Petra Diamonds Limited · LSE:PDL
Petra Diamonds — FY2013 Earnings Presentation
29 slides from Petra Diamonds's earnings presentation, Sep 16, 2013
Slide 1: Petra Diamonds – FY 2013 Preliminary Results
An exceptional 25.5 ct blue diamond sold for US$16.9m Petra Diamonds – FY 2013 Preliminary Results 16 September 2013
Slide 2: FY 2013 – Another Year of Solid Delivery
FY 2013 – Another Year of Solid Delivery • Further growth in production, revenues and profitability • Acceleration of major expansion programmes at Finsch and Cullinan – on track and in accordance with expectations • Continuous refinement and optimisation of mine plans – emphasis on maximising acces
Slide 3: FY 2013 – Key Performance Indicators
FY 2013 – Key Performance Indicators Production Revenue Profit from Mining Activity¹ Mcts US$M US$M 2.67 Mcts US$402.7m US$136.8m +21% +27% +34% 3.0 450 160 400 140 2.5 350 120 2.0 300 100 250 1.5 80 200 60 1.0 150 100 40 0.5 50 20 0.0 0 0 FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 2009 2010 2011
Slide 4: FY 2013 – Key Performance Indicators
FY 2013 – Key Performance Indicators Adjusted EBITDA1 Adjusted operating cashflow2 Capex³ US$M US$M US$M 140 150 250 US$122.4m US$132.8m US$198.3m +36% +57% +44% 120 130 200 110 100 90 150 80 70 60 100 50 40 30 50 20 10 0 0 -10 -20 -30 -50 FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 2009 2010 2011
Slide 5: Safety and Environmental Performance
Safety and Environmental Performance • Group LTIFR improved to 0.67 for FY 2013 • OHSAS 18001 (international health and safety standards) certification achieved for all underground pipe mines • ISO 14001 (international environmental standards) certification achieved for all underground pipe mines •
Slide 6: FY 2013 – Summary of Results
FY 2013 – Summary of Results FY 2013 FY 2012 (US$m) (US$m) Revenue 402.7 316.9 Adjusted mining and processing costs¹ (270.3) (222.6) Other direct income 6.2 9.0 Profit from mining activity1 138.6 103.3 Exploration expense (4.8) (3.0) Corporate overhead (11.4) (10.0) Adjusted EBITDA1 122.4 90.3 Depre
Slide 7: Operating Costs
Operating Costs 13% On-mine • On-mine cash costs increased by 12% due to: cash cost • Inclusion of Finsch for full 12 months (+8%) 13% 40% • Inflationary increases (incl. energy and labour costs) (+9%) • Treatment of higher tonnages (+9%) • Offset by depreciating ZAR vs USD (-14%) • Petra’s cost foc
Slide 8: Balance Sheet Snapshot
Balance Sheet Snapshot 30 June 2013 30 June 2012 (US$M) (US$M) Cash and cash equivalents: Bank 26.2 47.3 Diamond debtors (relating to the June 2012/2013 tenders and settled shortly after year end) 74.8 25.1 Diamond inventories 31.5 24.5 Total 132.5 96.9 Loans and borrowings: Loans and borrowings (to
Slide 9: 2013 Resource Statement (30 June 2013)
2013 Resource Statement (30 June 2013) • World-class Resource base of 309.6 million carats worth ~US$55.0 billion • Resources +2.5% due to higher grade for Finsch life of mine • Reserves +14.3% due to new areas brought into production and detailed mine planning at Cullinan Gross Resources (Mcts) 200
Slide 10: Exciting Diamond Market Fundamentals
Exciting Diamond Market Fundamentals • Limited supply: only ~30 significant kimberlite mines in production; no major discoveries since 1990’s • Major mines maturing: past production peak; moving underground = lower tonnages + higher operating costs • Late cycle credentials: demand driven by urbanisa
Slide 11: Broad Production Profile
Broad Production Profile • Production profile covers full diamond spectrum from low to top quality • Includes world-class diamonds such as 25.5ct Cullinan blue that sold for US$16.9m in April 2013 (right) • Mainstay is commercial mass market goods 11
Slide 12: Rough Diamond Pricing
Rough Diamond Pricing • Rough market was stable in FY 2013; flat pricing in H1, firmer pricing in H2 • Expect prices to remain stable in FY 2014, with potential for upside • Constrained supply/steady demand support this firmer market trend Rough Diamond Index (June 2006 = 100) Petra – Rough Diamond
Slide 13: FY 2013 Development Snapshot
FY 2013 Development Snapshot Underground development Tailings retreatment Optimising orehandling Plant refinements 13
Slide 14: Moving into Undiluted Ore
Moving into Undiluted Ore • Caving is a safe and proven mechanised mining method; provides access to higher volumes of ore than other methods • Current underground mining taking place in diluted, mature caves nearing end of lives • Expansion programmes to take next ‘cut’ by deepening and establishin
