Gem Diamonds Limited · LSE:GEMD
Gem Diamonds — FY2013 Earnings Presentation
24 slides from Gem Diamonds's earnings presentation, Mar 18, 2014
Slide 1: Full Year 2013 Presentation
Presentation Full Year 2013 18 March 2014
Slide 2: Disclaimer
1 Full Year 2013 Results Disclaimer The following presentations are confidential and are being made only to, and are only No statement in this presentation is intended as a profit forecast or profit estimate and directed at, persons to whom such presentations may lawfully be communicated no statemen
Slide 3: Agenda
2 Full Year 2013 Results Agenda FULL YEAR 2013 RESULTS HIGHLIGHTS DIAMOND MARKET OUTLOOK OPERATIONAL OVERVIEW GROUP FINANCIAL PERFORMANCE OUTLOOK © 2014 GEM DIAMONDS LIMITED
Slide 4: Full year 2013 results Highlights
3 Full Year 2013 Results Full year 2013 results Highlights EBITDA REVENUE US$213m +5% US$77m +18% EBITDA margin at 36% 350 167 306 180 60% USD Millions 300 160 54% 50% 140 USD Millions 250 213 38% 36% 202 120 32% 40% 189 200 167 27% 100 30% 150 80 77 72 65 100 60 20% 45 40 50 10% 20 - - 0% 2009 2010
Slide 5: Diamond market outlook
4 Full Year 2013 Results Diamond market outlook Improved prices in Q4 2013 continuing into Letšeng rolling US$ per carat (including Jan 2014 tender) Q1 2014 2,500 2,400 Improved polished trading 2,300 2,200 6 month average US$ Strong consumer demand in the US and 2,100 per carat 2,000 China 1,900 12
Slide 6: Letšeng resource delivering exceptional diamonds in 2013
5 Full Year 2013 Results Letšeng resource delivering exceptional diamonds in 2013 92.9ct sold for US$ 5.3m (US$ 56 494/ct) January 2013 94.4ct sold for US$ 4.6m (US$ 48 619/ct) January 2013 164ct sold for US$ 9.0m (US$ 54 911/ct) April 2013 99.9ct sold for US$ 6.5m (US$ 64 631/ct) July 2013 12.5ct b
Slide 7: Letšeng resource delivering exceptional diamonds in 2014
6 Full Year 2013 Results Letšeng resource delivering exceptional diamonds in 2014 Two +160 carat diamonds recovered in February 2014 162.02 carat type II, which achieved US$11.1 million (US$68 687 per carat) in March 2014 162.02 carat type II 161.31 carat type I, which achieved US$2.4 million (US$14
Slide 8: Group HSSE performance
7 Full Year 2013 Results Group HSSE performance Lost time injury frequency rate All injury frequency rate Corporate social Expenditure 0.50 0.45 7.00 6.13 1.2 1.1 0.40 6.00 1 4.79 4.54 4.45 0.30 5.00 0.73 0.7 0.8 US$ millions 0.30 0.25 4.00 0.6 0.6 0.5 3.00 2.49 0.20 0.13 0.4 2.00 0.10 0.2 0.00 1.00
Slide 9: Letšeng
8 Full Year 2013 Results Letšeng © 2014 GEM DIAMONDS LIMITED
Slide 10: Letšeng operational review
9 Full Year 2013 Results Letšeng operational review Carats recovered (000's) Ore treated (millions) Waste tonnes mined (millions) 140 8 20 120 100 6 15 80 AV 4 AV 10 60 Letšeng Letšeng Letšeng 40 2 5 20 - 0 0 2011 2012 2013 2011 2012 2013 2011 2012 2013 Carats recovered of 95 053 Tonnes treated of 6
Slide 11: Letšeng – addressing diamond damage
10 Full Year 2013 Results Letšeng – addressing diamond damage Decrease in severe breakage following installation of 4 new cone crushers in Plants 1 & 2 39 +50 carat diamonds recovered to March 2014 2013/2014 +50 Carat Diamonds* 200 Introduction of new crushers 180 160 Individual Diamond Size 140 Typ
Slide 12: Letšeng – Mine project review
11 Full Year 2013 Results Letšeng Letšeng –Mine project review Advanced technology coarse recovery plant – Maloti 140m • To treat the high value, coarse fraction • Latest XRT technology to ensure total recovery of type II diamonds • Security improvements • Advanced technology diamond accounting of a
