Petra Diamonds Limited · LSE:PDL
Petra Diamonds — Shareholder Meeting (November 2019)
34 slides from Petra Diamonds's shareholder meeting presentation, Nov 29, 2019
Slide 1: Foundations for the future
Foundations for the future Petra Diamonds Limited Annual General Meeting – 29 November 2019
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: Chief Executive Review
Chief Executive Review Richard Duffy
Slide 4: Board of Directors
Board of Directors Adonis Pouroulis Richard Duffy Jacques Breytenbach Tony Lowrie Dr Patrick Bartlett Non-Executive Chairman Chief Executive Finance Director Senior Independent Independent Non-Executive Appointed 1 April 2019 Non-Executive Director Director Nomination Committee Audit & Risk Committe
Slide 5: Taking Stock: One of the world's top independent diamond producers
Taking Stock One of the world’s top 5 independent diamond producers Cullinan Finsch Williamson Koffiefontein 74% Petra; 26% BEE 74% Petra; 26% BEE 75% Petra; 25% Gov of Tanzania 74% Petra; 26% BEE Block cave / Sub-level cave Sub-level cave / Block cave Open Pit Sub-level cave Mine Plan to 2029 Mine
Slide 6: A Unique Portfolio
A Unique Portfolio Consistent producers of world-class diamonds with exceptional heritage The Star of Josephine The Cullinan Heritage 25.5ct blue diamond The Blue Moon of Josephine 26.6ct rough, 7.0ct polished 507.5ct rough, 104ct polished sold for $16.9m ($663k/ct) 29.6ct rough, 12.0ct polished sol
Slide 7: Positioned to make a Difference
Positioned to make a Difference The diamond mining industry generates $16 billion in net positive socioeconomic and environmental benefits Petra Diamonds Limited: 2019 AGM 7
Slide 8: Our Contribution in FY 2019
Our Contribution in FY 2019 Driving sustainable development in our local communities Our Values Petra Diamonds Limited: 2019 AGM 8
Slide 9: Relentless Focus on Zero Harm
Relentless Focus on Zero Harm Steady improvement in safety performance over 10 year period • Safety is our most important personal and organisational value • Board safety pledge (right) shows importance of leading from the top • LTIFR reduced by 70% and LTIs by 64% over last 10 years, despite a 19%
Slide 10: Shaping a Sustainable Business
Shaping a Sustainable Business By developing our assets responsibly, we unlock value for all stakeholders Our People • Extensive education, training and development from school pupils to staff 1 and wider community members • Ca. $6.6m training spend in FY 2019 Occupational Health • 100% of employees
Slide 11: Favourable Long-term Market Fundamentals
Favourable Long-term Market Fundamentals The supply side outlook continues to contract • Rough diamond production fell 2% to 148.4 Mcts in 2018 with a value of $14.5bn (2017: $14.1bn) • Argyle mine to close in 2020; produced around 10% of world supply in 2018 and only major source of pink diamonds g
Slide 12: Evolution of Management Structures
Evolution of Management Structures Flatter management structure sees operations report directly to the CEO • Upon appointment of new CEO in April 2019 • Executive Committee above to drive delivery of our strategy • Organisational design review completed, with aim to maximise efficiency of our operat
Slide 13: Foundations for the Future
Foundations for the Future Completion of heavy capital intensive phase US$ 10 year capital investment programme and 3 year outlook 350 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 • Petra has completed major capital expansion programmes across each of its
Slide 14: Consistent Operational Delivery against Market Expectations
Consistent Operational Delivery against Market Expectations Q1 FY 2020 saw the highest ROM tonnes and carats in Petra’s history ROM tonnes treated 8000 000 Q1 FY 2020 7000 000 6000 000 • Production +1% to 1.08 Mcts 5000 000 4000 000 • On track to deliver 3.8 Mcts for FY 2020; each 3000 000 operation
Slide 15: Generation of Free Cash Flow to reduce Leverage
Generation of Free Cash Flow to reduce Leverage Project 2022 expected to start delivering benefits from H2 FY 2020 • Initial target of $150-200 million¹ free cash flow over three year period² • Change management exercise – important cultural shift reinforced by continuous employee engagement and CEO
Slide 16: Support of Diamond Market via DPA
Support of Diamond Market via DPA The DPA aims to actively influence consumer demand for diamonds Global consumer demand grew 2% in 2018 to $76bn¹ Dispelling myths about our industry • China (+4.7%) and the US (+4.5%) were the fastest growing regions Generic marketing • Budget of +$70m for 2019; pri
Slide 17: Support of Diamond Market via DPA: The Diamond Journey
Support of Diamond Market via DPA New hero campaign “The Diamond Journey” follows the 3 billion year odyssey of a diamond from genesis to jewellery • Cinematic short film captures the transformation of a beautiful rough diamond into the ultimate representation of love, commitment and meaningful mome
