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Results For The Year Ended 30 June 2011
19 September 2011
Finsch mine, South Africa
2
Important Notice
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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.
Building A Leading Diamond Producer
3
Cullinan
July 2008
74% Petra26% BEE Partners
Block Cave
20 Year Mine Plan
Williamson
November 2008
75% Petra25% Government of United Republic of
Tanzania
Open Cast
20 Year Mine Plan
Kimberley UG
May 2010
74% Petra26% BEE Partners
Block Cave
12 Year Mine Plan
Finsch
74% Petra26% BEE Partners
Block Cave
18 Year Mine Plan
Koffiefontein
July 2007
74% Petra26% BEE Partners
Front Cave
20 Year Mine Plan
Petra’s growth path – establishing a reserves and resources base of +300 Mcts worth US$56bn
Successful track record:• Focus on efficiencies: right-size operation, restructure cost base & empower management• Utilise in-house capabilities to execute Capex programmes• Optimise plant processing & security to ensure recovery of full spectrum of diamonds• Achieve best rough diamond prices through open tender system
September 2011
FY 2011 Highlights
Operations Highlights
• Production of 1,117,795 carats (FY 2010: 1,164,856)
• Expansion plans on target to increase production to ca. 4 million carats by FY 2014 and over 5 million carats by FY 2019
• Sound cost control despite inflationary pressures
• Diamond prices rose steadily from Oct 2010 to highs in June 2011
Corporate Highlights
• Acquisition of Finsch for R1.425 billion (ca. US$192 million) – completed 14 Sep 2011
• Equity fundraising of US$325 million
• US$83 million debt facilities in place with IFC and RMB
4
Finsch mine, South Africa
FY 2011 Results Snapshot
5
Note: FY 2010 included the sale of the 507 carat Cullinan Heritage diamond for US$35.3 million
FY 2011 Summary Of Results
6
FY 2011(US$M)
FY 2010(US$M)
Revenue* 220.6 163.7Mining and processing costs (146.9) (98.9)Other direct income 2.7 2.4Profit from mining activity* 76.4 67.2Other income - 5.4Exploration (expense) / income (1.3) 1.2Corporate overhead (8.0) (7.5)Deferred taxation on inventory fair value adjustment - (7.4)Inventory fair value adjustment - (19.0)Cullinan fair value adjustment - 31.0Adjusted EBITDA* 67.1 70.9Net impairment charges and reversals 6.5 -Recycling of foreign exchange differences on exploration projects - 12.3Depreciation & Amortisation (22.4) (12.9)Share based expense (1.9) (1.7)Net unrealised foreign exchange gain* 18.6 0.9Net finance expense* (3.5) (0.5)Tax (expense) / credit (5.2) 1.2Net profit after tax – Group 59.2 70.2EPS – US$ cents* 12.83 22.65
* Refer to announcement dated 19 September 2011 for detailed notes
Operating Cashflows
7
FY 2011(US$M)
FY 2010(US$M)
Group net profit after tax 59.2 70.2
Income tax credit (expense) 5.2 (1.2)
Profit before taxation 64.4 69.0
Adjusted for non cashflow items 3.6 (10.0)
Cash generated before working capital changes 68.0 59.0
Increase in net working capital (15.8) (6.9)
Cash generated from operations 52.2 52.1
Finance expense and taxation (1.6) (3.3)
Net cash generated from operating activities 50.6 48.8
Balance Sheet Snapshot
FY 2011(US$M)
FY 2010(US$M)
Cash and cash equivalents:
Bank 324.9¹ 34.5
Diamond inventories 13.3 15.0
Total 338.2 52.7
Loans, borrowings and deferred consideration:
IFC / RMB debt facilities (ca. US$83m in total) 75.5 nil
Al Rajhi loan (coupon 8%) nil 32.0
Deferred Cullinan consideration (coupon 0%)² 18.7 32.0
Other loans and borrowings (average coupon approx. 10%, incl. ZAR debt) 0.0 0.4
Total 94.2²,³ 112.3
8
¹ Includes US$192 million applied to settle the Finsch acquisition consideration on 14 September 2011² IFRS present value; Al Rajhi deferred consideration of US$20 million due Dec 2011 ³ Does not include BEE loans due to Petra of US$73 million at 30 June 2011; BEE loan relating to Finsch transaction post Period-end of a further US$54 million
FY 2011 – Operations Results
Operation Cullinan Koffiefontein Kimberley Underground
Fissures Williamson
FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010
Sales
