Petra Diamonds Limited · LSE:PDL
Petra Diamonds — Shareholder Meeting (November 2012)
31 slides from Petra Diamonds's shareholder meeting presentation, Nov 29, 2012
Slide 1: 2012 AGM – Delivering Growth in Diamonds
LISTED PREMIUM 2012 AGM – Delivering Growth in Diamonds 29 November 2012 The Finsch mine in South Africa
Slide 2: Important Notice
Important Notice These Presentation Materials do not constitute or form part of any invitation, offer for sale or subscription or any solicitation for any offer to buy or subscribe for any securities in the Company nor shall they or any part of them form the basis of or be relied upon in any manner
Slide 3: Petra Diamonds
Petra Diamonds • Exceptional growth profile to 5 million carats pa • Diversified portfolio – 8 producing mines & exploration • Major, long life resource base of +300 million carats • High quality assets and management team • Sustainability at heart of Petra • Pure play exposure to diamond market (LS
Slide 4: The Petra Board
The Petra Board Adonis Pouroulis (42) Johan Dippenaar (55) David Abery (50) Jim Davidson (67) Non-Executive Chairman CEO Finance Director Technical Director Successful mining entrepreneur One of South Africa’s most successful Extensive experience as Chief Financial Acknowledged world authority on Fo
Slide 5: Proven Track Record – Continuous Growth
Proven Track Record – Continuous Growth Gross Production Profile - CAGR of 82% Gross Revenue Profile - CAGR of 41% US$ Mcts Finsch million 2.8Mcts* contribution 3.0 EST boosts Strong +US$400m* production 450 revenue EST growth due 2.5 to Finsch 2.2 Mcts 400 acquisition +98% US$316.9m Recovery 350 in
Slide 6: Delivering Profitability And Cashflow
Delivering Profitability And Cashflow US$M Profit from mining activity US$M Adjusted EBITDA1 US$M Net Operating Cashflow 120 100 90 +35% +58% +35% 80 100 80 70 80 60 60 50 60 40 40 40 30 20 20 20 10 0 0 0 FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
Slide 7: Highlights – FY 2012 & To Date
Highlights – FY 2012 & To Date September 2011: Completion of Finsch acquisition for R1.425bn (ca. US$192m) November 2011: Appointment of Dr Patrick Bartlett and Gordon Hamilton as independent NEDs December 2011: Step-up from AIM to Main Market of LSE March 2012: Inclusion in FTSE 250 Index June 2012
Slide 8: Fully Financed Capex Profile
Fully Financed Capex Profile • New debt facilities of ca. US$244m put in place with Absa, RMB (FNB) and IFC • An increase and reorganisation of Petra’s existing debt structures • Provides greater assurance and flexibility to the Group’s project expansion plans • Petra has entered into an agreement w
Slide 9: Balance Sheet Snapshot
Balance Sheet Snapshot 30 Sep 12 FY 2012 US$M) (US$M) Cash and cash equivalents: Bank 15.4 47.3 Diamond debtors Nil 22.1 Diamond inventories 61.5 24.5 Total 76.9 93.9 Bank borrowings: Absa / RMB / IFC facilities drawn down (ca. US$244m total facilities; (100.2) (69.2) available facilities US$143.8m)
Slide 10: Diamond Market – Declining Supply
Diamond Market – Declining Supply • Global production of just 124 Mcts in 2011 (Zimbabwe: 8.5 Mcts) vs 176 Mcts in 2005 (Zimbabwe: 0.2 Mcts) • Only ~30 significant kimberlite mines in production • Many major producers moving from open pit to underground – lower tonnages & higher operating costs • Su
Slide 11: Diamond Market – Increasing Demand
Diamond Market – Increasing Demand • Demand driven by urbanisation trend and growing middle class • 2015: 221 Chinese cities with population of +1m (vs 107 in Europe, Japan & US combined) • Chinese economic plan seeks to boost China’s domestic consumption; goal to double China’s 2010 GDP and average
Slide 12: End Users Look To Secure Rough
End Users Look To Secure Rough China India “Demand for mid-quality…diamonds over the next three to five years will be very strong (estimate +30% pa), creating a significant imbalance between supply and demand….the jewelry market in China is just beginning to take off.” "The next decade will be the d
Slide 13: Rough Diamond Prices
Rough Diamond Prices FY 2013 FY 2013 FY 2012 FY 2011 • Rough market stabilised in July 2012 and has remained Actual Guidance Actual Actual flat since then (Petra direct experience) September Weighted Weighted Weighted Tender Average Average Average • First tenders of FY 2013 mainly delivered better
Slide 14: Petra Production Profile
Petra Production Profile Profile runs the full spectrum, from high to low value, across all fancy colours A 102ct yellow (Finsch) A very rare 3ct lilac (Finsch) A typical Type II of 68ct A 152ct (Cullinan) (Cullinan) A very high quality 13ct A distinctively shaped 177ct Two classic colourless Finsch
Slide 15: Aim Of Expansion Programmes – Undiluted Ore
Aim Of Expansion Programmes – Undiluted Ore • Current mining at underground pipe mines taking place in diluted mature caves resulting in lower grades Still need to amend • Expansion programmes will open up fresh word ‘depleted’ to ‘mature’ below block caves, delivering access to undiluted ore result
