Gem Diamonds Limited · LSE:GEMD
Gem Diamonds — Investor Presentation (February 2014)
25 slides from Gem Diamonds's investor presentation, February 2014
Slide 1: Investor Presentation
Investor Presentation February 2014
Slide 2: Disclaimer
1 Investor Presentation February 2014 Disclaimer The following presentations are confidential and are being made only to, and are only No statement in this presentation is intended as a profit forecast or profit estimate and directed at, persons to whom such presentations may lawfully be communicate
Slide 3: Agenda
2 Investor Presentation February 2014 Agenda GEM DIAMONDS’ OPERATIONS GEM DIAMONDS RESOURCE STATEMENT INVESTMENT THESIS DIAMOND MARKET OUTLOOK LETŠENG GHAGHOO SALES & MARKETING GROUP CASH AND FUNDING CORPORATE COSTS OUTLOOK © 2014 GEM DIAMONDS LIMITED
Slide 4: Gem Diamonds' operations
3 Investor Presentation February 2014 Gem Diamonds’ operations Gem Diamonds Limited UK, BVI Gem Diamonds Marketing Services/Baobab Belgium Gem Diamonds Manufacturing/ Calibrated Mauritius Ghaghoo Mine Botswana Letšeng Mine Lesotho Gem Diamond Technical Services South Africa © 2014 GEM DIAMONDS LIMIT
Slide 5: Gem Diamonds resource statement as at January 2013
4 Investor Presentation February 2014 Gem Diamonds resource statement as at 1 January 2013 Letšeng Grade Average Diamond Category Classification Tonnes (millions) (carats/100T) Carats (millions) Price US$/carat Reserves Probable 78.9 1.75 1.38 1 715 Resources Indicated 80.8 1.76 1.42 2 185 Inferred
Slide 6: Investment thesis
5 Investor Presentation February 2014 Investment thesis Strong diamond market fundamentals. Ghaghoo Mine coming into production in H2 2014. Letšeng Mine - highest value diamonds, long life, proven ebitda margin. Improving consumer confidence. Ghaghoo mine in Botswana nearing production – H2 2014. Po
Slide 7: How Gem Diamonds grows value
6 Investor Presentation February 2014 How Gem Diamonds grows value Focused on mining and selling diamonds effectively to maximise returns. The flagship asset - Letšeng mine: Building the Ghaghoo mine: • Enhancing current operating efficiencies. • Significant technical, environmental and social • Lif
Slide 8: Diamond market outlook
7 Investor Presentation February 2014 Diamond market outlook Improved prices in Q4 2013 continuing into Letšeng rolling US$ per carat (including Jan 2014 tender) Q1 2014. 2,500 2,400 Letšeng achieving remarkable prices for its 2,300 2,200 6 month average US$ high value production. 2,100 per carat 2,
Slide 9: Letšeng
8 Investor Presentation February 2014 Letšeng © 2014 GEM DIAMONDS LIMITED
Slide 10: Q4 2013 Letšeng operational review
9 Investor Presentation February 2014 Q4 2013 –Letšeng operational review Letšeng Q4 2013 Q3 2013 % Change FY 2013 FY 2012 % Change Waste mined (mT) 4 079 676 5 136 368 (21%) 19 072 658 17 396 233 10% Ore mined (mT) 1 756 516 1 668 160 5% 6 499 133 6 285 127 3% Ore treated (mT) 1 621 815 1 569 532 3
Slide 11: Q4 2013 Letšeng operational review
10 Investor Presentation February 2014 Q4 2013 Letšeng operational review Letšeng: An average value of US$ 2 533 per carat was achieved for the 3 exports during Q4 2013 (US$ 2 022 per carat in Q3 2013 and US$ 1 703 per carat in Q4 2012). January 2014 tender achieved an average value of US$ 2 673 per
Slide 12: Letšeng resource delivering exceptional diamonds in 2013
11 Investor Presentation February 2014 Letšeng resource delivering exceptional diamonds in 2013 92.9ct sold for US$ 5.3m (US$ 56 494/ct) January 2013 94.4ct sold for US$ 4.6m (US$ 48 619/ct) January 2013 164ct sold for US$ 9.0m (US$ 54 911/ct) April 2013 99.9ct sold for US$ 6.5m (US$ 64 631/ct) July
Slide 13: Letšeng – Addressing diamond damage
