Petra Diamonds Limited · LSE:PDL
Petra Diamonds — FY2007 Earnings Presentation
32 slides from Petra Diamonds's earnings presentation, Oct 11, 2007
Slide 1: Group Results Presentation
Group Results Presentation 8 – 11 October O 2007
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's strategy
Petra’s strategy Petra Diamonds is a diamond mining group focused on the production, exploration and beneficiation of diamonds in Africa By offering investors exposure to a mid-tier diamond group with production cash flows and world class exploration projects, Petra believes it can deliver superior
Slide 4: Group structure
Group structure Production Exploration Beneficiation S th Af South Africa i Early stage exploration Advanced exploration Koffiefontein Angola - Luangue Angola – Alto Cuilo Calibrated Diamonds Kimberley Underground* Botswana - Kalahari Sierra Leone - Kono Fissure mines; Helam, Sedibeng, Star * Acquis
Slide 5: Petra's operations
Petra’s operations Sierra Leone Kono Project j Angola Alto Cuilo Luangue South Africa Koffiefontein Botswana Kimberley Underground Kalahari Diamonds Helam Sedibeng Star Calibrated Diamonds 5
Slide 6: Executive management
Executive management Adonis Pouroulis Johan Dippenaar David Abery Jim Davidson Chairman CEO Finance Director Technical Director •Successful mining •17 years in the •Extensive CFO •> 20 years experience entrepreneur; high diamond mining experience in SA in mine management; l levell mining i i i d ind
Slide 7: South Africa Production & cash flow
South Africa Production & cash flow 7
Slide 8: South Africa – producing mines
South Africa – producing mines 5 producing underground kimberlite mines; Koffiefontein, Kimberley Underground (underground pipes) and Helam, Sedibeng, Star (fissures) World class skills in underground kimberlite pipe mining - also the world’s leading expert in fissure mining Substantial produc
Slide 9: Koffiefontein
Koffiefontein Illustrates Petra’s ability to successfully operate larger operations and to turn ‘end end of life mines’ mines back to account; Koffiefontein - at least 10 years life of mine planned by Petra Since completing acquisition of Koffiefontein in July 2007: Values of average US$350/ca
Slide 10: Kimberley Underground mines
Kimberley Underground mines Acquisition of Wesselton, Du Toitspan and Bultfontein mines (together Ki b l Underground) Kimberley U d d) ffrom D De B Beers announcedd 14 SSeptember t b ’07 ’07; consideration R78.5 million (US$11m) Petra expects annual sales from Kimberley U/G in excess of 100 100,
Slide 11: South Africa – expected production growth
South Africa – expected production growth 600 er annum - ('000) 500 Group 400 300 South 200 Carats pe Africa 100 C 0 2005/6 2006/7 2007/8 2008/9 2009/2010 Management Expectations “Increasing our production will not only add to the upside of the major exploration projects within the Group, it will al
Slide 12: Angola Exploration
Angola go a Exploration p Early stage (Luangue) & Advanced (Alto Cuilo) 12
Slide 13: Modern day Angola – diamond country
Modern day Angola – diamond country Accepted by experts as hosting many undiscovered kimberlites, many large and d un-eroded d d Due to previous hostilities (now at peace since 2002) and remoteness, largely unexplored Angola – politically stable – large exporter of oil to US Angola historica
Slide 14: Angola – Project Alto Cuilo
Angola – Project Alto Cuilo Alto Cuilo is Petra’s flagship project, an opportunity of considerable potential upside Petra is in JV with BHP Billiton (30 Sept ’07 – BHP Billiton funding US$52.2m - one of the highest spends in BHP Billiton’s global mining & mineral exploration portfolio) 77 kimb
Slide 15: Alto Cuilo - kimberlite comparison
Alto Cuilo - kimberlite comparison AC 98 – 174.8 ha Alto Cuilo ki b li fi kimberlite field ld Total estimated surface area to date 1400 ha Botswana Orapa - 111 ha Jwaneng - 45.5 ha South Africa Premier – 32 ha Approx. to scale 15
