MMG : Announcements and Notices – Announcement on Interim Results for the Six Month Ended 30 June 2019

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

MMG LIMITED

五礦資源有限公司

(Incorporated in Hong Kong with limited liability)

(HKEX STOCK CODE: 1208)

(ASX STOCK CODE: MMG)

ANNOUNCEMENT ON INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2019

The Board of Directors (Board) of MMG Limited (Company) is pleased to announce the consolidated results of the Company and its subsidiaries (Group) for the six months ended 30 June 2019. The financial information has been reviewed by the Company's Audit Committee and the Company's auditor.

The financial information set out in this announcement does not constitute the Group's complete set of the condensed consolidated interim financial statements for the six months ended 30 June 2019, but represents an extract from those condensed consolidated interim financial statements.

The unaudited consolidated results of the Group are annexed to this announcement.

1

MMG RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2019

KEY POINTS

• Net loss after tax of US$73.0 million, including a loss of US$81.0 million attributable to equity holders of the Company. The loss was primarily attributable to lower commodity prices and lower sales volumes following the community-related disruptions at Las Bambas in the first half of 2019.
• MMG's net debt increased by US$98.8 million during the six months ended 30 June 2019. The higher net debt was primarily attributable to lower operating cash flow due to the inventory build-up at 30 June 2019, with approximately 33,000 tonnes of copper in concentrate stockpiled at Las Bambas that will be progressively sold down during the second half. As a result, gearing temporarily increased from 72% at 31 December 2018 to 73% at 30 June 2019.
• EBITDA from continuing operations of US$646.7 million was 34% lower than the first half of 2018.
• Las Bambas produced 185,825 tonnes of copper in copper concentrate in the first half of 2019, with production stable compared to the first half of 2018. EBITDA of US$541.0 million was 25% below the first half of 2018. This was due to lower copper prices and lower sales volumes - as a result of community roadblocks that took place from early February until mid-April 2019 blocking inbound and outbound logistics. Once road access was re-established on 13 April 2019, operations ramped back up to normal levels.
• Kinsevere produced 29,002 tonnes of copper cathode in the first half, 28% lower compared to the first half of 2018 due to challenging mining conditions in the Mashi pit, declining ore feed grade and plant stability issues.
• Dugald River recorded an EBITDA of US$52.5 million during the first half of 2019, 82% higher than the first half of 2018, following commercial production on 1 May 2018. Zinc production of 74,515 tonnes was 11% above the first half of 2018, despite the significant flooding events that impacted the region in February 2019.
• Rosebery produced 39,565 tonnes of zinc in zinc concentrate during the first half of 2019. EBITDA of US$64.1 million decreased 46% on the first half of 2018, largely due to lower sales volumes across all commodities as a result of lower mined ore grades and lower prices. The strong and consistent performance in the mine and the mill continued with both mining and milling volumes remaining around one million tonnes on an annualised basis.
• The Board did not recommend the payment of a dividend for the period.
• MMG expects to produce 450,000-455,000 tonnes of copper and 250,000-270,000 tonnes of zinc in 2019, with total capital expenditure between US$400 million and US$500 million.

2

MMG RESULTS FOR THE SIX MONTHS ENDED 30

JUNE 2019 CONTINUED

SIX MONTHS ENDED 30 JUNE	2019	2018	CHANGE %
	US$ MILLION	US$ MILLION	FAV/(UNFAV)
Continuing operations
Revenue	1,387.4	1,898.8	(27%)
EBITDA	646.7	984.2	(34%)
EBIT	195.4	577.4	(66%)
(Loss)/profit for the period from continuing
operations	(73.0)	188.8	(139%)
Profit for the period from discontinued operation	-	4.6	(100%)
(Loss)/profit for the period	(73.0)	193.4	(138%)
EBITDA margin	47%	52%	n/a
Net cash generated from operating activities	290.0	941.5	(69%)
Dividend per share	-	-	n/a
Basic (loss)/earnings per share	US (1.01) cents	US 1.61 cents	(163%)
Diluted (loss)/earnings per share	US (1.01) cents	US 1.59 cents	(164%)

3

CHAIRMAN'S LETTER

Dear Shareholders,

I sincerely thank you for your long-term support for MMG. On behalf of the Board of Directors, I would like to present our 2019 Interim Report to all shareholders.

