Slide 1: Gemfields Group Ltd – Update Presentation March 2020
Gemfields Group Ltd –Update Presentation March 2020
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: Company Highlights
Gemfields Group Limited COMPANY HIGHLIGHTS 1. Gemfields is a world-leading miner and supplier of responsibly sourced precious coloured gemstones 2. Key assets are: a. Montepuez Ruby Mine in Mozambique (75%) b. Kagem Emerald Mine in Zambia (75%) and c. Fabergé (100%) 3. Gemfields is the market leader
Slide 4: Group Structure Diagram (Simplified)
Gemfields Group Limited GROUP STRUCTURE DIAGRAM (SIMPLIFIED) 2 3 1 4
Slide 5: Our Principal Focus
Gemfields Group Limited OUR PRINCIPAL FOCUS EMERALDS RUBIES FABERGÉ (ZAMBIA) (MOZAMBIQUE) 2 3 SAPPHIRES (?) 5
Slide 6: Key Revenue Drivers
Gemfields Group Limited KEY REVENUE DRIVERS Auction Revenues (Kagem + MRM) + Faberge (Last 12 Months, shown monthly, USD million) 200 150 100 50 0 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15
Slide 7: Introduction to Coloured Gemstones Market
Gemfields Group Limited INTRODUCTION TO COLOURED GEMSTONES MARKET • Since 2009, Gemfields has held 48 auctions (35 of Zambian emeralds & 13 of Mozambican rubies), surpassing USD 1.2 billion in combined auction revenue. • Sales of coloured gemstones continue to outperform the wider jewellery market.
Slide 8: Rationale for AIM Listing
Gemfields Group Limited RATIONALE FOR AIM LISTING • AIM listing occurred on 14 February 2020 to provide shareholders with the option of owning UK-listed shares with greater liquidity. • Reintroduce Gemfields to UK and European investors as a business that has a strict application of governance, capi
Slide 9: Board Members - Industry Veterans in Technical, Supply Chain & Financial Fields
Gemfields Group Limited BOARD MEMBERS - INDUSTRY VETERANS IN TECHNICAL, SUPPLY CHAIN & FINANCIAL FIELDS Non-Executive Chairman Executive Directors Non-Executive Director Martin Tolcher Sean Gilbertson David Lovett Dr Christo Wiese Chairman Chief Executive Officer Chief Financial Officer (Appointed 2
Slide 10: Timeline of Key Corporate Events (2017-2020)
Gemfields Group Limited TIMELINE OF KEY CORPORATE EVENTS (2017-2020) 10
Slide 11: Share Prices
GEMFIELDS Responsibly sourced Zambian emeralds and Mozambican rubies. Enhancing environmental sustainability by regenerating land and replanting native flora.
Slide 12: Market Capitalisation (USD Million)
Gemfields Group Limited MARKET CAPITALISATION (USD MILLION) Gemfields Group Limited (formerly Pallinghurst Resources Limited) vs. Gemfields Ltd (formerly Gemfields plc) 600 Gemfields Group Ltd is today circa 39% cheaper 500 than Gemfields plc was at de-listing from AIM in August 2017, despite 400 si
Slide 13: Valuation Comparison to Previously AIM Listed Gemfields Plc
Gemfields Group Limited VALUATION COMPARISON TO PREVIOUSLY AIM LISTED GEMFIELDS PLC Gemfields Plc 1 Gemfields Group Limited (AIM) (JSE/AIM) % difference 30 June 2017 31 December 2019 USD millions USD millions Cash 25.7 78.2 204% (Debt) (62.3) (52.8) 15% Net (Debt) / Cash (36.6) 25.4 169% 30 June 201
Slide 14: Share Price Performance versus Diamond Peer Group
Gemfields Group Limited SHARE PRICE PERFORMANCE VERSUS DIAMOND PEER GROUP Gemfields Group Limited share price (USD) versus Diamond Peer Group (USD) for the past 1 year 120 100 80 Rebased to 100 60 40 20 0 28/02/2019 31/03/2019 30/04/2019 31/05/2019 30/06/2019 31/07/2019 31/08/2019 30/09/2019 31/10/2
Slide 15: Share Price (1 Year)
