Petra Diamonds Limited · LSE:PDL

Petra Diamonds — Technical Presentation (February 2017)

48 slides from Petra Diamonds's technical presentation, Feb 4, 2017

  1. Slide 1: Cullinan Site Visit

    Cullinan Site Visit 4 February 2017 Photo: Underground at Cullinan: Silo no.2 C-cut project

  2. Slide 2: Important Notice

    Important Notice • These Presentation Materials are being supplied to you by Petra Diamonds Limited (the “Company”) solely for your information and use at this presentation. These Presentation Materials may contain information that is confidential, legally privileged or otherwise protected by law. T

  3. Slide 3: Cullinan Site Visit Itinerary

    Cullinan Site Visit Itinerary • 08:00 Pick up from Sandton, Johannesburg • 08:15 Pick up from OR Tambo • 09:30 Arrive Cullinan Diamond Mine • 09:45 Overview on Petra, Cullinan & Safety briefing • 11:00 Underground visit 138.57 ct Cullinan white, sold for US$6.5 million FY 2017 • 13:00 New plant visi

  4. Slide 4: About Petra

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  5. Slide 5: Discover Petra…

    Discover Petra… Revenue Adjusted EBITDA …a leading independent diamond miner with a US$m US$m diversified portfolio and high quality team 600 200 188 472 431 164 425 392 128 139 400 317 Petra expansion plans expected to: 277 100 90 116 200 • Improve grades 154 49 0 0 • Improve product mix FY12 FY13

  6. Slide 6: H1 FY 2017 – driving forward to FY 2019

    H1 FY 2017 – driving forward to FY 2019 H1 FY 2017 FY 2019 21% 51% 5% 41% 40% Production 1% by mine Finsch 22% Cullinan 11% Williamson 2% 6% Koffiefontein 20% Kimberley Ekapa 33% Revenue 43% Mining 36% by mine 14% 11% 12% 17% 6% 8% Unit H1 FY 2017 H1 FY 2016 Variance FY 20161 SALES Revenue US$m 228.

  7. Slide 7: Moving to Undiluted Ore

    Moving to 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 establishing

  8. Slide 8: Growth and Margin Expansion

    Growth and Margin Expansion Adjusted EBITDA margin expected to rise from ca. 38% in FY 2016 to +50% by FY 2019 • Increase in ROM grades and increase in tonnage throughput (mainly due to Kimberley Mines transaction) to lead to ca. 43% growth in production • Lower value tailings carat production to re

  9. Slide 9: Growth and Margin Expansion

    Growth and Margin Expansion Petra to maintain a fairly flat tonnage profile from FY 2017 onwards, but the replacement of poor quality tonnes with better quality tonnes will significantly grow production and increase the average value per carat FY 2019 production target of ca. 5.3 Mcts; revenue of ca

  10. Slide 10: Cullinan Overview

    V4 Cullinan Overview

  11. Slide 11: Cullinan Diamond Mine (“CDM”) Overview

    Cullinan Diamond Mine (“CDM”) Overview 1902 1903 1905 1930 1932 1945 1997 2008 2009 Cullinan Open pit Recovery of De Beers Mine closed Mine Premier Mine acquired Petra kimberlite pipe mining the 3,106 acquired due to reopened and (Transvaal) by Petra increased its originally commenced at carat Culli

  12. Slide 12: Iconic Diamonds of Cullinan

    Iconic Diamonds of Cullinan • Petra’s Exceptional Diamonds (+$5 million stones) contributed on average $23 million p.a. from FY 2009 to FY 2016 • A 121 carat white diamond, recovered at Cullinan in June 2016, was sold for US$6 million in July • A 138.57 carat white stone from Cullinan sold for US$6.

  13. Slide 13: Safety Performance

    Safety Performance Highest LTIFR/nr = 2001: 0.80 / (19) 2001 = Previous time that development was done U/G 2010 – current = Increase in activities, employees and projects both Lowest LTIFT/nr = 2008&9: 0.13 (2) underground and surface plant *LTIFR = Nr of lost time injuries x 200,000 hrs / hrs worke

  14. Slide 14: Major Diamond Resources

    Major Diamond Resources Gross (June 2016) Contained Tonnes Grade Diamonds Category (millions) (cpht) (Mcts) Reserves Proved - - - Probable 47.8 45.1 21.6 Sub-total 47.8 45.1 21.6 Resources Measured - - - Indicated 251.5 70.3 176.9 Inferred 171.2 10.1 17.3 Sub-total 422.7 45.9 194.2 • Resource bottom

