Gem Diamonds Limited · LSE:GEMD
Gem Diamonds — Investor Presentation (February 2020)
15 slides from Gem Diamonds's investor presentation, Feb 1, 2020
Slide 1: Investor Presentation
Investor Presentation 1 February 2020
Slide 2: Disclaimer
Disclaimer This presentation is confidential and is being made only to, and is only directed at, persons to whom this presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Informatio
Slide 3: Gem Diamonds – an overview
Gem Diamonds – an overview • Listed on the Main Board of the London Stock Exchange (LSE : GEMD) • Leading producer of large, high quality, exceptional Type II diamonds Mining - Letšeng Diamonds Sales, Marketing and Innovation and Technology • Located in Maluti mountains of Manufacturing • Developing
Slide 4: Our strategy and key priorities
Our strategy and key priorities Extracting maximum value Working responsibly and Preparing for our future from operations maintaining social licence • Driving business • Promoting a culture of zero • Advancing innovative optimisation by enhancing harm and responsible care technologies to enhance the
Slide 5: Diamond market
Diamond market • Polished diamond market has been under pressure since latter half of 2017: • Financing constraints in the midstream • Surplus inventory in the manufacturing sector • Concerns over lab-grown diamonds entering the market • Severe downward pressure on pricing of smaller, commercial typ
Slide 6: Financials
Financials Revenue EBITDA Basic EPS (pre exceptional items) (US$ millions) (US$ million) (US$ cents) 267 104 30.0 249 214 82 190 63 19.0 49 13.0 7.0 2015 2016 2017 2018 2019* 2015 2016 2017 2018 2019* 2015 2016 2017 2018 2019* *Final results to be released on 11 March 2020 4
Slide 7: Market information
Market information Gem Gem Diamonds vs peers share price performance (rebased to 100) 200 Petra 180 Lucara 160 Lucapa Firestone 140 Mountain 120 Province Stornoway 100 80 60 40 20 0 Jan 18 Mar 18 May 18 Jul 18 Sep 18 Nov 18 Jan 19 Mar 19 May 19 Jul 19 Sep 19 Nov 19 2019 annual share performance Anal
Slide 8: Letšeng
Letšeng Mining Processing and recoveries CSRI • Total Resource: 5.0 million carats • Three treatment plants • Dairy farming project • Two kimberlite pipes: Main & • 6.4 – 6.6 mtpa • Egg distribution project Satellite (17.0ha; 5.2ha) • 13.32ct pink diamond sold for • Vegetable project • Mining lease
Slide 9: Letšeng Mining Agreement
Letšeng Mining Agreement • Mining Agreement renewed in October 2019 • 10 year term up to 2029 • Exclusive option to renew for further 10 years up to 2039 • Work permits – increased from 5 to 60 • Royalties increased from 8% to 10% in line with the 2005 Mining and Minerals Act • Royalties may be remi
Slide 10: Letšeng Community Projects
Letšeng Community Projects Police station in the Phutha-lichaba village Dairy farming project School infrastructure construction Footbridge construction Wool & mohair project Vegetable project 8
Slide 11: Letšeng Sales and marketing
Letšeng Sales and marketing • Global diamond market under pressure • Prices for Letšeng large high quality goods showed signs of weakness from mid-2019 • 2019 sales highlights: 27 diamonds sold for > US$ 1.0 million each, generating revenue of US$68.2 million 67 diamonds sold for > $20 000 per c
Slide 12: Frequency of large diamond recoveries
Letšeng Frequency of large diamond recoveries Number of diamonds 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 >100 carats 6 7 6 3 6 9 11 5 7 15 11 60 - 100 carats 11 11 22 17 17 21 15 21 19 22 20 30 - 60 carats 79 66 66 77 60 74 65 70 74 83 82 20 - 30 carats 111 101 121 121 82 123 126 83 1
Slide 13: Significant diamond recoveries in 2019
Letšeng Significant diamond recoveries in 2019 6.91ct pink 13.32ct pink (US$55 010/ct) (US$656 934/ct) 140.28ct ($21 392/ct) 161.03ct ($41 919/ct) 6.99ct pink (US$171 245/ct) 125.09ct ($36 114/ct) 125.21ct ($35 948/ct) 123.28ct ($28 850/ct) 70.69ct ($48 255/ct) 11
Slide 14: Business Transformation
Business Transformation • Business Transformation commenced in 2017 • Target of $100m cumulative over 4-year period to 2021 (from revenue, productivity improvements and cost savings) • Sustainable annual benefit of $30m from 2022 • Implemented initiatives on track to deliver US$100m by 2021 • $50m d
Slide 15: Contact us
Gem Diamonds Limited Celicourt Communications Susan Wallace Contact us T: +44 (0) 203 043 0280 IR@gemdiamonds.com Joanna Parker/Mark Antelme T: +44 (0) 207 520 9565