Gem Diamonds Limited · LSE:GEMD
Gem Diamonds — FY2016 Earnings Presentation
29 slides from Gem Diamonds's earnings presentation, Mar 15, 2017
Slide 1: Full Year 2016 Results
GEM piaMONDs Full Year 2016 Results 15 March 2017
Slide 2: Disclaimer
Disclaimer The following presentations are confidential and are being made only to, and are only directed at, persons to whom such presentations may lawfully be communicated ("relevant persons’). Any person who is not a relevant person should not act or rely on these presentations or any of their co
Slide 3: Full year 2016 results overview
Full year 2016 results overview ¥r GEM DIAMONDS Diamond market Operational overview ¢ HSSE ¢ LetSeng * Ghaghoo Sales, marketing and manufacturing * Group financial performance ¢ Outlook — 2017 focus
Slide 4: Full year 2016 results overview
Full year 2016 results overview Revenue EBITDA / EBITDA margin (%) Kr GEM DIAMONDS USD Millions USD Millions 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Basic EPS (pre exceptional items) Free cash flow from operations 61 USD Millions (51) 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
Slide 5: Diamond market
— | €3) —— me at : f as Dia raateyate| ma rket 88.43 carat white Letseng diamond sold for c.US$ 48 100 per carat in 2016 Clifford Elphick | Chief Executive Officer
Slide 6: Diamond market
Diamond market * Global economic backdrop in 2016 GEM aUMENESL * Continuing macro-economic uncertainty * Slower growth in Chinese economy + Demonetisation in India * Positive economic trends in US * Diamond market in 2016 Stabilised demand and high inventory levels in China Continued US recovery Liq
Slide 7: Diamond market
Diamond market * Gem Diamonds market position * Letseng prices for high quality diamonds firm in 2016 * Letseng current Tender valuation in Antwerp USS1 900 per carat + Market for Ghaghoo commercial goods weak ¢ Medium to long-term outlook * Demand trends expected to grow in real value terms * New m
Slide 8: Operational performance
Operational performance Johnny Velloza | Chief Operating Officer Satellite pit at Letseng open-pit mine
Slide 9: Group HSSE performance
Group HSSE performance ¢ All injury frequency rate at a Group historical low GEM BONDS! ° Zero + Fatalities Major or significant community incidents Major or significant environmental incidents ¢ Five lost time injuries Lost time injury frequency rate (LTIFR) All injury frequency rate (AIFR) 0.30 20
Slide 10: * eke
* eke Main pit at Letseng open-pit mine 10
Slide 11: Letseng operational overview
LetSeng operational overview bees tute) (seliin SSCuu ferns Severe weather impact contained as GEM mevenwal F Revised production targets achieved 1.7 million tonnes Satellite pipe contribution Recovered grade 1% above reserve grade 2012 2013 2014 2015 2016 Plant 2 upgrade increased throughput Ore tr
Slide 12: Delivering value at Letseng
Delivering value at LetSeng * Initiatives undertaken to unlock additional value GEM DIAMO! * Updated open-pit life of mine plan * Large diamond recovery and breakage initiative projects * Mining optimisation project * Fleet management system * Improved mining processes
Slide 13: Waste tonnes mined and ore tonnes treated
Ore tonnes treated - millions Waste tonnes mined - millions
Slide 14: Letseng resource performance
LetSeng resource performance * Of the 100 highest USS per carat ¢ Large high value diamonds ; diamonds produced over the last six account for 70 - 80% of revenue CEM biaMonpe years, twelve were recovered in 2016 m+10cts 5-10 cts -5 cts ¢ Lower volume of large high value diamonds recovered in 2016 +
Slide 15: Letseng remarkable recoveries
LetSeng remarkable recoveries * Strong track record of diamonds of exceptional size and colour : GEM DIAMON "2 LetSeng Legacy Letseng Star Letseng Destiny 493ct 550ct Lesotho Promise Leseli La Letseng Letseng Dynasty 603ct 478ct 357ct
