Gem Diamonds Limited · LSE:GEMD
Gem Diamonds — H1 2013 Earnings Presentation
22 slides from Gem Diamonds's earnings presentation, Aug 15, 2013
Slide 1: Half Year 2013 Results Presentation
Half Year 2013 Results Presentation 15 August 2013 © 2013 GEM DIAMONDS LIMITED
Slide 2: Disclaimer
1 Half Year 2013 Results Disclaimer The following presentations are confidential and are being made only to, and are only No statement in this presentation is intended as a profit forecast or profit estimate and directed at, persons to whom such presentations may lawfully be communicated no statemen
Slide 3: Half Year 2013 – Review
2 Half Year 2013 Results Half Year 2013 – Review Diamond Market HSSE performance Operations Financial Results Sales, Marketing and Manufacturing © 2013 GEM DIAMONDS LIMITED
Slide 4: Diamond Market
3 Half Year 2013 Results Diamond Market 2013 began with improved prices Improved polished trading Prices flattened from May onwards Long-term supply/demand imbalance Robust prices for Letšeng high value production Rough and Polished Prices Supply Demand and future prices Short term trends 1000 60 Su
Slide 5: Group HSSE Performance
4 Half Year 2013 Results Group HSSE Performance Half Year 2013: Group-wide Lost Time Injury Frequency Rate of 0.17 (0.30 for FY 2012) Group-wide All Injury Frequency Rate of 2.34 (4.45 for FY 2012) Zero major community incidents Zero major environmental incidents CSI expenditure of US$ 0.2 million ©
Slide 6: Operational Review – Letšeng
5 Half Year 2013 Results Operational Review – Letšeng © 2013 GEM DIAMONDS LIMITED
Slide 7: Operational Review – Letšeng
6 Half Year 2013 Results Operational Review – Letšeng % Variance H1 H1 2013 H2 2012 2013 to H2 2012 H1 2012 Carat production 42 268 57 234 (26%) 57 116 Carats sold* 47 065 48 892 (4%) 58 725 Recovered grade (cpht) 1.39 1.80 (23%) 1.68 Waste mined (mT) 9.9 9.6 3% 7.8 Ore mined (mT) 3.1 3.0 3% 3.4 Ore
Slide 8: Letšeng – Project Review
7 Half Year 2013 Results Letšeng – Project Review Current status Replacement of four cone crushers for Plants 1&2 was completed in Q2 2013 • Reduce diamond damage Design and costing of a new modular Recovery Plant – advanced stage • To treat the high value, coarse fraction • Latest XRT technology to
Slide 9: Letšeng – Addressing Diamond Damage
8 Half Year 2013 Results Letšeng – Addressing Diamond Damage Noticeable decrease in incidence of severe breakage Five c.100 carat stones in last three tenders - none in the previous 6 tenders (incl. a 99ct type II white diamond and a 146ct lower value diamond recovered in Aug 2013) Type II - Signifi
Slide 10: Ghaghoo Mine Development
9 Half Year 2013 Results Ghaghoo Mine Development © 2013 GEM DIAMONDS LIMITED
Slide 11: Ghaghoo Development Update
10 Half Year 2013 Results Ghaghoo Development Update Phase 1 current spend to date: USS$ 59.8m of total capex budget of US$ 96.0m Sand portion of decline completed in H1 2013 Access decline entered competent basalt (514 meters of basalt ramp development to go, followed by production development) Pla
Slide 12: Ghaghoo Development - Phase 1
11 Half Year 2013 Results Ghaghoo Development - Phase 1 CK VK Main VKSE © 2013 GEM DIAMONDS LIMITED
Slide 13: Financial Results for Half Year 2013
12 Half Year 2013 Results Financial Results for Half Year 2013 Revenue of US$ 96.5m (US$ 122.6m* in H1 2012). Underlying EBITDA of US$ 33.2m (US$ 46.0m* in H1 2012). Attributable net profit of US$ 8.6m (US$ 14.3m* in H1 2012). Basic EPS of US 6.23cents (10.36 US cents* in H1 2012). Cash on hand of U
Slide 14: Group Financial Performance
13 Half Year 2013 Results Group Financial Performance US$ millions H1 2013 H1 2012* % Change Revenue 96.5 122.6 Royalty and selling costs (7.8) (11.5) Cost of sales (49.3) (58.0) Corporate expenses (6.2) (7.1) Underlying EBITDA 33.2 46.0 (28%) Depreciation and amortisation (9.1) (10.0) Non cash and
Slide 15: Letšeng Operational Performance
14 Half Year 2013 Results Letšeng Operational Performance US$ (millions) Letšeng Diamonds H1 2013 H1 2012 Revenue 85.6 123.6 Royalty and selling costs (6.7) (10.1) Cost of sales (47.3) (57.2) EBITDA 31.6 56.3 EBITDA margin % 37% 46% Exchange rate – Average to US$ Maloti 9.21 Maloti 7.94 Unit costs (
Slide 16: Sales, Marketing & Manufacturing
15 Half Year 2013 Results Sales, Marketing & Manufacturing US$ (millions) H1 2013 Achieved Polished (gross sales achieved) 28.4 Extracted cost at rough value (23.5) Value add 4.9 Direct manufacturing costs (1.4) EBITDA generated 3.5 % Value add over rough costs (after direct manufacturing costs) 15%
Slide 17: Group Financial Performance – EBITDA Movement
16 Half Year 2013 Results Group Financial Performance EBITDA Movement (US$m) 60 8 22 40 1 3 46 16 20 19 33 29 4 2 4 0 © 2013 GEM DIAMONDS LIMITED
Slide 18: Group Financial Performance – Cash Movement
17 Half Year 2013 Results Group Financial Performance Cash Movement (US$m) 140 120 100 (31) 48 80 (17) (6) 60 (4) 40 71 61 20 0 © 2013 GEM DIAMONDS LIMITED
Slide 19: Outlook
18 Half Year 2013 Results Outlook As anticipated, a difficult first 6 months - now concluded Mining in the Satellite pipe ramps up in H2 2013 Decrease diamond damage – new crushers installed in H1 2013 Detailed design and estimate on improved recovery plant Complete access decline at Ghaghoo – on tr
Slide 20: Appendix - Guidance For Full Year 2013
19 Half Year 2013 Results Appendix 1 - Guidance For Full Year 2013 Letšeng Tonnes treated (mT) 6.2 – 6.5 Waste tonnes mined (mT) 16 - 19 Carats recovered (k) 95 - 105 Carats sold (k) 95 - 105 Total cash costs / tonne treated (pre waste) (local currency) 115.00 – 130.00 Waste cash cost / waste tonne
Slide 21: Appendix - Share Information
20 Half Year 2013 Results Appendix 2 - Share Information Share prices and trading volumes Price (p) Volume (000s) 15 July Major Shareholders 225 1,000 2013 200 Graff Diamonds International Limited 15.09 175 750 Lansdowne Partners Ltd 14.99 150 FIL Limited/FMR LLC 11.62 125 500 BlackRock Inc 11.28 10
Slide 22: Thank You
Thank You © 2013 GEM DIAMONDS LIMITED