Park Elektrik retim Madencilik Sanayi ve Ticaret A

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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A. Ş. January 25, 2013

Park Elektrik Üretim Madencilik Sanayi ve Ticaret A. Ş. January 25, 2013

Contents I. III. IV. V. VIII. Park Elektrik Overview Ciner Group in Brief Operations

Contents I. III. IV. V. VIII. Park Elektrik Overview Ciner Group in Brief Operations Reserves Planned Investments Financial Structure Evaluation of The Latest Financial Tables Corporate Governance Rating Park Elektrik Madencilik January 2013 3 7 10 13 20 24 33 39 2

I. Park Elektrik Overview Park Elektrik Madencilik January 2013 3

I. Park Elektrik Overview Park Elektrik Madencilik January 2013 3

The Company § Initially offered to public in 1997, Park Elektrik is the sole

The Company § Initially offered to public in 1997, Park Elektrik is the sole copper mining company on the ISE. The company currently operates two mines namely; a copper mine in Siirt and an asphaltite (a kind of hydrocarbon) mine in Sırnak. § Park Elektrik took over operational rights of copper mine in 2004 and commenced copper mining operations in late 2006. Copper revenues make up around 90% of the company’s total sales revenues. Park Elektrik’s end product is concentrated copper which involves around 20% copper content. Park Elektrik sells all of its concentrated copper production to international commodity brokers. § In mid 2009, following its merger with ISE-listed Group company Ceytas, Park Elektrik added asphaltite mining into its operation line. Asphaltite is sold to a sister company with a long term cost plus contract. § Employees working in copper and asphaltite mines are 486 and 93, respectively. With remaining administrative staff, company’s total work force is 627. Park Elektrik Madencilik January 2013 4

Ownership Structure Park Elektrik Madencilik January 2013 5

Ownership Structure Park Elektrik Madencilik January 2013 5

Participation, Park Termik § Park Elektrik has 10% stake in Park Termik Elektrik San.

Participation, Park Termik § Park Elektrik has 10% stake in Park Termik Elektrik San. ve Tic. A. S. , a Ciner Group company which is involved in thermal power generation in Çayırhan, Ankara. § Park Termik operates Çayırhan Thermal Power Plant which has a total production capacity of 620 MW, in four units. § The plant is an integrated power generator which procures coal through its own lignite mines. § In June 2012, Park Termik paid TL 5. 2 mn dividends to Park Elektrik & Madencilik. Park Elektrik Madencilik January 2013 6

II. Ciner Group in Brief Park Elektrik Madencilik January 2013 7

II. Ciner Group in Brief Park Elektrik Madencilik January 2013 7

Ciner Group, Main Line of Businesses Ciner Group Park Holding Ciner Yayın Holding Energy

Ciner Group, Main Line of Businesses Ciner Group Park Holding Ciner Yayın Holding Energy & Mining Group Commerce, Industry & Services Group Major Companies Park Elektrik, Park Termik, Silopi Elektrik, Park Teknik, Park Toptan, Eti Soda, Kazan Soda, Park Cam, TMC Major Companies Ciner Marine, Ciner Aviation, Lares Park Hotels, Park Insurance, Denmar Logistics, UCZ Retail Chain Park Elektrik Madencilik January 2013 Media Group Major Companies & Brands Haberturk Newspaper Haberturk TV, Radio, Haberturk Web Site Bloomberg HT 8

Ciner Group, Introduction § Park Holding, the main shareholder of Park Elektrik with 61%

Ciner Group, Introduction § Park Holding, the main shareholder of Park Elektrik with 61% share, is solely owned by Mr. Turgay Ciner. § Ranking among the largest Groups of Turkey, Ciner Group’s history goes back to 1978 when it was founded. The Group has a diversified business portfolio. However, the Group’s main line of businesses are mining and energy in which it has a wide expertise. § Ciner Group is a pioneering actor in energy and mining sector given its new and initial steps since early 1990 s. In line with accelerated privatization efforts in 1990 s, the Group successfully involved in mining and energy sectors which are the underlying sectors of the Group’s fast growth in recent years. § As of year-end 2011, Park Holding has TL 1. 3 bn of consolidated sales and TL 3. 2 bn of total assets. Total number of employees within the Group is 5, 700. Park Elektrik Madencilik January 2013 9

III. Operations Park Elektrik Madencilik January 2013 10

III. Operations Park Elektrik Madencilik January 2013 10

Park Elektrik’s Existing & Planned Facilities Natural Gas Power Plant Edirne Copper Mine Siirt

