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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş.

Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. BGC Conference, London Turkey: A Game Changer September 12-13, 2013. Contents. I. Company & Operations 3 Planned Investments 18 Ownership Structure & Participation 22 Ciner Group 25 V. Financial Structure 2 8

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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş.

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  1. Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. BGC Conference, London Turkey: A Game Changer September 12-13, 2013

  2. Contents I. Company & Operations3 • Planned Investments 18 • Ownership Structure & Participation 22 • CinerGroup 25 V. Financial Structure 28 VI. Evaluation of The Latest Financial Tables 37 VII. Corporate Governance Rating 43 Park Elektrik September 2013

  3. I. Company & Operations Park Elektrik September 2013 3

  4. Introduction 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. Making up 90% of total sales revenues, concentrated copper is the main product of the company. 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. Park Elektrik took over operational rights of copper mine in 2004 and commenced copper mining operations in late 2006. 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 472 and 115, respectively. With remaining administrative staff, company’s total work force is 635. Park Elektrik September 2013 4

  5. Asphaltite Mine Natural Gas Power Plant Copper Mine HPP Natural Gas Power Plant Sırnak Adana Siirt Diyarbakır Edirne Park Elektrik’s Existing & Planned Facilities September 2013

  6. 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 TL9.4 mn. • Mine operations started in late 2006 in the copper zone. So far, around 5.5mn tons of ore was extracted in the copper zone mainly through underground mining. • According to initial reports, proven reserves in the zone was determined as 13 mn tons of ore. However, according to a reservereport issued by Micromine Consulting Services in November 2011, 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, while the end customer is China. September 2013

  7. 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 done by different companies since 1981, 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 September 2013 7

  8. Capacity Expansion & Condemnation * 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 750k to 1.2 mn tons of ore processing as of October 2011. Total capex for this investment was Euro 3.5mn. • Furthermore, Park Elektrikhas completedit’s second phase of capacity expansion project to 1.8 mn tons of ore processing by December 2012 with an investment amount of Euro 3.5mn. • Condemnation process around open pit mine will continue in 2013 in line with the mine’s developmental needs. Park Elektrik September 2013 8

  9. Production Volumes & Targets Park Elektrik September 2013 9

  10. Shift To Open Pit Mining & Stripping Expenses • Having being operated underground mining since the beginning of operations in the Madenköy copper zone, now Park Elektrik plansto 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, the company plans to continue open pit mining between 2013-2025 for thirteen years in two phases. • Regarding this shift, the company started pre-stripping in Madenköy copper zone by subcontractors. Pre-stripping of 13 mn m3 from mid of 2012 until mid of 2013 will cost TL65 mn. Including pre-stripping, total planned stripping cost for 2013 is TL 82mn. Park Elektrik September 2013 10

  11. 2013 Estimated Expenses In Copper Zone Park Elektrik September 2013 11

  12. Open Pit Site View September 2013

  13. Open Pit Topographic View – I Topography Main Ore Body September 2013

  14. Open Pit Topographic View - II Main Ore Body September 2013

  15. Open Pit Site Intersection September 2013

  16. 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 135MW. • 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 135MW to 405MW. 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”. September 2013

  17. Open-Pit Mining in Silopi September 2013

  18. II. Planned Investments September 2013

  19. 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 TL27mn for 2013. September 2013

  20. 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. September 2013

  21. 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 September 2013 21

  22. III. Ownership Structure & Participation Park Elektrik September 2013

  23. Ownership Structure Park Elektrik September 2013 23

  24. Participation, Park Termik • Park Elektrik has 10% stake in Park TermikElektrik San. ve Tic. A.S., a Ciner Group company which is involved in thermal power generation in Çayırhan, Ankara. • Park Termikhas operating rights of ÇayırhanThermal 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 TL5.2 mn dividends to Park Elektrik & Madencilik. Park Elektrik September 2013 24

  25. IV.CinerGroup Park Elektrik September 2013

  26. Ciner Group, Main Line of Businesses Ciner Group Park Holding Ciner Yayın Holding Commerce, Industry & Services Group Energy & Mining Group Media Group Major Companies Ciner Marine, Ciner Aviation, Lares Park Hotels, Park Insurance, Denmar Logistics, UCZ Retail Chain Major Companies & Brands Haberturk Newspaper Haberturk TV, Radio, Haberturk Web Site Bloomberg HT, Aks TV (Show TV) Major Companies Park Elektrik, Park Termik, Silopi Elektrik, Park Teknik, Park Toptan, Eti Soda, Rio Tur Soda, Park Cam Park Elektrik September 2013 26

  27. 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 1990s. In line with accelerated privatization efforts in 1990s, 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 2012, Park Holding has TL1.4 bn of consolidated sales and TL5 bn of total assets. Total number of employees within the Group is 6,000. CinerGroup September 2013

  28. V. Financial Structure September 2013

  29. Annual Concentrated Copper Production (wmt) * Annual production declined due to production halt of four-month in 2010. Park Elektrik September 2013 29

  30. Annual Con. Copper (dmt) & Cathode(ton) Sales * In 2010, there was a production halt of four months. ** 6,613 dmt of concentrated copper were used to produce 1,210 mt copper cathode. This pushes 2011 total sales up to 61,667 dmt. *** 14,296 dmt of concentrated copper were used to produce 2,521 mt copper cathode, that is increasing 2012 total sales volume up to 87,663 dmt. September 2013

  31. Annual Asphaltite Sales (ton) * Asphaltite operations started in mid 2009. Park Elektrik September 2013 31

  32. Total Sales Revenues (TL) September 2013

  33. Net Earnings (TL mn) Park Elektrik September 2013 33

  34. Breakdown of COGS, as of YE12 September 2013

  35. Annual Margin Comparison September 2013

  36. Sources of Financing (TL mn) * Park Elektrik has no financial debt. September 2013

  37. VI. Evaluation of 1H13 Financial Results September 2013

  38. Evaluation of 1H13 Financial Results • In 1H13, total copper concentrate production has beenrealized as 50,021 wmt, indicating 7%increase compared to 1H12.In 1H13, copper concentrate sales increased by 23%, y-o-y. However, as company ended trial cathode copper sales last year, the production and sales of such a copper product do not exist in 1H13 resulting lower sales of total copper product for 1H13. • In 1H13, asphaltite production and sales were realized as 158,687 tons along with the demand by Silopi Elektrik, indicating %29 increase. • Total revenues decreasedby 15% due to the declinein the average copper prices and high amount of cathode copper sales effect in 1H12. Profit margins of the company dropped significantly due to transition in the copper zone from underground to open pit which required to utilize very low grade stockpile. September 2013

  39. Production & Sales Amount * In 1H12, 5,010 dmt of concentrated copper were utilized for production of 902 mt of cathode. For the sale of 2,521 mt of cathode, 14,000 dmt of concentrated copper were utilized. September 2013

  40. Sales Breakdown (TL) & Gross Margin by Products September 2013

  41. Income Statement (TL) September 2013

  42. Summary Balance Sheets (TL) September 2013

  43. VII.Corporate Governance Rating September 2013

  44. Corporate Governance Rating Park Elektrik’s corporate governance rating increased to 8.98according to a recent report conducted by SAHA Corporate Rating Agency in June 2013. Based on the report, 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. September 2013

  45. T H A N K Y O U. CONTACTS Yesim Bilginturan Selim Erdogan IR Manager IR Manager Phone: +90 216 531 25 33 +90 216 531 25 35 y.bilginturan@cinergroup.com.trs.erdogan@cinergroup.com.tr www.parkelektrik.com.trwww.cinergroup.com.tr September 2013

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