Slide 13: Ghaghoo
12 Full Year 2013 Results Ghaghoo © 2014 GEM DIAMONDS LIMITED
Slide 14: Ghaghoo development review
13 Full Year 2013 Results Ghaghoo development review Kimberlite intersected at Level 0 on 25 US$71m of capital spent to December November 2013 2013 Main decline reached break-off to Level 1 Balance of US$25m to be spent in 2014 in February 2014 (Funding raised) Plant construction completed, Balance
Slide 15: Group financial performance
14 Full Year 2013 Results Group financial performance 2013 2012 Before exceptional Before exceptional US$ millions items items % Increase Revenue 212.8 202.1 + 5% Royalty and selling costs (18.5) (19.1) Cost of Sales (103.1) (103.3) Corporate expenses (13.8) (14.2) Underlying EBITDA 77.4 65.5 + 18%
Slide 16: Letšeng financial performance
15 Full Year 2013 Results Letšeng financial performance US$ (millions) Letšeng Diamonds 2013 2012 Revenue 201.3 207.7 Royalty and selling costs (16.1) (16.7) Cost of sales (99.2) (100.1) EBITDA 86.0 90.9 EBITDA margin 43% 44% Attributable profit 35.7 41.8 Exchange rate – Average to US$ Maloti 9.65 M
Slide 17: Sales, marketing & manufacturing
16 Full Year 2013 Results Sales, marketing & manufacturing US$ (millions) 2013 2012 Polished (gross sales achieved) 29.6 28.9 Extracted cost at rough value (24.2) (26.1) Value add 5.4 2.8 Direct manufacturing costs (1.8) (1.3) EBITDA generated 3.6 1.5 % Value add over rough costs (after direct manuf
Slide 18: Group cash
17 Full Year 2013 Results Group cash (US$m) 220 200 15 180 (59) 160 140 109 120 (30) 100 (14) (10) 80 (6) (3) (3) 60 40 74 71 71 20 0 © 2013 GEM DIAMONDS LIMITED
Slide 19: Group cash and funding
18 Full Year 2013 Results Group cash and funding Cash: 31 December 2013 Group cash of US$71m Funding / Facilities: Maloti 250m (US$24m) Letšeng unsecured revolving credit facility US$20m Gem Diamonds unsecured revolving credit facility US$25m Ghaghoo facility for the remaining capital expenditure co
Slide 20: Strategy
19 Full Year 2013 Results Strategy Focused on maximising returns Optimising the Letšeng mine Improving revenue achieved for diamonds Developing the Ghaghoo mine Mining sustainably Supported by a vastly experienced management team © 2014 GEM DIAMONDS LIMITED
Slide 21: Outlook
20 Full Year 2013 Results Outlook Strong start to 2014 Complete development of Ghaghoo Phase 1 – commence production H2 2014 Mining in Satellite pipe continues in 2014 Decreased diamond damage – improved revenue Coarse recovery plant project commences Dividend © 2014 GEM DIAMONDS LIMITED
Slide 22: Appendix – Capital structure
21 Full Year 2013 Results Appendix 1 – Capital structure Gem Diamonds Limited - LSE:GEMD Gem Diamonds share price performance and LSE volume last 12 months Major Shareholders at 14 Mar2014 180 Price (GBp) Volume (‘000) 1,600 Graff Diamonds International Limited 15.12% 170 1,400 Lansdowne Partners Lt
Slide 23: Appendix - resource statement as at January 2013
22 Full Year 2013 Results Appendix 2 - resource statement as at 1 January 2013 Letšeng Grade Average Diamond Category Classification Tonnes (millions) (carats/100T) Carats (millions) Price US$/carat Reserves Probable 78.9 1.75 1.38 1 715 Resources Indicated 80.8 1.76 1.42 2 185 Inferred 220.9 1.75 3
Slide 24: Thank You
Thank You © 2014 GEM DIAMONDS LIMITED