Exhibit 99.1
11811 North Tatum Blvd., Suite 2500 - Phoenix, AZ 85028
Phone: Arizona: (602) 494-5328 - Fax: (602) 494-5317
Southern Copper Corporation Reports
Second Quarter and Six Month 2010 Results
July 28, 2010 - Southern Copper Corporation (NYSE and BVL: SCCO)
· On July 22, 2010, the Board of Directors approved a 5 year $3.8 billion capital investment program in the state of Sonora, Mexico, to expand production and improve cost competitiveness. This investment plan includes $2.1 billion to expand Cananea’s annual production from 180,000 tons to 450,000 tons of copper contained, an increase of 150%. The increase of 270,000 tons of copper is the result of a new concentrator with an estimated annual production of 188,000 tons of copper, and three additional leaching plants with a Quebalix circuit with a copper capacity of 82,000 tons per year. The plan also includes a molybdenum plant with an estimated annual capacity of 2,000 tons. The Company will continue with the social, educational and cultural programs that it usually conducts in all its mining operations in conjunction with the local communities. These programs were put on hold due to the union labor disputes.
After the termination of the labor relations by enforcement of the law, the Company has aggressively started the repair of the facilities and currently has more than 3,000 workers and contractors personnel who are working at the mine to restore the facilities. The estimated cost to restore this mining unit is approximately $114 million. The Company’s goal is to reach full capacity by February of 2011.
· Second quarter 2010 (“2Q10”) sales were $1,173.2 million, 42.3% higher than the $824.5 million in the 2Q09. First half 2010 (“1H10”) sales were $2,392.6 million, 65.4% higher than the $1,446.5 million in the 1H09. These increases were mainly the result of higher metal prices and higher molybdenum volume.
· Operating cash cost per pound of copper, net of by-products credit, was 6.4 cents per pound in the 1H10, compared with 49.7 cents per pound in 1H09. This improvement was the result of continuing operational efficiencies and higher by-products credits, principally from molybdenum and zinc.
· EBITDA in 2Q10 was $612.4 million, compared to $380.4 million in the 2Q09, an increase of $232.0 million or 61% higher. EBITDA in 1H10 was $1,303.9 million, compared to $606.1 in the 1H09, an increase of $697.8 million or 115% higher.
· Net income for the 2Q10 was $313.4 million, 79.1% higher than the $175.0 million in the 2Q09. Net income for the 1H10 was $696.6 million, 174.6% higher than the $253.7 million in the 1H09.
SOUTHERN COPPER CORPORATION
www.southerncoppercorp.com
Committed to today’s needs without compromising the generations to come
· The Tia Maria Project is underway, the technical group conformed by the Peruvian Government, the Company and local communities was partially formed and is scheduled to initiate the review of the Environmental Impact Assessment (“EIA”). The group will resolve which of the three alternatives for water supply is the more feasible. The Company has offered to build a dam with an increased capacity of approximately forty million cubic meters of water that currently drains to the Pacific Ocean. The Company would only use seven million cubic meters per year of this water, the remaining additional thirty-three million cubic meters would be available for the significant benefit of the Tambo valley agriculture communities and the Islay population. The second alternative for water supply is the extraction of underground water through wells, and the third alternative is the desalinization of seawater. With the latter two alternatives, the local communities will be deprived of the benefit of the additional thirty-three million cubic meters of water if the dam is not built. We expect to receive the approval to begin construction of the project during the 4Q10. In the meantime, we continue with the development of the detailed engineering, as well as with the equipment acquisitions. We anticipate to begin production during 2012. The Tia Maria mining unit will produce through its SXEW process 120,000 tons of copper.
· On July 22, 2010, the Board of Directors authorized a dividend of 37 cents per share to be paid on August 25, 2010 to the Company’s shareholders of record at the close of business on August 12, 2010.
