Petra Diamonds Limited · LSE:PDL
Petra Diamonds — Investor Presentation (November 2023)
36 slides from Petra Diamonds's investor presentation, November 2023
Slide 1: Investor update November 2023
creating abundance from rarity Investor update November 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: Company overview
Company overview The plant at Cullinan Mine
Slide 4: Petra is the leading independent natural diamond miner
Petra is the leading independent natural diamond miner We primarily supply the manufacturing industry with gem/near gem quality natural diamonds safely and to the highest ethical standards Our mines produce a range of diamonds, from very large, highest quality gemstones spanning Type II white to yel
Slide 5: Building a resilient business
Building a resilient business A diversified portfolio of Proactive approach to Embedding sustainability long-life assets managing price cycles ✓ Petra manages one of the world’s ✓ Flexible approach to extension ✓ Safety our Number 1 priority largest diamond resources projects at Cullinan Mine & Fins
Slide 6: Safety - our number 1 priority
Safety - our number 1 priority Underground employees conducting mini risk assessment LTI and LTIFR1 1.00 40 35 0.75 30 LTIFR 25 0.50 20 LTI 15 0.25 10 5 0.00 0 FY24 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 YTD LTI's 27 27 32 35 25 16 19 25 15 17 2 LTIFR 0.32 0.29 0.29 0.27 0.23 0.21 0.29 0.
Slide 7: Operating and financial highlights
Operating and financial highlights1 Total tonnes treated (Mt) Diamonds produced (Mcts) Average price (US$/ct)2 Revenue (US$m) 12.6 3.20 11.9 2.90 135 3.32 116 564 2.67 161 139 11.2 9.0 325 FY22 FY23 FY24e FY22 FY23 FY24e FY22 FY23 FY24e FY22 FY23 CAPEX (US$m)3 Adjusted EBITDA (US$m) Operational FCF
Slide 8: Implementing a well-structured Sustainability Framework
Implementing a well-structured Sustainability Framework Operationalisation of our Sustainability Framework underway Recent developments KPIs embedded into business objectives Valuing our • Increased focus on proactively identifying and mitigating safety risks PEOPLE • Co-creation and implementation
Slide 9: Investment thesis
Investment thesis 1 Production growth remains intact despite temporary pause on development rates - Near-term production increase to potentially coincide with improved pricing environment 2 Structurally supportive diamond market - Diamond supply has peaked, and growth is limited to 1-2% p.a. - Luxur
Slide 10: Diamond market update
Diamond market update The plant at Cullinan Mine
Slide 11: Pricing trends
Pricing trends Recent pricing reflective of prevailing macro-economic Petra’s av. price split by run-of-mine (ROM) and Exceptional uncertainties1 Stones (US$15 million or higher)1 250 180 US$/ct 160 Index (US$, rebased to 100) 200 140 120 152.6 150 100 80 100 60 40 50 20 - H1 FY21 H2 FY21 H1 FY22 H2
Slide 12: Recent natural diamond market commentary
Recent natural diamond market commentary • Major producers working to manage supply and stimulate demand Indian exports monthly from Mar 2018 to Oct 20231 • DeBeers and Alrosa providing full flexibility for rough diamond allocations; Alrosa withheld sales in Sept & Oct US$m 3000 • De Beers announces
Slide 13: 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 14: Product mix geared to supportive fundamentals
Product mix geared to supportive fundamentals Natural diamond supply has peaked1 (Mcts) Middle-class to increase by 700m people by 20302 160 4.5 40 150 4.0 35 140 3.5 30 US$ trillion 3.0 Spending (right) 130 Billion 25 2.5 120 20 2.0 110 15 1.5 10 100 1.0 0.5 Population (left) 5 90 0.0 0 80 2020 203
Slide 15: Laboratory-grown gem diamonds diverge as a separate product category
Laboratory-grown gem diamonds continue to diverge as a separate product category with a lower price point LGDs and natural diamonds can together grow the overall diamond Pricing divergence continues for larger categories2 market, but they are two distinct product categories 100% • Production capacit
Slide 16: Considerations beyond pricing and value
Considerations beyond pricing and value Laboratory-grown diamonds are manufactured within Natural diamonds were formed billions of years ago and each weeks one is unique and rare • Two manufacturing processes exist (‘Chemical Vapour • Diamond-bearing kimberlites are rare; of 6,800 sampled Deposition
Slide 17: Project update
