Gemfields Group Limited · JSE:GML

Gemfields — Investor Presentation (September 2019)

54 slides from Gemfields's investor presentation, September 2019

1. Slide 1: Investor Update – September 2019

   Investor Update – September 2019

2. Slide 2: Important Notice and Disclaimer

   IMPORTANT NOTICE AND DISCLAIMER This document, which has been compiled by Gemfields Group Limited (the “Company”), comprises the written materials/slides for a presentation concerning the Company, including its business, results of operations and prospects. This document does not constitute or form

3. Slide 3: Group Structure Diagram

   GEMFIELDS GROUP LIMITED GROUP STRUCTURE DIAGRAM 3 20/09/2019 www.gemfieldsgroup.com

4. Slide 4: Board Members

   GEMFIELDS GROUP LIMITED BOARD MEMBERS Non-Executive Chairman Executive Directors Non-Executive Director Brian Gilbertson Sean Gilbertson David Lovett Dr Christo Wiese Chairman Chief Executive Officer Chief Financial Officer (Appointed 4 September 2007) (Appointed 17 July 2017 - (Appointed 31 March 2

5. Slide 5: Share Price Performance (ZAR)

   GEMFIELDS GROUP LIMITED SHARE PRICE PERFORMANCE Gemfields Group Limited closing share prices Gemfields Group Limited closing share prices (18 Sep 2018 - 18 Sep 2019 / 1 Year) – ZAR/share (18 Sep 2014 - 18 Sep 2019 / 5 Years) – ZAR/share 2.2 5.4 2.1 4.9 2 4.4 1.9 3.9 ZAR ZAR 1.8 3.4 1.7 2.9 1.6 2.4 1

6. Slide 6: Share Price Performance (USD)

   GEMFIELDS GROUP LIMITED SHARE PRICE PERFORMANCE Gemfields Group Limited closing share prices Gemfields Group Limited closing share prices (18 Sep 2018 - 18 Sep 2019 / 1 Year) – USD/share (18 Sep 2014 - 18 Sep 2019 / 5 Years) – USD/share 0.16 0.44 0.15 0.39 0.14 0.34 0.13 0.29 USD USD 0.12 0.24 0.11

7. Slide 7: Market Capitalisation (USD million)

   GEMFIELDS GROUP LIMITED MARKET CAPITALISATION (USD million) Gemfields Group Limited (formerly Pallinghurst Resources Limited) vs. Gemfields Ltd (formerly Gemfields plc) 600 500 Gemfields Ltd delisted from AIM (effective 28 July 2019) 400 USD millions 300 200 100 0 18/09/2009 18/09/2010 18/09/2011 18

8. Slide 8: Comparison to Diversified Miners – Key Metrics

   GEMFIELDS GROUP LIMITED COMPARISON TO DIVERSIFIED MINERS – KEY METRICS Diversified Miners TIDM Headquarters FCF Yield (%) Dividend Yield (%) PE Ratio EV/Sales EV/EBITDA Market Cap (USD m) GEMFIELDS GML-ZA St Peter Port 13.8%* N/A 11.0 0.6 3.5 USD 153 MAJORS FQM FM-CA Toronto -10% 0% 18.0 3.3 8.3 USD

9. Slide 9: Operations Overview

   GEMFIELDS GROUP LIMITED OPERATIONS OVERVIEW 9 20/09/2019 www.gemfieldsgroup.com

10. Slide 10: Recent Timeline of Key Corporate Events

    GEMFIELDS GROUP LIMITED RECENT TIMELINE OF KEY CORPORATE EVENTS 10 20/09/2019 www.gemfieldsgroup.com

11. Slide 11: Financial Highlights for the Six Months Ending June

    GEMFIELDS GROUP LIMITED FINANCIAL HIGHLIGHTS FOR THE SIX MONTHS ENDING 30 JUNE 2019 1 Earnings before interest, taxation, depreciation and amortisation 2 Free Cash Flow is calculated as cashflow from operating activities less capital expenditure and tax paid. Free Cash Flow is calculated pre working

