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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş.

Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. March 2014. Contents. I. Company & Operations 3 Planned Investments 18 Ownership Structure & Participation 22 Ciner Group 25 V. Financial Structure 2 8 VI. Evaluation of The Latest Financial Tables 3 7

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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş.

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  1. Park Elektrik ÜretimMadencilikSanayiveTicaret A.Ş. March 2014

  2. Contents I. Company & Operations 3 • Planned Investments 18 • Ownership Structure & Participation 22 • Ciner Group 25 V. Financial Structure 28 VI. Evaluation of The Latest Financial Tables 37 VII. Corporate Governance Rating 43 Park Elektrik March 2014

  3. I. Company & Operations Park Elektrik March 2014 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. Park Elektrik’s BOD recently decided to transfer operating rights and assets of asphaltite mine to its sister company Silopi Elektrik A.S. However, transfer has not completed yet. 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. As of YE2013, employees working in copper and asphaltite mines are 430 and 87, respectively. With remaining administrative staff, company’s total work force is 577 as of year end 2013. Park Elektrik March 2014 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 March 2014

  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. • Copper mineoperations started in late 2006 in Madenköy copper zone. So far, 6,4mn tons of ore have beenextracted in the copper zone, while the remaining resources is 33.4 mn tons of ore as of YE2013. • According to initial reports, proven reserves in the zone was determined as 13 mn tons of ore when Park Elektrik commenced its operations in 2006. However, according to a reservereport issued by Micromine Consulting Services in September 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 an international commodity broker namely Traxys, while the end customer is China. March 2014

  7. Micromine Reserve Report Based On JORC • According to a JORC (Joint Ore Resources Code) compliant reserve report issued by Micromine Consulting Services in February 2014, total resources of the project has increased to 41.5 million tonnes from previously declared 39.8 million tonnes. • According to the same report, average grade in Madenkoy copper mine is 2.02% for the whole zone and average grade of the measured resources is 1.95%. February 2013

  8. Capacity Expansion & Condemnation • In parallel with growing reserves in Madenkoycopper zone, the company increased its concentration facility’s capacity from 750k to 1.8 mntons of ore processing in two phases with a total investment amount of €7 mn. • Condemnation process due to expanding area of open pit mine continued in 2013 in line with the mine’s developmental needs. Company paid TL12mn in 2012 and TL11mn in 2013 for condemnation expenses. For 2014, TL10mn of condemnation expense is included in the Company’s investment plan. Park Elektrik March 2014 8

  9. Production Volumes & Targets * Pre-stripping started in 2012. ** Production through open-pit started in mid of 2013. Park Elektrik March 2014 9

  10. Long Term Planning in Open Pit • Having being operated by underground mining since the beginning of operations in the Madenköy copper zone, Park Elektrikrecently shiftedits copper mining operations from underground to open-pit mining by the mid of 2013. • Based on projections, the company plans to continue open pit mining between 2013-2031 for 19 years. Throughout open pit mining operations, the company plans to produce 26.4 mn tons of ore with 246 mn m3 stripping with an average strip ratio of 9.3. Park Elektrik March 2014 10

  11. 2014 Estimated Investments In Copper Zone Park Elektrik March 2014 11

  12. Open Pit Site View March 2014

  13. Current View From Mine March 2014

  14. Views From The Pit March 2014

  15. Open Pit Topographic View – I Topography Main Ore Body March 2014

  16. Open Pit Topographic View - II Main Ore Body March 2014

  17. Open Pit Site Intersection March 2014

  18. II) SilopiAsphaltiteZone • Recently, Park Elektrik’s Board of Directors decided to transfer all of the assets as well as operating rights of Silopi asphaltite mine to its sister company Silopi Elektrik A.S. who is also the consumer of asphaltite. According to an independent company’s valuation, Park Elektrik will transfer asphaltite mine for TL61mn and related amount wil be paid in 12 installments by the end of 2014. • Asphaltiteis a petroleum-origin hydrocarbon with a thermal value of 5,500-5,800 kcal/kg. Park Elektrik has the operational rights of Silopiasphaltite 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%”. March 2014

  19. Open-Pit Mining in Silopi March 2014

  20. II. Planned Investments March 2014

  21. 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 company plans to start HPP investment in the second half of 2013 • with an estimated investment amount of TL27mn for 2013. March 2014

  22. 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 2014

  23. 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 2014 23

  24. III. Ownership Structure & Participation Park Elektrik March 2014

  25. Ownership Structure Park Elektrik March 2014 25

  26. 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 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 2013, Park Termik paid TL6mn dividends to Park Elektrik & Madencilik. Park Elektrik March 2014 26

  27. IV. Ciner Group Park Elektrik March 2014

  28. 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, 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 March 2014 28

  29. Park Holding, the main shareholder of Park Elektrik with 61% share, is solely owned by Mr. TurgayCiner. 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 TL1.4bn of consolidated sales and TL5bn of total assets. Total number of employees within the Group is 6,000. Ciner Group March 2014

  30. V. Financial Structure March 2014

  31. Annual Concentrated Copper Production (wmt) * Annual production declined due to production halt of four-month in 2010. March 2014 31

  32. 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 2014

  33. Annual Asphaltite Sales (ton) * Asphaltite operations started in mid 2009. Park Elektrik March 2014 33

  34. Total Sales Revenues (TL) March 2014

  35. Net Earnings (TL mn) Park Elektrik March 2014 35

  36. Breakdown of Cost of Production, as of YE13, (copper operations) March 2014

  37. Annual Margin Comparison March 2014

  38. Sources of Financing (TL mn) * Park Elektrik has no financial debt. March 2014

  39. VI. Evaluation of YE13 Financial Results March 2014

  40. Evaluation of 2013 Financial Results • In 2013, total copper concentrate production has beenrealized as 96.038 wmt, indicating %8increase compared to 2012. In 2013, copper concentrate sales increased by 27%, y-o-y. However, taking into account 2,521 mt ton of cathode copper sales in 2012 period which corresonds roundly 14.000 DMT of concentrate sales, volume growth deteriorates to around 6%, y-o-y. • In 2013, asphaltite production and sales were realized as 322.010 tons along with the demand by Silopi Elektrik, indicating %11.5 decrease. • Despite increase in volume sales, totalrevenues increased by only 1.4% due to declinein the average copper prices. Profit margins of the company dropped significantly due to utilizing very low grade stockpile as well as low grade ore in the early stages of the open pit in the transition period. March 2014

  41. Production & Sales Amount • * 5,010 dmt of concentrated copper is used for production of 902 mt cathode. • ** 14,000 dmt of concentrated copper is used for production of 2,521 mt of cathode. March 2014

  42. Sales Breakdown (TL) & Gross Margin by Products March 2014

  43. Income Statement (TL) March 2014

  44. Summary Balance Sheets (TL) March 2014

  45. VII. Corporate Governance Rating March 2014

  46. 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. March 2014

  47. 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 2014

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