Slide 1: 2014 Half Year Results Presentation
2014 Half Year Results Presentation 20 August 2014
Slide 2: Disclaimer
Disclaimer 2 The following presentations are confidential and are being made only to, and are No statement in this presentation is intended as a profit forecast or profit estimate only directed at, persons to whom such presentations may lawfully be and no statement in the presentation should be inte
Slide 3: Agenda
Agenda 3 2014 Half year results highlights Diamond market Operational overview Group financial performance Outlook
Slide 4: 2014 Half Year Results Highlights
2014 Half Year Results Highlights 4 REVENUE EBITDA US$149m up 54% US$62m up 87% 200 70 62 149 60 150 50 USD Millions USD Millions 97 40 33 100 30 50 20 10 0 0 H1 2013 H1 2014 H1 2013 H1 2014 BASIC EPS FREE CASH FLOW US cents 14.28 up 129% US$86m up 89% 14.28 15 100 86 80 10 USD Millions 60 US Cents
Slide 5: Diamond Market
Diamond Market 5 Strong prices in H1 2014 expected to continue through H2 2014 Improved demand seen in the US and Japan; Letšeng rolling average US$ per carat continued strong demand in China and India Favourable medium to long-term 2 900 supply/demand fundamentals 2 747 2 700 2 543 Impact o
Slide 6: Operational Overview
Operational Overview Alan Ashworth
Slide 7: Group HSSE Performance
Group HSSE Performance 7 LTIFR 0.09 (2013 FY LTIFR 0.13) AIFR 2.81 (2013 FY AIFR 2.49) Ghaghoo was awarded a 4-star IRCA rating Zero major or significant stakeholder or environment incidents occurred Continued implementation of international Fully equipped clinic and ambulance at Letšeng b
Slide 8: Mineral Resource Management
Mineral Resource Management 8 Carats (millions) Grade (cpht) US$/ct Gross resources at Letšeng and Ghaghoo (incl. Reserves) 25.54 6.35 601 Letšeng Indicated Resource 3.23 1.73 2 086 Letšeng Reserve 2.26 1.71 2 045 Ghaghoo Indicated Resource 15.49 19.51 242 Ghaghoo Reserve 2.08 27.81 267 Letšeng 21
Slide 9: Letšeng overview
Letšeng overview Alan Ashworth
Slide 10: Letšeng
Letšeng 10 Alluvial Ventures contract extended Carats recovered (000’s) 60 50 55 MMIC contract extension negotiated 40 42 30 Larger equipment commissioned 20 10 0 Satellite mix Carats recovered H1 2013 H1 2014 Ore tonnes treated (mT) Waste tonnes mined (mT) 4 12 10 10.0 3 3.2 9.9 3.0 8 2 6 4
Slide 11: Letšeng - optimising overall mining process
Letšeng - optimising overall mining process 11 Letšeng +50 Carat Recoveries Increased recovery of valuable 250 100% Type II diamonds 200 80% Stone Size (Carats) Increasing Satellite contribution 150 60% Price performance against expected 100 40% 1.20 50 20% 1.10 Diamond protection initiatives 0 0% 2
Slide 12: Letšeng delivering exceptional diamonds in 2014
Letšeng delivering exceptional diamonds in 2014 12 H1 2014 Average value per carat* US$2 747 Rough diamonds achieving > US$1.0m each 37 Rough diamonds achieving > US$20 000/ct 77 Rough diamonds achieving > US$60 000/ct 5 Rough diamonds > than 10.8ct 311 Three exceptional quality +100 carat diamonds
Slide 13: Letšeng project review
Letšeng project review 13 Letšeng expansion/improvement programme Continued phased introduction of technologies to improve recovery, throughput and diamond breakage Coarse Recovery Plant No.2 Plant phase 1 upgrade Capital of Maloti 140.0m (US$13.2m) approved Capital of Maloti 50m (US$4.7m) appro
Slide 14: Ghaghoo development overview
Ghaghoo development overview Alan Ashworth
Slide 15: Ghaghoo development review
