Petra Diamonds Limited · LSE:PDL
Petra Diamonds — FY2011 Earnings Presentation
31 slides from Petra Diamonds's earnings presentation, Sep 19, 2011
Slide 1: Results For The Year Ended 30 June 2011
Finsch mine, South Africa Results For The Year Ended 30 June 2011 19 September 2011
Slide 2: Important Notice
Important Notice These Presentation Materials do not constitute or form part of any invitation, offer for sale or subscription or any solicitation for any offer to buy or subscribe for any securities in the Company nor shall they or any part of them form the basis of or be relied upon in any manner
Slide 3: Building A Leading Diamond Producer
Building A Leading Diamond Producer Petra’s growth path – establishing a reserves and resources base of +300 Mcts worth US$56bn July 2007 July 2008 November 2008 May 2010 September 2011 Koffiefontein Cullinan Williamson Kimberley UG Finsch 74% Petra 74% Petra 75% Petra 74% Petra 74% Petra 26% BEE Pa
Slide 4: FY 2011 Highlights
FY 2011 Highlights Finsch mine, South Africa Operations Highlights • Production of 1,117,795 carats (FY 2010: 1,164,856) • Expansion plans on target to increase production to ca. 4 million carats by FY 2014 and over 5 million carats by FY 2019 • Sound cost control despite inflationary pressures • Di
Slide 5: FY 2011 Results Snapshot
FY 2011 Results Snapshot Note: FY 2010 included the sale of the 507 carat Cullinan Heritage diamond for US$35.3 million 5
Slide 6: FY 2011 Summary Of Results
FY 2011 Summary Of Results FY 2011 FY 2010 (US$M) (US$M) Revenue* 220.6 163.7 Mining and processing costs (146.9) (98.9) Other direct income 2.7 2.4 Profit from mining activity* 76.4 67.2 Other income - 5.4 Exploration (expense) / income (1.3) 1.2 Corporate overhead (8.0) (7.5) Deferred taxation on
Slide 7: Operating Cashflows
Operating Cashflows FY 2011 FY 2010 (US$M) (US$M) Group net profit after tax 59.2 70.2 Income tax credit (expense) 5.2 (1.2) Profit before taxation 64.4 69.0 Adjusted for non cashflow items 3.6 (10.0) Cash generated before working capital changes 68.0 59.0 Increase in net working capital (15.8) (6.9
Slide 8: Balance Sheet Snapshot
Balance Sheet Snapshot FY 2011 FY 2010 (US$M) (US$M) Cash and cash equivalents: Bank 324.9¹ 34.5 Diamond inventories 13.3 15.0 Total 338.2 52.7 Loans, borrowings and deferred consideration: IFC / RMB debt facilities (ca. US$83m in total) 75.5 nil Al Rajhi loan (coupon 8%) nil 32.0 Deferred Cullinan
Slide 9: FY 2011 – Operations Results
FY 2011 – Operations Results Operation Cullinan Koffiefontein Kimberley Fissures Williamson Underground FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 Sales Revenue (US$M) 140.2 127.0 30.8 22.8 18.2 n/a 21.8 13.5 9.5 14.4 Diamonds sold (carats) 944,405 903,861 54,640
Slide 10: Costs & Capex
Costs & Capex Operation Cullinan Koffiefontein Kimberley Fissures Williamson Underground FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 Costs On-mine cash cost per tonne 164 167 115 123 191 n/a 684 669 n/a n/a treated (ZAR) Cost Breakdown % Labour 43.9 46.4 40.0 40.9
Slide 11: Safety Performance
Safety Performance • Health and safety of employees is top priority for management • Formation of Board level HSSE Committee post year-end • January 2011 – regrettable fatality occurred at Koffiefontein • Petra striving for zero harm across its operations 11
Slide 12: Diamond Market – Strong Fundamentals
Diamond Market – Strong Fundamentals • Strong market in FY 2011 underscored by firm retail demand (both new & established markets) • Rough prices in all categories rose substantially but small gem diamonds saw exceptional growth – trend towards higher content in jewellery & luxury goods (e.g. eterni
Slide 13: Diamond Market – Key Drivers
Diamond Market – Key Drivers • Urbanisation trend – by 2025: 221 Chinese cities with +1m population (vs 107 cities in Europe, Japan, US combined) • Diamond engagement ring trend rising in urban centres in China and India: +11m marriages in China pa; +10m in India pa • Diamond consumption per capita
Slide 14: Diamond Prices
Diamond Prices Actual tender prices: Mine Average price for Average price for Average price for Average price for H2 FY 2011 H1 FY 2011 FY 2011 FY 2010 (US$) (US$) (US$) (US$) Cullinan 178 120 148 141 (101 excluding the Cullinan Heritage) Koffiefontein 756 470 564 402 Kimberley Underground 355 285 3
Slide 15: Production & Revenue Split – FY 2011 & Projected FY 2019
Production & Revenue Split – FY 2011 & Projected FY 2019 Gross Production Gross Revenue FY 2011: 1.1 million carats FY 2011: US$221 million FY 2019: 5.4 million carats FY 2019: US$1,294 million* FY 2019 figures are management estimates * Calculated using a 4% real price increase 15
