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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş.

Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. January 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. January 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 January 2014

  3. I. Company & Operations Park Elektrik January 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. 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. 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 January 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 January 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. • Mine operations started in late 2006 in the copper zone. So far, around 7mn 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 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 an international commodity broker namely Traxys, while the end customer is China. January 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 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 January 2014 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 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 3.5mn. • 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. Park Elektrik January 2014 8

  9. Production Volumes & Targets Park Elektrik January 2014 9

  10. Shift To Open Pit Mining & Stripping Expenses • Having being operated 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 2013-2030 for 17 years. • 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 costed TL65 mn. Including pre-stripping, total planned stripping cost for 2013 is TL 82mn. Park Elektrik January 2014 10

  11. 2013 Estimated Expenses In Copper Zone Park Elektrik January 2014 11

  12. Open Pit Site View January 2014

  13. Open Pit Topographic View – I Topography Main Ore Body January 2014

  14. Open Pit Topographic View - II Main Ore Body January 2014

  15. Open Pit Site Intersection January 2014

  16. II) SilopiAsphaltiteZone • Asphaltite is 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%”. January 2014

  17. Open-Pit Mining in Silopi January 2014

  18. II. Planned Investments January 2014

  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. January 2014

  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. January 2014

  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 January 2014 21

  22. III. Ownership Structure & Participation Park Elektrik January 2014

  23. Ownership Structure Park Elektrik January 2014 23

  24. 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 June 2012, Park Termik paid TL5.2 mn dividends to Park Elektrik & Madencilik. Park Elektrik January 2014 24

  25. IV. Ciner Group Park Elektrik January 2014

  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 January 2014 26

  27. 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 January 2014

  28. V. Financial Structure January 2014

  29. Annual Concentrated Copper Production (wmt) * Annual production declined due to production halt of four-month in 2010. Park Elektrik January 2014 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. January 2014

  31. Annual Asphaltite Sales (ton) * Asphaltite operations started in mid 2009. Park Elektrik January 2014 31

  32. Total Sales Revenues (TL) January 2014

  33. Net Earnings (TL mn) Park Elektrik January 2014 33

  34. Breakdown of COGS, as of YE12 January 2014

  35. Annual Margin Comparison January 2014

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

  37. VI. Evaluation of 9M13 Financial Results January 2014

  38. Evaluation of 9M13 Financial Results • In 9M13, total copper concentrate production has beenrealized as 75.084 wmt, indicating 10.3%increase compared to 9M13. In 9M13, copper concentrate sales increased by 37%, y-o-y. However, taking into account 2,521 mt ton of cathode copper sales in 9M12 period which corresonds roundly 14.000 DMT of concentrate sales, volume growth deteriorates to around 9%, y-o-y. • In 9M13, asphaltite production and sales were realized as 249.142 tons along with the demand by Silopi Elektrik, indicating %10 increase. • Despite increase in volume sales, totalrevenues increased by only 1.2% 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. January 2014

  39. 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. January 2014

  40. Sales Breakdown (TL) & Gross Margin by Products January 2014

  41. Income Statement (TL) January 2014

  42. Summary Balance Sheets (TL) January 2014

  43. VII. Corporate Governance Rating January 2014

  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. January 2014

  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 January 2014

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