Slide 1: Half Year 2018 Results
Half Year 2018 Results The 910 carat Lesotho Legend
Slide 2: Disclaimer
Disclaimer The following presentation is confidential and is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. I
Slide 3: Our strategy – our key priorities…
Our strategy – our key priorities… Extracting maximum value Working responsibly and Preparing for our future from operations maintaining social licence Business transformation – Promoting a culture of zero Advancing innovative driving business optimisation harm and responsible care technologies to e
Slide 4: … and our 2018 delivery
… and our 2018 delivery Extracting maximum value Working responsibly and Preparing for our future from operations maintaining social licence Record recovery of 12 diamonds Zero fatalities Continued progress towards goal of >100 carats to date identifying diamonds within kimberlite Zero major or sign
Slide 5: Our market
Our market Global economic backdrop Diamond market in 2018 Gem Diamonds’ market in 2018 position Emerging market and developing Upward trend in rough prices as Highest $ per carat kimberlite economies under pressure manufacturers reduced inventories producer Stabilisation of polished prices as Conti
Slide 6: Increased $ per carat achieved
Increased $ per carat achieved 12 month rolling average $ per carat 2,360 2,414 1,930 1,716 1,625 Jun 2017 Sep 2017 Dec 2017 Mar 2018 Jun 2018 The Lesotho Legend – 910 ct white diamond The Lesotho Legend – 910 ct white diamond Largest diamond recovered at Letšeng Sold for $40 million ($43 956/ct) 6
Slide 7: Other significant Letšeng recoveries in 2018
Other significant Letšeng recoveries in 2018 66.27 ct (US$56 028/ct) 2.26ct pink ($62 433/ct) Highest $/ct white diamond in H1 2018 Highest $/ct rough diamond in H1 2018 169.10 ct ($55 354/ct) 49.84 ct ($52 896/ct) 24.53 ct ($51 289/ct) 28.62 ct ($50 138/ct) 151.78 ct ($48 306/ct) 28.04 ct ($36 844/
Slide 8: Operational performance
Operational performance The 910 carat Lesotho Legend
Slide 9: Zero harm is a priority
Zero harm is a priority Zero fatalities Four lost time injuries in Q1 2018; zero in Q2 2018 Zero major or significant community or environmental incidents CSI investment continues in line with our strategy ➢ Flagship dairy farming project formally opened ➢ Egg farming project launched All in
Slide 10: Letšeng operational overview
Letšeng operational overview Carats recovered up 22% from H1 2017 Damaged scrubber shell replaced with feed rates reverting to normal Continued focus on diamond damage and value management AV contract extended to mid-2020 Construction of relocated mining complex completed – on time; below
Slide 11: Letšeng resource performance
Letšeng resource performance Record recovery of 10 diamonds > 100 Revenue by size fraction carats during a six-month period 7% Grade performance - MCF of 101% 9% Diamonds >10.8 carats account for 84% of revenue Resource drilling continues 84% > 10 cts 5 - 10 cts < 5 cts Frequency of large di
Slide 12: Business Transformation
Business Transformation The 910 carat Lesotho Legend
Slide 13: Business Transformation - Targeting $100m
Business Transformation - Targeting $100m Timing of impact 70 100 30 4 4 4 41 1 1 20 20 1 4 10 11 11 31 1 Income 4 42 8 statement 42 $100m 8 1 & Balance Target 4 14 14 14 sheet impact of 9 $100m 5 1 34 2017 2018 2019 2020 2021 2022 27 onwards Cumulative $100m Sustainable $30m Cost reduction (I/S) Ne
Slide 14: Business Transformation - Implemented $47m
Business Transformation - Implemented $47m Timing of impact 15 50 4 47 45 3 2 40 12 11 38 Income 1 11 35 1 9 statement 18 20 1 30 $47m 27 1 & Balance Implemented 4 4 25 9 3 20 sheet impact of 16 15 $47m 20 6 6 5 10 3 5 17 1 - 2017 2018 2019 2020 2021 Cost reduction (I/S) Cumulative $47m Net Revenue
Slide 15: Business Transformation - Cash flowed $10m
