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Unique Growth In A Rising Diamond Market
Indaba Conference, 1 - 4 February 2010
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 Materialswarranty 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 aactual 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,f rther distrib ted passed on or the contents other ise di lged directl or indirectl to an other person (e cept the recipient’sfurther 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.
2
Petra At A Glance
• Resource of 262m carats (gross), 195m carats (attributable)
• The diamond producer that offers substantial growth:
• FY2008 – 0.2m carats
• FY2009 – 1.1m carats
• FY2010 – on track for 1.2m carats
• Firm plan in place to exceed 3m p pcarats by FY2019 (all organic growth)
St t t d• Strong management team andoperational track record
3Strategy to grow production from 1 million to 3 million+ carats pa
Why Diamonds?
• Less than 30 significant producing diamond mines in the world
Falling supply
diamond mines in the world
• Most important diamond mines are past their peak
• No new major discoveries for many years; no new major sources of production to come
Source: RBC Capital Markets, Sep ‘09
Rising demand
• Market has made good recovery – Xmas sales & consumer confidence up in US market
• Strong growth drivers, particularly from emerging markets – China became world’s second l t di d i 2009largest diamond consumer in 2009
• Financing has begun to return to pipeline; inventories are being replenished
• All producers are reporting a strong recovery in rough diamond prices
4
All producers are reporting a strong recovery in rough diamond prices
Petra: A Unique Growth Story
Majors:
Anglos / Private Diversified Diversified State-ownedAnglos / Private Diversified Diversified State owned
Pure diamond equities with significant production:
Diamond ProducerDiamond Producer & Diamond Producer
Diversified production portfolio
All assets in expansion phase
S b t ti l d ti d
Diamond Producer &Retail Stores
Diamond Producer
Substantial production andearnings growth to be delivered
5
Production Portfolio
Williamson
Production
South Africa • Cullinan
• Koffiefontein
• Kimberley Underground*
Geographically focused portfolio in stable and low-risk countries
• Fissures
• Helam
• Sedibeng
• Star
6
in stable and low risk countriesTanzania • Williamson* Acquisition to complete soon
Mines + Assets + Infrastructure
Petra has acquired four of the world’s important diamond mines
July 2007 July 2008 November 2008 To complete soon
CullinanKoffiefontein Williamson Kimberley UG
July 2007 July 2008 November 2008 To complete soon
70% Petra30% Re-Teng Diamonds
74% Petra14% Thembinkosi /
12% Employee Share Trust
75% Petra25% Government of Tanzania
on completion: 74% Petra26% Sedibeng Mining
Petra advantage:
• Right-size operations and treat as core assets• Lower costs and improve efficiencies; empower management teams• Optimise plant processing and security to ensure full spectrum recoveries, incl.
‘specials’
7
specials• Achieve best rough diamond prices through open tender system
Iconic Mines – Writing The History Of Diamonds
The Golden Jubilee755 carats rough,
546 polishedCullinan mine
The Taylor Burton241 carats rough,
69 polished
The Cullinan3,106 carats rough
Largest gem diamond ever discoveredCullinan mine
The Oppenheimer 253.7 carats rough
Perfect yellow diamondDutoitspan Mine, Kimberley U/G
Cullinan mineCullinan mine
The Centenary599 carats rough,
The Blue Heart31 carats polished
The Greater Star of AfricaLargest polished yield from the
The Williamson Pink55 carats rough, 24 carats599 carats rough,
274 polishedCullinan mine
31 carats polishedCullinan mine
8
Largest polished yield from theCullinan at 530 carats
Sits in the Royal SceptreCullinan mine
55 carats rough, 24 caratspolished; gifted to Princess
Elizabeth on her engagementWilliamson mine
Block Caving Schematic
9
CullinanOwnership 74% Petra / 14% Thembinkosi Investments /
12% Employee Share TrustMining type Block cave miningg yp g
Production*
FY 09: 1.99 mt (888,595 carats)FY 10: 2.2 mt (957,000 carats)substantial growth to 4 mt (2.2 mcts), plus 4 mttailings (0.4 mcts) by 2019
