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Delivering Growth in DiamondsJune 2012
LISTEDP R E M I U M
Construction underway of the new Cullinan modular tailings plant
2
Important Notice
These Presentation Materials do not constitute or form part of any invitation, offer for sale or subscription or any solicitation forany 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 reliedupon in any manner or for any purpose whatsoever.
These Presentation Materials must not be used or relied upon for the purpose of making any investment decision or engaging inan investment activity and any decision in connection with a purchase of shares in the Company must be made solely on thebasis of the publicly available information. Accordingly, neither the Company nor its directors makes any representation orwarranty in respect of the contents of the Presentation Materials.
The information contained in the Presentation Materials is subject to amendment, revision and updating in any way without noticeor liability to any party. The presentation materials contain forward-looking statements which involve risk and uncertainties andactual results and developments may differ materially from those expressed or implied by these statements depending on avariety of factors. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of theinformation or opinions contained herein, which have not been independently verified.
The delivery of these Presentation Materials shall not at any time or in any circumstance create any implication that there hasbeen no adverse change, or any event reasonably likely to involve any adverse change, in the condition (financial or otherwise) ofthe Company since the date of these Presentation Materials.
The Presentation Materials are confidential and being supplied to you for your own information and may not be reproduced,further distributed, passed on, or the contents otherwise divulged, directly or indirectly, to any other person (except the recipient’sprofessional advisers) or published, in whole or in part, for any purpose whatsoever. The Presentation Materials may not be usedfor the purpose of an offer or solicitation to subscribe for securities by anyone in any jurisdiction.
Discover Petra Diamonds
• London’s largest quoted diamond mining group (LSE: PDL) – member of the FTSE 250
• Major diamond resource of +300 million carats
• Exceptional organic growth profile – on track to increase production to over 5 Mcts by 2019
• Brownfields expansion – proven operations with long histories of production
• Sustainability at the heart of Petra – securing a long-term future for our assets
3
Proven Track Record – Continuous Growth
4
0.0
0.5
1.0
1.5
2.0
2.5
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
Gross Production Profile
Strong production growth due to Finsch acquisition
Mcts
Major increase due to higher
volume Cullinan mine
0
50
100
150
200
250
300
350
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
Gross Revenue Profile
US$ million
Acquisition of Koffiefontein
Recovery in rough diamond prices & sale of 507 ct Cullinan Heritage
Finsch contribution boosts revenue
Decreased revenue due to the economic downturn
Q3 FY 2012
Q3 FY 2012
* The above columns suggesting full year FY 2012 production and revenue levels are for illustrative purposes only and are not market forecasts
* *
A Diversified Portfolio
• Focus on Africa – source of 60% of the world’s diamonds by value
• Eight producing mines – provides flexibility in terms of portfolio performance
5
LDD sampling campaign currently underway on KX36
Diamond Market – Key Demand Drivers
6
Per capita consumption of key commodities: China relative to the US “steady state”
• Confidence in continued strong demand growth from China
• 5 year economic plan seeks to boost China’s domestic consumption
• Demand driven by urbanisation trend and growing middle class
• Chow Tai Fook: “Demand for mid-quality…diamonds over the next three to five years will be very strong (estimate +30% pa), creating a significant imbalance between supply and demand….We believe that the jewelry market in China is just beginning to take off.” (Rapaport – 1 May 2012)
