Petra Diamonds Limited · LSE:PDL
Petra Diamonds — GMP Jamboree February 2013
29 slides from Petra Diamonds's conference presentation, February 2013
Slide 1: Building A World-Class Diamond Group
LISTED PREMIUM Building A World-Class Diamond Group February 2013 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 of producing mines & exploration • Major, long life resource base of +300 million carats • High quality assets & management team • Sustainability at heart of Petra • Pure play exposure to diamond market (LSE:P
Slide 4: Focus on Africa – source of ~60% of world's diamonds by value
Focus on Africa – source of ~60% of world’s diamonds by value • Multi-mine portfolio provides flexibility in terms of operational performance • Disposal process underway for non-core Fissure Mines (Helam, Sedibeng, Star) Focus on kimberlite KX36 discovery & surrounding area 4
Slide 5: An Exceptional Growth Path
An Exceptional Growth Path Petra has acquired five non-core diamond mines from De Beers: July 2007 July 2008 November 2008 May 2010 September 2011 Koffiefontein Cullinan Williamson Kimberley UG Finsch 74% Petra; 26% BEE 74% Petra; 26% BEE 75% Petra; 25% 76% Petra; 24% BEE 76% Petra; 24% BEE Governme
Slide 6: Proven Track Record – Continuous Growth
Proven Track Record – Continuous Growth - CAGR of 82% - CAGR of 41% US$ Mcts Finsch million contribution 2.65 Mcts* boosts EST ca. US$380m* revenue EST US$316.9m 2.2 Mcts +98% +44% Recovery in rough diamond Major increase prices & due to higher Decreased sale of 507 volume Cullinan revenue ct Cullin
Slide 7: Delivering Profitability And Cashflow
Delivering Profitability And Cashflow US$M Profit from mining activity US$M Adjusted EBITDA1 US$M Net Operating Cashflow 120 100 90 US$90.3m +35% US$79.9m +58% US$103.3m +35% 80 100 80 70 80 60 60 50 60 40 40 40 30 20 20 20 10 0 0 0 FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 2008 2009 2010 2011 20
Slide 8: H1 FY 2013 Trading Update
H1 FY 2013 Trading Update Unit H1 FY 2013 H1 FY 2012 Variance FY 2012 Sales Revenue US$m 156.3 101.4 +54% 316.9 Diamonds sold Carats 1,066,662 678,772 +57% 2,084,429 Production ROM diamonds Carats 995,521 817,161 +22% 1,872,120 Tailings & alluvial diamonds Carats 252,001 136,392 +85% 336,742 Total d
Slide 9: Diamond Market – Supply / Demand Fundamentals
Diamond Market – Supply / Demand Fundamentals • Only ~30 significant kimberlite mines in production; no major discoveries since 1990’s • Many major mines moving underground – lower tonnages + higher operating costs • Demand driven by urbanisation trend and growing middle classes • Consumption per ca
Slide 10: Rough Diamond Prices
Rough Diamond Prices • Rough market stabilised in July 2012; flat since then with slight uptick towards year end • Petra H1 prices mostly in line with guidance for FY 2013 • January tender underway seeing strong demand • Prices expected to remain firm at current levels for H2 FY 2013 Rough Diamond I
Slide 11: Petra Production Profile
Petra Production Profile Profile runs the full spectrum, from high to low value, across all fancy colours 11
Slide 12: Objective – Accessing Undiluted Ore
Objective – Accessing Undiluted Ore • Current underground mining taking place in diluted, mature caves nearing end of lives Still need to amend word ‘depleted’ to • Expansion programmes to take next ‘cut’ by ‘mature’ below deepening and establishing new block caves in undiluted kimberlite • Grades t
Slide 13: Underground Development – A Snapshot
Underground Development – A Snapshot Installing steel brows in the new production tunnels Preparing a long hole drill rig Optimising orehandling 13
Slide 14: Expansion Plan – Key Deliverables
Expansion Plan – Key Deliverables Finsch Mining Schematic Expansion Plan – to take ROM production from 2.8Mtpa to 3.5Mtpa • Mining currently taking place in Block 4 at 630m – FY 2013 Current Mining Area Block 4 Pillars Change in scope for FY 2013 to 670m FY 2016: • SW Precursor removed from 710m min
Slide 15: 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 Men & Material 2012 Shaft Rock Shaft North Decline Planned I
Slide 16: 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$1 billion(1) Fissure Mines Finsch
Slide 17: Conclusion
Conclusion Rising Production Rising Margins Rising Prices? • Organic growth to ca. 5 million • Grades to rise ca. 50% once • Supply/demand deficit forecast due carats based on existing portfolio expansion plans access undiluted to continued strong emerging ore markets growth • Brownfield expansions
Slide 18: Sustainability Highlights
Sustainability Highlights Safety Community health The Mwadui clinic at Williamson services 400-600 people per month 1.2 1 Safety of employees is top priority for management 0.8 Formation of Board level 0.6 HSSE Committee in FY 2012 0.4 0.2 Petra striving for zero harm across its operations 0 FY FY F
Slide 19: Appendix
Employees at the Williamson mine Appendix
Slide 20: Capital Structure
Capital Structure High Quality Shareholder Base 25 Jan 2013 Share Price & Volume (1 year) Al Rajhi Holdings W.W.L. 13.1% Saad Investments Company Ltd/AWAL Bank 12.0% JP Morgan Asset Management Holdings Inc. 7.8% The Capital Group Companies, Inc. 5.8% Prudential plc group of companies* 5.1% Listing L
Slide 21: Petra Rough Diamond Prices
Petra Rough Diamond Prices H1 FY 2013 FY 2013 FY 2012 FY 2011 Actual Guidance Actual Actual Mine Average Average Average Average (US$/ct) (US$/ct) (US$/ct) (US$/ct) Finsch 122 129 138 n/a Cullinan 134 129 128 148 Koffiefontein 435 475 487 564 Kimberley Underground 260 300 320 333 Williamson 248 220
Slide 22: Cullinan – Large Stones
Cullinan – Large Stones Petra takeover History of +100 & +200 carat stone recoveries in July 2008 22
Slide 23: 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 24: 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 25: 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 – complete • Substantial stockpile of ore at each plant built up (~0.5Mt combi
Slide 26: 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 27: Fully Financed Capex Profile
Fully Financed Capex Profile • Nov 2012: new debt facilities completed of ca. US$249.5m with Absa, RMB (FNB) and IFC • An increase by ca. US$111m from ca. US$138m and optimisation of Petra’s prior debt structures Lender Type Size Interest Rate Repayment Absa & Amortising term facility US$94.8 JIBAR
Slide 28: Capex Profile
Capex Profile Financial Year 2013 2014 2015 2016 2017 2018 2019 Operation Finsch ROM tonnes treated 2.8 2.8 3.2 3.5 3.5 3.5 3.5 Tailings tonnes treated 2.8 3.5 3.5 3.5 3.0 3.0 3.0 Expansion Capex (ZARm) 449.8 665.7 377.8 221.9 321.1 168.2 93.0 Sustaining Capex (ZARm) 93.6 78.7 71.7 71.0 68.7 67.5 83
Slide 29: Further enquiries: Petra Diamonds
Employees at the Williamson mine Further enquiries: Petra Diamonds Cathy Malins [email protected] +44 20 7494 8203 www.petradiamonds.com