Gemfields Group Limited · JSE:GML
Gemfields — Investor Presentation (March 2019)
46 slides from Gemfields's investor presentation, Mar 25, 2019
Slide 1: Investor Update, March 2019
GEMFIELDS « Westor Update, March ZO Pe GEMFIELDS Responsibly sourced Zambian emeralds and Mozambican rubies, Championing transparency and trust in the coloured gemstone industry.
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER This document, which has been compiled by Gemfields Group Limited (the “Company”), comprises the written materials/slides for a presentation concerning the Company, including its business, results of operations and prospects. This document does not constitute or form
Slide 3: Board Members
GEMFIELDS GROUP LIMITED BOARD MEMBERS Non-Executive Chairman Executive Directors Non-Executive Director Brian Gilbertson Sean Gilbertson David Lovett Dr Christo Wiese Chairman Chief Executive Officer Chief Financial Officer Audit Committee Independent Non-Executive Directors Martin Tolcher (Chair) L
Slide 4: Recent Timeline of Key Corporate Events
GEMFIELDS GROUP LIMITED RECENT TIMELINE OF KEY CORPORATE EVENTS 4
Slide 5: Gemfields Ltd
GEMFIELDS LTD (100% owned by Gemfields Group Ltd) • The world’s leading miner of responsibly sourced precious coloured gemstones. • Africa-focussed, with three principal activities: mining, grading and marketing and selling. • 100% owned by Gemfields Group Ltd (JSE-listed). Market value: USD 175 mil
Slide 6: Financial Highlights for the Year Ended December 2018
Financial Highlights for the Year Ended 31 December 2018
Slide 7: Financial Highlights for Year Ending December 2018
GEMFIELDS GROUP LIMITED FINANCIAL HIGHLIGHTS FOR YEAR ENDING 31 DECEMBER 2018 Revenues – USD EBITDA1 – USD Loss Per Share – USDc 206.1 million 58.9 million 5.0 Cash Flows from Free Cash Flows before changes Normalised Earnings Operating Activities - USD in working capital2 – USD Per Share3 – USDc 5.
Slide 8: Segmental Income Statement
GEMFIELDS GROUP LIMITED SEGMENTAL INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2018 8
Slide 9: Net Profit Pre and Post Exceptionals
GEMFIELDS GROUP LIMITED NET PROFIT PRE AND POST EXCEPTIONALS 9
Slide 10: Segmental Statement of Cash Flows
GEMFIELDS GROUP LIMITED SEGMENTAL STATEMENT OF CASH FLOWS – (EBITDA / FREE CASH FLOW) FOR THE YEAR ENDED 31 DECEMBER 2018 10
Slide 11: Segmental Balance Sheet
GEMFIELDS GROUP LIMITED SEGMENTAL BALANCE SHEET AT 31 DECEMBER 2018 11
Slide 12: Net Cash / (Debt) Profile
GEMFIELDS GROUP LIMITED NET CASH / (DEBT) PROFILE USD'000 80,000 60,000 40,000 20,000 (20,000) (40,000) 30-Jun-10 30-Jun-11 30-Jun-12 30-Jun-13 30-Jun-14 30-Jun-15 30-Jun-16 30-Jun-17 30-Jun-18 31-Dec-18 Cash Debt Net cash/(debt) Note: Auction receivables at 31 December 2018 were: USD 41.1 million 1
Slide 13: Annual Operating Costs
GEMFIELDS LTD ANNUAL OPERATING COSTS Annual Operating Costs (USD) Annual Operating Costs by type (USD) 12 month rolling period Financial years ending 31 December 30,000,000 30,000,000 Security costs 25,000,000 25,000,000 Other 20,000,000 Rent and rates 20,000,000 Travel and 15,000,000 accommodation
Slide 14: Mining Update
Mining Upda GEMFIELDS Responsibly sourced Zambian emeralds and Mozambican rubies. Empowering local communities by establishing schools, education initiatives and scholarships.