Luxury purchases:An aspirational ladder as disposable income increases
Source: BofA Merrill Lynch Global Metals and Mining Research Source: Goldman Sachs Research estimates
China is already at 30% of world consumption of luxury handbags
Aim Of Expansion Programmes – Undiluted Ore
7
• Current mining at underground pipe mines taking place in diluted mature caves and low grade remnants
• Expansion programmes will open up fresh block caves, delivering access to undiluted ore in higher grade areas
• Cullinan grade expected to rise from ~34cpht to ~50cpht; Finsch grade expected to rise from ~33cpht to ~47cpht; Koffiefontein grade expected to rise from ~5cpht to ~8cpht
• Substantial higher revenue per tonne leading to increased margins
• Will put less stress on processing system (waste rock is harder & more abrasive than kimberlite)
Block cave mining schematic
Expansion Programmes – Key Milestones
8
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
PHASE ONEMajor underground development and infrastructure build
PHASE TWOFinalise ore-handing systems;
Large percentage of production starts to come from higher grade areas once access gained to
undiluted ore
Cullinan – shaft sinking and related infrastructure at Cullinan (taking shaft from 580m to 930m)
First access to undiluted ore from FY 2015
New tailings plant – first module to be commissioned H1 FY 2013; ramping tailings up to 4 Mtpa by FY 2014
Cullinan – establish new production level at ~830m
New C-Cut block cave to provide access to undiluted ore
Replace ore-handling system with new system, taking ore direct to new shaft bottom
Finsch – development of Sub Level Caves between 700m to 780m
First access to undiluted ore from FY 2015
Deepening of shaft to 950m
Finsch – new Block 5 cave to provide access to undiluted ore
Related shaft and ore-handling infrastructure in place at 880m
Koffiefontein – development of Sub Level Caves between 560m and 600m
Koffiefontein – new block cave at 690m level provides access to undiluted ore
Kimberley Underground – commissioning of Wesselton main plant; ramp up tonnages to 1 Mtpa
Williamson – enhanced rebuild of existing plant (3 Mtpa); commissioning completed, production now restarted
Decision on longer term phase two expansion (10 Mtpa) FY 2013
FY 2019
+5 Mctpa
Expansion Programmes – FY 2012: A Snapshot
9
Cullinan: Underground development Finsch: Underground development
Williamson: Rebuilt plant Kimberley UG: Plant constructionKoffiefontein: Underground development
Robust Balance Sheet
30 Apr 2012(US$m)
31 Dec 2011(US$m)
Cash and cash equivalents:
Bank 17.5 45.1
Diamond inventories of 332,218 carats (stated at the lower of cost or net realisable value)
34.7 38.1
Total 52.2 83.2
Loans and borrowings:IFC / RMB Debt Facilities - ca. US$79m (US$40m IFC; R300m RMB)* (69.9) (70.5)
RMB Revolving Credit Facility - ca. US$39m (R300m)** undrawn undrawn
FNB Working Credit Facilities - ca.US$23m (R180m)*** (3.0) -
Deferred Cullinan consideration (Al Rajhi) – repaid Q3 FY 2012 - (6.0)
Total (72.9) (76.5)
BEE loans due to Petra 128.7 117.0
Net cash, diamond stock, borrowings and BEE loans due 108.0 123.7
10
* IFC interest charged at US$ 6 month LIBOR + 4.5%; RMB interest charged at South African 3 month JIBAR +4.5%** Interest charged at South African 3 month JIBAR +2.5% *** Interest charged at ca. JIBAR +2.4%
An end April exchange rate of R7.74/$1 (Dec: R8.12/$1) has been used in converting the Rand denominated amounts reflected above
KX36 – New Kimberlite Discovery
• New discovery in Botswana
• Homogeneous orebody
• Core drilling and micro-diamond sampling campaign indicated:
• Initial modelled (undiluted) diamond grade between 75-180 cpht
• Indications of a reasonably coarse diamond size distribution from MiDAmodelling
• Potential kimberlite tonnage between 28 Mt and 34 Mt to a depth of 516m below surface
• Surface area interpreted to be ~5 ha under 78m of Kalahari overburden