Ghaghoo development review 15 Phase 1 capital project completed on time and on budget Processing plant commissioned - 2 400 carats recovered as at end of June 2014 Development of first three production tunnels on Level 1 underway Drilling of 3rd ventilation hole underway First sale for Gha
Slide 16: Sales, marketing and manufacturing overview
Sales, marketing and manufacturing overview Clifford Elphick
Slide 17: Sales, marketing and manufacturing
Sales, marketing and manufacturing 17 5 rough tenders in Period – rough sales of US$ 147.8m* Carats sold 53 799 377 carats extracted for manufacturing at a rough value of US$4.2m 2013 partnership diamonds sold in the Period for additional revenue to Letšeng of US$1.5m Ghaghoo preparation f
Slide 18: Financial performance
Financial performance Michael Michael
Slide 19: Group financial performance
Group financial performance 19 US$ millions H1 2014 H1 2013 % Increase FY 2013 Revenue 148.9 96.5 54% 212.8 Royalty and selling costs (13.4) (7.8) (18.5) Cost of Sales (67.2) (49.3) (103.1) Corporate expenses (6.1) (6.2) (13.8) Underlying EBITDA 62.2 33.2 87% 77.4 Depreciation and Amortisation (7.9)
Slide 20: Letšeng financial performance
Letšeng financial performance 20 US$ millions H1 2014 H1 2013 % Increase FY 2013 Rough tender sales 147.8 81.9 198.8 Polished margin 2.4 4.8 5.4 Total Revenue 150.2 86.7 73% 204.2 Royalty and selling costs (14.4) (7.8) (19.0) Cost of sales (64.8) (47.3) (99.2) EBITDA 71.0 31.6 125% 86.0 EBITDA margi
Slide 21: Sales, marketing and manufacturing financial performance
Sales, marketing and manufacturing financial performance 21 US$ millions H1 2014 H1 2013 % Variance FY 2013 Polished (gross value achieved) 13.6 28.3 29.6 Rough value of extraction (11.2) (23.5) (24.2) Polished margin 2.4 4.8 (50%) 5.4 Direct manufacturing costs (0.9) (1.4) (1.8) EBITDA generated (n
Slide 22: Group cash generated
Group cash generated 22 (US$m) 200 180 1 160 (26) 140 (17) 102 (6) 120 (11) (11) 16 100 (5) 80 60 114 103 98 40 71 20 0
Slide 23: Group cash and funding
Group cash and funding 23 Cash: Group cash of US$114m (US$98m attributable to Gem Diamonds) Net cash of US$98m after debt of US$16m Funding: Expiry/ Amount Drawn down Available Facility Term Lender Renegotiation (US$ millions) (US$ millions) (US$ millions) GDL revolving credit facility 3 yea
Slide 24: Outlook
Outlook 24 Continued operational efficiency and performance improvements Delivery of Coarse Recovery Plant project Delivery of No.2 Plant - Phase 1 upgrade Refining longer term mine plans, including optimising waste stripping profiles to maximise value Anticipated strong diamond market/pri
Slide 25: Appendix – Capital and corporate structure
Appendix 1 – Capital and corporate structure 25 Gem Diamonds shareprice performance, up 42% year to date as at Major shareholders 15 August 2014 Price (GBp) Volume (‘000) 225 1 600 Graff Diamonds International Limited 15.12% 200 1 400 175 1 200 Lansdowne Partners Ltd 14.99% 150 125 1 000 FIL Limited
Slide 26: Appendix – Updated resource and reserve statement as at Jan 2014
Appendix 2 – Updated resource and reserve statement as at 1 Jan 2014 26 Average Letšeng Tonnes Grade Carats diamond price Category Classification (millions) (carats/100T (millions) (US$/carat) Reserves Probable 131.9 1.71 2.26 2 045 Resources Indicated 187.1 1.73 3.23 2 086 Inferred 106.8 1.67 1.78
Slide 27: Appendix – FY 2014 Guidance
Appendix 3 – FY 2014 Guidance 27 Letšeng guidance for full year 2014 FY2014 Waste tonnes mined (Mt) 18 - 20 Ore tonnes treated (Mt) 6.3 - 6.5 Carats recovered (Kct) 95 - 100 Carats sold (Kct) 97 - 103 Direct cash costs (before waste) per tonne treated (Maloti) 127 -135 Mining waste cash costs per to