Slide 15: CY2018 Production and Mining KPIs
GEMFIELDS GROUP LIMITED CY2018 PRODUCTION AND MINING KEY PERFORMANCE INDICATORS (KPIs) MONTEPUEZ RUBY MINING CY2018 PRODUCTION AND MINING KPIs UNITS KAGEM MINING LTD LDA Premium Emerald/ Premium Ruby Production carats’000 224 92 Total Gemstone Production carats’000 35,576 2,872 Ore Processed tonnes’
Slide 16: The Rise of Ruby Revenue
GEMFIELDS GROUP LIMITED THE RISE OF RUBY REVENUE GEMFIELDS ANNUAL AUCTION REVENUE (YEARS ENDING 31 DECEMBER, USD MILLION) 200.0 180.0 160.0 140.0 120.0 USD millions 100.0 80.0 60.0 40.0 20.0 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Year 16
Slide 17: Kagem Emerald Mine, Zambia
GEMFIELDS Responsibly sourced Zambian emeralds and Mozambican rubies. Working with conservation partners to protect Africa's wildlife and [=
Slide 18: Kagem Emerald Mine Performance
GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM EMERALD TOTAL AUCTION SALES (USD MILLION) CUMULATIVE REVENUE IS USD 567 MILLION 40.0 36.5 34.9 34.7 35.0 33.1 31.6 31.5 30.0 28.4 26.8 26.2 25.0 22.3 21.5 USD millions 19.6 19.2 20.0 16.4 15.2 15.5 14.5 14.3 14.5 15.0 11.0 10.7 10.8 10.310
Slide 19: Kagem Emerald Mine Performance
GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM ROLLING 12 MONTH TOTAL OPERATING COSTS (ACTUAL CASH COST BASIS) USD’000 (UNAUDITED) 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Dec 14
Slide 20: Kagem's Chama Pit
KAGEM’S CHAMA PIT: (140 meters deep) 20
Slide 21: Kagem Emerald Mine Performance
GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM 12 MONTH ROLLING PREMIUM EMERALD PRODUCTION (CARATS) 1,400,000 1,200,000 Conclusion of a series of material changes to the grading system. 1,000,000 800,000 600,000 400,000 200,000 0 Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09
Slide 22: Kagem Emerald Mine Performance
GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM 12 MONTH ROLLING GEMSTONE PRODUCTION – EMERALD + BERYL (CARATS) 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 De
Slide 23: Kagem Emerald Mine Performance
GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM CUMULATIVE PREMIUM EMERALD (PE) PRODUCTION (CARATS) BY CALENDAR YEAR 240,000 224,415 carats 220,000 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Budget PE for
Slide 24: Kagem Emerald Mine Performance
GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM CUMULATIVE EMERALD (E) PRODUCTION (CARATS) BY CALENDAR YEAR 12,000,000 10,849,910 carats 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Budget E for 2019 Actual E for 2018 Actual E for
Slide 25: The Inkalamu Emerald
THE INKALAMU EMERALD a. The 5,655 carat gem was successfully sold at Gemfields’ emerald auction in Singapore in November 2018 b. Named ‘Inkalamu’, the Lion Emerald, in honour of the work carried out by Gemfields’ conservation partners the Zambian Carnivore Programme (www.zambiancarnivores.org) and t
Slide 26: Montepuez Ruby Mining, Mozambique
Montepuez Ruby Mining, Mozambique
Slide 27: Montepuez Ruby Mine Performance
GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MONTEPUEZ ROUGH RUBY TOTAL AUCTION SALES (USD MILLION) CUMULATIVE REVENUE IS USD 462 MILLION 80.0 09 Jun 18 70.0 60.0 14 Jun 17 10 Nov 17 14 Dec 18 50.0 USD millions 08 Dec 14 19 Jun 16 40.0 17 Jun 14 21 Jun 15 16 Dec 16 18 Dec 15 30.0 20.0 22
Slide 28: Montepuez Ruby Mine Performance
GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MONTEPUEZ ROLLING 12 MONTH OPERATING COSTS (ACTUAL CASH COST BASIS) USD’000 (UNAUDITED) 40,000 Includes the settlement costs to English Law firm Leigh Day 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-
Slide 29: MRM Mugloto Pits
MRM MUGLOTO PITS (depth = max 12 meters) 29
Slide 30: Montepuez Ruby Mine Performance
GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MONTEPUEZ ROLLING 12 MONTH PREMIUM RUBY PRODUCTION (CARATS) 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 30