• LDD and bulk sampling campaign commenced in April 2012
• Results expected later in the year
11Calcretized KimberliteWeathered KimberliteFresh Kimberlite
Core Drilling516m
Large Diameter (24”) Drilling
516m
Production & Revenue Portfolio Split
Gross Production
FY 2011: US$221 million FY 2019: ca.US$1.3 billion*
FY 2019 figures are management estimates* Calculated using a 4% real price increase
12
Cullinan 0.9
Williamson 0.6
Koffiefontein 0.05
Kimberley 0.2
Fissures 0.08
Cullinan 2.4
Fissures 0.1
Williamson 0.03
Koffiefontein 0.1
Kimberley 0.06 Finsch 1.9
Cullinan 140.2
Koffiefontein 30.8
Fissures 21.8
Williamson 9.5
Kimberley 18.2 Cullinan 489
Williamson 179 Koffiefontein 85
Kimberley 70
Fissure 52
Finsch 419
Q3 FY 2012: US$91 million
Cullinan 30.6
Koffiefontein 6.4
Kimberley 5.8
Fissures 4.1
Finsch 51.1
FY 2011: 1.1 million carats FY 2019: 5.4 million carats
Cullinan 222,196
Koffiefontein 9,903
Fissures 17,472
Williamson 18,983
Kimberley 10,903
Finsch 343,051
Q3 FY 2012: 622,508 carats
Gross Revenue
Sustainability – At The Heart Of Petra
Investing in education and communities
Mwadui Primary School – owned and operated by Williamson
Promoting biodiversity and progressive rehabilitation
The Williamson Nursery, with the capacity to raise 500,000 seedlings annually
Portable skills workshop at Koffiefontein – Boiler making
Focus on training
Petra cultivates a culture of continuous improvement
Developing our people
Health and safety of employees is top priority for management
Formation of Board level HSSE Committee in FY 2012
Petra striving for zero harm across its operations
Left: Petra’s LTIFR Rate
Health and Safety
Focus & Strategy
14
Core objective to increase production fivefold to +5 Mctpa through organic growth
Increaseoutput
Focused oncash-generative
diamond production Optimise
recoveriesDrive
efficiencies
• Expansion programmes to increase production at each operation
• Utilise resources available including tailings deposits
• Programmes to deepen underground mines to establish new block caves and provide access to undiluted ore
• Focus on “value” as opposed to “volume” production
• Optimise plant processing and security
• Contain costs on a unit basis• Utilise in-house skills, alongside
contractors, to execute capexprogrammes
Steadily growing annual production, with a target of over 5 million carats by FY 2019
Maintaining a culture of effective cost control
Aiming to improve operating margins at each mine over time
Appendix
Capital Structure
16
High Quality Shareholder Base 7 June 2012
Al Rajhi Holdings W.W.L. 13.3%
Saad Investments Company Ltd/AWAL Bank 12.1%
JP Morgan Asset Management Holdings Inc. 7.9%
Capital Group International, Inc. 7.3%
Prudential plc group of companies* 5.1%
Scottish Widows Investment Partnership 5.0%
T. Rowe Price 4.9%
BlackRock Investment (UK) Limited 4.2%
Kames Capital 3.3%
Ignis Investment Services Limited 3.0%
Directors 2.8%
Listing LSE: PDL
Average daily trading volume (shares) – YTD
1.2m
Shares in issue 504m
Free float 72%
Market cap @ 134p (7 June 2012)
£677m
Share Price Chart (1 year)
* of this holding, 25,467,015 shares are held by M&G Investment Funds 3
The Petra Board
Adonis Pouroulis (41)Non-Executive Chairman
Successful mining entrepreneurFounded Petra Diamonds in 1997 and floated first diamond company on AIMAlong with fellow directors, built Petra into pan-African diamond group with over 3,600 employeesInstrumental in raising funds to help finance and structure early stage mining companies in Africa
Johan Dippenaar (54)CEO
One of South Africa’s most successful diamond entrepreneurs with +20 years’ experience Founded diamond group in 1990 and grew portfolio to three producing mines before listing as Crown Diamonds on ASXMerger with Petra in 2005 – now at helm of London’s largest diamond company
David Abery (49)Finance Director
Extensive experience as Chief Financial Officer in South African and UK business environmentsIn-depth knowledge of London capital marketsIntegral to structuring and deliverance of strategic group corporate development, including acquisitions and joint ventures