Park Elektrik’s Existing & Planned Facilities Natural Gas Power Plant Edirne Copper Mine Siirt Natural Gas Power Plant Adana Park Elektrik Madencilik January 2013 HPP Diyarbakır Asphaltite Mine Sırnak 11

I) Madenköy Copper Zone § Park Elektrik acquired operation license of Madenkoy copper mine

I) Madenköy Copper Zone § Park Elektrik acquired operation license of Madenkoy copper mine in 2004 from Eti Holding, a state-owned entity engaged in mining businesses, for TL 9. 4 mn. § Mine operations started in late 2006 in the copper zone. So far, around 5. 1 mn tons of ore was extracted in the copper zone. § According to initial reports, proven reserves in the zone was determined as 13 mn tons of ore. However, according to latest reserve report issued by Micromine Consulting Services, total reserves in the zone was determined as 39. 8 mn tons of ore, 31. 2 mn tons of which was measured. § The company has a concentration facility and it produces and sells concentrated copper that includes copper content of around 20% level. § Park Elektrik exports all of its concentrated copper production to international commodity brokers. Park Elektrik Madencilik January 2013 12

Micromine Reserve Report Based On JORC § § According to a JORC (Joint Ore

Micromine Reserve Report Based On JORC § § According to a JORC (Joint Ore Resources Code) compliant reserve report issued by Micromine Consulting Services in November 2011, based on the drilling and sampling works by Eti Holding (1981), Preussag AG Metall (1988) and Park Elektrik, the total reserves of Madenköy project was determined as 39, 821, 000 tons of ore, 31, 182, 000 tons of which was measured. According to the same report, average grade in Madenkoy copper mine is 2. 4% for the whole zone. Current grade in the zone is lower, at 1. 8 -1. 9% levels in average. Source: JORC Resource Estimate Report by Micromine Park Elektrik Madencilik January 2013 13

Capacity Expansion & Condemnation Concentration Facility Ore Processing Capacity (ton) 2011 2012 2013 750,

Capacity Expansion & Condemnation Concentration Facility Ore Processing Capacity (ton) 2011 2012 2013 750, 000 1, 200, 000 1, 800, 000 * Capacity increase to 1, 2 mn tons was realized in October 2011. § In parallel with growing reserves in the Madenkoy copper zone, the company increased its concentration facility’s capacity from 750 k to 1. 2 mn tons of ore processing as of October 2011. Total capex for this investment was Euro 3. 5 mn. § Furthermore, Park Elektrik has completed it’s second phase of capacity expansion project to 1. 8 mn tons of ore processing by December 2012 with a planned investment amount of Euro 3. 5 -4 mn. § Condemnation process around open pit mine will continue in 2013 in line with the mining technological needs. Park Elektrik Madencilik January 2013 14

2012 Production Targets & Realizations by 9 M 12 § Park Elektrik Madencilik aims

2012 Production Targets & Realizations by 9 M 12 § Park Elektrik Madencilik aims 90, 000 wmt of concentrated copper production for the YE 2012. This amount implies 17% unit growth for 2012 as compared to previous year’s production volume of 77, 510 wmt. Park Elektrik Madencilik January 2013 15

Production Targets Ore (tons) Growth Concentrated Copper (wmt) Growth Park Elektrik Madencilik 2011 A

Production Targets Ore (tons) Growth Concentrated Copper (wmt) Growth Park Elektrik Madencilik 2011 A 2012 E 2013 E 949, 731 1, 200, 000 1, 500, 000 - 27% 25% 77, 510 90, 000 105, 000 - 17% January 2013 16

Shift To Open Pit Mining & Stripping Expenses § Park Elektrik plans to shift

Shift To Open Pit Mining & Stripping Expenses § Park Elektrik plans to shift its copper mining operations from underground to open -pit mining by the mid of 2013, while until mid of the year underground mining will continue. § Based on projections, production through open pit mining will continue until the end of 2025 for thirteen years in two phases. § Regarding this shift, the company started stripping in the copper zone by subcontractors. The planned stripping cost for 2013 is TL 82 mn. Park Elektrik Madencilik January 2013 17

2013 Estimated Capex In Copper Zone CAPEX TL mn ORE PRODUCTION 88 - Stripping

2013 Estimated Capex In Copper Zone CAPEX TL mn ORE PRODUCTION 88 - Stripping 82 - Others 6 FACILITY 30 OTHER 26 TOTAL 144 Park Elektrik Madencilik January 2013 18

II) Silopi Asphaltite Zone § Asphaltite is a petroleum-origin hydrocarbon with a thermal value

