BHP Group Limited Q4 FY2021 earnings call

• 2021 was a strong year where Capstone achieved the top end of copper production guidance despite industry-wide cost pressures, with cost controls and optimizations at Pinto Valley and Cozamin. - Pinto Valley's tailings thickeners were upgraded in 2021 to improve water recycling capabilities. - Record financial results in 2021 included adjusted net income of $242 million, adjusted EBITDA of $432 million, and operating cash flows of $376 million. - In January 2022, provisional guidance for both mines was set at 82,000 to 90,000 tonnes of copper at a C1 cash cost of $1.85 to $2 per pound, with an update to be provided after the combination with Mantos Copper. - Cozamin benefited from FX hedges with $2.6 million in realized gains in 2021. - The PV4 PFS expansion study was on track for a Q4 2021 release, with Jetti catalytic column test work ongoing. - An exploration and metallurgical testing program at the Copper Cities project, located near Pinto Valley, was started in January 2022. - Cozamin's dry stack tailings and paste backfill facility was advancing on schedule for commissioning by year-end. - Santo Domingo project progress included early infrastructure work and drilling for geometallurgical variability and cobalt feasibility study. - Capstone continued developing its ESG strategy, including reducing carbon footprint, water stewardship, and workforce investment. - The Mantos transaction update had ISS and Glass Lewis recommending shareholders vote FOR the proposed business combination.

In 2021, Capstone achieved strong results. Pinto Valley had a record quarterly mill throughput of 58,500 tonnes per day, with copper production of 37.1 million pounds at $2 per pound payable and an operating cash flow of $270 million. Cozamin had a record year, with Q4 being the most productive quarter at 14.5 million pounds of copper at $0.99 per payable pound C1 cost and an operating cash flow of $127 million. Overall, Capstone realized record financial results with an adjusted net income of $242 million, adjusted EBITDA of $432 million, and operating cash flows of $376 million. The net cash position at year-end grew to $264 million.

• In January 2022, provisional guidance for both mines was 82,000 to 90,000 tonnes of copper at a C1 cash cost of $1.85 to $2 per pound. - Guidance will be updated following the completion of the combination with Mantos Copper.

• Forward-looking information is subject to risks and uncertainties, with actual results possibly differing materially from views expressed. - Inflationary pressures were noted as affecting costs. - Uncertainties existed regarding Chile's mining fiscal regime and constitutional redraft.

Q: Wishing Cashel Meagher well, asked about low-hanging fruit for optimization on existing operations and thoughts on brownfield projects at assets.

A: Cashel Meagher was impressed with Capstone's current assets, noting strong management teams and ongoing projects yielding results.

Q: Inquired about Copper Cities and PV4, whether waiting on drill results from Copper Cities.

A: Brad Mercer stated they were proceeding with PV4 as if Copper Cities were not there but expected optimization between the two sites post-PV4 study.

Q: Asked about Chile's mining fiscal regime and constitutional redraft.

A: Darren Pylot said Chile was a top mining jurisdiction, with taxes expected to increase but expecting a conservative approach.

Q: Regarding Pinto Valley's grade, recoveries, and expansion, asked about grade trend and mill upgrades.

A: Cashel Meagher said Q4 grade was higher than the rest of the year but expected a trend to reserve grade; mill upgrades were for reliability and future throughput.

Q: Questioned about Santo Domingo's synergy study and investments.

A: Darren Pylot said it was early days, with the synergy study due in Q3, and investments potentially following Mantoverde's ramp-up.

Q: Asked about inflationary pressures.

A: Raman Randhawa said 50% of Pinto Valley's costs were locked, with some inflation but 40% of costs exposed to lower inflation.

Q: Inquired about foreign exchange hedging strategy post-merger.

A: Raman Randhawa said they would maintain proportionality for Chilean peso exposure, with CapEx already hedged.

Q: Asked about the outcome of the Copper Cities exploration.

A: Bradley Mercer said it was a consolidation opportunity with good geological data and an advancing drill program.