Gem Diamonds Limited · LSE:GEMD
Gem Diamonds — 121 Mining Conference, Hong Kong 2016
25 slides from Gem Diamonds's conference presentation, Oct 18, 2016
Slide 1: Investor Presentation – October 2016
Investor Presentation – October 2016 presented at the 121 Mining Conference, HK, 18-19 October 2016
Slide 2: Disclaimer
Disclaimer The following presentations are confidential and ar e being made only to, a nd are No st atement in t his pr esentation is intended as a pr ofit forecast or profit estimate only dir ected at, per sons to whom such present ations may lawfully be and no statement in the pr esent ation shoul
Slide 3: Agenda
Agenda Gem Diamonds at a glance Diamond Market Financial Highlights Operations Overview Investment Proposition 3
Slide 4: Background
Background • Gem Diamonds is a leading g lobal producer of high value diamonds • The Company owns the Letšeng Mine in Lesotho and is working towards bringingthe Ghag hoo Mine in Botswana into production • Letšeng is famous for the production of larg e, top colour, exceptional white diamonds, making
Slide 5: Major recoveries from Letšeng
Major recoveries from Letšeng 5
Slide 6: Operational Footprint
Operational Footprint Gem Diamonds Limited UK, BVI 2 employees Gem Diamonds Sales, Marketing and Manufacturing Belg ium 16 employees Ghag hoo Mine Botswana 250 employees/contractors Letšeng Mine Lesotho Gem Diamond Technical Services 1604 employees/contractors South Africa 24 employees 6
Slide 7: Diamond Market
GEM SENN) Diamond Market
Slide 8: Diamond Pricing
Diamond Pricing Letšeng Letšeng 6 and 12 Month Rolling $/carat Prices achieved for Letšeng's high value large 6 month 12 month Type II diamonds have remained resilient in H1 2016 3 000 Prices achieved H1 2016 - US$ 1 899* per carat 2 500 2 113 12 month rolling average - US$ 2 113* per carat
Slide 9: Group Financial Performance
Group Financial Performance
Slide 10: Half Year 2016 Results Highlights
Half Year 2016 Results Highlights REVENUE EBITDA and EBITDA margin US$109m US$44m 200 80 42% 44% 50% 39% 40% 149 34% 40% 150 122 131 60 118 109 63 58 30% 100 40 46 41 44 20% 50 20 10% 0% H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 BASIC EPS (pre exceptional items)
Slide 11: Letšeng Operational Overview
Letšeng Operational Overview
Slide 12: Letšeng Overview
Letšeng Overview Ownership 70% 30% Gem Diamonds Government of Limited Lesotho Letšeng Mine Lesotho • Located in the Maluti mountains of Lesotho • Two kimberlite pipes: Main pipe 17.0ha; and Satellite pipe 5.2ha • Highest average US$ per carat globally • Letseng 21 year Life of Mine open pit is wholl
Slide 13: Letšeng Operational Overview
Letšeng Operational Overview Waste mined (tonnes millions) Strong first half operational performance 15.3 Waste mined - in line with optimised mine plan 10.0 9.9 11.4 12.6 Satellite pipe contribution – 1.0 million tonnes (mt) with Full Year guidance increase to 1.7 – 1.8 mt from 1.65 mt H1 201
Slide 14: Letšeng Operational Overview
Letšeng Operational Overview Heavy snow falls and extreme winds impacted Letšeng in late July • Government owned power lines damaged • Access to mine restricted • Standby generators operated plants, albeit at reduced rates Current status • Power lines repaired and external power supply fully restore
Slide 15: Ghaghoo Operational Overview
Ghaghoo Operational Overview
Slide 16: Ghaghoo Operational Overview
Ghaghoo Operational Overview Downsizing progressed • Production downsized to 300 000 tonnes per annum • Sink hole buffer zone successfully created • Retrenchments undertaken Development progressed well • Total development metres – 1 168 metres • Development of all 13 VKSE tunnels on Level 1 complete
Slide 17: Operational Performance
GEM Sion Operational Performance Let3ens mine
Slide 18: Group HSSE Performance
Group HSSE Performance LTIFR Zero fatalities 0.30 Two Lost Time Injuries 0.20 0.13 0.15 Group Lost Time Injury Frequency Rate (LTIFR) 0.15 - Group All Injury Frequency Rate (AIFR) 2012 2013 2014 2015 H1 2016 1.87 Zero major or significant stakeholder or AIFR environmental incidents 4.
Slide 19: HSSE Overview - Group CSI initiatives
HSSE Overview -‐ Group CSI initiatives Lesotho Classrooms and office donated to Pae la itlhatsoa School in Lesotho Butha Buthe v eg etable project in Lesotho Lesotho community health workers Botswana Educational School tours at Ghaghoo New Xade Primary School donation ceremony in Botswana Kaudwane
Slide 20: Sales, Marketing & Manufacturing
Sales, Marketing & Manufacturing
Slide 21: Sales, Marketing and Manufacturing
Sales, Marketing and Manufacturing Sales and marketing Flexible sales strategy 20 rough diamonds achieved a value of greater than US$ 1.0 million each 11.8 carat pink diamond (pictured) achieved the third 11.8 carat pink diamond from Letšeng highest price per carat for a single Letšeng diam
Slide 22: Group Outlook
Group Outlook
Slide 23: Group Outlook
Group Outlook Dividend Policy remains unchanged Gem Diamonds has a unique set of assets Strong balance sheet – net cash position Long term fundamentals for diamonds remain strong Letšeng Ghaghoo • Produces the highest value diamonds • Ready to ramp up when market conditions allow (US$2 299 per carat
Slide 24: Thank you
Thank you
Slide 25: Annexure 1 - Gem Diamonds capital structure
Annexure 1 - Gem Diamonds capital structure Gem Diamonds share price performance since 1 January 2016 Major shareholders as at 170 2 500 15 September 2016 Share Price n Volume 160 Graff Diamonds International Ltd 15.11% 150 2 000 140 Lansdowne Partners Ltd 14.98% 1 500 130 Gem Diamonds Holdings Ltd