Slide 1: Annual Report and Accounts
ANNUAL REPORT AND ACCOUNTS 17 March 2022
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: 2021 in Review
2021 IN REVIEW Revenue EBITDA Carats recovered US$202 million US$57 million 115 335 Basic EPS (pre-exceptional items) All Injury Frequency Rate Net cash position 10.5 US cents 0.93 US$21 million Business Transformation Cumulative to date US$ per carat achieved Dividend US$110 million US$1 835 2.7 US
Slide 4: Key Strategic Priorities
KEY STRATEGIC PRIORITIES UNEARTHING UNIQUE POSSIBILITIES WORKING RESPONSIBLY AND EXTRACTING MAXIMUM VALUE MAINTAINING SOCIAL LICENCE PREPARING FOR OUR FUTURE FROM OPERATIONS TO OPERATE • Optimise operating model: • ‘Stop for Safety’ campaign • Adoption of TCFD - Improved mine waste and maturing safe
Slide 5: 2021 Diamond Market
2021 DIAMOND MARKET CONTINUED RECOVERY OF THE DIAMOND MARKET ACROSS ALL SEGMENTS GEM DIAMONDS’ MARKET GLOBAL ECONOMIC BACKDROP DIAMOND MARKET POSITION • Impact of Russia’s invasion • Strong demand throughout • Highest US$ per carat of the Ukraine uncertain at 2021 kimberlite producer this stage • Mi
Slide 6: Our Approach to Climate Change
OUR APPROACH 6 TO CLIMATE CHANGE GEM DIAMONDS LIMITED FULL YEAR RESULTS 2021
Slide 7: TCFD Roadmap
OUR APPROACH TO CLIMATE CHANGE • TCFD recommendations adopted in 2021 • Phase 1 of our implementation included: - Established Board and management governance structures - Identified and assessed physical and transition risks over short, medium and long term - Enhanced risk management processes to in
Slide 8: Climate Strategy Considerations
CLIMATE STRATEGY CONSIDERATIONS Impact on strategy, operations and financial planning WORKING RESPONSIBLY AND EXTRACTING MAXIMUM VALUE MAINTAINING SOCIAL LICENCE PREPARING FOR OUR FUTURE FROM OPERATIONS TO OPERATE Operational initiatives to Bolstering resilience to physical Work done in 2021 enables
Slide 9: Zero Harm and Responsible Care
ZERO HARM AND 9 RESPONSIBLE CARE GEM DIAMONDS LIMITED FULL YEAR RESULTS 2021
Slide 10: Zero Harm is a Priority
ZERO HARM IS A PRIORITY • AIFR: 0.93 • Zero fatalities and six LTIs during the year • ‘Stop for Safety’ campaign and various initiatives implemented to mature the safety culture at Letšeng which led to a marked safety performance improvement in H2 • No major or significant environmental incidents •
Slide 11: COVID-19: Protecting Our People
COVID-19: PROTECTING OUR PEOPLE • 99% of workforce fully vaccinated to date • Continued to protect our people through three COVID-19 waves in order to safely and responsibly continue uninterrupted operations during 2021 • COVID-19 protocols adjusted and implemented as required • Donated 20 000 vacci
Slide 12: Corporate Social Responsibility
CORPORATE SOCIAL 12 RESPONSIBILITY GEM DIAMONDS LIMITED FULL YEAR RESULTS 2021
Slide 13: 2021 CSR Overview
2021 CSR OVERVIEW • Updated community needs analyses informed 5-year CSI strategy • Integration of six UN SDGs • 2020 and 2021 CSI projects implemented • Rebuilding of infrastructure destroyed by localised flooding in surrounding areas • Successful trials of bioremediation pilot plant • Aligned to G
Slide 14: Letšeng
14 GEM DIAMONDS LIMITED FULL YEAR RESULTS 2021 LETŠENG
Slide 15: Business Transformation
BUSINESS TRANSFORMATION • US$110 million achieved – exceeding the four-year target of US$100 million • Initiatives are embedded and will continue to deliver value • Ensuring the sustainability of these and other CI initiatives US$110 million achieved US$ millions 12 US$100 million target 9 13 34 Min
Slide 16: Operations Review
OPERATIONS REVIEW • Waste mined in line with mine plan and ore treated during the year Waste tonnes mined (millions) • Steeper slopes success continued • Ore tonnes treated impacted primarily by: 30 26 24 - COVID-19-related supply chain challenges, skills availability, lost shifts 19 16 - Reduced fe
Slide 17: Operations Review
OPERATIONS REVIEW • 2021 Focus projects: - Advanced Process Control to ensure stable plant operating conditions - Initial surface miner trials concluded, further trials planned for 2022 - Cost containment and reduction initiatives - New fines XRT commissioned in 2021 - Resource core drilling program
Slide 18: Revised Long-Term Mine Plan