ROM value* US$95 per caratOn-mine cost per tonne* R160 per ROM tonne
P t i d it t k t 74% (f Al R jhi) N b 2009
• Source of world’s largest gem diamond ever – 3 106 carats
On mine cost per tonne R160 per ROM tonneMine life +50 years (+21 years current mine plan)
• Petra increased its stake to 74% (from Al Rajhi) – November 2009
• Mine cashflows no longer ring-fenced to Al Rajhi loan repayments
• Profitable first year of production despite diamond downturn
ever 3,106 carats• Produced over 300
diamonds of over 100 carats and a quarter of all • Profitable first year of production despite diamond downturn
• Recovery of several world-class diamonds incl. 507 carat diamond in 2009
• Large Diamond Recovery Plant commissioned – December 2009
diamonds over 400 carats
• Only reliable source of highly prized, rare bl di d
10
Large Diamond Recovery Plant commissioned December 2009blue diamonds
* Company forecasts
Cullinan Expansion
Accessing C-Cut / Tailings production
Current• 133m carat C-Cut resource,
ROM grade 55cpht
• C-Cut production 4 mtpa (2 2m
CurrentShaftBottom580 Level AUC
SouthBA5
Current Infrastructure
Planned Infrastructure• C-Cut production 4 mtpa (2.2m
ctpa) from 2019
• Tailings – 17m carat resource
630m Level
732m Level
andBAW Phase 1
BA5BB1E
C-CUT(165mt), grade 10cpht
• Tailings production 4 mtpa (0.4 mct pa) from 2014
763mLoadingLevel
830m Level Phase 2
950mShaft mct pa) from 2014
• CAPEX: US$30m to be funded from treasury / 507 carat di d l t t b
Kimberlite
ShaftBottom C-CUT
diamond sale; rest to befinanced by mine cash flows
* Company forecast
1073m Base of Resource
Footprint16 Ha @830Level
11Takes gross production to 2.6m ctpa & revenue in excess of US$220 million*
Koffiefontein
Ownership 70% Petra / 30% BEE partnersMining type Front cave mining
FY 09: 0 9 mt (52 089 carats)Production*
FY 09: 0.9 mt (52,089 carats)FY 10: 1.0 mt (76,000 carats), expectedgrowth to 1.2 mt (104,000 ctpa) by 2017
ROM value* US$480 per caratROM value US$480 per caratOn-mine cost per tonne* R123 per ROM tonneMine life +21 years
• One of the world’s top kimberlite mines by average value per
• Increase ROM tonnes from 1mtpa to 1.2mtpa (104,000 ctpa)
• ROM grade to increase from 6 6cphtaverage value percarat
• Renowned for high value white diamonds and a regular producer
• ROM grade to increase from 6.6cphtto 8.7cpht
• 400,000 tpa tailings production (1 4mct / 65mt resource) 10 000of coveted pink
diamonds
* C f t
(1.4mct / 65mt resource) – 10,000ctpa
• Ebenhaezer pipe offers further upside
12Expansion plan to take gross production to 114,000 ctpa & revenue >US$50 million*
* Company forecasts
WilliamsonOwnership 75% Petra / 25% Government of TanzaniaMining type Open pit miningFY09 bulk sampling 1 5mt delivering 84 486 carats (5 7cpht)FY09 bulk sampling 1.5mt delivering 84,486 carats (5.7cpht)
Production post upgrade* 10 mtpa / 600,000 ctpaROM value* US$200 per caratOn-mine cost per tonne* US$7.30 per ROM tonneMine life +/- 20 years (phase 1 to 205m depth)
• 3 year expansion programme reshaping open pit installing autogenous
• Renowned for high value and pink diamonds
• 3 year expansion programme - reshaping open pit, installing autogenousmill and constructing new plant
• New plant will treat increased tonnages and improve diamond recoveriesCapex required US$45 $50m
• 146 hectare (360 acre) orebody, continuously mined for 70 years
• Capex required US$45-$50m
• Nov ‘08 – 75% interest in Williamson acquired for U$10m
* C f t
13Takes gross production to 600,000 ctpa & revenue in excess of US$120 million*
* Company forecasts
Kimberley Underground – Completion Soon
Ownership 74% Petra / 26% BEE Partners (on completion)
Mining type Block cave miningMining type Block cave mining
Forecast production* 1mtpa (180,000 carats) from year twoROM value* US$170 – US$200 per caratOn-mine cost per tonne* R100 per ROM tonneMine life +12 years
• Acquisition consideration of US$2.0m (R15m) cash, completion expected soon
• Asset comprises Bultfontein, Dutoitspan and Wesselton mines• Potential for large and
fancy yellow diamonds Asset comprises Bultfontein, Dutoitspan and Wesselton mines• Care and maintenance period enabled Petra to build up a substantial