12 Investor Presentation February 2014 Letšeng – Addressing diamond damage Decrease in severe breakage following installation of 4 new Kawasaki cone crushers in Plants 1 & 2. 25 +50 carat diamonds recovered since then, to 31 December 2013. 2013 +50 Carat Stones 2.5 200 Introduction of new crushers 2
Slide 14: Letšeng – Project review
13 Investor Presentation February 2014 Letšeng Mine Letšeng – Project review Advanced Technology Coarse Recovery Plant – (estimated cost US$ 14m) • To treat the high value, coarse fraction • Latest XRT technology to ensure total recovery of type II diamonds • Security improvements • Advanced technol
Slide 15: Corporate Social Investment at Letšeng
14 Investor Presentation February 2014 Corporate Social Investment at Letšeng CSRI Action taken Education 32 tertiary scholarships awarded to Basotho nationals to date. Infrastructure 3 woolsheds constructed and handed over to farming communities. 30 latrines and two wells constructed for the Khapha
Slide 16: Ghaghoo
15 Investor Presentation February 2014 Ghaghoo © 2014 GEM DIAMONDS LIMITED
Slide 17: Ghaghoo development update
16 Investor Presentation February 2014 Ghaghoo development update Current Status: 2014 objective: A total of 1 096 meters of tunnel completed at end Complete construction of Phase 1 January 2014. Production build up to nameplate capacity by end 2014. Kimberlite intersected at Level 0 (stockpile at s
Slide 18: Corporate Social Investment at Ghaghoo
17 Investor Presentation February 2014 Corporate Social Investment at Ghaghoo CSRI Action taken Education Workplace training conducted. Establishing a vegetable garden at Lephephe Primary school - generating income for the school by supplying the mine’s canteen; teaching learners business skills. In
Slide 19: Sales and marketing
18 Investor Presentation February 2014 Sales and marketing Strong market knowledge. In-house hi-tech analytical and manufacturing ability. Mapping and analysis of Letšeng rough diamonds, increases understanding of the high value, high quality diamonds. Rough sales strategy Polished sales strategy Ac
Slide 20: Group Health, Safety, Social & Environment
19 Investor Presentation February 2014 Group Health, Safety, Social & Environment 3 LTI’s occurred in the Group during 2013. 2013 LTIFR 0.13 (2012 LTIFR 0.30). 2013 AIFR 2.40 (2012 AIFR 4.45). The Letšeng mine awarded 5-star rating following 2013 IRCA audit for health, safety and enviroment. Zero ma
Slide 21: Group cash and funding
20 Investor Presentation February 2014 Group cash and funding Cash: 31 December 2013 Group cash of US$ 71m; US$ 62m attributable to Gem Diamonds. (30 June 2013 Group cash was US$ 61m). Funding / Facilities: Maloti 250m (US$ 25m) 3-year unsecured revolving credit at Letšeng. US$ 20m 3-year revolving
Slide 22: Corporate costs
21 Investor Presentation February 2014 Corporate costs Alignment of costs to current asset base. Restructuring undertaken in 2013. Steady state costs in 2014 - down to US$ 12m (from US$ 15m). © 2014 GEM DIAMONDS LIMITED
Slide 23: Outlook
22 Investor Presentation February 2014 Outlook Complete development of Ghaghoo – production H2 2014. Mining in Satellite pipe continues in 2014 – updated medium-term planning to ensure more regular production from Satellite pipe. Benefits of decreased diamond damage. Detailed design and estimate on
Slide 24: Appendix – Capital structure
23 Investor Presentation February 2014 Appendix 1 – Capital structure Gem Diamonds Limited - LSE:GEMD Gem Diamonds share price performance and LSE volume last 12 months Major Shareholders at 15 Jan 2014 180 Price (GBp) Volume (‘000) 1,600 Graff Diamonds International Limited 15.12% 170 1,400 Lansdow
Slide 25: Thank You
Thank You © 2014 GEM DIAMONDS LIMITED