Revenue (US$M) 140.2 127.0 30.8 22.8 18.2 n/a 21.8 13.5 9.5 14.4
Diamonds sold (carats) 944,405 903,861 54,640 56,707 54,733 n/a 89,491 72,629 31,555 91,901
Average price per carat (US$) 148 141¹ 564 402 333 n/a 244 185 302 157
ROM Production
Tonnes treated (Mt) 2.3 2.2 0.7 0.9 0.4 0.009 0.2 0.2 n/a 1.3
Grade (cpht) 36.6 38.9 4.9 6.0 12.9 14.9 45.7 42.0 n/a 6.3
Diamonds recovered (carats) 851,193 841,293 35,139 53,026 57,402 1,362 83,876 70,950 n/a 84,241
Tailings / Alluvial
Tonnes treated (Mt) 0.6 0.2 0.7 0.2 n/a n/a 0.05 0.03 0.5 0.4
Grade (cpht) 7.7 34.9 1.9 3.0 n/a n/a 6.9 10.7 5.6 4.0
Diamonds recovered (carats) 44,246 86,638 12,817 7,234 n/a n/a 3,612 3,282 29,510 16,830
Total Production
Tonnes treated (Mt) 2.9 2.4 1.4 1.1 0.4 0.009 0.2 0.2 0.5 1.8
Diamonds recovered (carats) 895,439 927,931 47,956 60,260 57,402 1,362 87,488 74,232 29,510 101,071
9¹ US$101 excluding the sale of the Cullinan Heritage diamond for US$35 million
Costs & Capex
10
¹ Cost break-down for Williamson n/a as costs have been capitalised during the bulk sampling phase in FY 2010 andduring the plant rebuild project in FY 2011
² Total Group Capex of US$110.7 million includes US$11.0 million relating to work in progress at the Group’s projectsdivision
Operation Cullinan Koffiefontein Kimberley Underground
Fissures Williamson
FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010
Costs
On-mine cash cost per tonne treated (ZAR)
164 167 115 123 191 n/a 684 669 n/a n/a
Cost Breakdown
% Labour 43.9 46.4 40.0 40.9 45.8 n/a 60.4 60.7 n/a n/a
% Stores 33.7 34.1 39.0 43.0 31.9 n/a 23.0 23.3 n/a n/a
% Power 13.9 16.1 13.5 12.8 11.5 n/a 10.3 9.3 n/a n/a
% Other 8.5 3.4 7.5 3.3 10.8 n/a 6.3 6.7 n/a n/a
Capex
Capex (US$M) 33.9 20.4 11.0 4.6 13.0 10.2 5.2 2.5 36.6 11.6
Safety Performance
• Health and safety of employees is top priority for management• Formation of Board level HSSE Committee post year-end• January 2011 – regrettable fatality occurred at Koffiefontein • Petra striving for zero harm across its operations
11
Diamond Market – Strong Fundamentals
12
• Strong market in FY 2011 underscored by firm retail demand (both new & established markets)• Rough prices in all categories rose substantially but small gem diamonds saw exceptional
growth – trend towards higher content in jewellery & luxury goods (e.g. eternity wedding rings, watches, pens etc)
• Recent economic uncertainty has led to adjustment in rough diamond prices off recent highs• Demand remains strong – positive results from bellwether retailers Tiffany’s & Signet• Long term picture remains same – growing demand and limited supply
Emerging Deficit
Source: Deutsche Bank, April 2011
Supply Constraints
Source: RBC Capital Markets, September 2011
World Production (MM cts)
0
20
40
60
80
100
120
140
160
180
200
2005A 2006A 2007A 2008A 2009A 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E
MM
ct
Angola Australia Botswana Canada DRC Namibia Russia South Africa Zimbabwe Other Countries
Diamond Market – Key Drivers
• Urbanisation trend – by 2025: 221 Chinese cities with +1m population (vs 107 cities in Europe, Japan, US combined)
• Diamond engagement ring trend rising in urban centres in China and India: +11m marriages in China pa; +10m in India pa
• Diamond consumption per capita in emerging regions currently far below mature markets
• Far East (China, Hong Kong, Taiwan, India & the Gulf) expected to eventually account for ca. 40% of global demand by 2015
13
China DER Acquisition Rate China’s Polished Diamond Imports
Source: Shanghai Diamond ExchangeSource: De Beers – ‘DER’ : diamond engagement ring
Diamond Prices
Mine Average price for H2 FY 2011
(US$)
Average price for H1 FY 2011
(US$)
Average price for FY 2011(US$)
Average price for FY 2010
(US$)
Cullinan 178 120 148 141(101 excluding the Cullinan Heritage)
Koffiefontein 756 470 564 402Kimberley Underground 355 285 333 n/a
Fissures 289 192 244 185Williamson 314 264 302 157* Prices given are the average of ROM and tailings as Petra tenders mine production on a mixed parcel basis
14