SOUTHERN COPPER CORPORATION
www.southerncoppercorp.com
Committed to today’s needs without compromising the generations to come
Commenting on recent Company events, German Larrea, Chairman of the Board said, “I am pleased to inform that we are fully committed to restore Cananea’s production and to initiate our aggressive expansion programs that had been delayed due to the labor disputes. These programs will generate 6,000 jobs during the expansion and operation of this mining unit, as well as an important economic spill-over in benefit of the region and the State of Sonora, positioning Cananea as one of the largest copper mines in the world, with 450,000 tons of copper contained per year.”
“Once more we are experiencing a turbulent market due to concerns about the recovery of the U.S. economy, the European debt position and possible weakening of Chinese growth. However, we believe this to be a short term phenomenon. We see positive signs for the copper and molybdenum markets in the recovery of U.S. industrial production and the consistent decline in LME warehouse inventories from their February peak. We believe we are moving forward to a deficit copper market in 2011 due to possible production underperformance and ore grade reductions from several operations. We also think that Southern Copper, with its aggressive growth plan, is well positioned to seize the benefits of the current copper and molybdenum markets.”
SUMMARY FINANCIAL TABLE
|
| Second Quarter |
| Year to Date |
| ||||||||||||||||||
|
|
|
|
|
| Variance |
|
|
|
|
| Variance |
| ||||||||||
|
| 2010 |
| 2009 |
| $ |
| % |
| 2010 |
| 2009 |
| $ |
| % |
| ||||||
|
| (in millions except per share amount and %s) |
| ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Sales |
| $ | 1,173.2 |
| $ | 824.5 |
| $ | 348.7 |
| 42.3 | % | $ | 2,392.6 |
| $ | 1,446.5 |
| $ | 946.1 |
| 65.4 | % |
Cost of sales |
| 522.3 |
| 419.5 |
| 102.8 |
| 24.5 | % | 1,021.5 |
| 795.0 |
| 226.5 |
| 28.5 | % | ||||||
Operating income |
| 540.4 |
| 303.2 |
| 237.2 |
| 78.2 | % | 1,149.2 |
| 447.3 |
| 701.9 |
| 156.9 | % | ||||||
EBITDA (1) |
| 612.4 |
| 380.4 |
| 232.0 |
| 61.0 | % | 1,303.9 |
| 606.1 |
| 697.8 |
| 115.1 | % | ||||||
EBITDA margin |
| 52.2 | % | 46.1 | % | 6.1 | % | 13.1 | % | 54.5 | % | 41.9 | % | 12.6 | % | 30.1 | % | ||||||
Net Income |
| $ | 313.4 |
| 175.0 |
| 138.4 |
| 79.1 | % | 696.6 |
| 253.7 |
| 442.9 |
| 174.6 | % | |||||
Net income margin |
| 26.7 | % | 21.2 | % | 5.5 | % | 25.9 | % | 29.1 | % | 17.5 | % | 11.6 | % | 66.0 | % | ||||||
Income per share |
| $ | 0.37 |
| $ | 0.21 |
| $ | 0.16 |
| 79.1 | % | $ | 0.82 |
| $ | 0.30 |
| $ | 0.52 |
| 174.9 | % |
Capital expenditures |
| $ | 92.9 |
| $ | 142.7 |
| $ | (49.8 | ) | (34.9 | )% | $ | 168.3 |
| $ | 206.2 |
| $ | (37.9 | ) | (18.4 | )% |
Exploration |
| $ | 10.1 |
| $ | 5.0 |
| $ | 5.1 |
| 102.0 | % | $ | 18.6 |
| $ | 10.4 |
| $ | 8.2 |
| 78.8 | % |
(1) http://www.southerncoppercorp.com/ENG/invrel/Pages/PGEbitda.aspx
SOUTHERN COPPER CORPORATION
www.southerncoppercorp.com
Committed to today’s needs without compromising the generations to come
Production
Copper mined production in the 2Q10 decreased by 4.8% to 113,537 tons compared to 119,277 tons in the 2Q09. This decrease was mainly the result of 2,818 tons of lower production at our Peruvian mines resulting mostly from lower ore grades at the Cuajone mine and a decrease of 2,761 tons at the La Caridad mine also due to lower ore grades. Rod production increased by 21% in the 2Q10 compared to the same period of 2009 due to higher demand, allowing the Company to capture important copper premiums over the spot price.