Business Transformation - Cash flowed $10m -0.1 1.3 2.3 2.2 Income $10m statement 0.7 Cash flowed & Balance sheet impact of $10m 7.0 6.5 Mining Processing Working capital & overheads Corporate activities Cost reduction (I/S) Net Revenue increase (I/S) Cash (B/S) $10m net cash flowed to 30 June 201
Slide 16: Group financial performance
Group financial performance The 910 carat Lesotho Legend
Slide 17: H1 2018 – key performance indicators
H1 2018 – key performance indicators Revenue EBITDA 168 68 121 109 $ millions $ millions 93 44 81 36 19 13 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 Basic EPS (pre exceptional items) Cashflow from operating activities 17.68 98 $ millions 63 $ cents 9.70 6.56 44
Slide 18: H1 2018 financial results
H1 2018 financial results H1 2018 H1 2018 H1 2018 Before exceptional Exceptional Post exceptional H1 % $ millions items items items 2017 Variance Revenue 167.7 - 167.7 92.9 81% Royalty and selling costs (14.7) - (14.7) (8.4) Cost of sales (79.3) - (79.3) (66.7) Cost of sales – exceptional - (0.3) (0
Slide 19: Financial performance – Letšeng cost analysis
Financial performance – Letšeng cost analysis Unit cost analysis - LSL per tonne treated Business Non-cash Operating Costs Transformation (BT) accounting costs charges2 Fees and Total Total Tonnes Direct 3rd Plant Once-off Sub - XRT employee direct Total operating treated cash operator maintenance t
Slide 20: Financial performance – corporate costs
Financial performance – corporate costs Continued downward trend Negatively impacted by Fx rates BT savings achieved of $0.4m (before BT fees) 15.3 14.2 13.8 12.4 11.7 11.0 $ millions 9.2 *H1 2018 corporate costs includes $0.5m BT costs $0.2m Project costs 0.7 * 4.6 2011 2012 2013 2014 201
Slide 21: Improving cashflows
Improving cashflows Group cash of $70.5m ($58.1m attributable) Net cash of $29.8m after debt of $40.7m Available facilities of $38.2m Letšeng LSL250m RCF renewed post Period end to July 2021 and increased to LSL500m (increasing available facilities to $56.5m) 180 110 2 43 160 140 120 16 US$
Slide 22: Financial position
Financial position Decrease in non-current liabilities due to loan repayments Increase in current liabilities mainly due to increased tax payable $ millions H1 2018 FY 2017 % Variance Non-current assets 305.7 321.0 Current assets 108.8 91.6 Total assets 414.5 412.6 - Equity attributable to the p
Slide 23: Thank you
Thank you www.gemdiamonds.com The 910 carat Lesotho Legend
Slide 24: Annexure A: 2018 Guidance
Annexure A: 2018 Guidance FY 2018 Guidance Waste stripped (Mt) 24 - 26 Ore treated (Mt) 6.4 - 6.6 Satellite pipe ore contribution (Mt) 2.0 Carats recovered (Kct) 114 - 118 Carats sold (Kct) 112 - 116 Direct cash costs (before waste) per tonne treated1 (Maloti) 165 - 170 Operating costs per tonne tre
Slide 25: Annexure B: Letšeng – five out of top ten in the 21st century
Annexure B: Letšeng – five out of top ten in the 21st century (2000 - 2018) Largest white diamonds recovered in the last 100 years Mine Rank Name Weight Country Year Karowe 1 Lesedi la Rona 1,109 Botswana 2015 Letšeng 2 Lesotho Legend 911 Lesotho 2018 Karowe 3 The Constellation 813 Botswana 2015 Let
Slide 26: Annexure C: Funding and Facilities
Annexure: C Funding and Facilities* Term / Amount Drawn down Available Company Lender Expiry Interest Rate Description ($ millions) ($ millions) ($ millions) Gem Diamonds 3-year RCF South African JIBAR Nedbank December 2020 45.0 25.0 20.0 Limited and term loan + 4.5% Standard Lesotho Bank Letšeng Le
Slide 27: Annexure D: Gem Diamonds capital structure
Annexure D: Gem Diamonds capital structure 6 months Gem Diamonds share price performance Gem Diamonds Limited is listed on the Main Board of the Volume (000s) Price (GBP) London Stock Exchange LSE : GEMD 1.40 2,000 Daily average trading volumes across all 152k Thousands 1,800 1.20 platforms (last 6