Petra Diamonds Limited · LSE:PDL
Petra Diamonds — Investor Day (June 2024)
47 slides from Petra Diamonds's investor day presentation, Jun 27, 2024
Slide 1: Enhancing Resilience – Investor Day 27 June 2024
Image update Enhancing Resilience Investor Day – 27 June 2024
Slide 2: Disclaimer
Disclaimer BY RECEIVING THIS PRESENTATION, 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. (the "Company"). The Presentation has been prepared, and access
Slide 3: Agenda and your hosts for today
Agenda and your hosts for today Welcome Company overview The diamond market Short break Life of Mine overview Financial Framework Richard Duffy Jacques Breytenbach Vivek Gadodia Rupert Rowland-Clark Outlook CEO CFO Planning and Corporate General Counsel & Company Development Executive Secretary Q&A
Slide 4: A resilient business with a compelling value proposition
A resilient business with a compelling value proposition • Reset cost base by US$30m Agility • Smoothed capital profile c.US$100m p.a. • Repurchased US$5m of 2L Notes • World class assets with long-term potential Ability • Leveraging sustainability credentials • Able to withstand market and capital
Slide 5: Company overview
Company overview The Cullinan Mine
Slide 6: Petra is a leading independent natural diamond miner
Petra is a leading independent natural diamond miner We primarily supply gem/near gem quality natural diamonds safely and to the highest ethical standards Our mines, with a gross resource1 of 218Mcts, produce a range of diamonds, from very large, high quality gemstones spanning Type II white and blu
Slide 7: How we deliver value to our stakeholders
How we deliver value to our stakeholders Key behaviours and frameworks for strategic A value-led growth strategy underpinned by Focused on delivering Our Purpose delivery, with performance linked to KPIs our Operating Model Integrated Culture Code Current operations 1 Maximise value from existing op
Slide 8: Disciplined capital allocation
Disciplined capital allocation Priority 1 Priority 2 Operational and social licence to operate Execute approved mine extension projects Optimise stay in business capital Service debt obligations Objective: Objective: Ensure business sustainability Generate value through mine-life extensions Priority
Slide 9: Delivering value through embedded Sustainability
Delivering value through embedded Sustainability Responsible exit of Koffiefontein 7 years fatality free Definitive transaction agreement for sale of Koffiefontein agreed Health and safety is our number 1 priority with a focus on zero harm • Will provide ongoing economic activity in the region • Rem
Slide 10: Demonstrating our agility
Demonstrating our agility FY 2022 FY 2023 FY 2024e Production: 3.3 Mcts Production: 2.7 Mcts Production: 2.74 – 2.78 Mcts Cash Costs: US$271 m Cash Costs: US$246 m Cash Costs: US$261m - 269m Capex: US$52 m Capex: US$117 m Capex: US$85m - 88m Consolidated Net Debt: US$41 m Consolidated Net Debt: US$1
Slide 11: Petra's pricing assumptions for FY 2025
Petra’s pricing assumptions for FY 2025 Cullinan Mine Finsch 180 150 150 135 120 105 US$ per carat 120 125 90 US$ per carat 98 90 169 139 60 118 110 60 123 125 102 98 30 30 0 0 FY 22 FY 23 FY24* FY 25 Assumption FY 22 FY 23 FY24* FY 25 Assumption Williamson 480 Notes: 360 Future diamond prices are i
Slide 12: FY 2025-2029 Group guidance summary
FY 2025-2029 Group guidance summary FY 2024e FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Total carats Mcts 2.74 – 2.78 2.8 – 3.1 2.9 – 3.3 3.1 – 3.5 3.4 – 3.7 3.4 – 3.7 - SA Operations Mcts 2.41 – 2.44 2.4 – 2.7 2.6 – 2.9 2.8 – 3.1 3.0 – 3.3 2.9 – 3.3 - Williamson Mcts 0.33 – 0.34 0.37 – 0.41 0.33 – 0.3
