Petra Diamonds Limited · LSE:PDL
Petra Diamonds — FY2023 Earnings Presentation
33 slides from Petra Diamonds's earnings presentation, Sep 15, 2023
Slide 1: Preliminary Results FY 2023
creating abundance from rarity Preliminary Results FY 2023
Slide 2: Disclaimer
Disclaimer BY ATTENDING THE MEETING WHERE THIS PRESENTATION IS MADE, OR BY READING THE PRESENTATION SLIDES, YOU ACKNOWLEDGE AND AGREE TO COMPLY WITH THE FOLLOWING RESTRICTIONS. This presentation (the "Presentation") has been prepared and issued by and is the sole responsibility of Petra Diamonds Ltd
Slide 3: Highlights
Highlights Richard Duffy CEO A necklace from Boodles’ Peace of Mined collection which showcases stones exclusively sourced from Cullinan Mine
Slide 4: Setting the path for growth
Setting the path for growth World’s third largest Annual production to Embedding sustainability diamond resource increase by up to 1.3 Mcts in FY 2026 ✓ Mine plans to 2031/32 self-funded ✓ Extension projects at Cullinan Mine & ✓ Safety our Number 1 priority ✓ Further potential to extend mine plans F
Slide 5: FY 2023 operating and financial highlights
FY 2023 operating and financial highlights Koffiefontein classified as discontinued operation and excluded from numbers below1 Total tonnes treated (Mt) Diamonds produced (Mcts) Average price (US$/ct) Revenue (US$m) 11.2 3.32 161 563.7 9.0 2.67 139 325.3 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 Adjus
Slide 6: Safety remains our number 1 priority
Safety remains our number 1 priority Underground employees conducting mini risk assessment LTI and LTIFR1 0.5 40 0.45 35 0.4 30 0.35 0.3 25 LTIFR 0.25 20 LTI 0.2 15 0.15 10 0.1 0.05 5 0 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 LTI's 27 27 32 35 25 16 19 25 15 17 LTIFR 0.32 0.29 0.29 0.27
Slide 7: FY 2023 progress on our sustainability journey
FY 2023 progress on our sustainability journey Valuing our • Increased focus on proactively identifying and mitigating safety risks PEOPLE • Co-creation and implementation of Petra Culture Code • c US$5 million spent on training and development in FY 2023 Respecting our • Focus on improving biodiver
Slide 8: Market overview
Market overview Recent pricing reflective of prevailing macro-economic Petra’s av. price split by run-of-mine (ROM) and Exceptional uncertainties1 Stones (US$15 million or higher)1,2 250 US$/ct 180 160 Index (US$, rebased to 100) 200 140 120 150 156.9 100 80 60 100 40 20 50 - H1 FY21 H2 FY21 H1 FY22
Slide 9: Structural supply deficit underpinned by maturing global diamond mines
Structural supply deficit underpinned by maturing global diamond mines Planned closures and new mines • Major mines accounting for 15% of supply (Ekati, Diavik, Nyurbinskaya and Almazy-Anabara) expected to be depleted by the end of the decade Udachniy Jubilee Zarnitsa Komsomolsky • Smaller Koffiefon
Slide 10: Financial performance
Financial performance Jacques Breytenbach CFO The plant at Cullinan Mine
Slide 11: FY 2023 financial highlights
FY 2023 financial highlights US$m FY 2023 FY 2022 Revenue Restated2 • Revenue of US$325.3 million. YoY reduction mainly due to a 20% decrease in Revenue 325.3 563.7 diamonds recovered, deferral of sales to FY 2024 and no contribution from Contribution from Exceptional Stones3 - 40.2 Exceptional Ston
Slide 12: FY2023 on-mine costs in-line with expectations
FY2023 on-mine costs in-line with expectations Group Diamond technical, Adjusted Williamson inventory and support and mining and tailings facility – Total mining On-mine cash Diamond stockpile marketing processing remediation and processing costs1 royalties movement costs2 costs costs3 Depreciation4
Slide 13: Contribution by mine
Contribution by mine1 Revenue Adjusted profit from mining activity Adjusted profit margin US$m US$m 350 250 70% 60% 300 200 50% 250 150 40% 200 30% 100 150 20% 50 10% 100 0% 50 0 -10% 0 -20% -50 Cullinan Mine Finsch Williamson Cullinan Mine Finsch Williamson Cullinan Mine Finsch Williamson FY22 FY23
Slide 14: Balance sheet snapshot
Balance sheet snapshot US$m (unless otherwise stated) As at As at 30 June 2023 30 June 2022 Cash at bank (including restricted amounts) 61.8 288.2 Diamond debtors 8.9 37.4 Diamond inventories1,2 (US$m) 65.9 52.7 (Carats) 715,222 453,380 Loan notes (issued March 2021) 247.5 366.2 Bank loans and borro
Slide 15: Disciplined capital allocation in FY 2023
Disciplined capital allocation in FY 2023 Priority 1 Priority 2 Operational and social license to operate Approved mine extension projects at Cullinan Mine and Finsch Optimum stay in business capital Service debt obligations Objective: Objective: Generate value through mine life extensions beyond cu
Slide 16: FY 2024-26 Group guidance summary