In the 2Q10, molybdenum production reached a record of 5,510 tons, an increase of 25.5%, compared to 4,389 tons in 2Q09. Higher ore grades and recoveries at our open pit mines made possible increases of 55.4% in Toquepala, 36.7% in Cuajone and 10.4% in La Caridad, for a total increase in production of over 1,100 tons. It is important to note that the molybdenum production increase helped offset the lower copper sales value.
Zinc mine production in the 2Q10 decreased by 8.0% to 25,426 tons compared to 27,644 tons in 2Q09 mainly the result of lower ore grades at the Charcas and Santa Eulalia mines.
Capital Expenditures
On July 22, 2010, the Board of Directors approved a 5 year $3.8 billion capital investment program in the state of Sonora, Mexico to expand production and improve cost competitiveness. The following chart explains the program details:
|
|
|
| Previous |
| Additional |
| Previous + |
|
|
| |
|
| Sonora State |
| Cu Capacity |
| Cu Production |
| Additional |
| Investment |
| |
Location |
| Projects |
| (Tons) |
| (Tons) |
| (Tons) |
| ($ Million) |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Concentrator |
| 125,000 |
| 188,000 |
| 313,000 |
| $ | 1,200 |
|
Cananea |
| SX/EW Plant |
| 55,000 |
| 82,000 |
| 137,000 |
| $ | 690 |
|
|
| Mine Equipment & Infrastructure |
| — |
| — |
| — |
| $ | 150 |
|
|
| Molybdenum Plant |
| — |
| 2,000 Mo |
| — |
| $ | 30 |
|
|
| Subtotal Cananea |
| 180,000 |
| 270,000 |
| 450,000 |
| $ | 2,070 |
|
|
| Projects related to the expansion of Cananea |
| |||||||||
Empalme |
| Copper Smelter |
| — |
| 350,000 (capacity) |
| — |
| $ | 800 |
|
|
| Copper Refinery |
| — |
| 330,000 (capacity) |
| — |
| $ | 500 |
|
La Caridad |
| Power Plant |
| — |
| 250 MW |
| — |
| $ | 240 |
|
|
| Total Cananea |
| — |
| — |
| — |
| $ | 3,610 |
|
La Caridad |
| Pilares |
| — |
| 40,000 |
| 40,000 |
| $ | 195 |
|
Total State of Sonora |
| — |
| 310,000 |
| 490,000 |
| $ | 3,805 |
| ||
The investment program has already started at Cananea as we have begun with the investment of $114 million to restore the previous production capacity of 180,000 tons. In addition, the construction of the Quebalix III (crushing and conveying system for the
SOUTHERN COPPER CORPORATION
www.southerncoppercorp.com
Committed to today’s needs without compromising the generations to come
leaching material) with an investment of $56 million has restarted; although 80% of this investment was made prior to the labor disputes. Currently the Company is at the final stage of analyzing the proposals of contractors to start building the third leaching plant at Cananea (SXEW III) which will have a capacity of 32,000 tons and capital investment of $180 million; this plant is expected to begin production in 2012.
During the next year we will conduct the studies and engineering for the Cananea concentrator and molybdenum plant, as well as for its fourth and fifth leaching plants (SXEW IV & SXEW V). We will also work in the detailed engineering of the copper smelter and refinery at Empalme.
The program also includes the development of the Pilares mine site which will feed its mineral production for processing at the La Caridad concentrator. The estimated production of this project is 40,000 tons of copper per year and is expected to start during 2012.