Slide 31: Montepuez Ruby Mine Performance
GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MONTEPUEZ ROLLING 12 MONTH OVERALL GEMSTONE PRODUCTION (CARATS) (PRODUCTION EXCLUDES SAPPHIRE AND LOW SAPPHIRE PRODUCTION) 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Dec-13 Jun-14 Dec-14 Jun-15 D
Slide 32: Montepuez Ruby Mine Performance
GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MRM CUMULATIVE PREMIUM RUBY (PR) PRODUCTION (CARATS) BY CALENDAR YEAR 180,000 160,000 140,000 120,000 100,000 92,178 carats 80,000 60,000 40,000 20,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Budget PR for 2019 Actual PR for 2018 Actu
Slide 33: Montepuez Ruby Mine Performance
GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MRM CUMULATIVE RUBY (R) PRODUCTION (CARATS) BY CALENDAR YEAR 700,000 600,000 500,000 408,542 carats 400,000 300,000 200,000 100,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Budget R for 2019 Actual R for 2018 Actual R for 2017 Actual R
Slide 34: New MRM Sort House
NEW MRM SORT HOUSE • Gemfields unveiled its USD 15 million state-of-the-art, industry leading sort house in February 2019. • The first of its kind in the coloured gemstone industry. • On a par with the best diamond facilities in the world. • Expected to allow MRM to consistently deliver a greater vo
Slide 35: Fabergé Update
Fabergé Update 35
Slide 36: Fabergé Performance
GEMFIELDS GROUP LIMITED FABERGÉ PERFORMANCE 12 MONTH ROLLING SALES ORDERED AGREED 12 MONTH ROLLING OPERATING COSTS (USD, POST ANY DISCOUNTS, ALL CHANNELS) (USD) 36
Slide 37: Fabergé Performance
GEMFIELDS GROUP LIMITED FABERGÉ PERFORMANCE ROLLING 12 MONTH FUNDING REQUIRED BY FABERGÉ (USD) 37
Slide 38: Corporate Updates
CORPORATE UPDATES 38
Slide 39: A UK Listing for Gemfields Group Ltd
GEMFIELDS GROUP LIMITED A UK LISTING FOR GEMFIELDS GROUP LTD • Gemfields Group Limited (“GGL”) is listed on both the Johannesburg (JSE) and Bermudan (BSX) stock exchanges. • JSE ticker ‘GML’ / BSX ticker ‘GML.BH’ • Trading occurs on the JSE listing due to the lack of liquidity on the BSX. Approx. 70
Slide 40: Board Remuneration
BOARD REMUNERATION EXECUTIVE REMUNERATION HAS REDUCED BY APPROX. 70% SINCE JUNE 2017 • Remuneration Policy voted down at the 2018 AGM (29% of votes cast against). • Directors’ remuneration has reduced by approx. 70% from those numbers approved by shareholder in June 2017. • Directors’ bonuses based
Slide 41: Comparison to Diversified Miners – Key Metrics
GEMFIELDS GROUP LIMITED COMPARISON TO DIVERSIFIED MINERS – KEY METRICS Diversified Miners Headquarters FCF Yield Dividend Yield P/E Ratio EBITDA Margin BHP Billiton Melbourne, Australia 17% 4% 13 51% Rio Tinto Melbourne, Australia 12% 4% 13 42% Glencore Baar, Switzerland 13% 5% 9 6% Anglo American L
Slide 42: Broker Coverage
GEMFIELDS GROUP LIMITED BROKER COVERAGE • Gemfields Group Limited (“GGL”) has engaged with Edison Investment Research (“Edison”) to provide an Independent Research Valuation Report on GGL. • Edison will provide a detailed analysis of GGL, its strategy, markets, competitive environment and risk and o
Slide 43: CSR Updates
! Hi - ; ESR UPDATES il GEMFIELDS Responsibly sourced Zambian emeralds and Mozambican rubies. Providing dependable healthcare to A Story in Every Gemutone remote communitics. Discover more about Gemfickds and Faberge at Gemfields com
Slide 44: MRM Schools and Mobile Clinic Program
MRM SCHOOLS AND MOBILE CLINIC PROGRAM TWO MOBILE CLINICS PRESENTLY IN OPERATION, ALMOST 40,000 PATIENT SESSIONS COMPLETED 44
Slide 45: Doing More for Conservation Communities
DOING MORE FOR CONSERVATION COMMUNITIES Sponsored by: 45 45
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1 NEW BURLI NGT ON PLACE LONDON, W1S 2HR UNI T ED KI NGDOM T: +44 (0)20 7518 3400