Petra Diamonds Limited · LSE:PDL
Petra Diamonds — Investor Presentation (May 2021)
39 slides from Petra Diamonds's investor presentation, May 2021
Slide 1: Investor Presentation May 2021
Investor Presentation May 2021
Slide 2: Important Notice
Important Notice These Presentation Materials are being supplied to you by Petra Diamonds Limited (the “Company”) solely for your information and use at this presentation. These Presentation Materials may contain information that is confidential, legally privileged or otherwise protected by law. The
Slide 3: Overview
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Slide 4: Petra is well positioned to deliver from its world class asset base
Adapt to Thrive Petra is well positioned to deliver from its world class asset base • Diversified asset base - Petra has the third largest resources of global listed diamond producers with organic growth opportunities well beyond 2030 • Successfully optimising our portfolio - Project 2022 has elimin
Slide 5: Safety remains our first priority
Relentless Focus on Zero Harm Safety remains our first priority • Ongoing focus on safety – behaviour-based intervention Board Safety Pledge – demonstrates importance campaign: of leading from the top - in-shift safety stops; - visible leadership and management walkabouts; - awareness campaigns; - s
Slide 6: Resilient operating performance
Q3 FY 2021 KPIs Resilient operating performance 9M FY 2021 PRODUCTION 9M FY 2021 REVENUE H1 FY 2021 CAPEX¹ Million carats US$ million US$ million 2.4 -19% 284.2 0% 8.6 -68% 36.4 9.9 3.0 285.2 284.2 2.4 26.5 8.6 9M FY 2020 9M FY 2021 9M FY 2020 9M FY 2021 FY 2020 H1 FY 2021 • 9M FY 2021 production of
Slide 7: Delivering increased EBITDA and FCF in H1 FY 2021
H1 FY 2021 Financial KPIs Delivering increased EBITDA and FCF in H1 FY 2021 ADJUSTED EBITDA¹ OPERATIONAL FREE CASH FLOW US$ million (PRE-RESTRUCTURING FEES) ADJUSTED NET PROFIT / (LOSS) US$ million AFTER TAX¹ 80.8 +20% 54.0 +394% US$ million H1 FY 2020: (10.2) 54.0 2.7 80.8 52.0 67.2 ADJUSTED PROFIT
Slide 8: Responsible Mining – Playing a Positive Role within our Communities
Responsible Mining – Playing a Positive Role within our Communities Petra constructed the Lethabong Day Centre within Launch of the artisanal mining initiative at the Onverwacht school rounds, with 3 classrooms The Cullinan mine provides scholarships and Koffiefontein, which allows for legal and pro
Slide 9: Financial Overview
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Slide 10: H1 FY 2021 Summary of Results
H1 FY 2021 Summary of Results H1 FY 2021 H1 FY 2020 FY 2020 (US$m) (US$m) (US$m) Revenue 178.1 193.9 295.8 Adjusted mining and processing costs1 (99.2) (123.6) (225.3) Other direct income / (expense) 5.1 0.3 2.0 Profit from mining activity1 84.0 70.6 72.5 Exploration expense — (0.2) (0.5) Corporate
Slide 11: Balance Sheet Snapshot
Balance Sheet Snapshot Unit 31 Mar 2021 31 Dec 2020 30 Jun 2020 Closing exchange rate used for conversion R14.77:US$1 R14.69:US$1 R17.32:US$1 Cash at bank (incl. restricted amounts) US$m 153.8 106.3 67.6 Diamond inventories1 US$m 75.5 105.0 84.1 Carats 1,020,973 1,385,402 1,357,584 Diamond debtors U
Slide 12: Net Debt Movement in H1 FY 2021
Net Debt Movement in H1 FY 2021 Operational FCF US$54.0 million 12
Slide 13: Operating Costs
Operating Costs H1 FY 2021 Costs in line with expectations H1 FY 2021 On-mine cash cost breakdown • Absolute on-mine cash costs in H1 FY 2021 reduced by (South Africa operations) 30% vs H1 FY 2020 and in line with expectations due to: – the effect of translating ZAR denominated costs at SA 13% Labou
Slide 14: Impact of ZAR/USD Movement on Petra
