Gem Diamonds Limited · LSE:GEMD

Gem Diamonds — Investor Presentation (November 2011)

15 slides from Gem Diamonds's investor presentation, November 2011

  1. Slide 1: Investor Presentation

    Investor Presentation © 2011 GEM DIAMONDS LIMITED

  2. Slide 2: Disclaimer

    1 DISCLAIMER The following presentations are being made only to, and are only directed at, persons The presentations also contain certain non-IFRS financial information. The to whom such presentations may lawfully be communicated (“relevant persons”). Any Group’s management believes these measures p

  3. Slide 3: Agenda

    2 AGENDA Announcement Letšeng Uniqueness of Letšeng Project Kholo The Value of Gem © 2011 GEM DIAMONDS LIMITED

  4. Slide 4: Announcement

    3 ANNOUNCEMENT The expansion project (Project Kholo) at Letšeng approved by the Gem and Letšeng Boards Gem is considering all of its options regarding its Ellendale mine asset and has appointed advisors Gresham Advisory Partners to assist in this regard The Company’s Cempaka mine in Indonesia has be

  5. Slide 5: The Uniqueness of Letšeng

    4 THE UNIQUENESS OF LETSENG Product Differentiation The most valuable on Earth 20000 Letšeng 15000 Average $/¢t 10000 Petra BHP Alrosa Billiton Rockwell Rio Tinto Catoca 5000 De Beers 0 10 15 20 25 30 35 40 45 50 55 Average size ¢/stone (Elite Rough +25carats, A/B quality) Best of the best – coarsen

  6. Slide 6: The Uniqueness of Letšeng

    5 THE UNIQUENESS OF LETSENG Elite Production Market Share 45% 40% 35% 30% Letšeng Alrosa 25% De Beers 20% 15% 10% 2011 2012 2013 2014 2015 Currently leading producer of Elite – this position to grow after expansion Source – internal 2010 updated 2011 © 2011 GEM DIAMONDS LIMITED

  7. Slide 7: Letšeng – Project Kholo

    6 LETSENG – PROJECT KHOLO Project Kholo will commence in January 2012, and will ramp up to full production by July 2014 Increasing production to 10 million tonnes per annum (from 5.6 mtpa) Improving grade through increased liberation Reducing diamond damage Reducing unit costs Increasing value from

  8. Slide 8: Letšeng – Project Kholo Snapshot

    7 LETSENG – PROJECT KHOLO SNAPSHOT Letšeng Snapshot - (100% project value) November 2011 Total Project Kholo capital expenditure (US$m) 280 Revenue available for Cutting & Polishing up to 50% by 2017 Net Cutting & Polishing uplift 10-13% Exchange rate (Rand/US$) 8.00 Project Kholo NPV (US$m) 8% disc

  9. Slide 9: Letšeng – Production Profile

    8 LETSENG – PRODUCTION PROFILE Production profile - current Project Kholo Increase production to 10mtpa Increase carat production to 180k -200k per annum Underground to follow Conceptual study indicates going underground post Satellite Cut 5 adds value Waste stripping peak of 63 million tonnes reduc

  10. Slide 10: Project Kholo – Execution Timeline

    9 PROJECT KHOLO – EXECUTION TIMELINE Letseng Project Kholo Execution Program 2011 2012 2013 2014 J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D PFS / Feasibility study Option Selection Complete Board approval Procurement Long Lead items Detail Design Construction Early Works - Earthwo

  11. Slide 11: Project Kholo NPV Sensitivities

    10 PROJECT KHOLO NPV SENSITIVITIES REVENUE 0.70 0.80 0.90 1.00 1.10 1.20 1.30 7.40 146 214 280 801 413 813 546 205 678 004 809 459 940 914 7.60 181 797 315 995 448 899 581 060 712 730 844 185 975 640 7.80 215 374 349 281 482 185 614 128 745 675 877 130 1 008 585 EXCHANGE RATE 8.00 247 272 380 903 51

  12. Slide 12: Group – Cash Position

    11 GROUP – CASH POSITION Current group cash on hand as of 25 November 2011- $151m ($37m at Letšeng) Standby working capital facility implemented 3 year working capital facility - M250m ($31m) with Standard Lesotho Bank Agreements signed Facility available for draw down as from January 2012 Potential

  13. Slide 13: Letšeng – Project Kholo Internal Risks

    12 LETSENG – PROJECT KHOLO INTERNAL RISKS Risks Issue Solutions Power Additional 10 MVA required for 2 options available. Preferred option costed expansion into capital estimate ($25m). Possible delay, cost of diesel generated power will be required for delay period. Process water Depending on rainf

  14. Slide 14: The Value of Gem

    13 THE VALUE OF GEM GEM NPV – GROUP ASSETS (ATTRIBUTABLE) 2,000 137 118 1,600 1,684 1,586 43 36 NPV $USmm 1,200 800 400 484 - Letseng Ghaghoo Ellendale Cash Net CHQ Group NPV Current Market Cap Shares in issue – 138m Current Share Price - £2.03 * Internal Valuation - Based on Gem current price incre

  15. Slide 15: Thank You

    Thank You © 2011 GEM DIAMONDS LIMITED

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