  15. Slide 15: ROM Grade Improvement

    ROM Grade Improvement 45 40 39.9 38.9 35 36.6 34.5 33.3 30 30.7 30.3 27.8 Grade (cpht) 25 25.7 24.4 20 Declining ROM grade as result of maturing of cave (waste ingress), exacerbated Turnaround in ROM grade as a 15 by high level of development waste in FY 2014 and FY 2015 from host rock that result o

  16. Slide 16: Cullinan – Progress and the Road Ahead

    Cullinan – Progress and the Road Ahead FY FY FY FY FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Development programme 2011 2012 2013 2014 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 Development of Declines & Access Tunnels Blasting of Under Cut at 824L New Production levels at 839L Development of Shaft #1 to 943L Prod

  17. Slide 17: Mining Overview

    V4 Mining Overview

  18. Slide 18: Cullinan – High Level Development Programme

    Cullinan – High Level Development Programme Expansion Plan FY 2016 Development: Waste: 1,911 metres; Raiseboring: 838 metres; Kimberlite: 2,837 metres • Expansion plan to take production to ca. 2.2 Mcts by FY 2019 (2.0 ROM & 0.2 tailings) • C-Cut Phase 1: new block cave being established on the west

  19. Slide 19: Block Caving Schematic

    Block Caving Schematic Undercut tunnel is made through the orebody and Undercut material is broken up Production level is created below; draw points are set Draw bells / Draw points up and a fan is drilled above each one; ore starts to ‘cave’ Production level under its own weight and is removed from

  20. Slide 20: Plan View of Cullinan Mining Areas

    Plan View of Cullinan Mining Areas Petra Diamonds Limited: Cullinan Site Visit - 4 February 2017 20

  21. Slide 21: C-Cut Phase 1 Expansion Programme

    C-Cut Phase 1 Expansion Programme

  22. Slide 22: C-Cut Under Cut Level

    C-Cut Under Cut Level Petra Diamonds Limited: Cullinan Site Visit - 4 February 2017 22

  23. Slide 23: C-Cut Production Level

    C-Cut Production Level Petra Diamonds Limited: Cullinan Site Visit - 4 February 2017 23

  24. Slide 24: C-Cut Under Cut and Extraction Overlay (Dec’16)

    C-Cut Under Cut and Extraction Overlay (Dec’16) Petra Diamonds Limited: Cullinan Site Visit - 4 February 2017 24

  25. Slide 25: C-Cut Phase 1

    C-Cut Phase 1 C-Cut Phase 1 was 86% complete as at 31 December 2016 Petra Diamonds Limited: Cullinan Site Visit - 4 February 2017 25

  26. Slide 26: Cullinan Development Snapshot

    Cullinan Development Snapshot Rock breaker south extraction Long hole drilling draw point North production conveyor 2 Conveyor Planning Crusher installation Silo loading Box Petra Diamonds Limited: Cullinan Site Visit - 4 February 2017 26

  27. Slide 27: New Plant

    New Plant

  28. Slide 28: New Plant – Significantly Reduced Footprint

    New Plant – Significantly Reduced Footprint COMPARISON – CURRENT vs AG MILLING PLANT Current Plants New AG Milling Plant (Main, DTP & OSP) 6.0Mt ROM capacity 2.8 Mt ROM Initial feed: Throughput p.a. 2.5 Mt Tailings 4.0 Mt ROM 2.3 – 2.5 Mt Tailings Total footprint ca. 27 ha ca. 4 ha MAJOR EQUIPMENT I

  29. Slide 29: New Plant – Simplified Process Flow Diagram

    New Plant – Simplified Process Flow Diagram The New Mill Plant was 87% complete as at 31 December 2016 Petra Diamonds Limited: Cullinan Site Visit - 4 February 2017 29

  30. Slide 30: New Plant Construction Snapshot

    New Plant Construction Snapshot Mill 1 Feed – Fully Autogenous Milling, inter- HPGR motor side, Inter-particle crushing, XRL BV X-Ray Machine, X-Ray particle grinding Luminescence. 12-25mm & 25-75mm DTP BV X-Ray Machine, 6mm to 12mm . Mill 1 Discharge, Split 75-150, 12-75, 1-12mm 7 Dam Pumps, simpli

  31. Slide 31: New Plant Construction Snapshot

    New Plant Construction Snapshot Run of Mine Silo & Recycle Silo Main Sub Station Recovery & HPGR & XRL Buildings Mill plant, mill basis and DMS feed area Jaw Crusher installation 110 & 210 conveyor to mill Petra Diamonds Limited: Cullinan Site Visit - 4 February 2017 31