II) Silopi Asphaltite Zone § Asphaltite is a petroleum-origin hydrocarbon with a thermal value of 5, 500 -5, 800 kcal/kg. § Park Elektrik has the operational rights of Silopi asphaltite mine until 2033. Estimated asphaltite reserve in Silopi is around 35 mn tons based on Turkish Coal Enterprise (TKI) reports. § Operations in the asphaltite zone started in June 2009. The company provides asphaltite to Silopi Elektrik Üretim A. Ş. , a group company which is involved in electricity production in Silopi with fluidized bed technology and has a starting capacity of 135 MW. § Annual production amount in Silopi is around 450, 000 tons and is subject to increase from 2014 onwards in line with capacity expansion of Silopi EUAS from 135 MW to 405 MW. With the expansion, annual asphaltite production of Park Elektrik is also estimated to be tripled. § Based on recently renewed contract by two companies, sale price of asphaltite is determined as “Costs + 15%”. § Asphaltite mine will be open-pit for the first years of operation. Later on, underground mining will be done by the method of “Cut and Fill Block Caving”. Park Elektrik Madencilik January 2013 19

Open-Pit Mining in Silopi Park Elektrik Madencilik January 2013 20

Open-Pit Mining in Silopi Park Elektrik Madencilik January 2013 20

IV. Planned Investments Park Elektrik Madencilik January 2013 21

IV. Planned Investments Park Elektrik Madencilik January 2013 21

Diyarbakır HPP § § Installed capacity will be 50. 5 MW. Production license is

Diyarbakır HPP § § Installed capacity will be 50. 5 MW. Production license is valid for 49 years. § According to recent feasibility studies, estimated investment amount is US$ 100 mn. § The compay plans to start HPP investment in the second half of 2013 with an estimated investment amount of TL 27 mn for 2013. Park Elektrik Madencilik January 2013 22

Ceyhan Natural Gas Power Plant § Park Elektrik applied to Energy Market Regulatory Authority

Ceyhan Natural Gas Power Plant § Park Elektrik applied to Energy Market Regulatory Authority for a license to establish a NGPP in Ceyhan, Adana. § Installed capacity will be 423 MW*. § Production license will be valid for 49 years. § Estimated investment amount is Euro 250 mn. *The technological advances took place since the application to EMRA allow us to reach max. 570 MW in one unit. Park Elektrik Madencilik January 2013 23

Edirne Natural Gas Power Plant § Park Elektrik applied to Energy Market Regulatory Authority

Edirne Natural Gas Power Plant § Park Elektrik applied to Energy Market Regulatory Authority for a license to establish a NGPP in Edirne. § Installed capacity will be 423 MW. § Estimated investment amount is Euro 250 mn. Park Elektrik Madencilik January 2013 24

V. Financial Structure Park Elektrik Madencilik January 2013 25

V. Financial Structure Park Elektrik Madencilik January 2013 25

Annual Concentrated Copper Production (wmt) 90, 000 77, 510 64, 371 63, 138 52,

Annual Concentrated Copper Production (wmt) 90, 000 77, 510 64, 371 63, 138 52, 554 37, 426 13, 771 2006 2007 2008 2009 2010 * 2011 2012 E * Annual production declined due to production halt of four-month in 2010. Park Elektrik Madencilik January 2013 26

Annual Con. Copper (dmt) & Cathode (ton) Sales * In 2010, there was a

Annual Con. Copper (dmt) & Cathode (ton) Sales * In 2010, there was a production halt of four months. ** 6, 613 wmt of concentrated copper were used to produce 1, 210 mt copper cathode. This pushes 2011 total sales up to 61, 667 dmt. Park Elektrik Madencilik January 2013 27

Annual Asphaltite Sales (ton) * Asphaltite operations started in mid 2009. Park Elektrik Madencilik

Annual Asphaltite Sales (ton) * Asphaltite operations started in mid 2009. Park Elektrik Madencilik January 2013 28

Total Sales Revenues (TL) * Revenues from other sales is 1, 616, 016. Park

Total Sales Revenues (TL) * Revenues from other sales is 1, 616, 016. Park Elektrik Madencilik January 2013 29

Net Earnings (TL mn) Park Elektrik Madencilik January 2013 30

Net Earnings (TL mn) Park Elektrik Madencilik January 2013 30

Breakdown of COGS, as of YE 11 Park Elektrik Madencilik January 2013 31

Breakdown of COGS, as of YE 11 Park Elektrik Madencilik January 2013 31

Annual Margin Comparison (TL mn) 2007 2008 2009 2010 2011 Sales Gross Profit Gross