Gemfields Group Limited SHARE PRICE (1 YEAR) Gemfields Group Limited closing share prices Gemfields Group Limited closing share prices (28 Feb 2019- 29 Feb 2020/ 1 Year) – ZAR/share (28 Feb 2019- 29 Feb 2020/ 1 Year) – USD/share 2.2 0.15 2.1 0.14 2 1.9 0.13 1.8 0.12 USD ZAR 1.7 0.11 1.6 1.5 0.1 1.4
Slide 16: Share Price (5 Years)
Gemfields Group Limited SHARE PRICE (5 YEARS) Gemfields Group Limited closing share prices Gemfields Group Limited closing share prices (28 Feb 2015 - 29 Feb 2020 / 5 Years ) – ZAR/share (28 Feb 2015 - 29 Feb 2020 / 5 years ) – USD based 0.46 5.2 0.41 4.7 0.36 4.2 0.31 3.7 USD ZAR 0.26 3.2 0.21 2.7
Slide 17: Comparison to Diversified Miners – Key Metrics
Gemfields Group Limited COMPARISON TO DIVERSIFIED MINERS – KEY METRICS Diversified Miners TIDM Headquarters FCF Yield (%) Dividend Yield (%) PE Ratio EV/Sales EV/EBITDA Market Cap (USD m) GEMFIELDS GML-ZA St Peter Port 11* N/A 13 0.7 4 USD 167 MAJORS FQM FM-CA Toronto -12% 0% 34 4 10 USD 5,757 Glenc
Slide 18: The Mines, Side-by-Side
GEMFIELDS Responsibly sourced Zambian emeralds and Mozambican rubies. Creating sustainable livelihoods through local development programmes.
Slide 19: CY2019 Production and Mining KPIs
Gemfields Group Limited CY2019 PRODUCTION AND MINING KEY PERFORMANCE INDICATORS (KPIs) MONTEPUEZ RUBY MINING CY2019 PRODUCTION AND MINING KPIs UNITS KAGEM MINING LTD LDA Premium Emerald/ Premium Ruby Production carats’000 209 81 Total Gemstone Production carats’000 42,481 2,236 Ore Processed tonnes’
Slide 20: Competent Persons Reports
Gemfields Group Limited COMPETENT PERSONS REPORTS KAGEM MRM Effective Date 1 July 2019 1 July 2019 Competent Person SRK Consulting SRK Consulting Reporting code - mineral resources and mineral reserves JORC Code (2012 edition) JORC Code (2012 edition) Net Present Value (post-tax) USD 600 million USD
Slide 21: Montepuez Ruby Mining, Mozambique
Montepuez Ruby Mining, Mozambique 21
Slide 22: Montepuez Ruby Mining, Mozambique – Overview
Montepuez Ruby Mining, Mozambique OVERVIEW • The Montepuez ruby deposit is located in the northeast of Mozambique within the Cabo Delgado Province, believed to be the most significant recently discovered ruby deposit in the world, covering an area of 34,966 hectares. • Montepuez Ruby Mining Limitada
Slide 23: MRM Mugloto Pits
Montepuez Ruby Mining, Mozambique MRM MUGLOTO PITS (DEPTH = MAX 12 METRES) 23
Slide 24: Montepuez Geology and Exploration
Montepuez Ruby Mining, Mozambique MONTEPUEZ GEOLOGY AND EXPLORATION 1. The Montepuez concession is located within the wedge-shaped Montepuez Complex, a junction between the north–south trending Mozambique Belt and the east–west trending Zambezi Belt. Both belts are known to be “treasure-bearing” and
Slide 25: Montepuez Rough Ruby Total Auction Sales
Montepuez Ruby Mining Performance MOZAMBIQUE MONTEPUEZ ROUGH RUBY TOTAL AUCTION SALES (USD MILLION) CUMULATIVE REVENUE IS USD 584 MILLION 80.0 71.8 71.5 70.0 60.0 54.8 55.0 55.3 50.0 50.0 43.3 44.3 40.0 33.5 29.3 30.5 28.8 30.0 20.0 15.9 10.0 0.0 Jun-14 Dec-14 Apr-15 Jun-15 Dec-15 Jun-16 Dec-16 Jun-
Slide 26: Montepuez Gemstone Production
Montepuez Ruby Mining Performance MOZAMBIQUE MONTEPUEZ GEMSTONE PRODUCTION (LAST 12 MONTHS, in CARATS) (PRODUCTION EXCLUDES SAPPHIRE AND LOW SAPPHIRE PRODUCTION) 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 Mixed Corundum -4.6mm Low Ruby Ruby Tumble Ruby Premium
Slide 27: Myth Busting – Ruby/Corundum Value (in the rough)