Slide 16: Alto Cuilo - Location
Alto Cuilo - Location Lucapa p Catoca Project Luangue Chi Chicapa Saurimo Project Alto Cuilo 16
Slide 17: Angola – Project Luangue
Angola – Project Luangue Joint venture now extended with BHP Billiton buying into Luangue (block area adjacent to Alto Cuilo, expected to host similar kimberlite geology) August ‘07 - Petra signs Luangue JVA with BHP Billiton; BHPB pay Petra US$22.3m cash for 25% and (to earn in) to fund to late
Slide 18: Botswana Exploration
Botswana Exploration p – Early stage 18
Slide 19: Botswana Exploration – Sekaka Diamonds
Botswana Exploration – Sekaka Diamonds Botswana is the world’s largest producer of diamonds by value Petra has approx. approx 52 000km2 of the most prospective diamond 52,000km exploration ground in Botswana Acquisition cost of Botswana assets US$22m - an economic discovery in Botswana would b
Slide 20: Sierra Leone Exploration – Advanced
Sierra Leone Exploration – Advanced 20
Slide 21: Sierra Leone – Kono project
Sierra Leone – Kono project Kono project in the world renowned Koidu diamond field – historically in excess of 30 million carats produced p 51% interest with JV partner Stellar Diamonds (49%) (Mano River Resources group) Trial mining currently underway; grades of 50 – 80 cpht reported; better,
Slide 22: Calibrated Diamonds Beneficiation
Calibrated Diamonds Beneficiation f 22
Slide 23: The Diamond Pipeline
The Diamond Pipeline USD 12.7bn 13.2 14.0 14.3 19.2 17.7 62.4 Value of Retail R Rough h Purchase S l off Sales Mine Rough Diamond rough for Polished Diamond Production Sales Sales Content in manufacturing trade Jewellery retail sales Value-add Value add 3 3.9% 9% 6 6.1% 1% 2 2.1% 1% 34 34.3% 3% +/ +
Slide 24: Beneficiation – Calibrated Diamonds
Beneficiation – Calibrated Diamonds Calibrated focused on cutting and polishing of diamonds using a unique process – polished diamonds of a very high and consistent standard Significant value (approx. 50%) is added to rough diamond production world wide through the polishing process - Petra can
Slide 25: Calibrated Diamonds - advantages
Calibrated Diamonds - advantages Conventional Calibrated Conventional process CD Process (precision, technology) < 0.7% diamonds = symmetry Symmetry (H&A, MY) Throughput 4 4-5 5 days per stone Throughput (2ct/hr/machine) Yield (< 52%) Yield average 70% < 11% ROM Full ROM Labour
Slide 26: Results to June '07 and Corporate
Results to June ’07 and Corporate C 26
Slide 27: Preliminary Results 30 June 2007
Preliminary Results 30 June 2007 12 months to June 2007 12 months to June 2006 (US$M) (US$M) Revenue 17.0 20.9 Gross profit on mine 1.3 3.3 Exploration p expenses p ((1.2)) ((2.1)) Loss for the period (20.9) (18.8) Loss per share (US cents) (13.60) (13.11) P d ti ((carats) Production t ) 180 474 180
Slide 28: Preliminary Results June 2007
Preliminary Results 30 June 2007 Revenue 3 months to 30 Sept p ‘07 US$15.9m; revenue jump due to Koffiefontein coming on stream $6.4 million gross profit (Koffiefontein) booked in FY 2008 Group revenue and cash flow growth on track for 2008 Resource R iincrease off 101% tto 9 9.3 3 million i
Slide 29: Corporate snapshot
Corporate snapshot Shares in issue 184 million Fully diluted shares in issue 203 million Market cap £226 million 12 month high/low 167 0p – 82.0p 167.0p 82 0p Cash at 30 Sep ‘07 US$65 million 29
Slide 30: Share analysis
Share analysis Share graph Major shareholders % Institutions 86.2 Saad 29.1 JP Morgan 9.2 Al Rajhi j 7.8 Other 40.1 Management 6.6 Star Mining 5.0 BHP Billiton 2.2 30
Slide 31: Outlook
Outlook Petra's prospects for the current financial year and beyond are extremely encouraging Revenues for 3 months to 30 September 2007 have already reached US$15.9m, only US$1.1m less than that for the full year to 30 June 2007 Expected production of 250,000 carats for the year to 30 June 20
Slide 32: THANK YOU
THANK YOU www.petradiamonds.com