Annual Margin Comparison (TL mn) 2007 2008 2009 2010 2011 Sales Gross Profit Gross Margin EBITDA Margin Net Earnings Net Margin 80 47 59% 43 52% 20 25% 111 73 66% 62 56% 75 68% 79 32 41% 24 30% 19 25% 84 44 52% 42 50% 37 44% 173 107 62% 112 65% 101 58% Park Elektrik Madencilik January 2013 32

Sources of Financing (TL mn) * Park Elektrik has no financial debt. Park Elektrik

Sources of Financing (TL mn) * Park Elektrik has no financial debt. Park Elektrik Madencilik January 2013 33

VI. Evaluation of 9 M 12 Financial Results Park Elektrik Madencilik January 2013 34

VI. Evaluation of 9 M 12 Financial Results Park Elektrik Madencilik January 2013 34

Evaluation of 9 M 2012 Financial Results § § 9 M 12, total copper

Evaluation of 9 M 2012 Financial Results § § 9 M 12, total copper concentrate production was realized as 68, 060 wmt, indicating 19% increase compared to the same period of 2011. Total sales for copper products was realized as 54, 225 dmt for concentrate copper and 2, 521 mt for cathode copper. Total revenues increased by 44% due to the capacity expansion in the concentration center. Profit margins of the company did not realize as high as the previous year due to the depreciation costs of an open pit copper site in which the operations ended and falling copper prices. Net revenues from fx positions also diminished. However, EBITDA margin rose 1 bsp in the same period to 64%. The production and sales of asphaltite decreased as 29% due to the operational halt caused by a technical failure in the Silopi Elektrik A. Ş. Park Elektrik distributed TL 100 mn dividends out of 2011 earnings in May 2012. Park Elektrik Madencilik January 2013 35

Production & Sales Amount Production Concentrated Copper (wmt) Cathode Copper (MT) Asphaltite (ton) Sales

Production & Sales Amount Production Concentrated Copper (wmt) Cathode Copper (MT) Asphaltite (ton) Sales Concentrated Copper (dmt) Cathode Copper (MT) Asphaltite (ton) Park Elektrik Madencilik 9 M 11 9 M 12 % 57, 355 68, 060 19 1, 846 902 -52 318, 177 226, 256 -29 9 M 11 9 M 12 % 43, 044 54, 225 26 1, 210 2, 521 109 318, 177 226, 256 -29 January 2013 36

Sales Breakdown (TL) & Gross Margin by Products Copper Sales Gross Margin of Copper

Sales Breakdown (TL) & Gross Margin by Products Copper Sales Gross Margin of Copper Asphaltite Sales Gross Margin of Asphaltite Other Sales Total Sales Revenues Overall Gross Margin Park Elektrik Madencilik 9 M 11 9 M 12 % 122, 768, 872 175, 925, 695 44 64% 58% - 14, 087, 542 18, 707, 416 33 20% 14% - 1, 283, 988 4, 650, 991 263 138, 140, 402 199, 284, 102 45 60% 52% - January 2013 37

Income Statement (TL) Park Elektrik Madencilik January 2013 38

Income Statement (TL) Park Elektrik Madencilik January 2013 38

Summary Balance Sheets (TL) YE 11 9 M 12 Current Assets 297, 678, 924

Summary Balance Sheets (TL) YE 11 9 M 12 Current Assets 297, 678, 924 288, 657, 504 Fixed Assets 186, 424, 631 188, 986, 340 TOTAL ASSETS 484, 103, 555 477, 643, 844 Short Term Liabilities 34, 255, 807 40, 499, 192 Long Term Liabilities 6, 391, 196 5, 997, 811 Shareholders Equity 443, 456, 552 431, 146, 841 TOTAL LIABILITIES 484, 103, 555 477, 643, 844 Park Elektrik Madencilik January 2013 39

Corporate Governance Rating Park Elektrik was rated with 8. 82 as a result of

Corporate Governance Rating Park Elektrik was rated with 8. 82 as a result of the Corporate Governance study done by SAHA Kurumsal Rating Agency. According to report done by SAHA, the rating means that the company performs “very good” in terms of Capital Markets Board’s corporate governance principles. It has, to varying degrees, identified and actively managed all significant corporate governance risks through comprehensive internal controls and management systems. The company’s performance is considered to represent best practice, and it had no deficiencies in any of the areas rated. Park Elektrik Madencilik January 2013 40

T H A N K Y O U. CONTACTS Yesim Bilginturan Selim Erdogan IR

T H A N K Y O U. CONTACTS Yesim Bilginturan Selim Erdogan IR Manager Phone: +90 216 531 25 33 +90 216 531 25 35 y. [email protected] com. tr s. [email protected] com. tr www. parkelektrik. com. tr www. cinergroup. com. tr Park Elektrik Madencilik January 2013 41