Myth Busting – Ruby/Corundum Value (in the rough) MONTEPUEZ RUBY MINE 90% of total revenue comes US$ 400,000 per gram from just 6% of the weight. PRICE INCREASES (20 MILLION Quality …and production times!) deteriorates volume/weight dramatically…. increases dramatically US$ 0.02 per gram • Average o
Slide 28: Montepuez Premium Ruby Production
Montepuez Ruby Mining Performance MOZAMBIQUE MONTEPUEZ PREMIUM RUBY PRODUCTION (LAST 12 MONTHS, in CARATS) 140,000 • The key value driver for MRM is the production 120,000 and sale of premium rubies. 100,000 • Increased emphasis has been placed on 80,000 diversifying areas of the mining licence wher
Slide 29: Montepuez Operating Costs and Rock Handling
Montepuez Ruby Mining Performance MOZAMBIQUE MONTEPUEZ LAST 12 MONTH OPERATING COSTS (ACTUAL CASH COST BASIS) USD’000 (UNAUDITED) 45,000 40,000 Includes settlement costs relating to claim brought by law firm Leigh Day 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 MONTEPUEZ ROLLING 12 MONTH TOTAL
Slide 30: Montepuez Unit Costs
Montepuez Ruby Mining Performance MOZAMBIQUE MONTEPUEZ UNIT COST PER PREMIUM CARAT (LAST 12 MONTHS, in USD/carat, CASH COST BASIS) 600 500 400 300 200 100 0 MONTEPUEZ LAST 12 MONTH UNIT ROCK HANDLING COSTS (USD / TONNE OF ROCK MINED) 16 14 12 10 8 6 4 2 0 30
Slide 31: Montepuez Capital Expenditure
Montepuez Ruby Mining Performance CAPEX MONTEPUEZ CAPITAL EXPENDITURE (LAST 12 MONTHS, ACTUAL CASH COST BASIS in USD’000, UNAUDITED) 25,000 20,000 15,000 10,000 5,000 0 Major capex projects include the MRM sort house (completed Feb 2019), ab initio construction of the resettlement village for 105 fa
Slide 32: Kagem Mining Limited
GEMFIELDS Responsibly sourced Zambian emeralds and Mozambican rubies. Empowering local communities by establishing schools, education initiatives |A Story in Every Gemstone : and scholarships.
Slide 33: Kagem Emerald Mine, Zambia
Kagem Emerald Mine, Zambia OPERATIONS & EMERALDS 33
Slide 34: Chama Pit
Kagem Emerald Mine, Zambia CHAMA PIT – NOW 140 METRES DEEP 34
Slide 35: Kagem Emerald Mine, Zambia – Overview
Kagem Emerald Mine, Zambia OVERVIEW • Kagem is an emerald mine in the “Copperbelt” region of northern Zambia, estimated to produce around a quarter of the world’s emeralds. It has been operating for over 20 years. • It is the world’s single-largest producing emerald mine • Gemfields controls and own
Slide 36: Kagem Emerald Total Auction Sales
- 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 ZAMBIA Jul-09 Nov-09 Mar-10 Jul-10 Dec-10 Mar-11 Jul-11 Nov-11 Kagem Emerald Mine Performance Mar-12 Jun-12 Nov-12 Apr-13 Jul-13 Nov-13 Feb-14 High Quality Aug-14 Nov-14 Feb-15 Sep-15 Nov-15 Apr-16 May-16 Commercial Quality Sep-16 Feb-17 May-17 KAGEM EMERALD
Slide 37: Kagem Gemstone Production
Kagem Emerald Mine Performance ZAMBIA KAGEM (LAST 12 MONTHS) GEMSTONE PRODUCTION – EMERALD + BERYL (CARATS) 45,000,000 40,000,000 35,000,000 Gemfields agreed to acquire 75% of Kagem in 30,000,000 December 2007. 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 Beryl Emerald Premium Emerald 37
Slide 38: Myth Busting – Emerald Value (in the rough)
Myth Busting – Emerald Value (in the rough) 65% of total revenue comes US$ 40,000 per gram from just 4% of the weight. PRICE INCREASES (2,000,000 times!) Quality …and production deteriorates volume/weight dramatically…. increases dramatically US$ 0.02 per gram • Kagem’s 35 auctions to date (which ac
Slide 39: Kagem Premium Emerald Production