The following chart provides the breakdown of the main expansion investments in Peru:
|
|
|
| Previous |
| Additional |
| Previous + |
|
|
| |
|
|
|
| Cu Capacity |
| Production |
| Additional |
| Investment |
| |
Location |
| Projects in Peru |
| (Tons) |
| (Tons) |
| (Tons) |
| ($ Million) |
| |
Toquepala |
| Mine and Concentrator - Copper |
| 165,000 |
| 100,000 |
| 265,000 |
| $ | 600 |
|
|
| -Molybdenum |
| 4,200 |
| 3,100 |
| 7,300 |
|
|
| |
Cuajone |
| Mine and Concentrator - Copper |
| 190,000 |
| 72,000 |
| 262,000 |
| $ | 300 |
|
|
| -Molybdenum |
| 5,300 |
| 500 |
| 5,800 |
|
|
| |
Tia Maria |
| SX EW Copper |
|
|
| 120,000 |
| 120,000 |
| $ | 934 |
|
Total Peruvian Operations - Copper |
| 355,000 |
| 292,000 |
| 647,000 |
| $ | 1,834 |
| ||
|
| -Molybdenum |
| 9,500 |
| 3,600 |
| 13,100 |
|
|
| |
Through June 30, 2010, the Company has spent a total of $100 million on the Toquepala concentrator expansion. Detailed engineering is in progress. The use of high pressure grinding rolls (HPGR) at the tertiary crushing stage was approved; wet screening instead of dry screening is under evaluation. The EIA for this project is in its final stage and will be presented to the government at the end of August. An explanation of the project was recently presented to the local community.
In May 2010, the Ilo smelter marine trestle, with a total cost of $25.3 million, started operation. We now offload directly to offshore ships the sulfuric acid produced at the Ilo smelter, avoiding hauling cargo through the city of Ilo. The 500 meter long marine trestle is the last part of the Ilo smelter modernization project and created 170 jobs during its construction. The first ship using the new facility was loaded on May 2, after which all overseas shipments of sulfuric acid are being made using the marine trestle.
The first stage of the tailings disposal project at Quebrada Honda in Peru is almost completed. Construction of the drainage system for the lateral dam started in June. This project increases the height of the existing Quebrada Honda dam to impound future tailings
SOUTHERN COPPER CORPORATION
www.southerncoppercorp.com
Committed to today’s needs without compromising the generations to come
from the Toquepala and Cuajone mills. The project has a total cost of $66 million and will extend the expected life of this tailings facility by 35 years.
Tantahuatay:
The Tantahuatay gold project, in which the Company has a 44.25% participation with Compañía de Minas Buenaventura, will start operations in the second half of 2011 and is expected to produce between 80,000 and 100,000 ounces of gold and about 426,000 ounces of silver per year, for 5 years. This project will require a total investment of $110 million, of which $38 million has been already invested. Construction began in the 2Q10.
SOUTHERN COPPER CORPORATION
www.southerncoppercorp.com
Committed to today’s needs without compromising the generations to come
Conference call
The Company’s second quarter earnings conference call will be held on Thursday July 29, 2010 beginning at 10:00 A.M. — EST (9:00 A.M. Lima and Mexico City time).
