Gem Diamonds Limited · LSE:GEMD
Gem Diamonds — Investor Day (June 2018)
19 slides from Gem Diamonds's investor day presentation, Jun 6, 2018
Slide 1: Gem Diamonds Investor Presentation
Gem Diamonds Investor Presentation 6 June 2018
Slide 2: Disclaimer
Disclaimer 2 The following presentations are confidential and are being made only to, and are only directed at, persons to whom such presentations may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on these presentations or any of their
Slide 3: Agenda
Agenda 3 Background Market overview Letšeng and performance Innovative technology Business transformation Financials Sales and marketing overview Q&A
Slide 4: Background
Background 4 Gem Diamonds Producer of large, high quality, exceptional Type II diamonds Clear focus on continued creation of value through optimising the Letšeng mine production Seeking to maximise revenue through its sales, marketing and manufacturing operations in Belgium Innovation projec
Slide 5: Market overview
Market overview 5 Global economic backdrop Diamond market Market position Continued growth of the Continued strong demand for Continued high quality in the Chinese and US economy large high quality diamonds size and grade of Letšeng’s production Increase in retail demand in Continued US led demand a
Slide 6: Letšeng mine
Letšeng mine 6 Significant improvement in large diamond recoveries in 2017 and 2018 Business transformation programme underway Continued optimisation of LoM plan XRT installed in H2 2017 to retreat recovery tailings New scrubber installed in H1 2018 on time and budget Continued focus on
Slide 7: Letšeng resource performance
Letšeng resource performance 7 Large diamond recoveries (2018 YTD – 10 diamonds greater than 100 carats) Number of diamonds 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 >100 carats 7 6 7 6 3 6 9 11 5 8 60-100 carats 18 11 11 22 17 17 21 15 21 19 30-60 carats 96 79 66 66 77 60 74 65 70 74 20-3
Slide 8: Letšeng’s remarkable 2018 recoveries
Letšeng’s remarkable 2018 recoveries 8 2018 recoveries include: − The Lesotho Legend − exceptional quality 910 carat, D-colour Type IIa diamond − second largest gem quality diamond recovered in the past century − sold for $40 million on 12 March 2018 − Ten diamonds of over 100 carats recovered so
Slide 9: Innovation technology
Innovation technology 9 Reducing diamond damage remains a key value creation opportunity Innovative technologies designed to − Identify diamonds within kimberlite prior to crushing process − Liberate these diamonds through electric pulse technologies (in Collaboration with University of Johannes
Slide 10: Business transformation
Business transformation 10 Initiated business transformation process in 2017 On track to deliver US$100m of cumulative cash cost saving and productivity improvement over the next four years to the end of 2021 Ongoing identification of opportunities to increase this target Includes initiative
Slide 11: Targeting $100 million
Targeting $100 million 11 4 Cumulative target of $100 million 20 1 over 4 years 4 Cumulative 42 Annual sustainable 14 savings of $100m savings of $30m Sustainable annual saving of $30 11 34 million by 2022 Implemented initiatives Mining Processing contributing $27 million of the $100 Working c
Slide 12: Mining targeting $42 million
Mining targeting $42 million 12 Timing of impact 5 6 2 3 3 2 2 2 1 31 1 8 9 9 9 5 0- Load, drill & haul Blasting practices Pit design 2017 2018 2019 2020 2021 2022 onwards All recurring initiatives Contract renegotiation – reduces unit 42 cost rates 28 Pit slopes – reduces waste tonnes 15 13 14
Slide 13: Processing targeting $34 million
Processing targeting $34 million 13 Timing of impact 2 1 1 16 1 3 3 16 1 4 4 7 7 5 3 3 Plant uptime Additional throughput Plant consumables 1 - 2017 2018 2019 2020 2021 2022 onwards Recurring & once-off initiatives Increase treated tonnes and carats recovered through: 34 - Increasing plant uptime
Slide 14: Working capital & overheads targeting $4 million
Working capital & overheads targeting $4 million 14 Timing of impact 1 0.4 0.6 3 0.7 0.7 0.7 0.7 0.5 Overheads Working capital 0.1 0.0 2017 2018 2019 2020 2021 2022 onwards Recurring & once-off initiatives Once-off saving from working capital 3.7 management 0.5 3.0 0.6 Strict spend control proce
Slide 15: Corporate activities targeting $20 million
Corporate activities targeting $20 million 15 Timing of impact 4 7 16 3 3 3 3 Corporate costs Non-core assets 1 1 1 1 -- 1 Reducing or eliminating care & 2017 2018 2019 2020 2021 2022 onwards maintenance costs at Ghaghoo – formal Recurring & once-off initiatives sale process initiated 20 Selling
Slide 16: Full year 2017 financials – key performance indicators
Full year 2017 financials – key performance indicators 16 Revenue EBITDA 271 106 104 249 213 214 79 190 $ millions 63 $ millions 48.6 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Basic EPS (pre exceptional items) Cashflow from operating activities 30 134 26 119 97 88 $ millions $ Cents 17 13 71
Slide 17: Group cash balance and funding as at March 2018
Group cash balance and funding as at 31 March 2018 17 Net cash position of US$48.1m, a US$46.7m, improvement from the Q4 2017 net cash position of US$1.4m US$91.3m cash on hand of which US$66.7m is attributable to Gem Diamonds US$43.2m of available facilities have been drawn down with US$41.1m
Slide 18: Sales and marketing overview
Sales and marketing overview 18 Prices remain robust for Letšeng goods Average price of US$3 276 per carat achieved during Q1 2018 (up 48% from US$2 217 per carat in Q4 2017 ) Letšeng Q1 sales highlights − Seven gem quality diamonds greater than 100 carats recovered (ten including post period
Slide 19: Thank You
Thank You www.gemdiamonds.com