REVISED LONG-TERM MINE PLAN • Mine plan optimisation and steeper slopes resulted in: - Additional Satellite ore availability - Extended to 2025 vs mid-2023 (2019 plan) - Deferred commencement of next waste cutback in Satellite pipe (SC6W) to 2024 • Revised waste mining profile: - 2022/2023 - decreas
Slide 19: Revised Long-Term Mine Plan
REVISED LONG-TERM MINE PLAN 19 GEM DIAMONDS LIMITED FULL YEAR RESULTS 2021
Slide 20: Sales and Marketing
SALES AND MARKETING • 2021 sales highlights: - Achieved US$1 835 per carat - Sold 7 diamonds greater than 100 carats - Sold 21 diamonds for more than US$1.0 million - Sold 78 diamonds for more than US$20 000 per carat - >10.8 carat diamonds contributed 71% of revenue • Successful dual viewing held i
Slide 21: Significant Diamond Recoveries in 2021
SIGNIFICANT DIAMOND RECOVERIES IN 2021 367 CARAT LETŠENG PRINCESS 147 CARAT WHITE DIAMOND 246 CARAT WHITE DIAMOND 65 CARAT WHITE DIAMOND 3.35 CARAT PINK DIAMOND (HIGHEST WHITE $/CT) 101 CARAT WHITE DIAMOND (HIGHEST $/CT) 21 GEM DIAMONDS LIMITED FULL YEAR RESULTS 2021
Slide 22: Financial Results
FINANCIAL 22 GEM DIAMONDS LIMITED FULL YEAR RESULTS 2021 RESULTS
Slide 23: Income Statement
INCOME STATEMENT % US$ million 2021 2020 Variance Revenue 201.9 189.6 6 Royalty and selling costs (21.9) (19.8) Cost of sales (113.0) (104.7) COVID-19 costs (0.7) (3.9) Corporate expenses (8.9) (8.0) Underlying EBITDA from continuing operations 57.4 53.2 8 Depreciation and mining asset amortisation
Slide 24: Letšeng Cost Analysis
LETŠENG COST ANALYSIS % 2021 2020 Variance Ore tonnes treated (millions) 6.2 5.4 15 Direct cash costs¹ 185.59 185.73 Operating Costs Plant 3 operator costs 15.53 15.73 Total direct cash operating costs 201.12 201.46 - Non-cash accounting charges² 70.63 118.74 Total operating cost per tonne treated –
Slide 25: Financial Position
FINANCIAL POSITION % US$ million 2021 2020 Variance Non-current assets 312.0 323.5 IFRS 16 Right of use assets 3.1 4.8 Current assets 35.3 32.4 Income tax receivable 1.2 0.1 Cash 30.9 49.8 Total assets 382.5 410.6 (7) Equity attributable to the parent company 159.8 163.1 Non-controlling interest 86.
Slide 26: Cash Management
CASH MANAGEMENT • Group cash of US$31 million Corporate costs (US$ millions) • Net cash of US$21 million 10.0 • Group debt refinancing concluded in 2021 9.2 9.4 8.9 8.0 • Three facilities - US$83 million • Available facilities at year-end - US$74 million 2017 2018 2019 2020 2021 US$ millions 115 65
Slide 27: Dividend
DIVIDEND • Cash dividend of 2.7 US cents per share proposed • Total dividend payable cUS$3.8 million • Timetable: - Last date of registration: 19 May - Record date: 20 May - Subject to AGM approval on 8 June - Payment on 21 June • Dividend policy: - Annual cash dividend review based on cash resource
Slide 28: Letšeng 2022 Guidance
LETŠENG 2022 GUIDANCE 2022 Guidance Waste stripped (Mt) 10 – 12 Ore treated (Mt) 5.6 – 5.8 Satellite pipe ore contribution¹ (Mt) 2.8 – 3.0 Carats recovered (Kct) 112 – 116 Carats sold (Kct) 110 – 114 Direct cash costs (before waste) per tonne treated² (Maloti) 220 – 230 Operating costs per tonne tre
Slide 29: 2022 Focus Areas
2022 29 GEM DIAMONDS LIMITED FULL YEAR RESULTS 2021 FOCUS AREAS
Slide 30: 2022 Focus Areas
2022 FOCUS AREAS EXTRACTING MAXIMUM VALUE WORKING RESPONSIBLY AND PREPARING FOR OUR FUTURE FROM OPERATIONS MAINTAINING SOCIAL LICENCE TO OPERATE • Optimising mine plan and • Phase 2 of TCFD adoption • Downstream value add pit slope angles in Main pit • Advance GISTM alignment • Advancing technology
Slide 31: Contact Us
CONTACT US Gem Diamonds Limited Glenn Turner / Susan Wallace T: +44 (0) 203 043 0280 IR@gemdiamonds.com Celicourt Communications Mark Antelme / Felicity Winkles T: +44 (0)20 8434 2643 STOCKPILE AT LETŠENG 31 GEM DIAMONDS LIMITED FULL YEAR RESULTS 2021
Slide 32: Appendix A: Market Information
APPENDIX A: MARKET INFORMATION Gem Diamonds Limited is listed on the Main Board of the 2021 Annual share price (GBP millions) London Stock Exchange LSE: GEMD 2 0.8 Daily average trading volume across all 1.6 0.6 170k platforms in 2021 1.2 0.4 Shares in issue 140 534 485 0.8 0.4 0.2 Free float (excl.
Slide 33: Gem Diamonds Limited
2nd Floor, Coastal Building, Wickham’s Cay II, PO Box 2221, Road Town, Tortola, British Virgin Islands, Registration number: 669758 GEM DIAMONDS LIMITED www.gemdiamonds.com 33 GEM DIAMONDS LIMITED FULL YEAR RESULTS 2021