Jim Davidson (67)Technical Director
Acknowledged world authority on kimberlite geology and exploration+20 years’ experience in mine managementFormerly Head of Diamond Exploration for Rio Tinto across Southern AfricaAs Technical Director of Crown Diamonds, managed specialist underground fissure mines over a decade
Dr Patrick Bartlett (66)Independent Non-Executive Director
Acknowledged expert on kimberlite geology and design and geotechnical aspects of block cavingFormerly Chief Geologist for De Beers; responsible for all kimberlite mines in South AfricaIn-depth knowledge of several Petra mines, having worked at Finsch, Koffiefontein, Kimberley Underground, plus was geologist at Cullinan between 1983 to 2003Since retiring has been involved in block caving projects for BHP, Anglo and Rio Tinto
Gordon Hamilton (66)Independent Non-Executive Director
Extensive experience as a NED across wide range of businesses, both JSE and LSE listed; chairs Audit Committee for all these companiesFormerly a partner for +30 years at Deloitte & Touche LLP; primarily responsible for multinational and FTSE 100 listed company audits, mainly in mining, oil & gas, and aerospace and defence; headed up Deloitte South Africa desk in LondonServed for 9 years as member of the UK Financial Reporting Review Panel
Dr Omar Kamal (38)Non-Executive Director
Managing Director for Al Rajhi (Petra’s largest shareholder)Co-manages international investments in various asset classes – focus on equities, private equity, real estatePossesses broad expertise and knowledge ranging from past experience as an academic, working in the financial industry and strategy consultant with a global financial services arm
The company is actively seeking the appointment of one or more independent NEDs
17
An Exceptional Growth Path
18
Cullinan
July 2008
Block Cave
16yr Mine Plan+50yr Potential Life
Williamson
November 2008
Open Pit
17 yr Mine Plan+50yr Potential Life
Kimberley UG
May 2010
Block Cave
11yr Mine Plan+12yr Potential Life
Finsch
Block Cave
18yr Mine Plan+25yr Potential Life
Koffiefontein
July 2007
Front Cave
14yr Mine Plan+20yr Potential Life
September 2011
Petra has acquired the following five diamond mines from De Beers:
Successful track record:• Focus on efficiencies: right-size operation, restructure cost base & empower management• Industry leading team utilises in-house capabilities to execute capex programmes• Focus on ‘value’ as opposed to ‘volume’ production; optimise plant processing & security to
ensure recovery of full spectrum of diamonds• Achieve best rough diamond prices through open tender system
Cullinan – Development Programme
19
Cullinan Mining Schematic
BA5
Rock Shaft
Men & MaterialShaft
Current Shaft Bottom580 Level
630m Level
AUC South and BAW Phase 1
BB1E
830m Level
1073m base of Resource(open ended at depth)
930m Shaft Bottom
Current Infrastructure
Planned Infrastructure
C-CUTPhase 1
2000metres
Current extent of South Decline
16Ha @830 Level
Loading Level
880m Shaft Bottom
CurrentShaft Bottom805 Level
732m Level
Expansion Plan – to take production from +895,000 ctpa to ca. 2.4 Mctpa by FY 2019 (2.0 Mctpa ROM & 0.4 Mctpa tailings)• South Decline to establish
production at 830m and then on to bottom of new shaft at 930m – end FY 2013
• North Decline to create further access to 830m production level – commenced
• Shaft deepening from 580m to 930m to replace the current conveyor belt ore-handling system – mid FY 2015
• Contract for shaft deepening & related infrastructure awarded
• Initial production from new C-Cut cave – FY 2015
• Tailings programme ramp up to treat 4 Mtpa by FY 2014
• Upgrading and streamlining of plant facilities in order to treat 4 Mt underground & 4 Mt tailings –from FY 2015, 4 year programme
North Decline
Finsch – Development Programme
20
Kimberlite Footprint @880m Level:Main pipe: 3.7haPrecursors: 1.5ha
Finsch Mining SchematicExpansion Plan – to take production from ~1.5 Mctpa to just under 2 Mctpa by FY 2018 (1.6 Mctpa ROM & 0.3 Mctpatailings)• Current mining of Block 4 at