Slide 16: FY 2012 – A Snapshot
FY 2012 – A Snapshot Cullinan: Underground production and development Finsch: Production control room Williamson: Recommenced production Koffiefontein: Ebenhaezer open pit tonnes Kimberley UG: Plant construction after rebuilt plant commissioning supplemented underground 16
Slide 17: Finsch – Expansion Plan
Finsch – Expansion Plan Expansion Plan – to take Finsch Mining Schematic production to just under 2 Mctpa by FY 2017 (1.6 Mctpa ROM & 0.3 Mctpa tailings) • Mining currently taking place in Block 4 at 630m – FY 2012/13 Change in scope for FY 2013 to Current Mining Area FY 2016: Block 4 Pillars • SW P
Slide 18: Cullinan – Development Programme
Cullinan – Development Programme Expansion Plan – to take Cullinan Mining Schematic production to ca. 2.4 Mctpa by FY 2019 (2.0 Mctpa ROM & 0.4 Mctpa tailings) • Shaft deepening contractor commenced work on site – FY Current Infrastructure 2012 Men & Material Shaft Planned Infrastructure Rock Shaft
Slide 19: South Africa – Labour Relations
South Africa – Labour Relations • Reality is mining wages are in top quartile of SA wage environment and multiples of other developing countries • Labour unrest in mining industry is not a pure labour issue; underlying political and social issues • Elections for top positions in ruling party – Decem
Slide 20: Strategy In Action – FY 2013
Strategy In Action – FY 2013 • Investing • Capex of ca. R1.4bn in SA and ca. US$11m in Tanzania • Optimising • Continued focus on ‘value’ production • Reduction of bottom-cut at Finsch to 1mm to capture high value smalls • Ongoing plant modifications at Kimberley Underground and Williamson • Introdu
Slide 21: Production & Revenue – FY 2012 vs FY 2019
Production & Revenue – FY 2012 vs FY 2019 Gross Production Gross Revenue FY 2012: 2.2 million carats FY 2012: US$316.9 million 39% 35% 43% 50% Cullinan Williamson 4% 2%3% 3% 3% Koffiefontein 6% 6% 6% Kimberley Underground FY 2019: c.5 million carats(1) FY 2019: c.US$1 billion(1) Fissure Mines Finsch
Slide 22: Sustainability Highlights
Sustainability Highlights Health and Safety Investing in education and communities Tsholofelo Place of Hope (Finsch Children’s home) 1.2 Health and safety of 1 employees is top priority for management 0.8 Formation of Board level 0.6 HSSE Committee in FY 2012 0.4 0.2 Petra striving for zero harm acr
Slide 23: Appendix
Employees at the Williamson mine Appendix
Slide 24: Capital Structure
Capital Structure High Quality Shareholder Base 26 Nov 2012 Share Price & Volume (1 year) Al Rajhi Holdings W.W.L. 13.3% Saad Investments Company Ltd/AWAL Bank 12.1% JP Morgan Asset Management Holdings Inc. 7.9% Capital Group International, Inc. 7.3% Prudential plc group of companies* 5.1% Listing L
Slide 25: An Exceptional Growth Path
An Exceptional Growth Path Petra has acquired the following five diamond mines from De Beers: July 2007 July 2008 November 2008 May 2010 September 2011 Koffiefontein Cullinan Williamson Kimberley UG Finsch Front Cave Block Cave Open Pit Block Cave Block Cave 13yr Mine Plan 18yr Mine Plan 18yr Mine P
Slide 26: Cullinan – Large Stones
26 2011 Petra takeover in July 2008 2009 2007 2005 2003 2001 1999 1997 1995 1993 1991 1989 1987 1985 1983 1981 1979 1977 1975 1973 1971 +200 +100 & +200 carat stones recovered at Cullinan 1968 1966 1964 +100 (including stones recovered up to August 2012) 1962 1960 1958 1956 Cullinan – Large Stones 1
Slide 27: Williamson – Overview
Williamson – Overview Expansion Plan – Key Components Williamson Kimberlite Pipe Schematic • Company successfully recommenced production at 1km Williamson further to the N enhanced rebuild of plant – Q4 FY 2012 • Re-crush circuit in plant, which will lead to an improved LOM Pit Shell grade, will com
Slide 28: Koffiefontein – Overview
Koffiefontein – Overview Expansion Plan – to Koffiefontein Kimberlite Pipe Schematic take production to ca. 100,000 ctpa by FY 2016 (90,000 ctpa ROM & 10,000 ctpa tailings) • Planned reduction in ROM tonnes supplemented by ore from Ebenhaezer open pit (~5ha) • Installing new sub-level cave between 5
Slide 29: Kimberley Underground – Overview
Kimberley Underground – Overview Expansion Plan – to Kimberley Underground Kimberlite Pipes Schematic take production to ca. 135,000 ctpa by FY 2016 • Construction and commissioning of main plant (40,000 tpm) at Wesselton – underway • Substantial stockpile of ore at each plant built up (~0.7Mt combi
Slide 30: KX36 – Kimberlite Evaluation Update
KX36 – Kimberlite Evaluation Update • New discovery in Botswana • Core drilling and micro-diamond sampling campaign indicated: • Initial modelled (undiluted) diamond grade between 75-180 cpht • Indications of a reasonably coarse diamond size distribution from MiDA modelling • Potential kimberlite to
Slide 31: Further enquiries: Petra Diamonds
Employees at the Williamson mine Further enquiries: Petra Diamonds Cathy Malins [email protected] +44 20 7318 0452 www.petradiamonds.com