Slide 13: The diamond market
I have updated the caption to provide context for using the image The diamond market “Real. Rare. Responsible” The Natural Diamond Council’s new global marketing campaign starring brand ambassador Lily James aimed at driving consumer awareness
Slide 14: Our position in the current market environment
Our position in the current market environment Rough diamond index1 Petra’s product mix 250 Index (US$, rebased to 100) 23% 21% 19% 20% 19% 21% c. 60-80% of revenues from c.20% of 200 Group volume contribution in 100% 150 80% 144.1 Mcts as % 100 60% diamonds 50 40% 20% 0 Q2 (May)… Q4 2015 Q2 2019 Q4
Slide 15: Longer-term fundamentals attractive; India emerging as a strong consumer
Longer-term fundamentals attractive; India emerging as a strong consumer Rough diamond production 2014 – 2033 (Mcts)1 200 -1% 150 100 50 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Actual Forecast De Beers Group Rio Tinto Angola New mines Exi
Slide 16: LGDs now a separate lower-price product category
LGDs now a separate lower-price product category Market price divergence between 1ct LGD and natural diamonds1 LGD displacement of natural diamonds expected to reduce2 8,000 0% 70 LGD price discount vs. natural (%) 60 9 -20% 6,000 1 6 50 -40% 7 US$bn (real) 40 US$/ct 4,000 -60% 30 54 2,000 44 -80% 2
Slide 17: Traceability addresses consumer preferences
Traceability addresses consumer preferences Petra is embarking on traceability technology from mine-to-finger Leveraging Petra’s sustainability credentials • Products that make environmental, social and governance- related claims have achieved disproportionate growth in recent years1 • We are piloti
Slide 18: Reinvigorating natural diamond marketing
Reinvigorating natural diamond marketing 2024 marketing efforts campaigns at allinitiated levels ofatthe all value levels chain of the value chain • Signet (the world’s largest diamond Jewellery jewellery retailer) and De Beers partner “to drive demand for natural diamonds” • Natural Diamond Council
Slide 19: Life of Mine
Life of Mine Delivering a smoothed capital profile The 39.34 carat blue diamond from the Cullinan mine sold for US$40.2m (US$1m per carat) in July 2021 – believed to be the highest price per carat on record for a rough diamond
Slide 20: Optimised LOM plans with smoothed capital profiles
Optimised LOM plans with smoothed capital profiles Highlights 2030 2040 2050 • Approved life of mine plans expected to be self-funded Cullinan Future extension Mine Approved mine plan Future extension Orebody D-Cut Resource (C-Cut Block Cave / C-Cut Ext 3 / continues at (requires new 145 Mct C-Cut E
Slide 21: Cullinan Mine
Cullinan Mine One of the world’s most famous diamond mines and largest diamond resources Produced some of the most iconic diamonds, including the largest gem diamond ever discovered (3,106ct) and is the largest source of very rare and highly valuable Type IIb blue diamonds and high-quality Type IIa
Slide 22: Cullinan Mine presents multiple long-term opportunities
Cullinan Mine presents multiple long-term opportunities Dumps Plant Shaft C-Cut Block Cave (in production) New Production Shaft (depending on D-Cut development) 1 Planned Tonnes: 12.7 Mt. Planned Carats: 3 Mcts Men and material shaft C-Cut Extensions Block Cave (Ext 1 in development; Ext 2 approved;
Slide 23: Medium-term LOM to early 2040s (self-funded, excludes D-Cut)
Medium-term LOM to early 2040s (self-funded, excludes D-Cut) Cullinan Mine medium-term LOM profile to early FY 2040s showing base case and future extension potential APPROVED LIFE OF MINE1 - c. 14 Mcts C-Cut CC1E Ph I C-Cut Ext 1 & Ext 2 CC1E Ph II C-Cut Ext 3 Total Carats recovered (RHS) 5.0 2.0 C-