At MMG, safety is always our first value. We continued to perform well in the first half of the year, and the total recordable injury frequency (TRIF) was 1.67. We have one of the lowest injury rates among all the member companies of the International Council on Mining and Metals (ICMM) for 2018. This achievement comes from the fact that we put safety first in our day-to-day operations and have built a company safety culture by enhancing awareness and implementing innovative safety systems. In the future, we will continue to live our core value of safety and ensure that the safety and health of our employees is the foundation of all our work.

In the first half of 2019, downward pressure on the global economy increased, China's economic growth remained within a reasonable range, global trade tensions continued, and the pressure on the price of metals was maintained. Facing complex external environmental challenges, MMG is actively taking initiatives to strengthen its operations and management. In the first half of the year, we produced 215,527 tonnes of copper and 114,080 tonnes of zinc, and achieved revenue of US$1,387 million.

Across all our operations, we successfully responded to challenging events and continued to strengthen operational management. Las Bambas responded well to recover from community road blockades. After the incident was resolved, production resumed quickly, and stable operations have been maintained. In the first half of the year, 185,825 tonnes of copper in copper concentrate were produced. Despite regional flooding, Dugald River's processing throughput exceeded nameplate capacity and produced 74,515 tonnes of zinc in zinc concentrate; Kinsevere proactively responded to the mining and processing challenges caused by the monsoon season and its copper cathode production increased by 31% in the second quarter compared with the previous quarter. Rosebery continued to deliver strong mining and processing performance, with annual mining and processing volumes of around one million tonnes. In the reporting period, we continued to focus on cost competitiveness and to explore and implement business optimisation opportunities, reducing production costs, improving mine operating efficiency and maximising asset value and shareholder returns.

China Minmetals Corporation (CMC), the Company's major shareholder, is one of the largest and most international metals and minerals groups in China. CMC was rated a Class AA enterprise and received the Technology Innovation Contribution award in the 2016-2018 Annual Performance Appraisal in the latest assessment results released by the State Council of China. It also ranked 112th in the latest global Fortune

500. CMC is accelerating towards becoming the "No 1 in China and leading in the world" metal mining

group. MMG is the flagship platform for the development of CMC's metal and mineral resources. The major shareholder will, as always, strongly support the development and competitiveness of MMG.

Looking forward to the second half of the year, China's economic growth is expected to remain under pressure and global trade tensions may continue. The accelerated development of new energy and electric vehicles will strongly drive the demand for copper, zinc and other metals. On the supply side, copper and zinc supplies are in a tight pattern due to global issues including strikes, natural disasters and environmental policies. In the medium- to long-term, commodity demand in countries along the "One Belt, One Road" Initiative will continue to grow. China is actively pushing high-quality development, which will drive steady

4

CHAIRMAN'S LETTER CONTINUED

growth in the demand for commodities, including copper and zinc. For this reason, we are optimistic about the fundamentals and future development of the commodities that we manage.

In the future, the Company will continue to grow in-line with its long-term strategy, and to create greater value for shareholders and stakeholders. We will continue to focus on safety, strengthen operational management, seek opportunities to reduce cost and improve efficiency, enhance risk prevention and emergency management capabilities. We will do this while actively maintaining the relationship with the community and the government in each host country and ensuring the smooth operation of all mines. We will further tap into the potential of resources in surrounding areas, closely track business growth opportunities and promote the Company's sustainable development.

I would like to thank all shareholders, communities and business partners for their long-term support and express my sincere thanks to all employees for their valuable contributions.

GUO Wenqing

Chairman

5