Slide 16: Cullinan – Mining Overview
Cullinan – Mining Overview Expansion Plan – Key Components Cullinan Mining Schematic • South Decline to establish production at 830m and then on to the bottom of the new shaft at 930m – end FY 2012 Current Infrastructure (breakaway already Men & Material established at 830m) Shaft Planned Infrastruc
Slide 17: Finsch – A New Flagship Asset
Finsch – A New Flagship Asset • Acquisition of Finsch completed 14 September 2011 • Will add ca. 1 Mct for FY 2012 • State-of-the-art infrastructure & modern plant • Resource of 43.3 Mcts, incl. 25.8 Mcts reserves & 2.5 Mcts tailings • Petra to operate Finsch at 1.5 Mcts pa initially, rising to ~2 M
Slide 18: Finsch – Mining Overview
Finsch – Mining Overview Expansion Plan – Key Components Finsch Mining Schematic • Mining currently taking place in Block 4 at 630m – FY Vent Production 2012 Shaft Shaft • Treatment of Pre 1979 Tailings – until FY 2015 • Accessing and development Precursor of Precursor SLC at 630m – SLC Block 4 Rema
Slide 19: Exceptional Organic Growth Profile
Exceptional Organic Growth Profile 19 All forecasts are management estimates
Slide 20: Focus & Outlook
Focus & Outlook Production Cullinan mine, South Africa • Successful integration of Finsch brings step-change in production for FY 2012 • Managing ROM grades at Cullinan and roll-out of 1Mt tailings operation in FY 2012 • Ramp-up production at Kimberley Underground – full year from Joint Shaft and co
Slide 21: Thank You
Finsch mine, South Africa Thank You
Slide 22: Capital Structure
Capital Structure High Quality Shareholder Base 16 Sep 2011 Share Price Chart Al Rajhi Holdings W.W.L. 13.3% Saad Investments Company Ltd/AWAL Bank 12.2% JP Morgan Asset Management (UK) Ltd 8.6% Capital Group International, Inc. 7.3% Scottish Widows Investment Partnership 6.4% BlackRock Investment (
Slide 23: The Petra Board
The Petra Board Adonis Pouroulis Johan Dippenaar David Abery Jim Davidson Chairman CEO Finance Director Technical Director Successful mining entrepreneur One of South Africa’s most Extensive experience as Chief Acknowledged world authority successful diamond Financial Officer in South on kimberlite
Slide 24: World-Class Reserves & Resources
World-Class Reserves & Resources Gross Carat Base – 309.1Mcts Gross In-Situ Value – US$56bn* 48.1 5.7 0.8 4.6 Cullinan 7.5 Cullinan 2.1 Williamson 203.3 Williamson 23.6 5.7 Koffiefontein Koffiefontein 2.3 Kimberley Kimberley 40.0 Fissures Fissures Finsch Finsch 8.0 * Internal estimate calculated by
Slide 25: A Diversified Production Portfolio
A Diversified Production Portfolio Limpopo Helam Cullinan Mpumalanga Williamson North West Province Johannesburg Gauteng KwaZulu‐ Sedibeng Star Natal Finsch Free State Kimberley Northern Cape Koffiefontein Production Durban South Africa South Africa • Cullinan Eastern Cape • Koffiefontein • Kimberle
Slide 26: Williamson – Mining Overview
Williamson – Mining Overview Expansion Plan – Key Williamson Kimberlite Pipe Schematic Components • Stockpile (due to pit shaping activities) of ca. 1km 900,000 t (ca. 50,000 cts) N • Enhanced rebuild of existing plant (3 Mtpa) near completion – expected to be in LOM Pit Shell production Q3 FY 2012
Slide 27: Koffiefontein – Mining Overview
Koffiefontein – Mining Overview Expansion Plan – Key Koffiefontein Kimberlite Pipe Schematic Components • Installing new front cave at 590m Level – FY 2013 • Installing new block cave at 690m Level – FY 2016 • Tailings programme now ramped up with Petra processing +0.5 Mtpa 27
Slide 28: Kimberley Underground – Mining Overview
Kimberley Underground – Mining Overview Expansion Plan – Key Kimberley Underground Kimberlite Pipes Schematic Components • Bedding down Joint Shaft Plant after initial commissioning issues • Constructing and commissioning of mobile pan plant (40,000 tpm) at Wesselton – September 2011 • Constructing
Slide 29: Aim Of Expansion Programmes – Undiluted Ore
Aim Of Expansion Programmes – Undiluted Ore Schematic - block cave mining method Virgin kimberlite ore • Current mining at underground pipe mines taking place in diluted mature caves and low grade remnants • Expansion programmes will open up fresh block caves, delivering undiluted ore in higher grad
Slide 30: Capex Profile
Capex Profile Financial Year 2012 2013 2014 2015 2016 2017 2018 2019 Operation Area Finsch Existing Block 4 (630 meter Level) ‐ Block 4 pillars ‐ SLC Block 4 precursor ‐ SLC 770 meter Level ‐ Block 5 880 meter Level Development tonnes ROM Tonnes (Mt) 2.2 3.2 3.2 3.2 3.5 3.5 3.5 3.5 Tailings Tonnes (
Slide 31: Petra Diamonds
Petra Diamonds Cathy Malins cathym@petradiamonds.com +44 20 7318 0452 www.petradiamonds.com