To participate:
Dial-in number: | 866-371-3858 in the U.S |
| 631-813-4732 outside the U.S. |
|
|
| Genaro Guerrero, Vice President, Finance and Chief Financial Officer |
| Raul Jacob, Manager of Financial Planning and Investor Relations |
|
|
Conference ID: | 88170020 and “Southern Copper Second Quarter 2010 Results” |
SCC’s New Website:
In July 2010, we launched a new version of our website including new features which we believe will make it a more user friendly one. We invite you to visit our modernized website at:
http://www.southerncoppercorp.com
or
http://www.southerncoppercorporation.com
SOUTHERN COPPER CORPORATION
www.southerncoppercorp.com
Committed to today’s needs without compromising the generations to come
AVERAGE METAL PRICES:
|
| LME |
| COMEX |
|
|
|
|
|
|
|
|
|
|
| Copper |
| Copper |
| Molybdenum |
| Zinc |
| Silver |
| Gold |
|
|
| ($/lb) |
| ($/lb) |
| ($/lb) |
| ($/lb) |
| ($/oz) |
| ($/oz) |
|
1Q 2010 |
| 3.28 |
| 3.28 |
| 15.78 |
| 1.04 |
| 16.91 |
| 1,108.90 |
|
2Q 2010 |
| 3.19 |
| 3.19 |
| 16.10 |
| 0.92 |
| 18.35 |
| 1,195.68 |
|
6Mos average 2010 |
| 3.23 |
| 3.24 |
| 15.94 |
| 0.98 |
| 17.63 |
| 1,152.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q 2009 |
| 1.56 |
| 1.57 |
| 8.75 |
| 0.53 |
| 12.63 |
| 908.71 |
|
2Q 2009 |
| 2.12 |
| 2.15 |
| 9.10 |
| 0.67 |
| 13.75 |
| 921.51 |
|
3Q 2009 |
| 2.66 |
| 2.67 |
| 14.50 |
| 0.80 |
| 14.76 |
| 960.06 |
|
4Q 2009 |
| 3.02 |
| 3.03 |
| 11.29 |
| 1.00 |
| 17.56 |
| 1,101.64 |
|
6Mos average 2009 |
| 1.84 |
| 1.86 |
| 8.93 |
| 0.60 |
| 13.19 |
| 915.11 |
|
Average 2009 |
| 2.34 |
| 2.35 |
| 10.91 |
| 0.75 |
| 14.67 |
| 972.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variance: 2Q10 vs. 2Q09 |
| 50.5 | % | 48.4 | % | 76.9 | % | 37.3 | % | 33.5 | % | 29.8 | % |
Variance 2Q10 vs. 1Q10 |
| (2.7 | )% | (2.7 | )% | 2.0 | % | (11.5 | )% | 8.5 | % | 7.8 | % |
Source: Silver — COMEX; Gold and Zinc — LME; Molybdenum — Metals Week Dealer Oxide.
PRODUCTION AND SALES:
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| June 30 |
| June 30, |
| ||||||||
|
| 2010 |
| 2009 |
| % |
| 2010 |
| 2009 |
| % |
|
Copper (tons) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mined |
| 113,537 |
| 119,277 |
| (4.8 | )% | 222,781 |
| 239,049 |
| (6.8 | )% |
Smelted |
| 120,889 |
| 130,703 |
| (7.5 | )% | 243,291 |
| 260,821 |
| (6.7 | )% |
Refined |
| 110,276 |
| 112,174 |
| (1.7 | )% | 222,817 |
| 225,822 |
| (1.3 | )% |
Rod |
| 18,312 |
| 15,156 |
| 20.8 | % | 36,464 |
| 29,682 |
| 22.9 | % |
Sales |
| 116,003 |
| 122,892 |
| (5.6 | )% | 232,741 |
| 243,157 |
| (4.3 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molybdenum (tons) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mined |
| 5,510 |
| 4,389 |
| 25.5 | % | 10,264 |
| 8,445 |
| 21.5 | % |
Sales |
| 5,559 |
| 4,410 |
| 26.1 | % | 10,319 |
| 8,432 |
| 22.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zinc (tons) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mined |
| 25,426 |
| 27,644 |
| (8.0 | )% | 52,250 |
| 54,682 |
| (4.4 | )% |
Refined |
| 24,629 |
| 25,913 |
| (5.0 | )% | 50,377 |
| 52,326 |
| (3.7 | )% |
Sales |
| 24,311 |
| 25,023 |
| (2.8 | )% | 49,907 |
| 51,856 |
