Petra Diamonds Limited · LSE:PDL
Petra Diamonds — FY2010 Earnings Presentation
34 slides from Petra Diamonds's earnings presentation, Sep 20, 2010
Slide 1: Results For The Year Ended 30 June 2010
The 507 carat Cullinan Heritage – sold for US$35.3m Results For The Year Ended 30 June 2010 20 September 2010
Slide 2: Important Notice
Important Notice These Presentation Materials do not constitute or form part of any invitation, offer for sale or subscription or any solicitation for any offer to buy or subscribe for any securities in the Company nor shall they or any part of them form the basis of or be relied upon in any manner
Slide 3: A Unique Growth Profile
A Unique Growth Profile million Gross Production Gross Revenue Recovery in carats Major US$ million rough diamond increase due prices & sale of 1.4 to higher volume 200 Cullinan H it Heritage Cullinan mine 180 1.2 Acquisitions of Cullinan 160 and Willi Williamson 1.0 140 120 Acquisition 0.8 of Koffi
Slide 4: Growth Profile – Delivering Results
Growth Profile – Delivering Results EBITDA* Profit After Tax EPS US$M US$M US cents 80 80 70.2 02 30 70.9 22.65 70 60 20 60 40 10 50 -49.38 20 0 40 -89.0 0 10 -10 30 -20 -20 20 40 -40 30 -30 10 -8.6 0 -60 -40 10 -10 80 -80 50 -50 -20 FY 2009 FY 2010 -100 FY 2009 FY 2010 -60 FY 2009 FY 2010 FY 2009 r
Slide 5: FY 2010 Highlights
FY 2010 Highlights • Increased ownership in Cullinan mine from 37% to 74% • Fully financed capital expansion plans: • Raised US$120 million in equity fund raising • Agreed new debt facilities of US$78 million with IFC and Rand Merchant Bank • Completed acquisition of Kimberley Underground mine • 507
Slide 6: FY 2010 Production & Sales
FY 2010 Production & Sales Unit FY 2010 FY 2009 Variance Gross Sales Revenue US$M 177.7 94.4 +88% Diamonds sold Carats 1,125,098 1,011,707 +11% Gross Production ROM diamonds Carats 1 050 874 1,050,874 979 094 979,094 +7% Tailings & alluvial diamonds Carats 113,983 120,273 -5% Total diamonds Carats 1
Slide 7: FY 2010 Summary Of Results
FY 2010 Summary Of Results FY 2010 FY 2009 (US$M) (US$M) Revenue* 163.7 69.3 Mining and processing costs (98.9) (64.0) Other direct income 2.4 2.5 Profit from mining activity* 67.2 7.8 Oth operating Other ti income i 5.4 5 4 32 3.2 Exploration income/(expense) 1.2 (13.7) Corporate overhead (7.5) (5.
Slide 8: Strong Operating Cashflows
Strong Operating Cashflows FY 2010 (US$ ) (US$m) Group net profit after tax 70.2 Income tax credit ( ) (1.2) Profit before taxation 69.0 Adjusted for non cashflow items (10.0) Cash generated before working capital changes 59.0 Increase in net working capital (6.9) Cash generated from operations 52 1
Slide 9: Balance Sheet – Cash & Debt Summary
Balance Sheet – Cash & Debt Summary FY 2010 FY 2009 (US$M) (US$M) C h and Cash d cash h equivalents: i l t Bank 34.5 11.1 Diamond a o d inventories e to es (at cost) 18.2 8 6.5 6 5 Total¹ 52.7 17.6 Loans, borrowings and deferred consideration: Al Rajhi convertible loan note nil 20 Al Rajhi loan (cou
Slide 10: The Diamond Market
THE DIAMOND MARKET 10
Slide 11: Market Fundamentals
Market Fundamentals • Diamond supply constraints - world’s largest diamond mines are past their peak • Greenfield exploration cut due to downturn and lack of available funds • Strong demand drivers going forward, particularly from BRIC economies • Significant supply / demand deficit expected to emer
Slide 12: Diamond Prices
Diamond Prices Precious Metals and Diamonds – Jan 2009 = 100 • Rough diamond prices 500 450 recovered strongly in line with 400 other commodities 350 300 • Exciting double digit growth in 250 demand continued from China / 200 150 India – now also coming back 100 from major US market 50 2002 2003 200
Slide 13: Demand Growth Mainly Driven By China
Demand Growth Mainly Driven By China • China now world’s second largest economy • H1 2010: Diamond imports up 92% to US$577m (source: Shanghai Diamond Exchange Administration) • Increasingly important manufacturing centre (fiscal incentives in place to promote industry) • Hong Kong now most importan
Slide 14: Operations
OPERATIONS 14
Slide 15: Expansion Programmes On Track
Expansion Programmes On Track CULLINAN WILLIAMSON • Steady growth from underground • 3 year expansion plan now in progress production • Pit-shaping operations underway - • Decline already passed 800m level stockpile of 500,000 tonnes • Capex in line with forecasts • Opportunity O t it tot refurbish
Slide 16: Production – Expansion Plans
Production – Expansion Plans Mine Cullinan Williamson Koffiefontein Kimberley y Expected ROM tonnes 2.3 2.1 0.9 0.6 FY2011 (Mtpa) pa s o ROM Expansion O tonnes o es 4 0 (FY2019) 4.0 10 0 (FY2014) 10.0 1 2 (FY2017) 1.2 1 0 (FY2012) 1.0 (Mtpa) US$ / ROM carat* $105 $200 $480 $250 ROM grade d (cpht)* (
Slide 17: Production and Revenue Growth Profile (Gross)
Production and Revenue Growth Profile (Gross) 4 600 3 450 Gross Revenue Carats 2 300 in 2010 terms (Millions) (US$m) 1 150 0 - FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (Actual) Cullinan Koffiefontein Kimberley U/G Williamson Fissures Revenue 17
Slide 18: Production & Revenue Split
Production & Revenue Split Gross Production Gross Revenue FY 2010: 1.2 million carats FY2010: US$178 million 0.1 13.5 Cullinan 0.1 22.8 0.1 Williamson Koffiefontein 14.4 Fissure Mines 127.0 09 0.9 FY 2019: 3.5 million carats $ FY 2019: US$488 million 0.2 0.2 33.5 0.1 Cullinan 45.1 Williamson 0.6 52.
