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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş.

Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. March 2013. Contents. I. Park Elektrik Overview 3 II. Ciner Group in Brief 7 III. Operations 10 IV. Reserves 13 Shift To Open Pit Mining 17 Planned Investments 23 VI. Financial Structure 2 7

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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. March 2013

  2. Contents I. Park Elektrik Overview 3 II. Ciner Group in Brief 7 III. Operations 10 IV. Reserves 13 • Shift To Open Pit Mining 17 • Planned Investments 23 VI. Financial Structure 27 VII. Evaluation of The Latest Financial Tables 36 VIII. Corporate Governance Rating 42 Park Elektrik March 2013

  3. I. Park Elektrik Overview Park Elektrik March 2013 3

  4. 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. 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 486 and 93, respectively. With remaining administrative staff, company’s total work force is 627. Park Elektrik March 2013 4

  5. Ownership Structure Park Elektrik March 2013 5

  6. 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 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 March 2013 6

  7. II. Ciner Group in Brief Park Elektrik March 2013

  8. 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 Major Companies Park Elektrik, Park Termik, Silopi Elektrik, Park Teknik, Park Toptan, Eti Soda, Kazan Soda, Park Cam, TMC Park Elektrik March 2013 8

  9. 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 2011, Park Holding has TL1.3 bn of consolidated sales and TL3.2 bn of total assets. Total number of employees within the Group is 5,700. Ciner Group, Introduction March 2013

  10. III. Operations March 2013

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

  12. 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 5.1 mn 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 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, while the end customer is China. March 2013

  13. 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 March 2013 13

  14. 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 Elektrik has 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 3.5-4mn. • Condemnation process around open pit mine will continue in 2013 in line with the mine’s technological needs. Park Elektrik March 2013 14

  15. 2012 Monthly Production Figures • Park Elektrik Madencilik almost reached its 2012 production target of 90,000 wmt of concentrated copper with 89,253 wmt of realized production. This implies 15% growth in yearly basis. Difference between wet metric ton (wmt) and dry metric ton (dmt) is 8% humidity. Park Elektrik March 2013 15

  16. Production Volumes & Targets Park Elektrik March 2013 16

  17. Shift To Open Pit Mining & Stripping Expenses • Adopting underground mining since the beginning of operations in the Madenköy copper zone, 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, the company plans to continue open pit mining between 2013-2025 for thirteen years in two phases. • Regarding this shift, the company started stripping in Madenköy copper zone by subcontractors. The planned stripping cost for 2013 is TL 82mn. Park Elektrik March 2013 17

  18. 2013 Estimated Expenses In Copper Zone Park Elektrik March 2013 18

  19. Open Pit Topographic View – I Topography Main Ore Body March 2013

  20. Open Pit Topographic View - II Main Ore Body March 2013

  21. 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”. March 2013

  22. Open-Pit Mining in Silopi March 2013

  23. IV. Planned Investments March 2013

  24. 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. March 2013

  25. 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. March 2013

  26. 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 March 2013 26

  27. V. Financial Structure March 2013

  28. Annual Concentrated Copper Production (wmt) * Annual production declined due to production halt of four-month in 2010. Park Elektrik March 2013 28

  29. 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. March 2013

  30. Annual Asphaltite Sales (ton) * Asphaltite operations started in mid 2009. Park Elektrik March 2013 30

  31. Total Sales Revenues (TL) March 2013

  32. Net Earnings (TL mn) Park Elektrik March 2013 32

  33. Breakdown of COGS, as of YE12 March 2013

  34. Annual Margin Comparison March 2013

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

  36. VI. Evaluation of 2012 Financial Results March 2013

  37. Evaluation of 2012 Financial Results • In 2012, total copper concentrate production was realized as 89.253 wmt, indicating 15.2 % increase compared to 2011. Asphaltite sales was realized as 363.848, 16.2% less then the previous year, due to the diminished demand by Silopi Elektrik. Total sales for copper products was realized as 73.367dmt for concentrate copper and 2,521 mt for cathode copper. • Total revenues increased by 53.5% 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. • The production and sales of asphaltite decreased as 16.2% due to the operational halt caused by a technical failure in the Silopi Elektrik A.Ş. • Park Elektrik distributed TL100 mn dividends out of 2011 earnings in May 2012. March 2013

  38. Production & Sales Amount March 2013

  39. Sales Breakdown (TL) & Gross Margin by Products March 2013

  40. Income Statement (TL) March 2013

  41. Summary Balance Sheets (TL) March 2013

  42. Corporate Governance Rating Park Elektrik was rated with 8.82as a result ofthe 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. March 2013

  43. 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 March 2013

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