Management is using the following per carat prices in calculating the value of the Groups reserves and resources base, as well as for FY 2012 pricing assumptions:
Mine Weighted Average(US$)
ROM(US$)
Tailings / Other(US$)
Cullinan 163 170 100Koffiefontein 549 600 480 – Ebenhaezer
200 – TailingsKimberley Underground 325 325 150Fissures 271 180 – 450 n/aWilliamson – Main Pit 230 230 n/aFinsch 155 180 95
Actual tender prices:
15
Production & Revenue Split – FY 2011 & Projected FY 2019 Gross Production
FY 2011: 1.1 million carats
Gross Revenue
FY 2011: US$221 million
FY 2019: 5.4 million carats FY 2019: US$1,294 million*
* Calculated using a 4% real price increaseFY 2019 figures are management estimates
Cullinan – Mining Overview
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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 – Key Components• South Decline to establish
production at 830m and then on to the bottom of the new shaft at 930m – end FY 2012 (breakaway already established at 830m)
• Contract for shaft deepening & related infrastructure to be awarded imminently
• Development of North Decline to create further access to 830m production level - commencing Q3 FY 2012
• Shaft deepening from 580m to 930m to replace the current conveyor belt ore-handling system – mid FY 2015
• Production from new cave –commencing during FY 2015
• Upgrading and streamlining of plant facilities in order to treat 4Mt underground & 4Mt tailings – from FY 2015, 4 year ongoing programme
17
• Acquisition of Finsch completed 14 September 2011
• Will add ca. 1 Mct for FY 2012
• State-of-the-art infrastructure & modern plant
• Resource of 43.3 Mcts, incl. 25.8 Mctsreserves & 2.5 Mcts tailings
• Petra to operate Finsch at 1.5 Mcts pa initially, rising to ~2 Mcts pa
• Fully staffed going concern – increases the Petra skills pool across the Group
• First-rate safety record & well managed environmental programme
Finsch – A New Flagship Asset
Vent Shaft
ProductionShaft
630m Level670m Level
770m 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 SLC
Finsch – Mining Overview
18
Kimberlite Footprint @880m Level:Main pipe: 3.7haPrecursors: 1.5ha
Finsch Mining Schematic
Current Infrastructure
Planned Infrastructure
Expansion Plan – Key Components
• Mining currently taking place in Block 4 at 630m – FY 2012
• Treatment of Pre 1979 Tailings – until FY 2015
• Accessing and development of Precursor SLC at 630m –FY 2013
• Development of Sub Level Cave at 770m – FY 2013
• Production from Block 5 at 880m – FY 2014 onwards
• Treatment of Post 1979 Tailings – FY 2015 to FY 2020
• Deepening of shaft to 950m and ore-handling infrastructure on 880m Level – End FY 2015
• Ramp up ROM to 3.5 Mpta –FY 2018
880m base of Resource(open ended at depth)
Exceptional Organic Growth Profile
19All forecasts are management estimates
Focus & Outlook
20
Cullinan mine, South AfricaProduction
• Successful integration of Finsch brings step-change in production for FY 2012
• Managing ROM grades at Cullinan and roll-out of 1Mt tailings operation in FY 2012
• Ramp-up production at Kimberley Underground – full year from Joint Shaft and commencement of treatment at Wesselton
• Start-up of production at Williamson (Q3 FY 2012)
Expansion Plans
• Continue to strengthen mine management teams and internal skills set
Main Market step-up expected by December 2011
• Petra targeting inclusion in FTSE 250
• Appointment of independent Non-Executive Directors expected to be announced in the near future
Diamond market outlook
• Some short-term volatility due to current financial / capital markets uncertainty
• Medium to long-term fundamentals still firmly in place
• Petra’s strong growth will maximise leverage to anticipated supply deficit
Thank You
Finsch mine, South Africa
Capital Structure
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High Quality Shareholder Base 16 Sep 2011
Al Rajhi Holdings W.W.L. 13.3%
Saad Investments Company Ltd/AWAL Bank 12.2%
JP Morgan Asset Management (UK) Ltd 8.6%
Capital Group International, Inc. 7.3%
Scottish Widows Investment Partnership 6.4%
BlackRock Investment (UK) Ltd 4.2%