12. Slide 12: Segmental Statement of Cash Flows – EBITDA / Free Cash Flow

    GEMFIELDS GROUP LIMITED SEGMENTAL STATEMENT OF CASH FLOWS – (EBITDA / FREE CASH FLOW) FOR THE SIX MONTHS ENDED 30 JUNE 2019 1 Excluding share-based payments and inventory impairments. Zambia operating costs includes US$5.0 million of Zambian Export duty. 2 Includes movements relating to inventory pu

13. Slide 13: Segmental Income Statement

    GEMFIELDS GROUP LIMITED SEGMENTAL INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2019 1 Kagem held one commercial quality and one higher quality auction during the period. MRM held one mixed quality auction during the period. 2 Revenues have been recognised at one point in time, as control passes

14. Slide 14: Segmental Balance Sheet

    GEMFIELDS GROUP LIMITED SEGMENTAL BALANCE SHEET AT 30 JUNE 2019 14 20/09/2019 www.gemfieldsgroup.com

15. Slide 15: UK Corporate Operating Costs (Last 12 Months)

    GEMFIELDS LIMITED (FORMERLY GEMFIELDS PLC) UK CORPORATE OPERATING COSTS (LAST 12 MONTHS) in USD’000 30,000 25,000 20,000 USD'000 15,000 10,000 5,000 - 01/12/2010 01/06/2011 01/12/2011 01/06/2012 01/12/2012 01/06/2013 01/12/2013 01/06/2014 01/12/2014 01/06/2015 01/12/2015 01/06/2016 01/12/2016 01/06/

16. Slide 16: Net Cash/(Debt) Profile

    GEMFIELDS GROUP LIMITED NET CASH/(DEBT) PROFILE, USD’000 USD'000 At 30 June 2019 Cash – USD 75.3 million 90.0 Debt – USD 39.8 million _ 80.0 Net cash/(debt) – USD 35.5 million 70.0 (plus Auction Receivables – USD 28.4 million) 60.0 50.0 40.0 30.0 20.0 10.0 - 30-Jun-10 30-Jun-11 30-Jun-12 30-Jun-13 3

17. Slide 17: Group Gross Debt

    USD'000 20/09/2019 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 1 Figures pre August 2017 relate to Gemfields Lt

18. Slide 18: Marketing, Selling and Advertising Costs

    GEMFIELDS GROUP LIMITED MARKETING, SELLING AND ADVERTISING COSTS (ANNUAL) in USD’000 18,000 16,000 14,000 12,000 10,000 USD'000 8,000 6,000 Up to 30 June 2019 4,000 2,000 - 2012 2013 2014 2015 2016 2017 2018 2019 Selling, Marketing and Advertising 1 Figures for 2019 are for the period 1 January – 30

19. Slide 19: Operations – Kagem, MRM and Fabergé

    Operations – Kagem, MRM and Fabergé

20. Slide 20: YTD 2019 Production and Mining KPIs

    GEMFIELDS GROUP LIMITED YTD 2019 PRODUCTION AND MINING KEY PERFORMANCE INDICATORS (KPIs) MONTEPUEZ RUBY MINING YTD2019 PRODUCTION AND MINING KPIs UNITS KAGEM MINING LTD LDA Premium Emerald/ Premium Ruby Production carats’000 106 49 Total Gemstone Production carats’000 20,582 1,277 Ore Processed tonn

21. Slide 21: Competent Persons Reports

    GEMFIELDS GROUP LIMITED COMPETENT PERSONS REPORTS KAGEM MRM Effective Date 31 December 2017 31 August 2018 Competent Person SRK Consulting SRK Consulting Reporting code - mineral resources and mineral reserves SAMREC Code (2016 edition) SAMREC Code (2016 edition) Net Present Value (post-tax) USD 528

22. Slide 22: Key Revenue Streams

    GEMFIELDS GROUP LIMITED KEY REVENUE STREAMS Revenues: Emerald Auctions + Ruby Auctions + Fabergé Sales Orders Agreed (Last 12 Months, shown monthly, USD million) 200.0 150.0 Faberge Sales Orders Agreed 100.0 Ruby Auctions Emerald Auctions 50.0 0.0 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun

23. Slide 23: Kagem Mining Limited

    GEMFIELDS Responsibly sourced Zambian emeralds and Mozambican rubies. Empowering local communities by establishing schools, education initiatives and scholarships.