| (3.8 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silver (000s ounces) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mined |
| 3,118 |
| 3,362 |
| (7.3 | )% | 6,287 |
| 6,507 |
| (3.4 | )% |
Refined |
| 3,432 |
| 3,547 |
| (3.2 | )% | 6,977 |
| 5,989 |
| 16.5 | % |
Sales |
| 3,849 |
| 4,311 |
| (10.7 | )% | 7,309 |
| 8,272 |
| (11.6 | )% |
SOUTHERN COPPER CORPORATION
www.southerncoppercorp.com
Committed to today’s needs without compromising the generations to come
Southern Copper Corporation
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
|
| Three Months Ended |
| Six Months Ended |
| ||||||||||||
|
| June 30, |
| June 30, |
| ||||||||||||
|
| 2010 |
| 2009 |
| VAR % |
| 2010 |
| 2009 |
| VAR % |
| ||||
|
| (in thousands, except per share amount) |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net sales: |
| $ | 1,173,240 |
| $ | 824,509 |
| 42.3 | % | $ | 2,392,645 |
| $ | 1,446,507 |
| 65.4 | % |
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cost of sales (exclusive of depreciation, amortization, and depletion shown separately below) |
| 522,298 |
| 419,476 |
| 24.5 | % | 1,021,496 |
| 794,931 |
| 28.5 | % | ||||
Selling, general and administrative |
| 21,964 |
| 18,101 |
| 21.3 | % | 43,682 |
| 36,893 |
| 18.4 | % | ||||
Depreciation, amortization and depletion |
| 78,490 |
| 78,715 |
| (0.3 | )% | 159,743 |
| 156,936 |
| 1.8 | % | ||||
Exploration |
| 10,065 |
| 5,021 |
| 100.5 | % | 18,530 |
| 10,423 |
| 77.8 | % | ||||
Total operating costs and expenses |
| 632,817 |
| 521,313 |
| 21.4 | % | 1,243,451 |
| 999,183 |
| 24.4 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating income |
| 540,423 |
| 303,196 |
| 78.2 | % | 1,149,194 |
| 447,324 |
| 156.9 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest expense, net of capitalized interest |
| (45,050 | ) | (21,942 | ) | 105.3 | % | (68,838 | ) | (43,833 | ) | 57.0 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gain (loss) on derivative Instruments |
| — |
| 6,785 |
| (100.0 | )% | — |
| 4,181 |
| (100.0 | )% | ||||
Other income (expense) |
| (6,489 | ) | (1,495 | ) | 334.0 | % | (5,056 | ) | 1,868 |
| (370.7 | )% | ||||
Interest income |
| 1,328 |
| 898 |
| 47.9 | % | 3,380 |
| 5,173 |
| (34.7 | )% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income before income tax |
| 490,212 |
| 287,442 |
| 70.5 | % | 1,078,680 |
| 414,713 |
| 160.1 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income taxes |
| 174,901 |
| 111,413 |
| 57.0 | % | 378,142 |
| 159,438 |
| 137.2 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income net of income tax |
| 315,311 |
| 176,029 |
| 79.1 | % | 700,538 |
| 255,275 |
| 174.4 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Less: Net income attributable to non-controlling interest |
| 1,924 |
| 1,061 |
| 81.3 | % | 3,907 |
| 1,615 |
| 141.9 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net Income attributable to SCC |
| $ | 313,387 |
| $ | 174,968 |
| 79.1 | % | $ | 696,631 |
| $ | 253,660 |
| 174.6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Per common share amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income attributable to SCC common shareholders – basic and diluted |