Impact of ZAR/USD Movement on Petra • Exchange rate volatility over the past 24 months: 90-95% of operating costs are ZAR – ZAR weakness in first half of 2020 impacted by COVID19 and global denominated* sentiment USD – ZAR strength / USD weakness experienced over the past 12 months USD 90-95% – FY 2
Slide 15: Capital Restructuring completed March 2021
Capital Restructuring completed March 2021 9% Existing Shareholder Equity USD 56% Note US$650m Holders New Equity Principal New Equity outstanding Debt for on existing Equity Swap 2022 Notes 35% Equity to New Available to Money providers of US$49m US$30m in new May and Nov c.US$702m Providers Total
Slide 16: Operations Update
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Slide 17: Mine Contribution Split
Mine Contribution Split Solid production despite operational challenges Production by mine Revenue by mine 2% 2% 8% 9M FY 2021: 9M FY /2021¹: 39% 2.4 million carats $283.9 million 30% 59% 60% Cullinan Finsch Koffiefontein Williamson 2% 10% 18% 43% 9M FY 2020: 9M FY 2020 40% 3.0 million carats $285.3
Slide 18: Cullinan: Project 2022 throughput initiatives delivering increased volumes
Cullinan Project 2022 throughput initiatives delivering increased volumes • Undercut ring blasting commenced – FY 2015 • Production levels established at 839m and shaft to 934m commissioned – FY 2016 • New plant with throughput capacity of 4.0 Mt ROM and 2.0 Mt tailings – commissioned Q1 FY 2018 • G
Slide 19: Finsch: Steady state production from Block 5 SLC
Finsch Steady state production from Block 5 SLC • Block 5 SLC production commenced from first tunnels on 70L – FY 2016 • Production on 75L commenced in Q3 FY 2018; all tunnels in production - Q3 FY 2019 • Construction of ground handling infrastructure completed – Q1 FY 2019 • Overall carat productio
Slide 20: Finsch – Block 5 SLC Progression
Finsch – Block 5 SLC Progression 70 Level 73 Level 70 Level 75 Level 78 Level 73 Level 75 Level 78 Level 20
Slide 21: Waste Ingress at Finsch in the upper levels of Block 5 SLC
Finsch Waste Ingress at Finsch in a number of the upper levels of the Block 5 SLC • Mitigating measures: - revision to draw strategy to limit planned draw tonnage for 4 months - a build-up of inventory rings to allow for increased blasting from March 2021 - a change to drill and blast designs to opt
Slide 22: Koffiefontein: Operating challenges exacerbated by heavy rainfall
Koffiefontein Operating challenges exacerbated by heavy rainfall • Production commenced from 56 Level SLC – FY 2015 • Ground handling system commissioned – Q3 FY 2018 • Production from 60L commenced – Q2 FY 2019 • 9M FY 2021 production down 19% to 50 kcts • Treatment from underground ore mined suppl
Slide 23: Project 2022: Optimising production and driving cost efficiencies
Project 2022 Optimising production and driving cost efficiencies • Project 2022 remains a key focus to further stabilise our operations and ensure that continuous improvement is embedded in our operating model and culture • Project 2022 key drivers are throughput capacity and utilisation increases,
Slide 24: Recovery in Rough Diamond Prices
Rough Diamond Prices Strong consumer demand and destocking in the midstream has led to a recovery in rough diamond prices Actual Actual Actual • Robust midstream demand as inventories of rough and polished 9M FY 2021 9M FY 2020 FY 2020 Mine (US$/ct) (US$/ct) (US$/ct) diamonds remained low thanks to
Slide 25: Favourable Long-term Market Fundamentals
Favourable Long-term Market Fundamentals The supply side outlook continues to contract • Rough diamond production fell 7% to 138.2 Mcts in 2019 with a value of $13.6bn (2018: $14.5bn) • Argyle mine closed 2020; the mine produced around 10% of world supply by volume in 2019 and was only major source
Slide 26: Outlook
Outlook
