Petra Diamonds Limited · LSE:PDL
Petra Diamonds — Technical Presentation (March 2015)
56 slides from Petra Diamonds's technical presentation, Mar 20, 2015
Slide 1: Cullinan – The World's Most Celebrated Diamond Mine
Cullinan – The World’s Most Celebrated Diamond Mine 20 March 2015
Slide 2: Important Notice
Important Notice These Presentation Materials do not constitute or form part of any invitation, offer for sale or subscription or any solicitation for any offer to buy or subscribe for any securities in the Company nor shall they or any part of them form the basis of or be relied upon in any manner
Slide 3: Cullinan Site Visit Itinerary
Cullinan Site Visit Itinerary 09:30 Arrive at Cullinan Diamond Mine 09:45 Overview of Cullinan Diamond Mine & Safety Induction 11:00 Underground visit 13:30 Surface visit – plant and open pit 14:00 Changehouse 14:30 Lunch with management, further discussions and Q&A 16:00 Estimated time of departure
Slide 4: Petra Overview
PETRA OVERVIEW 4
Slide 5: Path To Million Carats Per Annum
Path To 5 Million Carats Per Annum • Brownfields expansion programmes expected to lift production ca. 60% by FY 2019 production FY 2019 – all programmes on time and on budget target of ca. 5.0 Mcts 6 1000 5 Carat production (million carats) FY 2015 FY 2014 production production of target of 3.3 Mcts
Slide 6: Location
Location Focus on kimberlite KX36 discovery & surrounding area 6
Slide 7: Cullinan Overview
CULLINAN OVERVIEW 7
Slide 8: The History Of Cullinan
The History Of Cullinan 1902 Cullinan kimberlite pipe originally discovered by Sir Thomas Cullinan - at 32ha surface area, largest diamondiferous kimberlite ever found in SA 1903 Open pit mining commenced at ‘Premier Mine’ - at time of outbreak of WW1 14,000 were employed at mine 1930 De Beers acqui
Slide 9: Ownership Structure
Ownership Structure Note: Petra has an interest in Sedibeng Mining (Pty) Ltd – refer document ‘Effective Interest in Mines: www.petradiamonds.com/investors/analysts/analyst- guidance 9
Slide 10: A Unique Heritage
A Unique Heritage • Source of “the Cullinan”, the world’s largest gem diamond (3,106 carats) • Has produced a quarter of all the world’s diamonds of +400 carats; 138 stones of +200 carats; 802 stones of +100 carats • World’s most important source of truly rare and highly prized blue diamonds The Cul
Slide 11: Writing the History of Diamonds
Writing the History of Diamonds The Cullinan – 3,106 carats rough Largest gem diamond ever discovered Also source of the largest polished diamonds in the world, incl. The Great Star of Africa (530 carats) 11
Slide 12: Iconic Diamonds from Cullinan
Iconic Diamonds from Cullinan The Greater Star of The Centenary Africa 599.10ct rough, Largest polished yield 273.85ct polished from the Cullinan at 1986 530ct; sits in the Royal Sceptre 1905 The Cullinan Heritage 507.55 carats rough 2009 The Golden Jubilee The Safia 755.50ct rough, 338.46ct rough,
Slide 13: Block Caving Schematic
Block Caving Schematic 13
Slide 14: Safety Performance
Safety Performance Highest LTIFR/nr = 2001: 0.80 / (19) 2001 – 2006 = Increase in activities and projects 2010 – current = Increase in activities, employees and Lowest LTIFT/nr = 2008&9: 0.13 (2) projects with a lower number of LTI and LTIFR *LTIFR = Nr of lost time injuries x 200,000 hrs / hrs work
Slide 15: H1 FY 2015 Results
H1 FY 2015 Results Unit H1 FY 2015 H1 FY 2014 Variance FY 2014 Sales Revenue US$m 77.7 61.3 +27% 162.8 Diamonds sold Carats 314,957 409,117 -23% 881,343 Average price per carat US$ 2471 150 +65% 1852 ROM Production Tonnes treated Tonnes 1,292,895 1,291,208 0% 2,546,383 Diamonds produced Carats 333,7
Slide 16: Mining Overview
MINING OVERVIEW 16
Slide 17: Moving into Undiluted Ore
Moving into Undiluted Ore • Caving is a safe and proven mechanised mining method; provides access to higher volumes of ore than other methods • Current underground mining taking place in diluted, mature caves nearing end of lives • Expansion programmes to take next ‘cut’ by deepening and establishin
Slide 18: Cullinan Mine Plan – High Level
Cullinan Mine Plan – High Level Current mining taking place in B-Cut at 732m and rehabilitation mining commencing on 645m C-Cut Phase 1 – new block cave being established on western side of orebody; production build up from FY 2016 – 16 yr mine plan Dramatic simplification of ore-handling system C-C
