Gem Diamonds Limited · LSE:GEMD
Gem Diamonds — Investor Presentation (June 2017)
25 slides from Gem Diamonds's investor presentation, June 2017
Slide 1: Investor Presentation
Investor Presentation June 2017
Slide 2: Disclaimer
Disclaimer The following presentations are confidential and are being made only to, and are only directed at, persons to whom such Presentations may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on these presentations or any of their co
Slide 3: Agenda
Agenda Gem Diamonds at a Glance Operational Overview Market and Pricing Financial Highlights HSSE Overview 3
Slide 4: Gem Diamonds
Gem Diamonds Leading global producer of high value diamonds Clear focus on creating value through optimising the Letšeng mine and reviewing operations at the Ghaghoo mine in line with market conditions Seeks to maximise revenue through its internal sales operation in Belgium and through captur
Slide 5: Remarkable recoveries from Letšeng
Remarkable recoveries from Letšeng Letšeng Legacy Letšeng Star Letšeng Destiny 493ct 550ct 314ct 2007 2011 2015 2006 2008 2014 2015 Lesotho Promise Leseli La Letšeng Yellow Letšeng Dynasty 603ct 478ct 299ct 357ct 5
Slide 6: Operational footprint
Operational footprint Gem Diamonds Limited UK, BVI 2 employees Gem Diamonds Sales, Marketing and Manufacturing Belgium 8 employees Ghaghoo Mine Botswana 60 employees/contractors Letšeng Mine Gem Diamond Technical Services Lesotho South Africa 1 431 24 employees employees/contractors 6
Slide 7: Operations - Letšeng
Satellite pit at Letšeng open-pit mine Operations - Letšeng 7
Slide 8: Letšeng 2016 operational performance
Letšeng 2016 operational performance Waste mined (tonnes millions) Severe 2016 weather impact contained 29.8 24.0 Revised production targets achieved 19.1 19.9 17.4 1.7 million tonnes Satellite pipe contribution 2012 2013 2014 2015 2016 Recovered grade 1% above reserve Ore treated (tonnes mi
Slide 9: Delivering value at Letšeng
Delivering value at Letšeng Initiatives undertaken to unlock additional value • Updated open-pit life of mine plan • Large diamond recovery and breakage initiative projects • Mining optimisation project: • Fleet management system • Improved mining processes Improvement in the size and quality of dia
Slide 10: Letšeng 2017 open pit Life of Mine plan
Letšeng 2017 open pit Life of Mine plan Increase in ore treated tonnes from 6mtpa to 7mtpa for life of mine Satellite pipe ore contribution increased from 1.65mtpa to 1.80mtpa up to 2018 and 2.0mtpa from 2019 to 2029 Reduced capital requirement over life of mine Near term improved cashflows
Slide 11: Letšeng resource performance
Letšeng resource performance Of the 100 highest US$ per carat Large high value diamonds diamonds produced over the last six account for 70 - 80% of revenue years, twelve were recovered in 2016 23 22 17 10% +10 cts 13 13 14% 12 5-10 cts -5 cts 77% 2011 2012 2013 2014 2015 2016 4 14 Lower volume
Slide 12: Letšeng capital forecast
Letšeng capital forecast Letšeng 5 year capital plan 2017 2018 2019 2020 2021 Total tonnes mined (millions) 38.7 39.0 39.0 45.2 45.0 Tonnes treated (million) 7.0 7.0 7.0 7.0 7.0 Project capital (US$m) 15 11 11 7 - Stay in business capital (US$m) 6 9 9 9 8 Capital intensity (US$/tonnes mined) 0.55 0.
Slide 13: Operations - Ghaghoo
Processing plant at Ghaghoo underground mine Operations - Ghaghoo 13
Slide 14: Ghaghoo operational overview
Ghaghoo operational overview Downsizing strategy completed in 2016 • Production rate reduced to 300 000 tonnes per annum • Operating costs reduced Operation placed on care and maintenance on 16 February 2017 due to ongoing market constraints • Sale of final c13 000 carats to take place during Q2
Slide 15: Diamond Market, Sales, Marketing & Manufacturing
88.43 carat white Letšeng diamond sold for c.US$ 48 000 per carat in 2016 Diamond Market Sales, Marketing & Manufacturing 15
Slide 16: Diamond market
Diamond market Global economic backdrop • Continuing macro-economic uncertainty • Slower growth in Chinese economy • Demonetisation in India • Positive economic trends in US Diamond market • Stabilised demand and high inventory levels in China • Continued US recovery • Liquidity • Polished inven
Slide 17: Diamond pricing
Diamond pricing Gem Diamonds market position • Letšeng prices for high quality diamonds remains firm • Market for Ghaghoo commercial goods remains constrained Medium to long-term outlook • Demand trends expected to grow in real value terms • New mines bolster short-term supply, long-term supply
Slide 18: Sales, marketing and manufacturing overview
Sales, marketing and manufacturing overview Flexible sales strategy to capitalise on opportunities in both the rough and polished markets Downstream manufacturing and partnering activities continue to maximise value Robust prices achieved for Letšeng's high quality production in challenging ma
Slide 19: Financial Overview
CAT777 truck at Letšeng mine Financial Overview 19
Slide 20: Full year 2016 results overview
Full year 2016 results overview Revenue EBITDA / EBITDA margin (%) 42% 271 39% 120 249 37% 100 33% 106 33% 202 213 104 190 USD Millions 80 USD Millions 79 67 60 63 40 20 - 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Basic EPS (pre exceptional items) Free cash flow from operations 61 21 USD Mil
Slide 21: HSSE Overview
Fresh water dam at Ghaghoo mine HSSE Overview 21
Slide 22: Group HSSE performance
Group HSSE performance All injury frequency rate at a Group historical low Zero • Fatalities • Major or significant community incidents • Major or significant environmental incidents Five lost time injuries Lost time injury frequency rate (LTIFR) All injury frequency rate (AIFR) 0.30 4.45 0.20
Slide 23: HSSE Overview - Group CSI initiatives
HSSE Overview - Group CSI initiatives Lesotho Local farmers at the Wool and Mohair project Butha Buthe Vegetable project Herd-boy participating in the Letšeng Community Grazing Initiative Botswana Lephepe Primary school Vegetable Garden project Lephepe landfill waste dumping site Kaudwane Primary sc
Slide 24: www.gemdiamonds.com
Gem Diamonds Limited IR@gemdiamonds.com Celicourt Communications Joanna Boon / Mark Antelme T: +44 (0) 207 520 9265 www.gemdiamonds.com
Slide 25: Annexure 1 - Gem Diamonds capital structure
Annexure 1 - Gem Diamonds capital structure Gem Diamonds share price performance since 31 May 2016 Gem Diamonds Limited is listed on the Main Board of the Share price (p) Volume (000's) London Stock Exchange LSE : GEMD 160 1 800 140 1 600 Daily average trading volume across all 1 400 platforms (6 mo