  32. Slide 32: Costs & Capex

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  33. Slide 33: Operating Cost History and Make-up

    Operating Cost History and Make-up 350 On-mine cash cost per tonne treated 7 Million tonnes treated R/t treated 300 6 250 5 200 4 150 3 Increased unit cost due to the planned reduction in processing of ROM and 100 2 tailings, to focus on grade control (FY 2016) as well as start-up of new plant (FY 2

  34. Slide 34: C-Cut Phase 1 Project: Actual Expenditure compared to Budget

    C-Cut – Phase 1 Project: Actual Expenditure compared to Budget 1,200 4,500 4,000 1,000 3,500 800 3,000 Rand (millions) 2,500 600 H1 FY 2016 2,000 YTD Actual - R493m YTD Budget - R490m 400 1,500 1,000 200 500 0 0 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Budget 570 704 842 918 591 291 1

  35. Slide 35: Outlook

    Outlook

  36. Slide 36: Cullinan – Production Plan

    Cullinan – Production Plan • ROM tonnages to rise 60%, but ROM carat production expected to rise +200%, due to increase in grade as result of mining undiluted C-Cut tonnes Tonnes treated and grades Carat production and average diamond values 7.5 60 3.0 200 New plant fully $/ct cpht Million carats Mi

  37. Slide 37: Cullinan Outlook

    Cullinan Outlook • Improving grades – grade to rise gradually from ca. 35 cpht to +50 cpht by FY 2019 • Improving product mix – due to production from undiluted areas and higher proportion of ROM vs tailings • Improving recoveries – new plant to optimise recoveries from Cullinan • Improving mining c

  38. Slide 38: CSR

    CSR

  39. Slide 39: Safety, Health & Employee Wellbeing

    Safety, Health & Employee Wellbeing • OHSAS 18001:2007 certified • Continued focus on safety • Fatality sustained during H1 FY2017 • Time out sessions to enhance safety culture • Formalized VFL system • Focused audits • Communication • Monthly HSE topics distributed, H&S meetings Cullinan achieve 50

  40. Slide 40: Environmental Management

    Environmental Management • ISO 14001 certified; recertification in 2015 • Incidents Management • No major environmental incidents reported • No external community complaint received in FY 2017 • EMP • Environmental Management Programme (EMP) approved in 2012 • Water Use License • Currently operating

  41. Slide 41: Training and Development

    Training and Development • Key area of focus – US$5.8m invested throughout the Group in FY 2016 • Leadership Development Programme – helps Petra identify and develop future leaders within the organisation: • 61 employees participated in FY 2016 • 28% of participants were female LDP Graduations • 40

  42. Slide 42: Education Initiatives

    Education Initiatives • Technical skills – long-term strategy to address scarcity of skills in the industry • Supporting early learning – Cullinan transformed the Refilwe Early Learning Centre to ensure a conducive learning environment • Careers Day – Cullinan hosted a careers days for 13 schools in

  43. Slide 43: Community Projects

    Community Projects • Significant investment – Group social spend of US$1.7 million in FY 2016 (FY 2015: US$1.7 million) • Multi-purpose sports facilities – constructed at 3 local primary schools, labourers from the local community were employed. Project launch date is 3 February 2017 • Expansion of

  44. Slide 44: Appendix

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  45. Slide 45: Location

    Location Petra Diamonds Limited: Cullinan Site Visit - 4 February 2017 45

  46. Slide 46: Current Trading – H1 FY 2017 Results

    Current Trading – H1 FY 2017 Results Unit H1 FY 2017 H1 FY 2016 Variance FY 2016 Sales Revenue US$m 46.0 25.0 +84% 83.8 Diamonds sold Carats 363,113 227,759 +59% 663,175 Average price per carat US$ 127 110 +16% 1261 ROM Production Tonnes treated Tonnes 1,039,417 1,180,399 -12% 2,302,892 Diamonds pro

  47. Slide 47: Labour Relations – Risk Mitigation

    Labour Relations – Risk Mitigation • Labour relations at Cullinan have been stable in FY 2015 and FY 2016 • No migrant labour – 70% of employees come from local/provincial area to Cullinan • Strong focus on internal communications and engagement with employee representatives • Petra concluded 3 year

  48. Slide 48: Thank you

    Thank you Further enquiries: Investor Relations [email protected] +44 20 7494 8203 www.petradiamonds.com

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