper sales
remained the same
at 119Mlbs with H1
2012.
649
147
5
586
145
17
Net revenue Adjusted EBITDA Net Earnings
H1 2012 H1 2013
6. KGHMI’s Main Operations as Percentage of Adjusted EBITDA
5
Main Operations as Percentage of Adjusted EBITDA
Adjusted EBITDA ($M)
7. Lower production of copper in Q2 2013
Copper production
k tonnes
Nickel production
k tonnes
TPM [Total Precious Metals]
k ozs
2012 Copper equivalent amounts are based on previously announced LOM commodity prices: Cu at $2.75/lb, Ni at $8/lb, Pt at
$1600/oz, Pd at US$500/oz, Au at $1000/oz and Mo at $12/lb and excludes the impact of the Franco Nevada Agreement.
Total copper equivalent* production in Q2 2013 slightly decreased to 33.6 k tonnes compared to
33.9 k tonnes in Q2 2012
Decrease in copper production in Q2 2013 due to the completion of production at the Podolsky
mine at the end of Q1 2013 accounting for a 2.6 k tonnes shortfall in Q2 2013. Morrison increased
production in Q2 2013 by 0.9 k tonnes over Q2 2012.
Increase in TPM production due to higher recoveries and higher gold content realized at Robinson
6
+6%+17%
27.0
25.6
Q2 2012 Q2 2013
1.0
1.2
Q2 2012 Q2 2013
-5%
23.3
24.8
Q2 2012 Q2 2013
8. Higher production of copper and TPM in H1 2013
Copper production
k tonnes
Nickel production
k tonnes
TPM [Total Precious Metals]
k ozs
2012 Copper equivalent amounts are based on previously announced LOM commodity prices: Cu at $2.75/lb, Ni at $8/lb, Pt at
$1600/oz, Pd at US$500/oz, Au at $1000/oz and Mo at $12/lb and excludes the impact of the Franco Nevada Agreement.
Total copper equivalent* production in H1 2013 increased to 71.4 k tonnes compared to 66.5 k
tonnes in Q1 2012
Increase in copper production in H1 2013 compared to H1 2013 mainly due to 22% increase at
Robinson as a result of higher recovery rates and continuous improvement in mill operating
practices.
Increase in TPM production mainly due to an increase in TPM at Robinson by 79% or 13.4Kozs
from higher recoveries and higher gold content in concentrate.
7
+17%+6% -6%
52.1
55.1
H1 2012 H1 2013
2.4
2.3
H1 2012 H1 2013
45.3
53
H1 2012 H1 2013
9. C1 cash cost decreased due to lower production costs and higher revenues
from TPM
Unit cash cost
C1 – USD/lb
Lower production costs and increased bi-product revenue at Robinson resulted in a decrease in
overall C1 cost from $2.90 in Q2 2012 to $2.23 in Q2 2013.
Higher production volumes at Robinson has a positive impact on overall unit cash cost in H1 2013.
Robinson achieved $1.71/lb unit cost in H1 2013 compared to $2.72/lb in H1 2012 due to exceptional
performance at the mill.
8
H1
$2.23
Q2
$2.66
$2.13
$2.90 2012
2013
10. Key KGHM International Operations
9
Robinson
Morrison
• Cu production 22% higher vs. H1
2012 - higher recoveries and
increased milling rates
• CAPEX for H1 related to waste
stripping and dewatering activity
• C1 cost significantly lower than H1
2012 at $1.84/lb Cu
• Increase in waste mined over
Q2 2012 due to acceleration of
waste removal in Ruth Pit area
to gain access to ore in 2014
• The remainder of 2013 ore
production will be from the
Liberty Pit with waste stripping
focused on the Kimbley and
Ruth pushbacks.
Outlook
• Production 23% higher vs Q2 2012
from full use of Craig infrastructure.
• Production 7% lower vs. H1 2012 -
due to remedial work at the Craig
Shaft and lower grades
• Lateral development continued
• C1 cost higher vs H1 2012 due to
lower production volume, lower by
product revenues and operation of
Craig Infrastructure
• Focus on reducing production
variability by improving
knowledge of orebody
• Main ramp development will
continue
• Copper and by-product
production is expected to
increase over H1
Outlook
11. Sierra Gorda project
• Project remains on schedule to commence production in 2014
• Overall progress June 30 at 51%
• Detailed engineering phase largely completed for plant, sea
water pipeline and tailings storage facility.
• Construction of seawater pipeline and tailings storage facility
over 1/4 complete and ~1/3 of the plant construction complete
• Pre-stripping June 30 at 45.3%
• Optimization of the pit slope design completed
• Entering peak construction phase where monthly progress
increases dramatically
• ~89% of the DCE revised initial CAPEX of $3.9B committed
• ~ $2.4B of the committed amount has been incurred.
• Finance lease approvals for trucks for a value of ~$40 million.
Other mining equipment leases in progress.
NAJWAŻNIEJSZE OSIĄGNIĘCIA W 2012 ROKUSIERRA GORDA
Mine under construction,
processing plant
construction and pre-
stripping, construction
progress 51%.
Status
Open pitMine
55% KGHM International,
45% SMM and SC
Ownership
~ 1,3 bn t @ 0,42% Cu,
0,0025% Mo
Reserves
Q2 2013 KEY ACCOMPLISHMENTS
Cu Au Mo
10
12. Levack
McCreedy West
Podolsky
10 km
Victoria
Fraser Morgan
Deposit
Totten Mine
Victor Deposit
Nickel Rim
Garson Mine
Thayer-Lindsley MineBlezard Deposit
Frood-Stobie Mine
Copper Cliff N Mine
Creighton Mine
Copper Cliff South Mine
Kelly Lake Deposit
Onaping Depth
Coleman Mine
Location in
Sudbury Basin
Victoria is a polymetallic deposit 100% owned by
KGHMI with offtake processed by Vale Canada’s
nearby mill and smelter complex
Vertical deposit orientation and very amenable to
long hole bulk underground mining
Resource* of ~15 M Tons at 2.4 % Cu, 2.5% Ni
and 7.4g/t TPM
Victoria Project Overview
Inferred resource Classification*
11
On August 1, 2013, an agreement between the
Company and Vale Inco has been reached regarding
the development of Victoria project
The Company has obtained the right to build and
operate the project as a sole owner.
Furthermore, both companies agreed to new terms
of off-take coming from KGHM International mines
in Sudbury Basin, including the future Victoria Mine.
Vale will receive a royalty on all future production
from the project