630m – FY 2012 to FY 2014
• Access to Sub Level Cave at ~700m – 780m – FY 2013
• Mining from Sub Level Cave – commencing H2 FY 2014
• Deepening of shaft to 950m and ore-handling infrastructure on 880m Level – End FY 2015
• Block Cave planned at 880m – FY 2016 onwards
• Ramp up ROM to 3.5 Mpta –FY 2018
• Treatment of Pre 1979 Tailings – until FY 2015
• Treatment of Post 1979 Tailings – FY 2015 to FY 2020
Vent Shaft
ProductionShaft
630m Level670m Level
780m Level
Shaft Bottom825m
880m Block Cave
950mDecline to 880m
SLC Conveyor
Ore Handling
Sub level Cave
Block 4 Pillars
Block 4 Remaining
Block 5Not in
currentmine plan
Precursor orebody –
not in current
mine plan
Current Infrastructure
Planned Infrastructure880m base of Resource(open ended at depth)
Williamson – Overview
21
Granite BrecciaRVKBoumaShale IslandBVKPK
Geology
205m
LOM Pit Shell
Schematic showing cut-away geology and planned open pit
N1km
Williamson Kimberlite Pipe SchematicExpansion Plan – Key Components
• Stockpile (due to pit shaping activities) of ca. 900,000 t (>50,000 cts)
• Enhanced rebuild of existing plant (3 Mtpa) completed and commissioned; production from main pit restarted – Q3 FY 2012
• Longer term expansion plan to enable a 10 Mtpa operation under review – Decision FY 2013
Koffiefontein – Overview
22
Koffiefontein Kimberlite Pipe SchematicExpansion Plan – to take production to ca. 100,000 ctpa by FY 2017 (90,000 ctpa ROM & 10,000 ctpa tailings)
• Lower than expected ROM production from planned areas supplemented by ore from Ebenhaezer open pit
• Installing new sub-level cave between 560m to 600m Level – FY 2013 to FY 2015
• Installing new block cave at 690m Level –FY 2016
Kimberley Underground – Overview
23
4.5 ha @ 870m Level
0.5 ha @ 845m Level
3.5 ha @ 995m Level
Kimberley Underground Kimberlite Pipes SchematicExpansion Plan – to take production to ca. 120,000 ctpa by FY 2013
• Construction and commissioning of main plant (40,000 tpm) at Wesselton – Q4 FY 2012
• Underground development – FY2012 onwards
• Sampling programme underway to extend mine life – FY 2012 onwards
24
Financial Year 2012 2013 2014 2015 2016 2017 2018 2019Operation Area
Finsch Existing Block 4 (630 meter Level)‐ Block 4 pillars‐ SLC Block 4 precursor‐ SLC 770 meter Level‐ Block 5 880 meter Level Development tonnes ROM Tonnes (Mt) 2.2 3.2 3.2 3.2 3.5 3.5 3.5 3.5 Tailings Tonnes (Mt) 1.6 2.8 3.5 3.5 3.5 3.0 3.0 3.0 Expansion Capex (US$m) 34.2 107.8 110.4 65.4 29.9 ‐ ‐ ‐Stay‐in‐business Capex (US$m) 4.7 6.6 6.9 6.9 7.1 6.8 6.8 6.9
Cullinan ROM Tonnes (Mt) 2.4 2.4 2.4 2.6 2.6 2.8 3.2 4.0 Tailings Tonnes (Mt) 1.0 3.0 4.0 4.0 4.0 4.0 4.0 4.0 Expansion Capex (US$m) 60.9 78.5 74.8 52.6 20.7 19.0 19.0 19.0 Stay‐in‐business Capex (US$m) 4.2 8.6 6.9 7.0 6.1 6.1 6.1 6.3
Williamson ROM Tonnes (Mt) 0.9 5.1 10.0 10.0 10.0 10.0 10.0 10.0 Expansion Capex (US$m) 45.9 35.3 ‐ ‐ ‐ ‐ ‐ ‐Stay‐in‐business Capex (US$m) 4.3 6.2 6.5 6.2 5.9 5.6 5.3 5.0
Koffiefontein ROM Tonnes (Mt) 0.6 0.8 1.0 1.1 1.2 1.2 1.2 1.2 Tailings Tonnes (Mt) 0.9 0.9 0.7 0.6 0.5 0.5 0.5 0.5 Expansion Capex (US$m) 7.5 8.5 9.2 5.9 8.9 ‐ ‐ ‐Stay‐in‐business Capex (US$m) 4.0 4.2 4.3 2.8 2.6 2.5 2.5 2.4
Kimberley U/G ROM Tonnes (Mt) 1.1 1.2 1.0 1.0 1.0 1.0 1.0 1.0 Expansion Capex (US$m) 17.9 9.6 7.4 ‐ ‐ ‐ ‐ ‐Stay‐in‐business Capex (US$m) 3.0 2.9 2.4 2.4 2.3 2.3 2.2 1.7
Fissures ROM Tonnes (Mt) 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Tailings Tonnes (Mt) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐Expansion Capex (US$m) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐Stay‐in‐business Capex (US$m) 2.1 2.1 2.1 2.0 1.9 1.9 1.9 1.8
Petra Diamonds(Gross)
ROM Tonnes (Mt) 7.4 12.9 17.9 18.2 18.6 18.8 19.2 20.0 Expansion Capex (US$m) 166.5 239.7 201.7 123.9 59.5 19.0 19.0 19.0 Stay‐in‐business Capex (US$m) 22.3 30.6 29.1 27.2 25.9 25.2 24.9 24.1
All monetary values stated in 2011 money terms; ZAR:USD rate used of R6.75 – as published in September 2011 at the time of Petra’s prelim results; will be subject to revision in September 2012
Capex Profile