Petra Diamonds Limited · LSE:PDL
Petra Diamonds — FY2008 Earnings Presentation
40 slides from Petra Diamonds's earnings presentation, September 2008
Slide 1: Petra Diamonds Limited – Results For The Year To June 2008
September 2008 Petra Diamonds Limited the international diamond mining group Results For The Year To June 2008
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: A Leading Diamond Producer
A Leading Diamond Producer One of the world’s larger diamond groups by resource base – 265 million carats, worth US$27.3 billion Superior growth - series of mine acquisitions – proven operational success 2008/9 production to exceed 1 million carats - continued growth from large resource base g
Slide 4: Rare Opportunity To Acquire Major Production
Rare Opportunity To Acquire Major Production There are only approximately 30 diamond mines of significance worldwide Source: ‘Global Rough Diamond Production since 1870’, A. J. A. (Bram) Janse Now ‘Petra’ mines Note: Kimberley Underground comprises the ‘Bultfontein, Dutoitspan and Wesselton mines’,
Slide 5: Focus on Africa – 65% World Production
Focus on Africa – 65% World Production * Acquisitions to complete 2008 5
Slide 6: Focus on the Diamond Market
Focus on the Diamond Market @ PetraDiamonds
Slide 7: Diminishing Supply
Diminishing Supply Structural constraints in the diamond mining industry – supply to remain flat at best Steadily declining mineral reserve base - in the region of +/- 20 years Continued lack of new discoveries Inventories of rough diamonds at historically low levels Global rough diamond sup
Slide 8: Survey Finds Rough Shortage #1 Concern for Industry
Survey Finds Rough Shortage #1 Concern for Industry Diamond professionals consider the shortage of rough supply as the most important challenge facing the diamond industry during the next five years, according to a survey conducted by Rio Tinto Diamonds. 8
Slide 9: Emerging Diamond Consumers
Emerging Diamond Consumers Key drivers of demand are growth in GDP per capita, rising income levels globally and cultural adaptation Research and Markets Group reported total Chinese jewellery sales at US$26 billion in 2007 (up 12.5% on 2006) - jewellery identified as third largest consumer "hot
Slide 10: The New Wealthy
The New Wealthy HNWIs* UHNWIs Rapid R id growthth off emerging i economies i and d oil il states t t has h Number of ultra HNWIs (US$30m +) growing more multiplied numbers of HNWIs (US$1m +) rapidly – CAGR of 13% over 2002-2006 Currently 9.5 million HNWIs globally, a rise of 8% on the previous
Slide 11: Diamond Price Performance
Diamond Price Performance 200 WWW Overall Rough Index Diamond prices have recorded healthy 175 increases but nothing like the huge rises seen increases, in other commodities 150 % change 125 US downturn could affect demand, but US is 100 becoming less important to diamond market overall 75 50 Ja
Slide 12: Results: Year to June 2008
R Results: lt Year Y to t JJune 2008 12
Slide 13: Summary of Results
Summary of Results 12 months to 12 months to 30 June 2008 30 June 2007 US$ million US$ million Revenue 76.9 17.0 Gross profit 39.2 1.3 Other operating p g income 1.1 - Exploration expense (9.5) (1.2) Other operating expense (5.3) (5.3) EBITDA 25.5 (5.2) Depreciation p (7.1) ( ) ((6.5)) Amortisation
Slide 14: Key Achievements
Key Achievements Updated gross resource base of 265 million carats, worth US$27.3bn (October 2007: 11.38 million carats, worth US$1.9bn) Record diamond prices achieved across all operations for FY 2008 Agreements reached to acquire Cullinan, Kimberley Underground, Williamson First full year
Slide 15: Reserves & Resources
Reserves & Resources Attributable carat base Total carat base Fissures - 4.7 47 Fi Fissures - 4.8 48 Kimberley - Kimberley - 6.4 4.8 Koffiefontein - Koffiefontein - 4.2 6.0 Williamson - Williamson - 30 1 30.1 40.2 02 Cullinan - Cullinan - 207.9 76.9 121 million illi caratst 265 million carats US$13.