Slide 24: Long-term conceptual LOM to 2050 (including D-Cut)
Long-term conceptual LOM to 2050 (including D-Cut) Cullinan Mine long-term conceptual LOM profile to 2050 showing D-Cut C-Cut CC1E Ph I C-Cut Ext 1 & Ext 2 CC1E Ph II C-Cut Ext 3 D-Cut Total Carats Recovered (RHS) FUTURE EXTENSION1 - c. 17 Mcts 2.5 D-Cut + New Production Shaft 5.0 Indicative remaini
Slide 25: Finsch
Finsch Finsch was opened in 1967. Open pit mining ceased in 1990 and has since operated as an underground operation. Finsch is renowned for highly commercial goods of +5 carats and is rich in gem quality smaller diamonds. A number of large +50 carat stones are also recovered annually. The mine also
Slide 26: Finsch presents further extension potential to the late 2030s
Finsch presents further extension potential to the late 2030s Plant Shaft Dumps Upper Block 5 (75-81L) (in production) 1 Planned Tonnes: 4.8 Mt. Planned Carats: 2.3 Mcts Lower Block 5 (86-90L) (approved) Current loading 75 level to 78 level 2 Planned Tonnes: 13.4 Mt. Planned Carats: 9 Mcts Current l
Slide 27: Extended LOM profile to late 2030s (self-funded)
Extended LOM profile to late 2030s (self-funded) Finsch extended LOM profile to FY 2037 showing base case and future extension potential 3.0 2.0 APPROVED MINE PLAN1 - c. 11.3 Mcts 1.8 78L Ph II + 81L + 86-90L 2.5 Capital Spent to Indicative remaining IRR 1.6 Date Capital (FY25 real) (%) 1.4 ROM Tonn
Slide 28: Williamson
Williamson The Williamson kimberlite was discovered in 1940 At 146 hectares, it is one of the largest kimberlites in the world and it still retains a major resource of 37.9 million carats Williamson is renowned for ‘bubblegum’ pink diamonds, including the Williamson Pink which is considered one of t
Slide 29: Williamson – ramp up complete
Williamson – ramp up complete Approved mine plan Current Production 33 Mt Mine plan defined by special mining licence (ends 2030) • 33Mt containing 2.3Mcts in reserves ± 112 Mt Crater Granite Breccia Diatreme ± 400Mt 600m (depth of resource) Long-term potential Mining beyond 2030 has identified 112M
Slide 30: Financial Overview
Financial Overview Marketing Manager Greg Stephenson examining the Letlapa Tala Collection in Antwerp
Slide 31: Significant reduction in costs and capital delivered
Significant reduction in costs and capital delivered FY 2024 cash costs and G&A, original guidance vs. estimate FY 2025 cash costs and G&A, original vs. restated guidance US$m 290 US$m 275 269 305 257 270 US$11m 253 261 US$7m expected vs. labour force 284 target of reduction 241 US$7-10m at US$30-33
Slide 32: Targeting <1.5x net debt/EBITDA through the cycle from FY 2026 onwards
Targeting <1.5x net debt/EBITDA through the cycle from FY 2026 onwards Debt evolution since Dec 2020 400 0.15x 2026 2L Notes 1.0x 1.75x 0.5x Facility Size US$ 257 million 200 8.9x 1.6x (US$210 million x 1.227533 PIK) 3.2x Maturity 8 March 2026 0 -41 9.75% cash pay -91 Coupon -154 -177 Bi-annual paym
Slide 33: Impact of ZAR:USD movement on Petra
Impact of ZAR:USD movement on Petra Exchange rate volatility: USD • Continued ZAR weakness in FY 2024 due to weak macro-economic sentiment and inflationary fears • YTD FY 2024 average exchange rate (USD:ZAR 18:74) c. 5% weaker than average FY 2023 exchange rate (USD:ZAR 17.77) Increase / decrease of
Slide 34: Concluding Remarks
Concluding Remarks
Slide 35: A resilient business with a compelling value proposition