Slide 27: Outlook: Focus on operational delivery and Project 2022
Outlook Focus on operational delivery and successful implementation of Project 2022 • Stabilising operational performance Continued strong performance at Cullinan driven by Project 2022 throughput improvements Close monitoring and implementation of mitigating measures to address waste ingress at Fin
Slide 28: Appendix
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Slide 29: Capital Structure
Capital Structure Share Price (1 year to 04 May 2021) Major Shareholders as at 04 May 2021 % Voting rights Vontobel Asset Mgt 17.83% Monarch Captial 12.00% Invesco Ltd. 8.43% Bank of America Corporation 7.61% Franklin Templeton Investment Management Ltd. 6.37% Listing LSE: PDL Average daily trading
Slide 30: Board of Directors
Board of Directors Richard Duffy Jacques Breytenbach Varda Shine Peter Hill Senior Independent Non- Independent Non- Chief Executive Finance Director Appointed April 2019 Executive Director Executive Chairman Appointed January 2020 Remuneration, Audit & Executive, HSE, SED and Executive and Investme
Slide 31: Our Assets
Our Assets The heritage of our assets imbues our diamonds with unique character Koffiefontein Cullinan Williamson Finsch 74% Petra; 26% BEE 74% Petra; 26% BEE 75% Petra; 25% Gov of Tanzania 74% Petra; 26% BEE Sub-level cave Block cave / Sub-level cave Open Pit Sub-level cave / Block cave Mine Plan t
Slide 32: A Unique Portfolio
A Unique Portfolio Consistent producers of world-class diamonds with exceptional heritage The Cullinan Heritage 25.5ct blue diamond The Blue Moon of Josephine The Cullinan Dream 507.5ct rough, 104ct polished sold for $16.9m ($663k/ct) 29.6ct rough, 12.0ct polished 122.5ct rough, 24.1ct polished sold
Slide 33: The Letlapa Tala Collection
The Letlapa Tala Collection A unique discovery and the first ever sale of five blue diamonds at one time • In September 2020 Petra recovered five blue diamonds of significant colour, clarity and size at the Cullinan mine, ranging from 9 to 25 carats in size • Blue diamonds are so rare that there are
Slide 34: Global Production
Global Production Only 29 significant kimberlite mines in production today 34
Slide 35: First Ever Global Advertising Campaign for the Natural Diamond Council
The First Ever Global Advertising Campaign for the Natural Diamond Council The NDC aims to reinforce the positive impact of the natural diamond industry and inspire, educate and protect the consumer • In September 2020 the NDC launched its first global advertising campaign ‘For Moments Like No Other
Slide 36: 9M FY 2021 vs. 9M FY 2020 Operational Results
9M FY 2021 vs. 9M FY 2020 Operational Results Cullinan Finsch Koffiefontein Williamson 9M FY 9M FY 9M FY 9M FY 9M FY 9M FY 9M FY 9M FY Unit 2021 2020 2021 2020 2021 2020 2021 2020 ROM PRODUCTION Tonnes treated Tonnes 3,394,451 3,311,850 1,783,057 2,258,945 624,155 797,646 0 3,880,335 Grade cpht 38.4
Slide 37: H1 FY 2021 vs. H1 FY 2020 Operational Results
H1 FY 2021 vs. H1 FY 2010 Operational Results Cullinan Finsch Koffiefontein Williamson H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY Unit 2021 2020 2021 2020 2021 2020 2021 2020 ROM PRODUCTION Tonnes treated Tonnes 2,339,473 2,295,197 1,323,000 1,534,256 493,661 561,296 0 2,654,906 Grade cpht 39.1
Slide 38: Debt Facilities
Debt Facilities New SA Bank debt facilities post restructuring as at 31 March 2021: The Group’s refinanced South African bank facilities comprise a ZAR1.2bn term loan (US$81.3 million) and a ZAR560 million (US$37.9 million) revolving credit facility. As part of the Restructuring, the BEE partner ban
Slide 39: Thank you
Thank you Further enquiries: investorrelations@petradiamonds.com +44 20 74948203 www.petradiamonds.com