| $ | 0.369 |
| $ | 0.206 |
| 79.1 | % | $ | 0.820 |
| $ | 0.298 |
| 175.1 | % |
Dividends paid |
| $ | 0.450 |
| $ | 0.045 |
| 900.0 | % | $ | 0.880 |
| $ | 0.162 |
| 443.2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares outstanding (Basic and diluted) |
| 850,000 |
| 850,008 |
|
|
| 850,000 |
| 851,390 |
|
|
| ||||
SOUTHERN COPPER CORPORATION
www.southerncoppercorp.com
Committed to today’s needs without compromising the generations to come
Southern Copper Corporation
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
|
| June 30, |
| December 31, |
| June 30, |
| |||
|
| 2010 |
| 2009 |
| 2009 |
| |||
|
| (in thousands) |
| |||||||
ASSETS |
|
|
|
|
|
|
| |||
Current assets: |
|
|
|
|
|
|
| |||
Cash and cash equivalents |
| $ | 2,144,623 |
| $ | 772,306 |
| $ | 235,540 |
|
Short-term investments |
| 50,144 |
| 22,948 |
| 33,890 |
| |||
Accounts receivable |
| 421,002 |
| 439,950 |
| 334,994 |
| |||
Inventories |
| 446,670 |
| 456,122 |
| 456,529 |
| |||
Prepaid, deferred taxes and other assets |
| 59,614 |
| 86,803 |
| 141,718 |
| |||
Total current assets |
| 3,122,053 |
| 1,778,129 |
| 1,202,671 |
| |||
|
|
|
|
|
|
|
| |||
Property, net |
| 4,011,329 |
| 3,969,558 |
| 3,876,384 |
| |||
Leachable material, net |
| 86,291 |
| 107,262 |
| 131,778 |
| |||
Intangible assets, net |
| 113,133 |
| 113,840 |
| 114,005 |
| |||
Deferred income tax |
| 52,863 |
| 52,670 |
| 55,901 |
| |||
Other assets |
| 63,814 |
| 41,113 |
| 61,012 |
| |||
Total assets |
| $ | 7,449,483 |
| $ | 6,062,572 |
| $ | 5,441,751 |
|
|
|
|
|
|
|
|
| |||
LIABILITIES |
|
|
|
|
|
|
| |||
Current liabilities: |
|
|
|
|
|
|
| |||
Current portion of long-term debt |
| $ | 10,000 |
| $ | 10,000 |
| $ | 10,000 |
|
Accounts payable |
| 222,858 |
| 283,703 |
| 279,014 |
| |||
Income taxes |
| 108,848 |
| 91,359 |
| — |
| |||
Due to affiliates |
| 3,108 |
| — |
| 9,656 |
| |||
Accrued workers’ participation |
| 118,350 |
| 150,692 |
| 42,236 |
| |||
Interest |
| 58,978 |
| 39,795 |
| 38,991 |
| |||
Other accrued liabilities |
| 27,528 |
| 26,876 |
| 33,682 |
| |||
Total current liabilities |
| 549,670 |
| 602,425 |
| 413,579 |
| |||
|
|
|
|
|
|
|
| |||
Long-term debt |
| 2,755,126 |
| 1,270,252 |
| 1,275,112 |
| |||
Deferred income taxes |
| 126,958 |
| 143,508 |
| 139,365 |
| |||
Other liabilities |
| 114,341 |
| 103,808 |
| 153,016 |
| |||
Asset retirement obligation |
| 59,227 |
| 48,925 |
| 18,423 |
| |||
Total non-current liabilities |
| 3,055,652 |
| 1,566,493 |
| 1,585,916 |
| |||
|
|
|
|
|
|
|
| |||
EQUITY |
|
|
|
|
|
|
| |||
Stockholders’ equity |
|
|
|
|
|
|
| |||
Common stock |
| 419,824 |
| 418,759 |
| 417,958 |
| |||
Accumulated comprehensive income |
| 3,405,502 |
| 3,456,869 |
| 3,008,950 |
| |||
Total stockholders’ equity |
| 3,825,326 |
| 3,875,628 |
| 3,426,908 |
| |||
Non controlling interest |
| 18,835 |
| 18,026 |
| 15,348 |
| |||
Total Equity |
| 3,844,161 |
| 3,893,654 |
| 3,442,256 |
| |||
|
|
|
|
|
|
|
| |||
Total liabilities and equity |
| $ | 7,449,483 |
| $ | 6,062,572 |
| $ | 5,441,751 |
|
As of June 30, 2010 and December 31, 2009 there were 850.0 million shares outstanding, respectively.