FY 2024-26 Group guidance summary1 US$m (real FY 2024) FY24E FY25E FY26E Total carats recovered, Mcts 2.9 – 3.2 3.4 – 3.7 3.7 – 4.0 Cash on-mine costs and G&A 270 - 290 270 - 290 280 – 300 Extension capex 124 - 135 109 – 125 85 – 92 Sustaining capex 31 – 36 24 – 28 24 – 28 Actual (including K
Slide 17: Our operations
Need to replace since employee has left Our operations Richard Duffy, CEO Employees at Cullinan Mine
Slide 18: Cullinan Mine
Cullinan Mine Resource supports significant opportunity to extend beyond current mine plans FY 2023 actual vs. FY 2024 guidance and price assumptions 2030 2040 2050 FY 2023 FY 2024 Approved mine plan to Rough diamond price actual & assumed1 Cullinan Resource 2032 Future projects: C-Cut Centre / Mine
Slide 19: Finsch mine
Finsch mine Resource supports significant opportunity to extend beyond current mine plans FY 2023 actual vs. FY 2024 guidance and price assumptions 2030 2040 2050 FY 2023 FY 2024 Approved mine plan to Future projects: Orebody Rough diamond price actual & assumed1 Finsch Resource 2031 Block 6 (92L, c
Slide 20: Williamson mine
Williamson mine Resource supports significant opportunity to extend beyond current mine plans FY 2023 actual vs. FY 2024 guidance and price assumptions 2030 2040 2050 FY 2023 FY 2024 Williamson Resource Approved mine Future projects: Open pit Rough diamond price actual & assumed1 Orebody continues a
Slide 21: Concluding remarks
Concluding remarks Richard Duffy CEO The Finsch mine in South Africa
Slide 22: Creating abundance from rarity
Creating abundance from rarity 1 Substantial production growth on track - Projects remain on track to contribute to increase production by up to 1.3 million carats in FY 2026, enabled by our operating model 2 Near-term diamond market softer but market fundamentals intact - Constrained demand for pol
Slide 23: Q&A
Q&A One of our community education projects, My Maths Buddy – a dictionary of mathematical terms for teachers and pupils
Slide 24: Appendix
Appendix Tunnel in Cullinan Mine
Slide 25: Consolidated net debt movement (FY 2023)
Consolidated net debt movement (FY 2023) Operational FCF (US$66.5 million) FY 2023 Preliminary results 25
Slide 26: Impact of ZAR/USD movement on Petra
Impact of ZAR/USD movement on Petra Exchange rate volatility: 80-90% of operating costs are ZAR denominated USD • ZAR weakness impacted by global sentiment and inflationary fears USD • FY 2023 closing exchange rate (US$1:ZAR18.83) ca. 16% weaker compared to FY 2022 USD (US$1:ZAR16.27) Increase / dec
Slide 27: FY 2024 cost breakdown – fixed (77%) and variable (23%)
FY 2024 cost breakdown – fixed (77%) and variable (23%) FY 2023 Preliminary results 27
Slide 28: Reduction in gross debt
Reduction in gross debt 400 US$m Disciplined capital allocation to maximise value generation • Current capex projects to be internally funded 200 • Committed to further reduction in gross debt levels • Opportunities to improve on our 2L debt structure 0 -40.6 • Maintain leverage below 1.5x Net debt
Slide 29: FY 2023 summary P&L
FY 2023 summary P&L US$m FY 2023 FY 2022 Revenue 325.3 563.7 Adjusted mining and processing costs (202.1) (272.5) Other direct income/(expenses) (0.5) (1.0) Profit from mining activities 122.7 290.2 Other corporate income 1.0 0.6 Adjusted corporate overhead (10.6) (13.0) Adjusted EBITDA 113.1 277.8
Slide 30: FY 2023 Operating Cost Reconciliation
FY 2023 Operating Cost Reconciliation Petra Diamonds Cost of Sales reconciliation - FY 2023 30-Jun-23 Average R/$ rate: 17.77 Total on-mine Diamond Group technical, Total Mining and cash cost Diamond inventory support and Rehab and TSF processing costs Cost / tonne Tonnes treated (million) royalties
Slide 31: Cullinan mine, current and future potential
Cullinan mine, current and future potential Dumps Plant Shaft Development Development projects projects (underway) (underway) Current mining C-Cut extension (T46 & T50 and C-Cut Current mining Centre) C-Cut • 2.3Mcts commencing from end- • Block cave mining to continue FY2024 and will extend C-Cut b
Slide 32: Finsch: further extension opportunities
Finsch: further extension opportunities Plant Shaft Dumps Current Production Current mining 4-level Upper Block 5 SLC Development projects Development (underway) projects (underway) Recent improvements to production Lower Block 5 3-Level 90L SLC have resulted from: • c.9.7 Mcts production from late
Slide 33: Williamson: significant potential beyond 2030 mine plan
Williamson: significant potential beyond 2030 mine plan Current Production Current mining Dumps Plant Mine plan defined by special mining 37.4Mt 49.5Mt 48 licence (ends 2030) MtMt 66 • 37.4Mt containing 2.63Mcts in Crater ± 64Mt reserves Granite Breccia Diatreme ± 400Mt 600m (depth of resource) 680m