Kagem Emerald Mine Performance ZAMBIA KAGEM (LAST 12 MONTHS) PREMIUM EMERALD PRODUCTION (CARATS) 1,200,000 • The key value driver for Kagem is the production and sale of Conclusion of a series of material 1,000,000 premium emeralds. changes to the grading system. • Increased emphasis has 800,000 bee
Slide 40: Kagem Total Operating Costs and Rock Handling
Kagem Emerald Mine Performance ZAMBIA (‘REACTION ZONE’ = ORE) KAGEM TOTAL OPERATING COSTS, LAST 12 MONTHS (ACTUAL CASH COST BASIS) USD’000 (UNAUDITED) 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 KAGEM LAST 12 MONTHS ROCK HANDLING (TONNES) 16,000,000 14,000,000 12,000,000 10,000,0
Slide 41: Kagem Unit Costs
Kagem Emerald Mine Performance ZAMBIA KAGEM UNIT COST PER PREMIUM CARAT (LAST 12 MONTHS in USD / carat, CASH COST BASIS) 1000 900 800 700 600 500 400 300 200 100 0 KAGEM LAST 12 MONTH UNIT ROCK HANDLING COSTS (USD / TONNE OF ROCK MINED) 5.0 4.0 3.0 2.0 1.0 0.0 41
Slide 42: Kagem Capital Expenditure
Kagem Emerald Mine Performance ZAMBIA KAGEM CAPITAL EXPENDITURE (LAST 12 MONTHS, ACTUAL CASH COST BASIS in USD’000, UNAUDITED) 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 42
Slide 43: Fabergé
Fabergé 43
Slide 44: Fabergé Overview
Fabergé OVERVIEW • Fabergé is one of the world’s most recognisable luxury brands owned outside of the major luxury conglomerates. • It has a well documented and globally respected heritage. • The Fabergé brand provides Gemfields with direct access to the coloured gemstone end consumer through direct
Slide 45: Fabergé Performance
Gemfields Group Limited FABERGÉ PERFORMANCE SALES ORDERS AGREED (LAST 12 MONTHS) OPERATING COSTS (LAST 12 MONTHS) (USD, POST ANY DISCOUNTS, ALL CHANNELS) (USD) 18,000,000 18,000,000 16,000,000 16,000,000 14,000,000 14,000,000 12,000,000 12,000,000 10,000,000 10,000,000 USD USD 8,000,000 8,000,000 6,
Slide 46: Fabergé Funding Requirement
Gemfields Group Limited FABERGÉ FUNDING REQUIREMENT FUNDING REQUIRED BY FABERGÉ (LAST 12 MONTHS, in USD) 25,000,000 2015 $23,650,000 The focus at Fabergé 22,500,000 remains the reduction of its dependency on funding 20,000,000 from Gemfields via 2014 $14,100,000 careful cost control and 17,500,000 r
Slide 47: Financials
(nancial GEMFIELDS Responsibly sourced Zambian emeralds and Mozambican rubies. Working with conservation partners
Slide 48: Financial Highlights for the Six Months Ending June 2019
Gemfields Group Limited FINANCIAL HIGHLIGHTS FOR THE SIX MONTHS ENDING 30 JUNE 2019 1 Earnings before interest, taxation, depreciation and amortisation 2 Free Cash Flow is calculated as cashflow from operating activities less capital expenditure and tax paid. Free Cash Flow is calculated pre working
Slide 49: Segmental Statement of Cash Flows for 6 Months Ended 30 June 2019
Gemfields Group Limited SEGMENTAL STATEMENT OF CASH FLOWS – (EBITDA / FREE CASH FLOW) FOR 6 MONTHS ENDED 30 JUNE 2019 1 Excluding share-based payments and inventory impairments. Zambia operating costs includes US$5.0 million of Zambian Export duty. 2 Includes movements relating to inventory purchase
Slide 50: Segmental Income Statement
Gemfields Group Limited SEGMENTAL INCOME STATEMENT FOR THE 6 MONTHS ENDED 30 JUNE 2019 1 Kagem held one commercial quality and one higher quality auction during the period. MRM held one mixed quality auction during the period. 2 Revenues have been recognised at one point in time, as control passes t
Slide 51: Segmental Balance Sheet at June 2019
Gemfields Group Limited SEGMENTAL BALANCE SHEET AT 30 JUNE 2019 51
Slide 52: Net Cash/(Debt) Profile