SOUTHERN COPPER CORPORATION
www.southerncoppercorp.com
Committed to today’s needs without compromising the generations to come
Southern Copper Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
|
| 3 months ended |
| 6 months ended |
| ||||||||
|
| 2010 |
| 2009 |
| 2010 |
| 2009 |
| ||||
|
| (in thousands) |
| ||||||||||
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
| ||||
Net earnings |
| $ | 315,311 |
| $ | 176,029 |
| $ | 700,538 |
| $ | 255,275 |
|
Depreciation, amortization and depletion |
| 78,490 |
| 78,715 |
| 159,743 |
| 156,936 |
| ||||
Cash provided from (used for) operating assets and liabilities |
| 146,857 |
| (171,060 | ) | (26,082 | ) | (514,558 | ) | ||||
Other, net |
| (12,902 | ) | 26,228 |
| 796 |
| 18,453 |
| ||||
Net cash provided from (used for) operating activities |
| 527,755 |
| 109,912 |
| 834,994 |
| (83,894 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
| ||||
Capital expenditures |
| (92,925 | ) | (142,725 | ) | (168,288 | ) | (206,181 | ) | ||||
Purchase of short-term investment |
| (37,780 | ) | — |
| (37,780 | ) | — |
| ||||
Other, net |
| 8,187 |
| 20,439 |
| 16,383 |
| 32,745 |
| ||||
Net cash used for investing activities |
| (122,518 | ) | (122,286 | ) | (189,685 | ) | (173,436 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
| ||||
Debt incurred (repaid) net |
| 1,484,674 |
| (5,000 | ) | 1,484,674 |
| (5,000 | ) | ||||
Dividends paid |
| (382,500 | ) | (38,251 | ) | (747,998 | ) | (137,806 | ) | ||||
SCC Common shares buyback |
| — |
| — |
| — |
| (71,566 | ) | ||||
Capitalized debt issuance cost |
| (8,155 | ) | — |
| (8,155 | ) | — |
| ||||
Distributions to non-controlling interest |
| (1,822 | ) | (189 | ) | (2,971 | ) | (189 | ) | ||||
Other |
| (88 | ) | 569 |
| (13 | ) | 639 |
| ||||
Net cash provided from (used for) financing activities |
| 1,092,109 |
| (42,871 | ) | 725,537 |
| (213,922 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Effect of exchange rate changes on cash |
| (4,687 | ) | (490 | ) | 1,471 |
| (9,948 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Increase (decrease) in cash and cash equivalents |
| $ | 1,492,659 |
| $ | (55,735 | ) | $ | 1,372,317 |
| $ | (481,200 | ) |
SOUTHERN COPPER CORPORATION
www.southerncoppercorp.com
Committed to today’s needs without compromising the generations to come
Company Profile
Southern Copper Corporation is one of the largest integrated copper producers in the world and has the largest copper reserves of the industry. The Company is a NYSE and Lima Stock Exchange listed company that is 80% owned by Grupo Mexico, a Mexican company listed on the Mexican stock exchange. The remaining 20% ownership interest is held by the international investment community. The Company operates mining units and metallurgical facilities in Mexico and Peru and conducts exploration activities in Mexico, Peru y Chile.
###
This news release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In addition to the risks and uncertainties noted in this news release, there are certain factors that could cause results to differ materially from those anticipated by some of the statements made. These factors include those listed in the Company’s most recently filed quarterly reports on Form 10-Q and annual report on Form 10-K. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.
SOUTHERN COPPER CORPORATION
www.southerncoppercorp.com
Committed to today’s needs without compromising the generations to come