LBMA Precious Metals Conference Mike Bunch Lima, November 2014

Transcription

1 LBMA Precious Metals Conference Mike Bunch Lima, November 2014 Who is Summit Mining Industry Trends & the Cost Quartiles Summit s Business Management Model Session 4 Mike Bunch 1

2 Newly Incorporated Subsidiary of Sumitomo Corporation (October 2009) Operation of Minera San Cristobal in Bolivia, SA Support for other Sumitomo Subsidiaries & Departments Metals & Energy JV s, Mergers, Acquisitions Operations Exploration US, Mexico, Bolivia VISION: To be a Leading Mineral Resource Company MISSION: To Develop, Operate, and Optimize Sumitomo Corporation s Global Mineral Resource Interest Session 4 Mike Bunch 2

3 Open Pit Mining & Milling Operation Zinc-Silver & Lead-Silver Concentrates Located in Southern Bolivia in the Department of Potosi Largest Mining Operation in the History of Bolivia World s 7 th Largest Zinc Producer, 8 th Largest Lead Producer & 4 th Largest Silver Producer 1,500 Direct and 3,000 Indirect Employees >98% Bolivian Nationals >65% Local and Indigenous Communities 500 Kilometers South of La Paz 4,000 Meter Elevation in the Bolivian Altiplano 135 Kilometers from the Chilean Border by Dirt Road Administrative Offices in La Paz & Potosi Session 4 Mike Bunch 3

4 Denver Gold Forum 2012 Prices up 20% but Costs up 20% 2013 Prices down 20% - Goal to cut costs 20% 40% Decrease in Mine Operating Efficiency Adsero & Lumley, SME September 2013 Session 4 Mike Bunch 4

5 % 41% Session 4 Mike Bunch 5

6 Value Based Leadership Organizational Development (Teamwork) Systems and Structure A Relationship Between Leaders and Followers that is Based on Shared Values that are Supported and Demonstrated by the Leader. Team Members Strongly Agree on the Importance of Values and Ways of Doing Things. Values are used in Decision Making with a Focus on Doing What s Right. Session 4 Mike Bunch 6

7 Leadership Performance What I ve Done Experience Personal Attributes Competencies What I Am Capable of Doing Knowledge What I Know Who I Am Tactical Implementation Strategic Development Tactical Implementation Strategic Development Session 4 Mike Bunch 7

8 Head Office Employees Flat Organizational Structure Matrix Organization No Managers Managing Managers High Level Strategic Focus Off Site Strategic Sessions Twice per Year Superintendents/Team Leaders Run the Operation Allow for Testing of New Ideas & Screw Ups Safety & Environmental - Zero No Non-Value-Added Corporate B.S. Lean Corporate Overhead Bubble size: Market Cap A B D 40 C 20 SMI ,000 1,500 2,000 2, Total Employees Session 4 Mike Bunch 8

9 Enterprise Model Enterprise Model Enterprise System Enterprise Owner System Owners Process Knowledge Process Owners Subject Matter Experts General Requirements 4.1 Documentation Requirements 4.2 Management Commitment 5.1 Management Review 5.6 General Requirements 4.1 Control of Documents 4.4.4, 4.4.5, Environmental Policy 4.2 Management Review 5.6 General Requirements 4.1 Control of Documents 4.4.4, 4.4.5, OH & Safety Policy 4.2 Management Review 5.6 Business Manual 1.03 Information Management 2.05 Business Manual 1.03 Business Review 1.02 Session 4 Mike Bunch 9

10 ISO 9001:2008 ISO 14001:2004 BS OHASAS 18001:2007 NB :2008 ISO/IEC 17025:2005 ISO/IEC 27001:2005 Quality Environmental Safety & Health Healthy Company Laboratory Information Systems 80 MSC Head Grades Ag(g/t) Zn(%) (right axis) Session 4 Mike Bunch 10

11 20 MSC Tonnes Milled (Million Tonnes) KTPD Nameplate Session 4 Mike Bunch 11

12 61,110 64, ,400 57,840 54,360 43,666 43,656 49,374 53,122 37, ,000 tpd Name Plate Design 2009 $5 Million Feasibility Study to 60,000 tpd $311 Million 2010 Permitted 52,000 tpd (30% increase) Debottlenecking vs. New Industry Trend of Just Go Buy It Power Water Tails Infrastructure Area 2011 Crushing 5.2 Feeders 0.0 Grinding 40.0 Floation 4.0 Thickeners 37.0 Well Field 28.0 Water Return 40.0 Power 20.0 Other 0.0 Total $ Plant Equipment Capacities 120, ,400 Wet Tonnage Target for Crushing Area- 61,176 TPD Dry Tonnage Target for Plant Systems- 54,736 TPD 100,000 86,616 86,616 T o n s 80,000 75,000 75,000 75,003 69,493 P e r 60,000 60,027 57,624 57,637 D a 40,000 y 20,000 - Crusher Stockpile Feed Conveyor Reclaim Feeders SAG Mill Feed Conveyor SAG Mill Ball Mills Cyclones Lead Roughers Zinc Roughers Tails Thickener Current Capacity Improved Capacity Target Capacity Session 4 Mike Bunch 12

13 Debottlenecking vs. Just Go Buy It 2009 $5 Million Feasibility Study 60ktpd $311 Million ktpd $174 Million 2013 $52ktpd $23 Million 2014 TBD ($25 Million) Area Crushing Feeders Grinding Floation Thickeners Well Field Water Return Power Other Total $ $ 23.0 Slower Mill Speeds Thickener Solids from 45% to 55% Session 4 Mike Bunch 13

14 SAN CRISTOBAL BLUE PRINT First Mine in the World to Achieve Simultaneous Triple ISO Certification (ISO 9001, ISO 14001,OHSAS 18001) Record Ramp-up Time (12 Months) Bankruptcy to Net Income in 10 Months (+$200 Million) De-Bottle Neck vs. Just Go Buy It (Mill Expansion) Significant Operating Cost Reductions ($60 Million the First Year) World Leader in Environmental Stewardship World Leader in Social Corporate Responsibility Hire & Retain the RIGHT Leaders Value Based Leadership Develop the RIGHT Work Environment Implement a Business Management System Organizational Development (Teamwork) Systems and Structure Session 4 Mike Bunch 14

15 Session 4 Mike Bunch 15