A resilient business with a compelling value proposition • Reset cost base by US$30m Agility • Smoothed capital profile c.US$100m p.a. • Repurchased US$5m of 2L Notes • World class assets with long-term potential Well positioned • Leveraging sustainability credentials to benefit from Ability market
Slide 36: Q&A
Q&A = PetraDiamonds Greating abundance from rarity
Slide 37: Appendix
Appendix
Slide 38: Historic financial performance
Historic financial performance Revenue1 (US$m) Average carat price (US$/ct) Gross debt (US$m) Net debt (US$m) 564 169 769 693 140 402 111 116 327 329 94 430 243 366 248 280 228 41 232 177 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 Q3 FY20 FY21 FY22 FY23 FY24 Q3 T1-6 T
Slide 39: FY 2025 - 29 Group guidance
FY 2025 - 29 Group guidance 2024e 2025 2026 2027 2028 2029 Total carats SA Operations Mcts 2.41 - 2.44 2.4 - 2.7 2.6 - 2.9 2.8 - 3.1 3 - 3.3 2.9 - 3.3 WDL Mcts 0.33 - 0.34 0.37 - 0.41 0.33 - 0.37 0.38 - 0.42 0.36 - 0.4 0.37 - 0.41 Cash on-mine cost SA Operations US$m 174 - 177 157 - 167 155 - 165 14
Slide 40: FY 2025 – 29 Cullinan Mine guidance
FY 2025 – 29 Cullinan Mine guidance Description Unit FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Guidance notes 1. Real amounts stated in FY 2025 ROM Tonnes Treated (Mt) 4.3 - 4.5 4.3 - 4.5 3.5 - 3.7 3.5 - 3.7 3.5 - 3.7 money terms using 6% SA CPI 2. US$ amounts converted at ROM Carats (Kcts) 1231 - 136
Slide 41: FY 2025 – 29 Finsch Mine guidance
FY 2025 – 29 Finsch Mine guidance Description Unit FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Guidance notes 1. Real amounts stated in FY 2025 money terms using 6% SA CPI ROM Tonnes Treated (Mt) 2.2 - 2.3 2.2 - 2.3 2.1 - 2.2 2.2 - 2.3 2.2 - 2.3 2. US$ amounts converted at ROM & Total Carats exchange ra
Slide 42: FY 2025 – 29 Williamson Mine guidance
FY 2025 – 29 Williamson Mine guidance Description Unit FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Guidance notes 1. Real amounts stated in FY 2025 money terms ROM Tonnes Treated (Mt) 5.4 - 5.7 5.4 - 5.6 5.4 - 5.6 5.4 - 5.6 5.4 - 5.6 2. Remaining unredeemed capital ROM & Total Carats expenditure availab
Slide 43: Balance sheet snapshot
Balance sheet snapshot US$m (unless otherwise stated) As at As at As at As at As at 31 March 2024 30 June 2023 30 June 2022 30 June 2021 30 June 2020 Cash at bank (including restricted amounts) 37 62 28 164 68 Diamond debtors 11 9 37 38 5 Diamond inventories1 (US$m) 71 66 53 45 84 (Carats) 671,989 7
Slide 44: FY25 Group cost breakdown – fixed (77%) and variable (23%)
FY25 Group cost breakdown – fixed (77%) and variable (23%) Investor Day - June 2024 44
Slide 45: A smaller, highly experienced Board
A smaller, highly experienced Board1 Board Stats as at 1 June 2024 43% Female Shareholder appointed Varda Shine Richard Duffy Jacques Breytenbach Bernie Pryor Board Observers Non-Executive Chair Chief Executive Officer Chief Financial Officer Senior Independent Director Nomination (Chair), Investmen
Slide 46: Capital structure – equity
Capital structure – equity Listing LSE: PDL Shares in issue 194,201,785 Major shareholders1 (as at 07.06.2024) % of voting rights The Terris Fund, SPC 29.19 Azvalor Asset Management SGIIC SA 18.00 José-Manuel Vargas 8.75 Vontobel Holding AG 6.11 Franklin Templeton Investment Management Limited 5.03
Slide 47: Our Sustainability Framework is underpinned by four pillars
Our Sustainability Framework is underpinned by four pillars Embedded into our business; linked to our KPIs Valuing our Respecting our Driving shared value Delivering reliable PEOPLE PLANET PARTNERSHIPS PRODUCTION • Safety • Climate change • Stakeholder relations • Mining to plan • Health, hygiene &