M&G Investments 3.6%
T. Rowe Price 3.3%
Kames Capital 3.3%
Ignis Investment Services Limited 3.0%
Directors 2.8%
Listing AIM: PDL
Average daily trading volume (shares) – 2011 YTD
1.6m
Shares in issue 499m
Free float 71.7%
Market cap @ 124p (16 September 2011)
£620m
Share Price Chart
The Petra Board
23
Adonis PouroulisChairman
Johan DippenaarCEO
David AberyFinance Director
Jim DavidsonTechnical Director
Successful mining entrepreneur
Founded Petra Diamonds in 1997 and floated first diamond company on AIM
Along with fellow directors, built Petra into pan-African diamond group with over 3,600 employees
Instrumental in raising funds to help finance and structure early stage mining companies in Africa
One of South Africa’s most successful diamond entrepreneurs with 20 years’ experience
Founded diamond group in 1990 and grew portfolio to 3 producing mines before listing as Crown Diamonds on ASX
Merger with Petra in 2005 –now at helm of London’s largest diamond company
Extensive experience as Chief Financial Officer in South African and UK business environments
In-depth knowledge of London capital markets
Integral to structuring and deliverance of strategic group corporate development, including acquisitions and joint ventures
Acknowledged world authority on kimberlite geology and exploration
Over 20 years’ experience in mine management
Formerly Head of Diamond Exploration for Rio Tinto across Southern Africa
As Technical Director of Crown Diamonds, managed specialist underground fissure mines over a decade
World-Class Reserves & Resources
24
23.6
8.0
2.3
2.1
0.8
5.7
Cullinan
Williamson
Koffiefontein
Kimberley
Fissures
Finsch
Gross Carat Base – 309.1Mcts Gross In-Situ Value – US$56bn*
203.3
40.0
5.7
7.5 4.6
48.1
Cullinan
Williamson
Koffiefontein
Kimberley
Fissures
Finsch
* Internal estimate calculated by reference to the average tender prices achieved during the second half FY 2011 and management’s forecast per carat value for Finsch
25
A Diversified Production Portfolio
Production
South Africa • Cullinan
• Koffiefontein
• Kimberley Underground
• Finsch
• Fissures
• Helam
• Sedibeng
• Star
Tanzania • Williamson
Finsch
Cape Town
Western Cape
Eastern Cape
Northern Cape
South Africa
Free State
KwaZulu‐Natal
Gauteng
JohannesburgNorth West Province
Limpopo
Mpumalanga Cullinan
Star
Helam
Sedibeng
Kimberley
Koffiefontein
Durban
Williamson
Williamson – Mining Overview
26
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 (ca. 50,000 cts)
• Enhanced rebuild of existing plant (3 Mtpa) near completion –expected to be in production Q3 FY 2012
• Standby power to be made available at site due to recent power issues – Q3 FY 2012
• Construction of new plant including autogenous mill – FY 2013
• Expansion plan to enable a 10 Mtpa operation –New timing tbc
Koffiefontein – Mining Overview
27
Koffiefontein Kimberlite Pipe SchematicExpansion Plan – Key Components
• Installing new front cave at 590m Level –FY 2013
• Installing new block cave at 690m Level –FY 2016
• Tailings programme now ramped up with Petra processing +0.5 Mtpa
Kimberley Underground – Mining Overview
4.5 ha @ 870m Level
0.5 ha @ 845m Level
3.5 ha @ 995m Level
Kimberley Underground Kimberlite Pipes SchematicExpansion Plan – Key Components
• Bedding down Joint Shaft Plant after initial commissioning issues
• Constructing and commissioning of mobile pan plant (40,000 tpm) at Wesselton –September 2011
• Constructing and commissioning of main plant (40,000 tpm) at Wesselton – April 2012
• Underground development – FY2012 onwards
• Sampling programme underway to extend mine life – FY 2012 onwards
28
Aim Of Expansion Programmes – Undiluted Ore
29
Virgin kimberlite ore
Production level
Undercut level
Drawpoints
Loaders
Haulage
Undiluted ore
Schematic - block cave mining method
• 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 undiluted ore in higher grade areas
• Substantial higher revenue per tonne leading to increased margins
Capex Profile
30
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
1. All monetary values stated in 2011 money terms; ZAR:USD rate used: R6.75