24. Slide 24: Kagem Emerald Total Auction Sales

    GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM EMERALD TOTAL AUCTION SALES (USD MILLION) CUMULATIVE REVENUE IS USD 608 MILLION 40.0 36.5 34.9 34.7 35.0 33.1 31.6 31.5 30.0 28.4 26.2 26.8 25.0 22.3 21.5 22.4 USD millions 20.0 19.6 19.2 18.6 16.4 15.2 15.5 14.5 15.0 14.5 14.3 11.0 10.8 1

25. Slide 25: Kagem Gemstone Production

    GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM (LAST 12 MONTHS) GEMSTONE PRODUCTION – EMERALD + BERYL (CARATS) 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 Dec 05 Apr 06 Aug 06 Dec 06 Apr 07 Aug 07 Dec 07 Apr 08 Aug 08 Dec 08 Apr 09 Aug 09 De

26. Slide 26: Kagem Premium Emerald Production

    GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM (LAST 12 MONTHS) PREMIUM EMERALD PRODUCTION (CARATS) 1,400,000 1,200,000 Conclusion of a series of material 1,000,000 changes to the grading system. 800,000 600,000 400,000 200,000 0 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12

27. Slide 27: Kagem Cumulative Annual Premium Emerald Production

    GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM CUMULATIVE ANNUAL PREMIUM EMERALD (PE) PRODUCTION (CARATS) BY CALENDAR YEAR 240,000 220,000 200,000 180,000 160,000 140,000 120,000 105,555 carats 100,000 80,000 60,000 40,000 20,000 0 Actual PE for 2019 Budget PE for 2019 Actual PE for 20

28. Slide 28: Kagem Cumulative Annual Emerald Production

    GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM CUMULATIVE ANNUAL EMERALD (E) PRODUCTION (CARATS) BY CALENDAR YEAR 12,000,000 10,000,000 6,124,545 carats 8,000,000 6,000,000 4,000,000 2,000,000 0 Actual E for 2019 Budget E for 2019 Actual E for 2018 Actual E for 2017 Actual E for 2016 2

29. Slide 29: Kagem Operating Costs and Rock Handling

    GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE 45,000 KAGEM TOTAL OPERATING COSTS, LAST 12 MONTHS (ACTUAL CASH COST BASIS) USD’000 (UNAUDITED) 40,000 35,000 30,000 USD’000 25,000 20,000 15,000 10,000 5,000 0 Feb 10 Feb 11 Feb 12 Feb 13 Feb 14 Feb 15 Feb 16 Feb 17 Feb 18 Feb 19 Aug 09 Aug 10

30. Slide 30: Kagem Unit Rock Handling Costs

    GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM UNIT ROCK HANDLING COSTS (LAST 12 MONTHS, in USD / TONNE OF ROCK MINED) 5.0 4.0 (USD / Tonne) 3.0 2.0 1.0 0.0 Feb 10 Feb 11 Feb 12 Feb 13 Feb 14 Feb 15 Feb 16 Feb 17 Feb 18 Feb 19 Aug 09 Aug 10 Aug 11 Aug 12 Aug 13 Aug 14 Aug 15 Aug 16 Aug

31. Slide 31: Kagem Unit Cost per Carat

    GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM UNIT COST PER PREMIUM CARAT (LAST 12 MONTHS in USD / carat, CASH COST BASIS) 900 800 700 600 USD / Carat 500 400 300 200 100 0 Feb 10 Feb 11 Feb 12 Feb 13 Feb 14 Feb 15 Feb 16 Feb 17 Feb 18 Feb 19 Aug 09 Aug 10 Aug 11 Aug 12 Aug 13 Aug 14

