What is the proposed transaction with Americas Mining Corporation (AMC)?

Southern Copper Corporation (SCCO) received a non-binding proposal from its parent company, AMC, for an all-stock business combination. Under this proposal, public stockholders of SCCO would exchange their shares for common shares of AMC. This would result in SCCO's public stockholders having an indirect ownership interest in both Southern Copper and Asarco (a parent company of AMC).

What are the key financial highlights for the second quarter of 2010?

Net sales increased by 42% to $1.2 billion compared to the second quarter of 2009. EBITDA was $612 million (52% of sales), up from $380 million (46% of sales) in the prior year. Operating cash costs, including by-product credits, improved significantly to 26.5 cents per pound from 39.6 cents per pound.

What are Southern Copper's major capital expenditure plans?

The company approved a $3.8 billion five-year capital investment program in Sonora, Mexico, focusing on expanding production capacity, especially at Cananea. Key projects include expanding Cananea's annual production from 180,000 tons to 450,000 tons, developing the Pilares mine, and advancing the Tia Maria and Toquepala expansion projects.

What is the status of the Cananea mine restoration?

Southern Copper has aggressively started repairing the Cananea mine facilities following labor disputes, with over 3,000 workers and contractors involved. The estimated cost for restoration is approximately $114 million, and the company aims to reach full capacity by February 2011.

SCCO 8-K SEC Disclosure

Summary

Southern Copper Corporation (SCCO) filed an 8-K on August 6, 2010, primarily to provide information regarding a proposed business combination with its parent company, Americas Mining Corporation (AMC). The filing includes details from the company's second quarter 2010 earnings conference call, where management discussed market conditions, operational performance, and significant capital investment plans. Investors are urged to read the forthcoming Proxy Statement for more details on the proposed transaction. The company reported strong financial results for Q2 2010, with net sales up 42% year-over-year, driven by recovering metal prices and increased molybdenum sales volume. Operational performance showed mixed results, with a decrease in copper production due to lower ore grades but record molybdenum production. SCCO also announced a substantial $3.8 billion five-year capital investment program in Sonora, Mexico, aimed at significantly expanding production, particularly at Cananea. The filing also addresses the ongoing restoration of the Cananea mine following labor disputes and provides an update on the environmental review for the Tia Maria project in Peru.

Key Highlights

1Southern Copper Corporation is proposing an all-stock business combination with its parent company, Americas Mining Corporation (AMC).
2The company reported a 42% increase in net sales for the second quarter of 2010 compared to the prior year, reaching $1.2 billion, driven by higher metal prices and increased molybdenum sales volume.
3EBITDA for Q2 2010 was $612 million, a significant increase from $380 million in Q2 2009, representing 52% of sales.
4Operating cash costs, including by-product credits, improved to 26.5 cents per pound in Q2 2010, down from 39.6 cents in Q2 2009.
5SCCO announced a $3.8 billion five-year capital investment program in Sonora, Mexico, to expand production, including a significant expansion of the Cananea mine.
6The Cananea mine, recently regained control of after labor disputes, is undergoing restoration with an estimated cost of $114 million, aiming for full capacity by February 2011.
7The company has declared a quarterly dividend of $0.37 per share, payable on August 25, 2010.

SOUTHERN COPPER CORP/ 8-K Report, Corporate Update (Aug 6, 2010)

Summary

Key Highlights

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