Slide 19: Grade Variation of the Orebody
Grade Variation of the Orebody 19
Slide 20: ROM Grade Volatility Mitigation
ROM Grade Volatility Mitigation To date: • Increase in underground and surface tonnes treated helps offset lower grade • Recovery of ‘special / exceptional’ diamonds assists mine revenue • Strict Opex and Capex control • Rehabilitation of 645mL in BA5, providing access to undiluted tonnes in Western
Slide 21: Cullinan – C-Cut Phase 1 Battery Limits
Cullinan – C-Cut Phase 1 Battery Limits 21
Slide 22: Cullinan – Development Programme
Cullinan – Development Programme Development Programme 2013 2014 2015 2016 2017 2018 2019 Commenced rehabilitation of BA5 areas at 645m to create access to undiluted ore Development of declines, access tunnels and shaft deepening on track Tailings ramp up to steady state 2.7 Mtpa New production leve
Slide 23: C-Cut Phase 1 – Project Summary
C-Cut Phase 1 – Project Summary 23
Slide 24: C-Cut Phase 1 Ore-handling Schematic
C-Cut Phase 1 Ore-handling Schematic 24
Slide 25: Expansion Plan – Current Status
Expansion Plan – Current Status • Shaft deepening (and related infrastructure) to 934m in progress • Sinking progressed with Shaft Nº1 at a depth of 162m out of 357m and Shaft Nº3 at a depth of 41m out of 83m • Development of blue (kimberlite) and waste tunnels in progress: >14,623 metres developed
Slide 26: Expansion Plan – Current Status
Expansion Plan – Current Status Under Cut Holing Tunnel 21 Support Installation 26 Drilling Under Cut Secondary Support
Slide 27: Expansion Plan – Current Status
Expansion Plan – Current Status Blue Development Blue Development : Drilling 27 Blue Development – Rock Seal Blue Development : Secondary Support
Slide 28: Plant Overview
PLANT OVERVIEW 28
Slide 29: An Aerial Perspective
An Aerial Perspective • Existing plant footprint ca. 27ha, including 13.5km of conveyor belts • Ongoing objective to simplify and streamline processing route 29
Slide 30: Treatment Plant Flow Diagram
Treatment Plant Flow Diagram STOCKPILE Mixed Feed RECRUSH CRUSHERS +75mm Mixed Feed CRUSHING CIRCUIT SHAFT -12mm COARSE DMS - -35mm -35+6mm 75+35mm RETREAT DMS WASHING PLANT -35mm RECOVERY & SORTHOUSE PREPARATION PLANT -1.2mm -75+35mm -1.2mm -6+1mm FINES DMS LARGE DIAMOND RECOVERY PLANT 30 SLIMES DA
Slide 31: Consistent Production of Large Diamonds
Consistent Production of Large Diamonds Acquisition by Petra: July 2008 31
Slide 32: Exceptional Diamonds (+US$5 million stones)
Exceptional Diamonds (+US$5 million stones) • Exceptional diamonds contributed on average US$18 million pa from FY 2008 to FY 2014 • Higher average in last two years: US$26 million pa from FY 2013 to FY 2014 • Company business model not reliant on exceptional diamond recoveries • Cullinan is known a
Slide 33: Major Tailings Project
Major Tailings Project Resource of 165 Mt (17.1 million carats) • New tailings treatment facility completed • Throughput to increase from 2.1 Mtpa (FY 2014) to steady state 2.5 Mtpa in FY 2015 at a grade of ca. 5.0 cpht • Throughput to increase to 2.7 Mtpa at a grade of ca. 7.5 cpht by FY 2016, foll
Slide 34: Costs & Capex
COSTS & CAPEX 34
Slide 35: Operating Cost History and Make-up
Operating Cost History and Make-up 200 On-mine cash cost per tonne treated ,5.0 R/t treated Mt 180 ,4.5 160 ,4.0 140 ,3.5 120 ,3.0 • Risk of rising electricity costs 100 ,2.5 managed through efficient design of 80 ,2.0 new infrastructure 60 ,1.5 40 ,1.0 • Maintenance and management of 20 ,0.5 new an
Slide 36: Labour Relations Risk Mitigation
Labour Relations Risk Mitigation • Labour relations at Cullinan have been stable in FY 2015 • No migrant labour - 65% of employees come from local/provincial area to Cullinan • Strong focus on internal communications and engagement with employee representatives • Petra concluded 3 year wage agreemen
Slide 37: Power Risk Mitigation
Power Risk Mitigation • Diamond mining industry is light user of power in comparison to other commodities (no smelting requirements etc) • Cullinan is already operating under its allotted power capacity (mine used to run at higher tonnage levels in its history) • Eskom consults with industry pre loa