Need to replace since employee has left Project update 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 assumptions2 2030 2040 2050 FY 2023 FY 2024 Approved mine plan to Rough diamond price actual & assumed1 Cullinan Resource 2032 Future projects: C-Cut Centre / Min
Slide 19: Cullinan mine, project update and future potential
Cullinan mine, project update and future potential Dumps Plant Shaft DevelopmentExtension projects projects (underway) Current mining C-Cut extension (T46 & T50 and C-Cut Current mining Centre) C-Cut • On pause until end June 2024 • Block cave mining to continue • 2.3Mcts originally expected to unti
Slide 20: Finsch mine
Finsch mine Resource supports significant opportunity to extend beyond current mine plans FY 2023 actual vs. FY 2024 guidance and price assumptions2 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,
Slide 21: Finsch: further extension opportunities
Finsch: further extension opportunities Plant Shaft Dumps Current Production Current mining 4-level Upper Block 5 SLC DevelopmentExtension projects projects (underway) Recent improvements to production Lower Block 5 3-Level SLC have resulted from: • On hold until end of June 2024 • Recruitment of pe
Slide 22: Williamson mine
Williamson mine Resource supports significant opportunity to extend beyond current mine plans FY 2023 actual vs. FY 2024 guidance and price assumptions1 2030 2040 2050 FY 2023 FY 2024 Williamson Resource Approved mine Future projects: Open pit Rough diamond price actual & assumed1 Orebody continues
Slide 23: 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
Slide 24: Financial overview
Financial overview A necklace from Boodles’ Peace of Mined collection which showcases stones exclusively sourced from Cullinan Mine
Slide 25: Prudent steps to generate cash savings of up to US$75m
Prudent steps to generate cash savings of up to US$75m1 during period of pricing uncertainty Targeted reduction to capex programme Increasing headroom and financial flexibility • Aiming for up to US$65 million in development capital savings • In discussions to increase existing ZAR1 billion Revolvin
Slide 26: Balance sheet snapshot
Balance sheet snapshot US$m (unless otherwise stated) As at As at As at 30 Sept 2023 30 June 2023 30 June 2022 Cash at bank (including restricted amounts) 74.3 61.8 288.2 Diamond debtors 33.0 8.9 37.4 Diamond inventories1,2 (US$m) 51.8 65.9 52.7 (Carats) 479,430 715,222 453,380 Loan notes (issued Ma
Slide 27: Disciplined capital allocation in FY 2023
Disciplined capital allocation in FY 2023 Priority 1 Priority 2 Operational and social license to operate Approved mine extension projects at Cullinan Mine and Finsch Optimum stay in business capital Service debt obligations Objective: Objective: Generate value through mine life extensions beyond cu
Slide 28: FY 2024 Outlook
FY 2024 Outlook Ongoing stabilisation and optimisation of operations Cullinan Mine: stabilised; continue to develop 813 and 833 Levels to ensure higher grade ore is brought to production from end June FY24 Finsch: manage near term volatility; continue development of 78-Level Phase II project to brin
Slide 29: Appendix
Appendix Tunnel in Cullinan Mine
Slide 30: 15 years of progress on sustainability
15 years of progress on sustainability Since 2008, Petra has managed and disclosed its performance on the most material ESG issues The major milestones on our sustainability journey to date: 2008 2013 2017 2019 Download our most recent Petra produces its first Petra commences climate Petra’s Sustain
Slide 31: FY 2023 financial highlights
FY 2023 financial highlights US$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 32: 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 33: Consolidated net debt movement (FY 2023)
Consolidated net debt movement (FY 2023) Operational FCF (US$66.5 million) Investor Update - Nov 2023 33
Slide 34: 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 pressures USD • Q1 FY 2024 closing exchange rate as at 30 September 2023 US$1:ZAR18.92 (Q1 FY 2023 USD US$1:ZAR18.15) Increase
Slide 35: FY 2024 cost breakdown – fixed (77%) and variable (23%)
FY 2024 cost breakdown – fixed (77%) and variable (23%) Investor Update - Nov 2023 35
Slide 36: Reduction in gross debt
Reduction in gross debt 400 US$m Disciplined capital allocation to maximise value generation • 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 • Generate sufficient balance sheet headroom to
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