Gemfields Group Limited NET CASH/(DEBT) PROFILE, USD’000 At 31 December 2019 Cash – USD 78.2 million USD'000 Debt – USD 52.8 million _ 80,000 Net cash/(debt) – USD 25.4 million (plus Auction Receivables – USD 56.7 million) 60,000 40,000 20,000 (20,000) (40,000) 30-Jun-10 30-Jun-11 30-Jun-12 30-Jun-1
Slide 53: Net Cash/(Debt) Profile, USD'000
USD '000 NET 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 - Jun-12 90,000 Aug-12 Oct-12 Dec-12 CASH/(DEBT) Feb-13 Apr-13 Jun-13 Gemfields Group Limited Aug-13 PROFILE, Oct-13 Dec-13 Feb-14 Apr-14 USD’000 1 Figures pre August 2017 relate to Gemfields Ltd (formerly Gemfields plc). Jun-14 Au
Slide 54: Host Country Benefits
ims * HOST. COUNTRY BI BENBLil GEMFIELDS Responsibly sourced Zambian emeralds and Mozambican rubies. Creating sustainable livelihoods through local development programmes.
Slide 55: Education, Health, Agriculture and Skills Training
Education, Health, Agriculture and Skills Training OVERVIEW • Gemfields is focused on implementing leading responsible mining policies across its operations, driving high standards around environmental management, community engagement and health & safety. • We have our own Director of Sustainability
Slide 56: Education, Health, Agriculture and Skills Training
Education, Health, Agriculture and Skills Training 56
Slide 57: Employment Created
Employment Created Kagem (Emerald) Employment Created Montepuez (Ruby) Employment Created 1,400 1,400 1,200 1,200 1,000 1,000 800 800 600 600 400 400 200 200 0 0 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Direct Employees Contractors' Employees Direct Employees Contractors' Employees 57
Slide 58: We Pay (and Publish) Our Taxes
We Pay (and Publish) Our Taxes Total Paid to Government in USD millions Kagem paid to Government MRM paid to Government 60 50 18 40 Government’s Share (using tax, royalty and dividends paid): 1. Zambia: 18% of revenue or USD 112 30 million (over 10 years on revenues of USD 28 630 million) 13 30 32 2
Slide 59: MRM Resettlement Village
MRM Resettlement Village CONSTRUCTION OF 105 HOUSING UNITS AND PUBLIC BUILDINGS ON SCHEDULE FOR JUNE 2020 HANDOVER 59
Slide 60: Mozambique Vocational Training Centre
Mozambique Vocational Training Centre TEACHES ELECTRICAL STUDIES, MASONRY, PLUMBING AND CARPENTRY 60
Slide 61: Primary and Secondary Schools in Mozambique and Zambia
Primary and Secondary Schools in Mozambique and Zambia TEACHING THE NEXT GENERATION 61
Slide 62: Agricultural Cooperatives & Livelihood Creation Projects
Agricultural Cooperatives & Livelihood Creation Projects PROVIDING A LEGACY OF IMPROVED LIVELIHOODS IN LOCAL COMMUNITIES 62
Slide 63: Mobile Clinic (Montepuez Ruby Mining, Mozambique)
Mobile Clinic (Montepuez Ruby Mining, Mozambique) PROVIDING BASIC MEDICAL SUPPLIES TO RURAL COMMUNITIES 63
Slide 64: Sustainability
Sustainability MINIMISING ENVIRONMENTAL IMPACT FROM OPERATIONS 64
Slide 65: Conservation
Conservation PROTECTING AFRICA’S BIODIVERSITY #CONSERVATIONGEMSTONES Sponsore d by: And a new project soon to be announced…. 65
Slide 66: Summary & Market Opportunity
Gemfields Group Limited SUMMARY & MARKET OPPORTUNITY 1. The clear market leader in coloured gemstones, providing a unique offering to investors that combines mining, grading, marketing and selling capabilities with ownership of Fabergé. 2. Two world class mines at Montepuez and Kagem, both with a lo
Slide 67: Contact
1 NEW BURLINGTON PLACE LONDON, W1S 2HR UNITED KINGDOM T: +44 (0)20 7518 3400