Slide 38: Capex Overview
Capex Overview • Total expansion Capex of ca. R4.3 billion (ca. US$390 million) • R2.2 billion capital spent to date (H1 FY 2015); remaining Capex of R2.1 billion (ca. US$190 million) to FY 2019 • Capex fully funded from current debt facilities, treasury and mine cashflows • Split of Capex guidance
Slide 39: Outlook
OUTLOOK 39
Slide 40: Production Plan
Production Plan • ROM tonnages to rise 48%, but ROM carat production expected to rise 180% Tonnes treated and grades Carat production and average diamond values ,2.5 200 ,8.0 60 Million carats $/ct cpht Million tonnes 180 ,7.0 50 ,2.0 160 ,6.0 140 40 ,5.0 ,1.5 120 ,4.0 30 100 ,3.0 ,1.0 80 20 60 ,2.0
Slide 41: Outlook
Outlook Rising Production Rising Margins Rising Prices • ROM production ramping up • Grade to almost double to ca. • Positive long term outlook from 0.8 Mctpa to ca. 2.2 50 cpht by FY 2019 based on fundamentals Mctpa by FY 2019 • Ongoing plant modifications • ‘Mass luxury’ to drive market; • Initial
Slide 42: Corporate Social Responsibility
Corporate Social Responsibility
Slide 43: Health & Safety
Health & Safety • OHSAS 18001 certification • Implementation of MOSH initiative • 1,533 medicals carried out during FY 2015 • Chronic disease awareness: • October – Heart disease month (included a GO WILD, GO RED awareness day) • November – Diabetes month (wellness day promoted testing for diabetes
Slide 44: Environment
Environment • ISO 14001 certification • Annual internal environmental audits carried out • Proactive and effective incident reporting • Phytoremediation project trials in progress: • Upscale modelling results finalised • Next phase of project can commence (additional release of no.7 dam water (treat
Slide 45: Social Compliance
Social Compliance Mine Community Development Projects • Expansion of a Technical Centre at Chipa Tabane High School in Refilwe, launched in May 2014 at a cost of R2 million • The construction of 4 classrooms, an administration block and a library at the primary school in Onverwacht is underway • The
Slide 46: Corporate Social Responsibility
Corporate Social Responsibility Community support More…. • The sports grounds at Sedibeng • Supporting the Lethabo Primary School in Refilwe were Day Care centre, within levelled and further development is the premises of the investigated (planting grass etc) – Onverwacht primary R1m was spent schoo
Slide 47: Corporate Social Responsibility – Mandela Day
Corporate Social Responsibility – Mandela Day 47
Slide 48: Education Initiatives
Education Initiatives Long-term strategy to address the scarcity of technical skills in the industry • Implementation of a Maths and Science Centre at 3 local schools • Assisting with improving Maths & Science results • Increasing number of applicants for careers in mining • Bursary programme – burs
Slide 49: Human Resources Development
Human Resources Development Career Day • The event focused on Grade 12 learners from schools in the City of Tshwane Metropolitan Municipal Regions 5 and 7 which are CDM’s mine communities • The aim of the event was to raise awareness and provide information on careers in mining • 12 stalls covering
Slide 50: Safety Induction
Safety Induction
Slide 51: General Risks
General Risks Track Bound & Trackless Machinery Moving Components - Point and Ask, Do Not Touch Uneven surfaces Stairs & Elevated Heights Noise & Dust – PPE Will Be Issued Explosives – No Smoking, Open Flames, No Mobile Phones If you should feel uncomfortable or claustrophobic at any time during the
Slide 52: Rescue Pack Induction
» PetraDiamonds RESCUE PACK INDUCTION
Slide 53: Enjoy the visit
Enjoy the visit
Slide 54: Appendix
Appendix
Slide 55: Appendix – Analyst Guidance
Appendix – Analyst Guidance Cullinan - Description Guidance notes (FY 2015) Overview • LOM: Current plan FY 2015: 2.7 Mt; 2.9 Mt in FY 2016, 3.1 Mt by FY 2017, up to 2030 ROM Tonnes (Mt) 3.6 Mt by FY 2018 and reaching steady state production of 4 Mtpa by FY 2019 • Residual C-Cut resource to FY 2015:
Slide 56: Further enquiries: Petra Diamonds
Further enquiries: Petra Diamonds Cathy Malins cathy.malins@petradiamonds.com +44 20 7494 8202 www.petradiamonds.com