Delivering operational excellence

Delivering operational excellence Jan Moström, President Boliden Mines Capital Markets Day 2014 10 November 2014

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42

2014-11-10

Delivering operational excellence

Operational excellence

Productivity - availability Metallurgy Tara transformation Project management

Organic expansion

Focusing on profitable growth M&A

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43

2014-11-10

Environmental excellence is a key focus 

Water treatment ‒ Fenton ‒ Biological process for nitrogen removal

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Reclamation ‒ Tailings facilities ‒ Waste rock ‒ Sites

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TMF, Operational performance

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Acid mine water – oxidation of Pyrite

Pyrite Sulfide ore

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High level of productivity but more to be achieved Copper - open pit with mill 2014

Zinc - underground mines 2016 tonne per man hour

5.0 4.5

tonne per man hour

35

Citronen project (Grönland)

Aitik

30

4.0 3.5

25

Garpenberg

3.0

Pyhäsalmi (Finland)

2.5 2.0

777 (Kanada) Doe Run (USA)

Bolidenområdet

Tara

Aguas Tenidas (Spanien) Tayahua Project (Mexiko) Cerro Lindo (Peru) Kazakhmys (Kazahstan)

1.5 1.0 0.5 0.0 0

1

2

3

4

5

Mineral Park (USA)

Gibraltar (Kanada) Boddington Butte (USA) (Australien)

20

Highland Valley Sierrita (USA) (Kanada)

15

Bingham Canyon (USA) Antamina (Peru) Cerro Verde (Peru) Los Pelambres

10 5

(Chile) Collahuasi (Chile)

Escondida (Chile)

0 0

6

20

40

60

80

Million tonne ore production per year

Million tonne ore production per year

CMD 2014

Mount Milligan (Kanada)

46

2014-11-10 5

100

Aitik – no 1 productivity Open pit Cu mines

Percentile **

Head grade

% Cu

99

Mine

t ore/hour

1

Mill

t ore/hour

0

G&A

t ore/hour

0

Overall

t ore/hour

0

Wage rate

$/hour

87

Labour cost

$/t

12

Cash cost, Normal C1* - All mines

c/lb Cu

42

* Cash cost Normal C1, Wood Mackenzie Q3 2014 estimate for 2014 ** All mines in Woodmackenzie model, Q2 2014 estimates for 2014 CMD 2014

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2014-11-10

World-class design



Fundamentals ‒ ‒ ‒



Mine ‒

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Geological target, conceptual study Mineral resource, pre feasibility Mineral reserve, feasibility study

Interaction infrastructure – production areas – stopes

Concentrator ‒ ‒ ‒ ‒

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Mill Flotation Dewatering TMF

48

2014-11-10

Increasing performance at mine and mill



Key productivity drivers at mine Minimizing lead time between work processes at faces/stopes/benches



Key drivers for the concentrator Optimizing availability of mill/flotation/dewatering and metallurgical performance

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Integrated control system drives efficiency

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Integrated control system for mine and mill ‒ Increased efficiency ‒ Lower costs

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Mobile control room ‒ Enables operators to monitor and adjust in real time



Control system integrated with maintenance system ‒ Only one original document

‒ All share same info ‒ Improved surveillance ‒ Easier to spot errors ‒ Diary improves visibility over time



WLan ‒ Enable status control and operational guidance

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Wlan Enable status control and operational guidance

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Leading expertise in handling complex ore



90 years of mining complex ore



Complex deposits with increasing grades of penalty elements



Case: Kankberg

CMD 2014

Kylylahti Cu, Au, Zn, Ni, Co

52

2014-11-10

Patented process with high recoveries Kankberg – leaching of gold and tellurium from goldtellurides 

Conceptual study initiated 2008 ‒ Conventional leaching plant, method not an option ‒ A hot leaching process developed ‒ Boliden patent ‒ Gold recovery 85% (without 45%)

‒ Tellurium leaching process developed ‒ Tellurium recovery 65%



New process commissioned 2011

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Restructuring Tara for improved profitability

Decrease mobile fleet Optimization on-going

Lowering headcount 2013 2014 Q3 2015

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700 620 590

54

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Future growth based on solid project pipeline Future options

Conceptual study

Pre feasibility study

feasibility study

execution

Aitik 45 Laver Garpenberg 2,5

Cu

Projects may loop, may be rejected or may be executed due to market conditions and project conditions

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55

Zn Au

2014-11-10

In-house project management a success factor 

General design by in-house resources



Project management all disciplines with in-house personnel



Suppliers used in parts of the project but no large turn-key assignments



Standardized process - Project manual with continuous improvements from previous projects A36. BoRe, Garpen, A45.



Key individuals assures continuity and experience sharing

Conceptual Study

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Prefeasibility Study

Feasibility study

56

Implementation

2014-11-10

Garpenberg – Set for 2.5 Mtonnes

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Aitik45 

45 (38) mton annually, +20%



Reserve grade 0.22 (0.24) ‒ Reserves 1 085 (633) mtonnes ‒ Life of mine 2040 (2030) years ‒ Copper life of mine 2 348 (1 471) ktonnes



Capex ‒ New crushers with improved reliability ‒ Lower stripping, approx. 0.5 ‒ TMF



-10% costs per ton of ore ‒ Economies of scales



New environmental permit ‒ In all, in according to our application

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Managing pushbacks to optimize financial performance

Ö

Sa2

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Adjusted mine plan Aitik



New environmental permit fall 2014



45 Mton 2017



Production 2015, 40 Mton



Life of mine Cu grade unchanged 0.22%



Cu grade 2015 and 2016 0.21%



2017-2019 over average grade

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Increased production with new crusher Improved reliability – proven design

Existing with reinforcements CMD 2014

New

61

2014-11-10

Further growth options Laver 

Kylylahti ‒ Near mine ‒ Depth ‒ Satelites

‒ Outokumpu Field



Laver ‒ Application for mine concession Q3 2014 ‒ Next step, pre feasibility

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Exploration, an unique opportunity

”Malmfälten”

Skellefte field

Outokumpu field

Bergslagen

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Kylylahti – near mine exploration

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Outokumpu Area – Copper and Nickel Deposits

Kokka

Luikonlahti

Saramäki

Kylylahti Perttilahti Vuonos Riihilahti

CMD 2014

Keretti Hautalampi

65

2014-11-10

Delivering operational excellence

Operational excellence

Productivity - availability Metallurgy Tara transformation Project management

Organic expansion

Focusing on profitable growth M&A

CMD 2014

66

2014-11-10

Disclaimer 

This presentation has been prepared by Boliden for information purposes only and as per the indicated date. Boliden does not undertake any obligation to correct or update the information or any statements made therein. Certain statements in this presentation are forward-looking and are subject to risks and uncertainties.



Nothing contained herein shall constitute any representation or warranty as to accuracy or completeness. Boliden has not made any independent verification of the information obtained from third parties.



Nothing in this material shall be construed as an offer or solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction.



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

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CMD 2014

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