Petra Diamonds Limited · LSE:PDL
Petra Diamonds — PDAC 2016
20 slides from Petra Diamonds's conference presentation, Mar 7, 2016
Slide 1: A World-leading Independent Southern Africa Producer and Explorer
A World-leading Independent Southern Africa Producer and Explorer PDAC – 7 March 2016 The Cullinan mine, South Africa
Slide 2: Important Notice
Important Notice • These Presentation Materials are being supplied to you by Petra Diamonds Limited (the “Company”) solely for your information and use at this presentation. These Presentation Materials may contain information that is confidential, legally privileged or otherwise protected by law. T
Slide 3: Discover Petra
Discover Petra • Diversified portfolio of diamond mining assets in Southern Africa, plus exploration • Exceptional growth profile • Consistently on track to achieve stated production of ca. 5 Mcts by FY 2019 • Improving grade and product mix to drive material operating margin expansion Breathing new
Slide 4: From Junior to Leading Independent Producer
From Junior to Leading Independent Producer • Merger with Crown Diamonds brought extensive underground production expertise to Petra, with Crown having operated a portfolio of 3 diamond fissure mines in South Africa since 1990 • Crown team had in-house skills-base across full mining spectrum, from e
Slide 5: World Diamond Mines
World Diamond Mines • Petra now has majority stakes in 5 of less than 30 significant kimberlite mines in operation • Major diamond resource of 308.7 Mcts valued at ca. US$54.3 bn1 5 1. Based on FY 2015 average diamond prices
Slide 6: Petra Acquisition Timeline
Petra Acquisition Timeline • The acquired mines were the mainstay of world production before the Russian and Botswana mines opened from the 1960s onwards • Petra is investing ca. ZAR12bn in the South African assets and ca. $100m into Williamson over 2008 to 2019 Date of acquisition by Petra July 200
Slide 7: Petra's Approach
Petra’s Approach • Petra can apply its lower overhead structure to assets with great success • Significantly lower expansion capital intensity compared to major mining companies Project Appraisal Mine Management Project Development • In-depth knowledge and • Right-size production • Utilise in-house
Slide 8: Robust Profit Margin from Mining Activities
Robust Profit Margin from Mining Activities • Margins generally between 30 – 40% despite operating in diluted mining areas • Margins forecast to go to +50% once operating in new mining areas (not reliant on increase in diamond pricing) % 60 First major mine acquisition (Koffiefontein) 50 40 30 Globa
Slide 9: Sustainability at the Heart of Petra
Sustainability at the Heart of Petra • Petra strives for continuous improvement across all CSR areas 1.2 • Petra CSR programmes focus on sustainable job creation, poverty 1 alleviation, skills transfer and local enterprise development 0.8 • Good track record of managing labour relations in South Afr
Slide 10: Moving into Undiluted Ore / Schematic
Moving into Undiluted Ore / Schematic • Caving is a safe and proven mechanised mining method; provides access to higher volumes of ore than other methods • Current underground mining taking place in diluted, mature caves nearing end of lives • Expansion programmes to take next ‘cut’ by deepening and
Slide 11: Cullinan Case Study – High Level Mine Plan
Cullinan Case Study – High Level Mine Plan Current mining taking • Expansion plan to take production from 0.7 Mcts to +2 Mcts by FY 2019 place in B-Cut at 732m and rehabilitation mining on 645m C-Cut Phase 1 – new block cave being established on western side of orebody; production build up from H2 F
Slide 12: Cullinan Case Study – New Plant
Cullinan Case Study – New Plant Expected benefits of new plant Existing Cullinan Plant • Footprint decreases from ca. 26 to ca. 5 hectares • Expected reduction in number of conveyor belts from 151 (ca. 15km) to 22 (ca. 3km) • Increase in revenue per tonne • Increase in grade due to increased liberat
Slide 13: Cullinan Case Study – Iconic Diamonds
Cullinan Case Study – Iconic Diamonds • Exceptional diamonds (+$5 million stones) contributed on average $21 million p.a. from FY 08 to FY 15 Historic Recoveries pre-Petra Recoveries by Petra The Cullinan The Golden Jubilee The Cullinan Heritage The Cullinan Dream 3,106 ct rough 755.5 ct rough 507.5
Slide 14: Transition from Low to High Quality Tonnes
Transition from Low to High Quality Tonnes • Increase in ROM grades and lower contribution of tailings to drive ca. 60% growth in production • Flat tonnage throughput helps contain costs Split of Petra’s tonnage profile from different ore sources Million tonnes Million carats 20.0 5.0 16.0 14% 14% 2
Slide 15: Improving Product Mix
Improving Product Mix • Lower value tailings to reduce from 1 in 3 carats in FY 2015 to 1 in 20 by FY 2018 • ROM carats are worth 2 to 3 times the value of tailings carats Split of carat production from ROM vs Tailings 5.0 Million tonnes Million carats 20.0 4% 4% 16.0 4.0 11% 12.0 23% 3.0 29% 96% 96
Slide 16: On Track for Full Year Guidance of 3.3 – 3.4 Mcts
On Track for Full Year Guidance of 3.3 – 3.4 Mcts H1 FY 2016 – Production and Sales Summary Unit H1 FY 2016 H1 FY 2015 Variance FY 2015 Sales Diamonds sold Carats 1,303,051 1,401,575 -7% 3,168,650 Gross revenue US$M 154.0 214.8 -28% 425.0 Production ROM diamonds Carats 1,243,706 1,167,982 +7% 2,276,
Slide 17: Rough Diamond Pricing
Rough Diamond Pricing • Rough diamond pricing achieved by Petra down ca. 20% over last 18 months • Impact of lower pricing has been mitigated by the Rand weakening ca. 25% over the same period Bloomberg Rough Diamond Index (Jan 04 to Dec 15) Bloomberg Rough Diamond Index – ZAR terms (Jan 04 to Dec 1
Slide 18: Kimberley Mines Acquisition
Kimberley Mines Acquisition • 18 January 2016: Petra completed acquisition of Kimberley Mines from DBCM in partnership with Ekapa Mining (Petra: 49.9%; Ekapa: 50.1%) • Petra share of acquisition cost: ZAR50.9 million ($3.6 million) • Kimberley Mines assets: • A number of tailings dumps (“TMRs”) in K
Slide 19: Outlook – Growth and Margin Expansion
Outlook – Growth and Margin Expansion FY 2019 production target of ca. 5.0 Mcts; revenue of ca. $0.85bn 900 6 30 FY 2015 FY 2016 25 5 production of production Carat production (million carats) 3.2 Mcts; target of 3.3 – FY 2007 revenue of 3.4 Mcts Tonnes treated (Mt) production $425m 4 20 of 0.2 Mcts
Slide 20: Thank You
The Williamson mine in Tanzania owns and operates the Mwadui Primary School, which provides free education to 460 students Thank You