32. Slide 32: Kagem Total Capital Expenditure

    GEMFIELDS GROUP LIMITED KAGEM EMERALD MINE PERFORMANCE KAGEM TOTAL CAPITAL EXPENDITURE (LAST 12 MONTHS, ACTUAL CASH COST BASIS in USD’000, UNAUDITED) 16,000 14,000 12,000 10,000 USD’000 8,000 6,000 4,000 2,000 0 Feb 10 Feb 11 Feb 12 Feb 13 Feb 14 Feb 15 Feb 16 Feb 17 Feb 18 Feb 19 Aug 09 Aug 10 Aug

33. Slide 33: Kagem's Chama Pit

    KAGEM’S CHAMA PIT: (now 140 meters deep) 33 20/09/2019 www.gemfieldsgroup.com

34. Slide 34: Montepuez Ruby Mining Limitada

    Montepuez Ruby Mining Limitada

35. Slide 35: Montepuez Rough Ruby Total Auction Sales

    GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MONTEPUEZ ROUGH RUBY TOTAL AUCTION SALES (USD MILLION) CUMULATIVE REVENUE IS USD 513 MILLION 80 71.8 70 60 54.8 55.0 55.3 50.0 50 USD millions 43.3 44.3 40 33.5 29.3 30.5 28.8 30 20 15.9 10 0 Dec-14 Dec-15 Dec-16 Dec-18 Apr-15 Jun-14 Jun-15 Jun

36. Slide 36: Montepuez Gemstone Production

    GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MONTEPUEZ GEMSTONE PRODUCTION (LAST 12 MONTHS, in CARATS) (PRODUCTION EXCLUDES SAPPHIRE AND LOW SAPPHIRE PRODUCTION) 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18

37. Slide 37: Montepuez Premium Ruby Production

    GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MONTEPUEZ PREMIUM RUBY PRODUCTION (LAST 12 MONTHS, in CARATS) 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 Feb-19 37 20/09/2019 www.gemfieldsgroup.com

38. Slide 38: MRM Cumulative Premium Ruby Production

    GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MRM CUMULATIVE PREMIUM RUBY (PR) PRODUCTION (CARATS) BY CALENDAR YEAR 180,000 160,000 140,000 120,000 100,000 80,000 60,000 48,880 carats 40,000 20,000 0 Actual PR for 2019 Budget PR for 2019 Actual PR for 2018 Actual PR for 2017 Actual PR for

39. Slide 39: MRM Cumulative Ruby Production

    GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MRM CUMULATIVE RUBY (R) PRODUCTION (CARATS) BY CALENDAR YEAR 700,000 600,000 500,000 332,077 carats 400,000 300,000 200,000 100,000 0 Actual TR and R for 2019 Budget TR and R for 2019 Actual TR and R for 2018 Actual TR and R for 2017 Actual TR

40. Slide 40: Montepuez Operating Costs and Rock Handling

    GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MONTEPUEZ LAST 12 MONTH OPERATING COSTS (ACTUAL CASH COST BASIS) USD’000 (UNAUDITED) 40,000 Includes settlement costs relating to claim brought by law firm Leigh Day 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Aug-13 Aug-14 Aug-15 Aug-16

41. Slide 41: Montepuez Unit Rock Handling Cost

    USD / TONNE 10 12 14 16 0 2 4 6 8 20/09/2019 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 GEMFIELDS GROUP LIMITED Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 MONTEPUEZ RUBY MINE PERFORMANCE Jun-16 www.gemfieldsgroup.com Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 O

42. Slide 42: Montepuez Unit Cost per Carat

    GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MONTEPUEZ UNIT COST PER PREMIUM CARAT (LAST 12 MONTHS, in USD/carat, CASH COST BASIS) 1,000.0 800.0 USD / carat 600.0 400.0 200.0 0.0 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Feb-15 Feb-16 Feb-17 Feb-18 Feb-19 MONTEPUEZ UNIT COST PER OVERALL C

43. Slide 43: Montepuez Capital Expenditure

    GEMFIELDS GROUP LIMITED MONTEPUEZ RUBY MINE PERFORMANCE MONTEPUEZ CAPITAL EXPENDITURE (LAST 12 MONTHS, ACTUAL CASH COST BASIS in USD’000, UNAUDITED) 25,000 20,000 15,000 USD’000 10,000 5,000 0 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 Feb-19 43