Slide 18: Outlook
Outlook Focus on the execution of Project 2022 to reduce leverage against the backdrop of a challenging diamond market 3 Year Succession Plan implemented and Evolution of Board and Senior Management organisational design review completed Consistent operational delivery against Operations running acc
Slide 19: Appendix
” PetraDiamonds Appendix
Slide 20: Capital Structure
Capital Structure Share Price (1 year to 26 November 2019) Major Shareholders as at 26 November 2019 % Voting rights Standard Life Aberdeen plc 15.2% M&G Plc 10.2% Cobas Asset Management 5.0% Lazard Asset Management 4.9% Directors 2.0% Listing LSE: PDL Petra Diamonds Corporate Bond Average daily tra
Slide 21: Balance Sheet Snapshot
Balance Sheet Snapshot • Increase in net debt at 30 Sep 2019 is due to only one tender in Q1 • Bank facilities of R1.5 billion fully undrawn and available (FX movement causes USD value to fluctuate) Unit 30 Sep 2019 30 Jun 2019 Closing exchange rate used for conversion R15.16:US$1 R14.07:US$1 Cash a
Slide 22: Diamond Market Performance
Diamond Market Performance Short term headwinds affecting pricing Q1 FY 2020 FY 2019 Diamond Market Performance Rough Diamond Prices US$/ct US$/ct • Challenging conditions in FY 2019 driven by a weakening in Finsch 81 99 global markets, trade tensions between the US and China, higher than normal pol
Slide 23: Finsch
Finsch Steady state production from Block 5 SLC to be reached in H2 FY 2020 • Block 5 SLC production commenced from first tunnels on 70L – FY 2016 • Production on 75L commenced in Q3 FY 2018; all tunnels in production in Q3 FY 2019 • Construction of ground handling infrastructure completed in Q1 FY
Slide 24: Block 5 SLC Progression
Finsch continued Block 5 SLC Progression 70 Level 73 Level 70 Level 75 Level 78 Level 73 Level 75 Level 78 Level Petra Diamonds Limited: 2019 AGM 24
Slide 25: Cullinan
Cullinan Steady state production from C-Cut Phase 1 and CC1E to be reached in FY 2020 • 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 in Q
Slide 26: C-Cut Progression
Cullinan continued C-Cut Progression At 30 Jun 2019, 91 draw bells completed out of 107 scheduled 16 ha at 830 mL • Draw-bell installations planned to be completed in H1 FY 2020; draw points will be maturing over a 12 month period • Cave was started in SW area due to geotechnical considerations to e
Slide 27: Koffiefontein
Koffiefontein Steady state production from SLC was reached in FY 2019 • Production commenced from 56 Level SLC – FY 2015 • Ground handling system commissioned – Q3 FY 2018 • Production from 60L commenced – Q2 FY 2019 • SLC Production Ramp Up – FY 2017 – 0.6 Mt – FY 2018 – 0.7 Mt – FY 2019 – 1.0 Mt –
Slide 28: Williamson
Williamson Steady state production achieved in FY 2018 • New mill plant commissioned H2 FY 2017 • FY 2018 production – 341 Kcts • FY 2019 production of 399 Kcts (best production since 1977) and sales revenue of $93.0m • FY 2019 ROM throughput of ca. 5.0 Mt supplemented by alluvial production of ca.
Slide 29: FY 2019 vs. FY 2018 Operational Results
FY 2019 vs. FY 2018 Operational Results Finsch Cullinan Koffiefontein Williamson FY FY FY FY FY FY FY FY Unit 2019 2018 2019 2018 2019 2018 2019 2018 ROM PRODUCTION Tonnes treated Tonnes 3,073,479 3,084,395 4,119,406 3,741,086 1,000,726 649,259 5,082,319 4,659,563 Grade cpht 56.1 62.5 38.6 35.9 6.4
Slide 30: Bank Debt Facilities – Covenants
Bank Debt Facilities – Covenants Bank debt facilities undrawn and available to the Group as at 30 June 2019 of R1.5 billion (ca. $106.6 million), in addition to cash at bank of $85.2 million Maintenance Covenants Distribution Covenants 12 months to 12 months to 12 months to 12 months to 12 months to
Slide 31: Debt Facilities
Debt Facilities Utilised at Commitment fee Size Size US$M1 Interest Rate Lender Type 30 June 2019 on undrawn Repayment ZARM facilities US$M1 ZAR Revolving 1M JIBAR + Absa & Nedbank 1,000 71 0 1.35%2 October 2021 credit facility 5.0%2 Absa & RMB ZAR Working SA Prime – Subject to 500 36 0 0.85% (FNB)
Slide 32: Analyst Guidance FY 2020 – Group Capex Profile
Analyst Guidance FY 2020 – Group Capex Profile 1 All Capex numbers stated in FY 2020 money terms (ZAR14.0/US$1 where applicable) 2 Depreciation on mining assets for FY 2020 guided at ca. US$85-90 million at R14.0/US$1 Petra Diamonds Limited: 2019 AGM 32
Slide 33: Tailings Residue Deposit Management in line with Best Practice
Tailings Residue Deposit Management in line with Best Practice • In South Africa risk-based mandatory Codes of Practices (“COP”)1 are available for all residue deposits at our mines as required by, and according to set guidelines from the Department of Mineral Resources (DMR), Mine Health and Safety
Slide 34: Thank you
Thank you Further enquiries: investorrelations@petradiamonds.com +44 20 74948203 www.petradiamonds.com