Slide 19: Investment Case
INVESTMENT CASE 19
Slide 20: A Unique Diamond Investment
A Unique Diamond Investment • Major diamond resources: • 261m carats (gross), 194m carats (attributable) • Diversified portfolio with seven producing mines • Substantial g growth p profile: • Organically grow production to 2.5m+ carats by FY 2014 and 3m+ carats by FY2019 • Strong cash flow generatin
Slide 21: Thank You
The 507 carat Cullinan Heritage – sold for US$35.3m Thank You
Slide 22: Capital Structure
Capital Structure High Quality Shareholder Base 17 Sep 2010 Share Price Chart Al Rajhi Holdings W W.W.L. WL 18 1% 18.1% Saad Investments Company Limited 17.3% JP Morgan Asset Management (UK) Limited 9.3% Scottish Widows Investment Partnership 6.2% Capital Group International, Inc. 6.2% BlackRock Inv
Slide 23: The Petra Executive Board
The Petra Executive 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 k
Slide 24: Diversified Production Portfolio
Diversified Production Portfolio Williamson Production South Africa • Cullinan • Koffiefontein • Kimberley Underground • Helam • Fissures • Sedibeng Geographically focused portfolio • Star in stable and low low-risk risk countries Tanzania • Williamson 24
Slide 25: Resource Update
Resource Update Total carat base Attributable carat base Cullinan 203.3 Cullinan 150.5 Williamson 40.0 Williamson 30.0 Koffiefontein 5.7 Koffiefontein 4.0 Kimberley 7.5 Kimberley 5.5 Fissures 4.6 Fissures 4.5 261 million carats 194 million illi carats t 25
Slide 26: Mines + Assets + Infrastructure
Mines + Assets + Infrastructure Petra has acquired four of the world’s important diamond mines July 2007 July 2008 November 2008 May 2010 Koffiefontein Cullinan Williamson Kimberley UG 70% Petra 74% Petra 75% Petra 74% Petra 30% Re-Teng Diamonds 14% Thembinkosi / 25% Government of United 26% Sediben
Slide 27: Iconic Mines – Writing The History Of Diamonds
Iconic Mines – Writing The History Of Diamonds The Cullinan The Golden Jubilee The Oppenheimer 3,106 carats rough 755 carats rough, 253.7 carats rough The Taylor Burton Largest gem diamond 546 polished Perfect yellow diamond 241 carats rough, ever discovered Cullinan mine Dutoitspan Mine, Kimberley
Slide 28: CAPEX Profile
CAPEX Profile Fi Financial i lYYear 2011 2012 2013 2014 2015 2016 2017 2018 2019 Operation Area Cullinan BAW/BB1E/AUC Gap Fillers AUC South C Cut Phase 1 C‐Cut ROM Tonnes (Mt) 2.3 2.4 2.4 2.4 2.6 2.6 2.8 3.2 4.0 Tailings Tonnes (Mt) 0.4 1.0 3.0 4.0 4.0 4.0 4.0 4.0 4.0 Expansion Capex (US$m) 35.4 58.
Slide 29: Cullinan Expansion Programme
Cullinan Expansion Programme Current Infrastructure Current Shaft Bottom 580 Level Planned Infrastructure BA5 AUC South and 630m Level BAW Phase 1 BB1E C-CUT 732m Level Phase 2 830m Level 763m Loading Level 950m Shaft Bottom Kimberlite Footprint C-CUT 16 Ha @830Level Current face of South Decline 10
Slide 30: Williamson Expansion Programme
Williamson Expansion Programme 30
Slide 31: Koffiefontein Expansion Programme
Koffiefontein Expansion Programme 31
Slide 32: Kimberley Underground Expansion Programme
Kimberley Underground Expansion Programme 32
Slide 33: Country Profiles
Country Profiles South Africa Tanzania Profile: Profile: South Africa is a middle-income, emerging market Tanzania’s robust economy reflects its stable political with an abundant supply of natural resources; well- situation and ensures that it ranks highly in Africa in developed financial, legal, co
Slide 34: Petra Diamonds Contact
The 507 carat Cullinan Heritage – sold for US$35.3m Petra Diamonds Cathy Roberts cathyr@petradiamonds com cathyr@petradiamonds.com +44 20 7318 0452 www.petradiamonds.com