44. Slide 44: MRM Mugloto Pits

    MRM MUGLOTO PITS (depth = max 12 meters) 44 20/09/2019 www.gemfieldsgroup.com

45. Slide 45: MRM Resettlement Action Plan (RAP)

    MRM RESETTLEMENT ACTION PLAN (RAP) CONSTRUCTION OF 105 HOUSING UNITS AND PUBLIC BUILDINGS ON SCHEDULE FOR HANDOVER BY APRIL 2020 45 20/09/2019 www.gemfieldsgroup.com

46. Slide 46: www.gemfieldsgroup.com

    46 20/09/2019 www.gemfieldsgroup.com

47. Slide 47: Fabergé Performance – Sales Orders and Operating Costs

    GEMFIELDS GROUP LIMITED FABERGÉ PERFORMANCE SALES ORDERS AGREED (LAST 12 MONTHS) OPERATING COSTS (LAST 12 MONTHS) (USD, POST ANY DISCOUNTS, ALL CHANNELS) (USD) 20,000,000 20,000,000 18,000,000 18,000,000 16,000,000 16,000,000 14,000,000 14,000,000 12,000,000 12,000,000 USD 10,000,000 10,000,000 8,00

48. Slide 48: Fabergé Performance – Pieces Sold and Transactions

    GEMFIELDS GROUP LIMITED FABERGÉ PERFORMANCE NO. OF PIECES SOLD, LAST 12 MONTHS NO. OF SALES TRANSACTIONS, LAST 12 MONTHS (NO. OF PIECES, ALL CHANNELS) (NO. OF SALES TRANSACTIONS, ALL CHANNELS) 2,500 900 2,250 800 2,000 700 1,750 600 1,500 500 1,250 400 1,000 300 750 500 200 250 100 0 0 Aug-10 Aug-11

49. Slide 49: Fabergé Performance – Funding Required

    GEMFIELDS GROUP LIMITED FABERGÉ PERFORMANCE FUNDING REQUIRED BY FABERGÉ (LAST 12 MONTHS, in USD) 25,000,000 2015 $23,650,000 22,500,000 20,000,000 2014 $14,100,000 17,500,000 15,000,000 2016 2017 $11,619,958 $11,110,000 12,500,000 USD 10,000,000 31 August 2019 $5,300,000 7,500,000 2018 $4,250,000 5,

50. Slide 50: Corporate

    GEMFIELDS Responsibly sourced Zambian emeralds and Mozambican rubies. Enhancing environmental sustainability by regenerating land and replanting native flora.

51. Slide 51: Board Remuneration

    GEMFIELDS GROUP LIMITED BOARD REMUNERATION Gemfields Group Limited (formerly Pallinghurst Resources Ltd) + Gemfields Ltd (formerly Gemfields plc) Board Remuneration 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 USD 2,500,000 Up to 2,000,000 30 June 2019 1,500,000 1,000,000 500,000 - 2010 2011 20

52. Slide 52: Share Buy-Back / Dividend Update

    GEMFIELDS GROUP LIMITED SHARE BUY-BACK / DIVIDEND UPDATE On 10 May 2019, the Company’s shareholders approved the general authority for the Company to acquire (repurchase) its own ordinary shares. The authority capped the number of shares that may be repurchased to approximately 143 million shares, b

53. Slide 53: Proposed AIM Listing

    GEMFIELDS GROUP LIMITED PROPOSED AIM LISTING • Gemfields Group Limited (“GGL”) is listed on both the Johannesburg (JSE) and Bermudan (BSX) stock exchanges. • JSE ticker ‘GML’ / BSX ticker ‘GML.BH’ • Trading occurs on the JSE listing due to the lack of liquidity on the BSX. Approx. 70% of GGL’s share

54. Slide 54: Contact – New Burlington Place, London

    1 NEW BURLINGTON PLACE LONDON, W1S 2HR UNITED KINGDOM T: +44 (0)20 7518 3400

Gemfields Group — Investor Presentation (September 2019) on 6ix