Petra Diamonds Limited · LSE:PDL
Petra Diamonds — FY2009 Earnings Presentation
33 slides from Petra Diamonds's earnings presentation, Sep 29, 2009
Slide 1: Results for year ended 30 June 2009
Results for year ended 30 June 2009 29 September 2009
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: Petra Diamonds – an introduction
Petra Diamonds – an introduction • Production Substantial p producer with over 1m carats p production p per annum • Resources At 262 million carats carats, one of the world’s world s largest diamond resources • Quality assets Production from 6 mines (5 in South Africa, Africa 1 in Tanzania), Tanzani
Slide 4: Proven track record
Proven track record Petra’s management has delivered five years consecutive production growth Financial Year Production (carats) Variance 2005¹ 143,673 n/a 2006 175 011 175,011 21 8% 21.8% 2007 180,474 3.1% 2008² 2008 200 287 200,287 11 0% 11.0% 2009³ 1,099,367 448.9% ¹ Petra Diamonds (exploration)
Slide 5: The diamond market
The diamond market a PetraDiamonds
Slide 6: Diamond market – partial recovery
Diamond market – partial recovery • Global economic downturn Rough and Polished Prices Jan 2003=100 caused severe p price declines 200 190 • Major cuts in supply helped WWW Overall Rough Index 180 support market PolishedPrices Overall Index 170 • Prices now stable 160 150 • Improved market condition
Slide 7: Long term supply / demand: the perfect storm
Long term supply / demand: the perfect storm • True scarcity – only 15 years of known diamond reserves left (source: BHP Billiton / Rio Tinto analysis) • No new discoveries since early 1990s, despite exploration boom • Many of the world’s largest diamond mines have been in production for a long time
Slide 8: Demand growth driven by urbanisation
Demand growth driven by urbanisation • US still most important market but share decreased to ~ 40% • Strong recovery in emerging markets • Signs of export economies (Japan/China) moving i ttowards d d domestic ti consumption ti driven markets • Urbanisation trend to deliver millions of consumers to
Slide 9: Results for year ended 30 June 2009
Results for year ended 30 June 2009 9
Slide 10: Summary results – key numbers
Summary results – key numbers 12 months to 12 months to June 2009 June 2008 US$ million US$ million Revenue 69.3 76.9 Profit from mining g activity y 7.8 38.8 Exploration * (13.7) (9.5) Corporate overhead * (5.9) (4.9) Adj t d EBITDA ** Adjusted (8 6) (8.6) 25 5 25.5 Depreciation/amortisation (14.9)
Slide 11: Group production and sales summary
Group production and sales summary Year ended Year ended Unit Change 30 June 2009 30 June 2008 Production Diamonds produced Carats 1,099,367 200,287 448.9% (gross 100% Cullinan*) (gross, Cullinan ) Sales Revenue (gross, 100% US$M 94.4 77.3 22.2% Cullinan **) Diamonds sold (gross, Carats 1,011,707 ,
Slide 12: Key highlights
Key highlights • Mine gross revenue: US$94.4 million, a 22.2% increase on FY2008: US$77.3 million; Group attributable revenue US$69.3 million (2008: US$76.9 million) • Profit from mining activity (before depreciation) US$7.8 million (2008: US$38.8 million), a notable achievement in a very tough diam
Slide 13: Cash and debt
Cash and debt 30 June ‘09 30 June ‘08 US$ million US$ million Cash at bank 11.1 37.5 Group debt 101 7 101.7 21 9 21.9 • Group debt June 09: Al Rajhi loan (50% share) US$43.3m; Al Rajhi con note US$20m; $ bank and similar facilities US$38.4m $ • Petra mayy undertake a small fundraising g for working
Slide 14: Operations overview
V4 Operations overview PetraDiamonds
Slide 15: Petra’s mine portfolio
Petra’s mine portfolio Production South Africa • Cullinan • Koffiefontein • Kimberley y Underground* g • Helam (‘fissure’ mine) • Sedibeng (‘fissure’ mine) • Star (‘fissure’ mine) Tanzania • Williamson 15 * Acquisition to complete soon
Slide 16: Reserves and Resources
Reserves and Resources A ib bl carat b Attributable base Total carat base Fissures - 4.5 Fissures - 4.7 Kimberley - 5.2 Kimberley - 6.9 69 Koffiefontein - 4.2 Koffiefontein - 5.9 Williamson a so - 30.0 Williamson - 40.1 Cullinan - 75.7 Cullinan - 204.6 119 million carats 262 million carats Note: Pet
Slide 17: Cullinan
Cullinan Ownership 37% Petra / 37% Al Rajhi / 26% BEE partners Date of acquisition July 2008 Mining type Block cave mining at 747m FY09 production 888,595 carats FY09 average value per carat US$66 FY09 grade 41 cpht FY09 cost per tonne R169 Source of the Mine life +21 years largest g g gem diamond e
Slide 18: ‘Flawless’ Cullinan blue sets world record (May ‘09)
