Slide 1: Half Year 2017 Results
Half Year 2017 Results 17 August 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 Half year 2017 results overview Diamond market and outlook - 2017 Operational overview HSSE Letšeng Ghaghoo Group financial performance Outlook – 2017 focus 3
Slide 4: Half year 2017 results overview
Half year 2017 results overview Revenue Group EBITDA 131 58 118 109 46 44 USD Millions 93 USD Millions 81 19 13 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 Basic EPS (pre exceptional items) Cashflow generated by operations 19.05 86 71 10.69 US Cents USD Millions 9
Slide 5: Diamond market
88.43 carat white Letšeng diamond sold for c.US$ 48 100 per carat Diamond market Clifford Elphick Chief Executive Officer 5
Slide 6: Diamond market and outlook - 2017
Diamond market and outlook - 2017 Diamond market and outlook • Rough and polished market steady • Polished D colour high value diamonds selling well Medium to long-term outlook • Continued growth in demand in emerging markets 6
Slide 7: Sales and marketing overview
Sales and marketing overview Improvement in prices achieved for Letšeng's high quality production • Average price of US$1 779 per carat achieved during H1, 20% higher than H2 2016 • Average price of US$2 385* per carat achieved at the most recent tender (July) • 18 rough diamonds achieved a value
Slide 8: Operational performance
Satellite pipe at Letšeng open-pit mine Operational performance Johnny Velloza Chief Operating Officer 8
Slide 9: Group HSSE performance
Group HSSE performance All injury frequency at a Group historical low Zero • Fatalities • Lost time injuries • Major or significant community or environmental incidents Lost time injury frequency rate (LTIFR) All injury frequency rate (AIFR) 4.45 3.01 2.87 2.49 1.93 0.30 1.69 0.20 0.18 0.13 0.00
Slide 10: Letšeng operational review
Main pit at Letšeng open-pit mine Letšeng operational review 10
Slide 11: Letšeng operational review
Letšeng operational review Waste mined (tonnes millions) Improved recovery of large diamonds 15.3 14.5 15.0 Four +100 carat diamonds recovered in H1 11.4 12.6 Updated mine plan • Reduction of overall mining costs of LSL100 million in 2017 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 Plant availab
Slide 12: Letšeng resource performance
Letšeng resource performance Frequency of recovery of large diamonds Number of diamonds 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 2017 >100 carats 7 6 7 6 3 6 9 11 5 4 60-100 carats 18 11 11 22 17 17 21 15 21 8 30-60 carats 96 79 66 66 77 60 74 65 70 34 20-30 carats 108 111 101 121 121 82 123
Slide 13: Ghaghoo operational review
Processing plant at Ghaghoo underground mine Ghaghoo operational review 13
Slide 14: Ghaghoo operational review
Ghaghoo operational review Care and maintenance status successfully achieved during H1 Annualised care and maintenance costs of US$3.0 million (excluding once off costs) on target for H2 Remaining staff compliment appropriate to service care and maintenance status Once off costs • Retrenchme
Slide 15: Group financial performance
Haul truck at Letšeng Group financial performance Michael Michael Chief Financial Officer 15
Slide 16: H1 2017 financial results
H1 2017 financial results US$ millions H1 2017 Exceptional H1 2017 H2 2016 H1 2016 Pre item Post exceptional exceptional item item Revenue 92.9 - 92.9 80.7 109.1 Royalty and selling costs (8.4) - (8.4) (7.4) (9.8) Cost of sales (66.7) (3.0) (69.7) (50.1) (48.7) Corporate expenses (4.8) - (4.8) (3.9)
Slide 17: Financial performance – Letšeng mining operations
Financial performance – Letšeng mining operations H1 2017 H2 2016 H1 2016 Average price per carat (US$) 1 779 1 480 1 899 Carats sold 49 930 52 997 55 948 US$ millions H1 2017 H2 2016 H1 2016 Revenue 89 79 106 EBITDA 19 19 50 EBITDA margin 21% 25% 47% Unit costs (US$) Direct cash costs (before waste
Slide 18: Group cashflow and funding
Group cashflow and funding Cash Group cash of US$20.0 million (US$ 16.1 million attributable) Net cash of US$14.2 million after debt of US$34.2 million Funding Total Group facilities of US$36.2 million (at 30 June 2017) Corporate office Revolving Credit Facility restructured into a new US$45
Slide 19: Outlook – 2017 focus
Mining activities at Letšeng open pit mine Outlook – 2017 focus Clifford Elphick Chief Executive Officer 19
Slide 20: Outlook – 2017 Focus
Outlook – 2017 Focus Letšeng Newly elected government in Lesotho Value through reducing diamond damage Mining plan evolution Mining complex on time and under budget Ghaghoo Board considering offer Group Re-establish balance sheet strength Cash preservation focus US$15.0 million ident
Slide 21: Thank you
Thank you Feedback Gem Diamonds Limited IR@gemdiamonds.com Celicourt www.gemdiamonds.com Mark Antelme/Jimmy Lea T: +44 (0) 207 520 9265
Slide 22: Annexure – Gem Diamonds capital structure
Annexure 1 – Gem Diamonds capital structure 12 months Gem Diamonds share price performance Gem Diamonds Limited is listed on the Main Board of the Volume (000s) Price (GBp) London Stock Exchange LSE : GEMD Daily average trading volumes across all 155k 140 1 400 120 1 200 platforms (last 6 months) 10
Slide 23: Annexure – Letšeng 2017 guidance
Annexure 2 – Letšeng 2017 guidance FY 2017 Waste tonnes mined (Mt) 30 - 32 Ore tonnes treated (Mt) 6.8 – 7.0 Carats recovered (Kct) 110 - 114 Carats sold (Kct) 108 - 112 Direct cash costs (before waste) per tonne treated (Maloti) 155 - 165 Operating costs per tonne treated (Maloti) 240 - 250 Mining