Slide 16: Letseng capital forecast
Letseng capital forecast Letseng 5 year capital plan GEM DIAMON oi 2017 2018 Total tonnes mined (millions) 38.7 39.0 Tonnes treated (million) 7.0 7.0 Project capital (US$m) Stay in business capital (US$m) Capital intensity (US$/tonnes mined)
Slide 17: Ghaghoo operational overview
GEM EAvevesl Ghaghoo operational overview Tocessng planar haghooundexground mine
Slide 18: Ghaghoo operational overview
Ghaghoo operational overview Downsizing strategy complete * Production rate reduced to 300 000 tonnes per annum * Operating costs reduced Development to access Level 2 VKSE ore completed 49% of planned Level 1 VKSE ore extracted and 51% remaining for mining VK-Main phase on Level 1 successfully samp
Slide 19: Sales, marketing and manufacturing
{ 160.21 white Letseng diamond sold into partnership arrangement in 2016 Sales, marketing and manufacturing Clifford Elphick | Chief Executive Officer 19
Slide 20: Sales, marketing and manufacturing overview
Sales, marketing and manufacturing overview Flexible sales strategy to capitalise on opportunities in both the rough and ; polished markets GEM biaMonpe Downstream manufacturing and partnering activities continue to maximise value Robust prices achieved for LetSeng's high quality production in chall
Slide 21: Group financial performance
GEM piAMoNDs Group financial performance Michael Michael | Chief Financial Officer
Slide 22: Full Year 2016 financial results
Full Year 2016 financial results 2016 pre exceptiona Exceptiona GEM biaMonpe S$ millions litems litems 2016 2015 V ce ~ a Revenue 189.8 189.8 Royalty and selling costs (17.2) (17.2) Cost of sales (98.8) (98.8) Corporate expenses (11.0) Underlying EBITDA 62.8 Depreciation and amortisation (10.4) Impa
Slide 23: Financial performance — Letseng mining operations
Financial performance — Letseng mining operations 2016 2015 % Variance Average price per carat (USS) Carats sold 1695 108 945 2299 102 778 (26%) 6% USS millions 2016 2015 % Variance Revenue EBITDA EBITDA margin 185 69 (22%) (32%) Unit costs (US$) % Variance Direct cash costs (before waste) per tonne
Slide 24: Group cashflow, funding and dividend
Group cashflow, funding and dividend Cash * Group cash of US$30.8 million (US$28.5 million attributable) ¢ Net cash of US$3.8 million after debt of US$27.0 million Funding ¢ Total Group facilities of US$53.3 million (at 31 December 2016) * Ghaghoo US$25.0 million debt facility settled post year end
Slide 25: Outlook - 2017 focus
ar yp Outlook - 2017 fo Clifford Elphick | Chief Executive Officer Z C Uu S Mining activity at Let’eng open pit mine 25
Slide 26: Outlook — 2017 Focus
Outlook — 2017 Focus Letseng ¥ GEM DIAMONDS ¢ Effective implementation of updated mine plan ¢ Deliver benefits from optimisation projects and focused cost reduction Construct mining complex on time and within budget Complete core drilling to enhance the understanding of the kimberlite geology Large
Slide 27: Thank you
GEM SAMONDS! Feedback Gem Diamonds Limited Th a Nn k yo U [email protected] Celicourt Communications Joanna Boon/Mark Antelme T: +44 (0) 207 520 9265 www.gemdiamonds.com
Slide 28: Annexure - Gem Diamonds capital structure and share price performance
Annexure 1 - Gem Diamonds capital structure 12 months Gem Diamonds share price performance mas Volume (000's). ——Price (GBp) O1-JuH6 = 01-Jun-16 O1-Oct-16 \ © © a & <= Ss SOURCE: Bloomberg 01-Nov-16 01-Jan-17 2500 2000 1500 1000 Thousands 500 Gem Diamonds Limited is listed on the London Stock Exchan
Slide 29: Annexure — Letseng 2017 guidance
Annexure 2 — LetSeng 2017 guidance FY 2017 Kr GEM DIAMONDS Waste tonnes mined (Mt) 30 - 32 Ore tonnes treated (Mt) 6.8-7.0 Carats recovered (Kct) 110-114 Carats sold (Ket) 108-112 Direct cash costs (before waste) per tonne treated (Maloti) 155-165 Mining waste cash costs per tonne of waste mined (Ma