‘Flawless’ Cullinan blue sets world record (May ‘09) 18
Slide 19: A new important Cullinan find
A new important Cullinan find • 507.55 carat diamond recovered 24 September 2009 • Considered amongst the top 20 largest high quality rough diamonds ever found worldwide • IInitial iti l indications i di ti are it iis off exceptional ti l colour l and quality – likely a Type II • Three other special
Slide 20: Cullinan future – 10 year strategy
Cullinan future – 10 year strategy Increase diamond production to 2.6 million carats pa • 1.99 Mtpa will be ramped up to interim target of 2.3 Mtpa by 2014 • An expansion programme to gain access to first portions of the C-Cut will enable production growth to 3 Mtpa by 2015 and then 4 Mtpa by 2019;
Slide 21: Koffiefontein
Koffiefontein Ownership 70% Petra / 30% BEE partners D t off acquisition Date i iti J l 2007 July Mining type Front cave mining at 490m FY09 production 52 089 carats 52,089 FY09 average value per carat US$252 FY09 grade 6.6 cpht FY09 cost per tonne R96 One of the Mine life 21 years world’s world s t
Slide 22: Koffiefontein – the future
Koffiefontein – the future • Annual production to exceed 1 Mtpa within 3 years and reach 1.2 Mtpa within 5 years • Production at 1.2 Mtpa will sustain a life of mine in excess of 20 years delivering 104,000 run of mine carats per annum • ROM g grade expected p to increase to 8.7 cpht p – new blocks
Slide 23: Kimberley Underground mines
Kimberley Underground mines • Acquisition expected to complete in near future: • Complex and lengthy process – MPRDA Section 102 cession application for ceding of portions of the converted original mining right • Care and maintenance period has enabled Petra to build up a substantial stockpile of or
Slide 24: Joint Shaft plant construction in progress
Joint Shaft plant construction in progress All sections created byy Petra’s in-house team – significant g savings g to Group p compared p to using external contractors 24
Slide 25: Fissures (Helam, Sedibeng, Star)
Fissures (Helam, Sedibeng, Star) Ownership Sedibeng: Petra 74.5%/BEE 25.5%; Helam & Star Petra 100% Mining type Helam: Full shrinkage overhand stoping Sedibeng: Full shrinkage overhand stoping Star: Open stope underhand FY09 production 71,274 carats FY09 average value per carat US$186 FY09 grade 37.
Slide 26: Williamson
Williamson Ownership 75% Petra / 25% Government of Tanzania D t off acquisition Date i iti N November b 2008 Mining type Open pit mining at 90m (deepest point) FY09 bulk sampling: Carats recovered 84,486 Value per carat US$126 Grade 5.7 cpht Largest kimberlite to be mined • Nov ‘09 – majority stake
Slide 27: Williamson – the future
Williamson – the future Expansion plan • Increase throughput g p to between 7.5 and 10 Mtpa, p for pproduction of 500,000 to 600,000 carats pa • Mine life of 19 years • Will only take mining to a depth of 260m below surface surface, extracting 170 Mt of 992 Mt total resource Programme will include:
Slide 28: Conclusion
Conclusion • Track record Proven depth of management and technical skill-set • Substantial growth 2 million carats production in 5 years; 3 million carats production in 10 years • Effective cost structure Delivers production and Capex programmes in cost effective manner • Long-term prospects Utilisi
Slide 29: Appendix
Appendix YP PetraDiamonds
Slide 30: Capital structure
Capital structure Major Shareholders % Listing AIM: PDL Saad Group 44.0 Shares in Issue 184 million JP Morgan 96 9.6 Fully diluted 203 million Al Rajhi 9.0 Share price @ 28 Sep 09 62 pence Management 8.5 52 week k hi high h 104 pence On 14 April 2009, the Petra directors substantially increased thei
Slide 31: The Petra Board
The Petra Board Adonis Pouroulis Johan Dippenaar David Abery Jim Davidson Chairman CEO Finance Director Technical Director Successful mining entrepreneur One of South Africa’s most Extensive experience as Chief Acknowledged world authority successful diamond Financial Officer in South on kimberlite
Slide 32: Impairment charges
Impairment charges The impairment charge of US$75.2 million is comprised of; US$M • Withdrawal from Luangue 37.0 • Withdrawal from Alto Cuilo 6.0 (write down of interest in Moyoweno) • Impairment of Helam mine based on IAS36 review 12.9 • Impairment of Star mine based on IAS36 review 10.8 • Impairme
Slide 33: Petra Diamonds contact details
Petra Diamonds Buchanan Communications Cathy Roberts Bobby Morse cathyr@petradiamonds.com bobbym@buchanan.uk.com +44 20 7318 0452 +44 20 7466 5151 www.petradiamonds.com www.buchanan.uk.com