Slide 15: Finsch – Development Programme
Finsch – Development Programme Expansion Plan – to take 2,311 development metres and 165 raiseboring metres in FY 2013 production to c.1.8 Mctpa by FY 2016 and c.2.0 Mctpa by FY 2019 Dedicated conveyor • Mining currently taking place in ore-handling system Block 4 at 630m – FY 2014 Current Mining Ar
Slide 16: Cullinan – Development Programme
Cullinan – Development Programme Expansion Plan – to take 4,147 development metres and 626 raiseboring metres in FY 2013 production to c. 2.2 Mctpa by FY 2019 (2.0 Mctpa ROM & 0.2 Mctpa tailings) • Commenced rehabilitation of Current Infrastructure Men & Material BA5 areas at 645m to create Shaft Pl
Slide 17: Strategy in Action
Strategy in Action Focus for FY 2014 • Production guidance of c.3.0 Mcts • Total tonnages treated to increase from 14.8Mt to Increase c.17.5Mt output Organic growth • Ongoing plant refinements across Group to capture to 5 Mctpa the optimal diamond value profile at each operation - undiluted ore and
Slide 18: Production and Revenue – FY 2013 vs FY 2019
Production and Revenue – FY 2013 vs FY 2019 Gross Production Gross Revenue FY 2013 actual: 2.7 million carats FY 2013 actual: US$402.7 million 33% 33% 41% 53% Cullinan Williamson 6% 10% Koffiefontein 4% 1% 8% 4% 3%4% Kimberley Underground Fissure Mines FY 2019: c.5 million carats¹ FY 2019: c.US$1 bi
Slide 19: Sustainability Highlights
Sustainability Highlights Striving for the highest standards Community health Williamson wins Presidential Award for CSR in Tanzania The clinic at Finsch offers healthcare services to the community Training and education ABET training underway at Koffiefontein Conserving protected habitats Petra man
Slide 20: Appendix
Open pit mining at Williamson Appendix
Slide 21: Petra Diamonds
Petra Diamonds • Mid-tier diamond producer (LSE:PDL; FTSE 250) • Quality management team delivering strong growth • Major resource base of 309m carats • Diversified portfolio of producing mines & exploration • On track for 5 Mctpa* / c.US$1bn* revenue by FY 2019 • Sustainability at heart of Petra •
Slide 22: Capital Structure
Capital Structure High Quality Share Register % ISC Share Price (1 year) (as at 11 September 2013) Al Rajhi Holdings W.W.L. 13.1% Saad Investments Company Ltd / AWAL Bank 11.9% T. Rowe Price 10.4% JP Morgan Asset Management Holdings Inc. 7.8% BlackRock Investment (UK) Limited 7.3% Listing LSE: PDL A
Slide 23: The Petra Board
The Petra Board Adonis Pouroulis (43) Johan Dippenaar (56) 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 24: FY 2013 – Operations Results
FY 2013 – Operations Results Operation Finsch Cullinan Koffiefontein Kimberley UG Williamson (74%¹ Petra; 26% BEE) (74%¹ Petra; 26% BEE) (74%¹ & 2 Petra; 26% BEE) (74%¹ Petra; 26% BEE) (75% Petra; 25% Government of Tanzania) Total Production Tonnes treated (Mt) 5,210,546 3,861,012 4,080,893 3,172,67
Slide 25: Kimberley Underground – Development Programme
Kimberley Underground – Development Programme Expansion Plan – to Kimberley Underground Kimberlite Pipes Schematic maintain annual production of c. 130,000 ctpa • Construction and commissioning of plants at both Joint Shaft and BULTFONTEIN Wesselton Shaft – completed in FY 2013 • Substantial stockpi
Slide 26: Koffiefontein – Development Programme
Koffiefontein – Development Programme Expansion Plan – to take Koffiefontein Kimberlite Pipe Schematic production to c. 105,000 ctpa by FY 2017 • ROM production supplemented by ore from Ebenhaezer open pit (~5ha) – FY 2014 to FY 2016 • Installation of SLC from 560m to 580m – FY 2014 to FY 2015 • SLC
Slide 27: Williamson – Development Programme
Williamson – Development Programme Expansion Plan – to take Williamson Kimberlite Pipe Schematic production to c. 300,000 ctpa by FY 2017 • Production resumed further 1km to the enhanced rebuild of N plant – Q4 FY 2012 • Successful ramp-up of production to 2.7 Mt – FY 2013 LOM Pit Shell • Re-crush c
Slide 28: Capex Profile
Capex Profile 1. All Capex numbers are stated in FY 2014 money terms (except for FY 2013 actuals). 2. Depreciation on mining assets for FY 2014 guided at c. US$45 million. 3. As in prior guidance, capital estimates above do not include any capitalised borrowing costs. Guidance is to assume 95% of bo
Slide 29: Further enquiries: Petra Diamonds
Open pit mining at Williamson Further enquiries: Petra Diamonds Cathy Malins [email protected] +44 20 7494 8203 www.petradiamonds.com