Slide 16: Production
2 PetraDiamonds Production “e e Bex < ) PE \/ ) " YX) \ ae Wie’: rh \ [7h att
Slide 17: Koffiefontein Sparkles
Koffiefontein Sparkles First full year production - 89,622 carats in FY 2008 One of the world’s top kimberlite mines by carat value – US$484 for FY 2008 (industry average is US$90/carat) Grade achieved of 9.1 cpht Potential to increase tonnages from underground – main pipe and satellite (Eb
Slide 18: Cullinan – A Company Maker
Cullinan – A Company Maker 16 July 2008 – Petra Consortium (PDCC) acquires Cullinan and Petra takes control of operations p World’s 2nd largest indicated diamond resource by in- situ value = 208 million carats (incl. Tailings) Historic producer of spectacular diamonds, incl. The Cullinan, 25%
Slide 19: Kimberley Underground
Kimberley Underground Petra currently operating mine under care & maintenance until acquisition completes (expected by end 2008) Custom plants being constructed in-house Diamond recoveries and sales will commence Q1 2009 – substantial stockpile will be in place Sales expected > 100,000 carat
Slide 20: Williamson
Williamson 9 September – Petra agreed to acquire 75% stake in Williamson mine for US$10m – will complete l midd October O b Major diamond resource of 40 million carats Open pit mine to depth of 90 metres – largest kimberlite ever to be mined economically (146ha) Renowned for large high value
Slide 21: Fissure Mines
Fissure Mines Fissures mines comprise: Helam, Sedibeng and Star Production of 110,665 carats Average value per carat off US$211 $ FY 2008 Regularly produces exceptional diamonds, i l di including 126 caratt stone t postt year end d 21
Slide 22: August Tender Highlights
August Tender Highlights CULLINAN KOFFIEFONTEIN Cullinan 26.54 carat white diamond sold for $1.6 million Two blue diamonds recovered Koffiefontein 4.13 carat fancy pink from Koffiefontein sold for $226,666 FISSURES Fissures 126.69 carat diamond sold for US$5.3m 22
Slide 23: Expected Production Growth
Expected Production Growth Carats in ‘000s 3000 2500 2000 1500 Gross Attributable 1000 500 0 FY 2008 FY 2009 FY2010 FY2011 23
Slide 24: Exploration & Development
E l Exploration ti &D Development l t 24
Slide 25: Exploration Overview
Exploration Overview Exploration provides the building blocks of future production 25
Slide 26: Alto Cuilo - Angola
Alto Cuilo - Angola Petra assumes control of Alto Cuilo - BHP Billiton handover of interest effective 31 March 2008 122 anomalies > 8Ha – 81 kimberlites from 104 targets drilled Petra refocused exploration programme: Enriched near-surface resedimented volcaniclastic kimberlite (RVK) deposits
Slide 27: RVK rims in Kimberlites
RVK rims in Kimberlites Tuff Ring washing back into Crater Crater Facies Sands forms RVK rim (re-concentration of diamonds) Proximal RVK Rim Distal Country Rock Breccia 27
Slide 28: Refocused Exploration Strategy
Refocused Exploration Strategy AC16 & AC9 RVK Rim Sampling Area of accelerated work programme 28
Slide 29: Luangue - Angola
Luangue - Angola Petra assumes control of Luangue – BHP Billiton handover of interest effective 30 April 2008 Contiguous to Alto Cuilo; operational & geological synergies Low level Airborne Magnetic survey - 138 targets (total surface area over 8,000ha) - certain targets up to 233 hectares in
Slide 30: Alto Cuilo and Luangue – Magnetics and Anomaly Picks
Alto Cuilo and Luangue – Magnetics and Anomaly Picks 1 2 Luangue 3 Alto Cuilo 30
Slide 31: Kalahari Diamonds - Botswana
Kalahari Diamonds - Botswana Botswana is world’s largest producer of diamonds byy value Petra has largest diamond exploration landholding of approx. 48,500km2 all ‘on craton’ ao Discovery of 2 new kimberlites from 6000m drilling programme underway Kimberlite BK1S of importance, contiguous wi
Slide 32: Kono – Sierra Leone
Kono – Sierra Leone Fissure mining project – JV with Stellar Diamonds Advanced exploration – trial mining at two shafts 1,729 carats (20,889 diamonds) recovered First 1,063 Fi 1 063 carat parcell sold ld on tender d – Pol P l K parcel (811 carats) achieved US$152 per carat Trial mining and
Slide 33: Conclusion
V7 PetraDiamonds Conclusion 33
Slide 34: Investment Highlights
Investment Highlights An exciting growth profile – acquisitions of 4 major mines in 2 years Revenue growth US$17.0m to US$76.3m; EBITDA from US$5.2m loss to US$25.5m profit Proven mining expertise – successful track record operating diamond mines profitably US$27.3 billion gross resource bas
Slide 35: Thank you
Thank you Further Enquiries, contact: Cathy Malins – cathym@petradiamonds.com – www.petradiamonds.com +44 20 7493 7671 35
Slide 36: Appendix - Corporate
Appendices A Appendix di - Corporate C t 36
Slide 37: Corporate Profile
Corporate Profile Major Shareholders Listing AIM: PDL Offices Corporate - Jersey % Representative - London - Saad 37.0 Shares in Issue 184 million - JP Morgan 9.6 y diluted Fully 203 million - Al Rajhi 8.0 12 month high/low 155p – 73.5p - Management 6.1 Cash at 30 June 2008 US$37.5 million Market ca
Slide 38: The Petra Board
The Petra Board Adonis Pouroulis Johan Dippenaar David Abery Jim Davidson Chairman CEO Finance Director Technical Director • Successful mining • One of South Africa’s most • Extensive experience as • Acknowledged world entrepreneur successful diamond Chief Financial Officer in authority on kimberlit
Slide 39: Our Responsibility to Diamonds
Our Responsibility to Diamonds Leading CSR practices aimed at stimulating socio socio- economic development in Africa A school rebuilt by Petra in Sierra Leone Angola - Clinic treats around 400 people per month, with large impact on infant mortality t lit over pastt 2 years South Africa - Literacy p
Slide 40: Thank you
Thank you Further Enquiries, contact: Cathy Malins – cathym@petradiamonds.com – www.petradiamonds.com +44 20 7493 7671 40