stockpile of ore – 400,000 tonnes containing in excess of 70,000 carats• New plant constructed and commissioned at Joint Shaft (servicing
fancy yellow diamonds• Produced the
Kimberley Octahedral – at 616ct currently the largest uncut diamond New plant constructed and commissioned at Joint Shaft (servicing
Bultfontein & Dutoitspan) – recoveries to commence on completion• Construction of plant at Wesselton by end of 2010
gin the world
* Company forecasts
14Brings new gross production of 180,000 ctpa & revenue in excess of US$32 million*
Growth On Track
Unit 6 months ended 31 6 months ended 30 6 months ended
Petra on track for production of 1.2m carats in FY2010 (figures below are on a gross basis as announced in Petra’s Trading Update on 13 January 2010):
Unit 6 months ended 31December 2009
6 months ended 30June 2009
6 months ended31 December 2008
Diamonds produced Carats 614 594 546 031 550 413Diamonds produced Carats 614,594 546,031 550,413Revenue US$M 62.4 47.0 47.3Diamonds sold Carats 572,227 643,675 368,031
4,000,000
Petra Diamond Production Profile (gross)FissuresKimberleyKoffiefontein
2,000,000
2,500,000
3,000,000
3,500,000
Prod
uced
WilliamsonCullinan
0
500,000
1,000,000
1,500,000
Car
ats
15
02010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Financial Year
US$120m Placing
• US$120m financing completed in December 2009• Acquired additional 37% of CullinanAcquired additional 37% of Cullinan• Strengthened balance sheet• Broadened shareholder base• New capital provides foundation for growth
M i f d $Main use of proceeds US$m
Part settlement of US$80m Al Rajhi / Cullinan loan, incl.accrued interest 31Repayment of Convertible Note to Al Rajhi 20Development capital for Cullinan 15Expansion capital for Williamson 15Settlement of short term debt 34
16
Capital Structure
Nov 2009 end Jan 2010
Al R jhi H ldi W W L 9 0% 18 1%Al Rajhi Holdings W.W.L. 9.0% 18.1%
Saad Investments Company Limited 44.0% 17.3%
JP Morgan Asset Management (UK) Limited 9.6% 9.3%
Scottish Widows Investment Partnership 0.0% 6.2%
Capital Group International, Inc. 0.0% 6.2%
Blackrock Investment (UK) Limited 0.0% 5.4%
Directors 8.5% 4.7%
Shares in issue 184 0 million 352 6 millionShares in issue 184.0 million 352.6 million
Analyst Target price Listing AIM: PDLy g
Ambrian Partners 95p
CanaccordAdams 120p
g
12 month high / low 89.25p –22.44p
17
RBC Capital Markets 115p Market capitalisation at 60p £210m
Petra – A Unique Diamond Investment
Project risk Major diamond resource; diversified portfolio of mines; access to full diamondProject risk Major diamond resource; diversified portfolio of mines; access to full diamondspectrum; minimal exposure to exploration spend
Technical risk Strong track record and proven delivery on operational targets
Financing risk US$120m fund-raising in Dec 2009 strengthened balance sheet
Growth risk Expansion plan to triple production – existing portfolio provides organic growth for many years
Diamond price risk
Petra’s mines weathered severe downturn – will generate strong revenues in normal market
Political risk Petra projects based in low-risk, stable African democracies
18
Questions?
19The Cullinan Heritage Diamond
Unique growth in a rising diamond market
Thank you
The Petra Board
Adonis PouroulisChairman
Johan DippenaarCEO
David AberyFinance Director
Jim DavidsonTechnical Director
Successful mining entrepreneur One of South Africa’s most successful diamond
Extensive experience as Chief Financial Officer in South
Acknowledged world authority on kimberlite geology and
Founded Petra Diamonds in 1997 and floated first diamond company on AIM
successful diamondentrepreneurs with 20 years’ experience
Founded diamond group in
Financial Officer in SouthAfrican and UK business environments
In-depth knowledge of AIM
on kimberlite geology andexploration
Over 20 years’ experience in mine management
Along with fellow directors, built Petra into pan-African diamond group with over 3500 employees
Founded diamond group in1990 and grew portfolio to 3 producing mines before listing as Crown Diamonds on ASX
In depth knowledge of AIM
Integral to structuring and deliverance of strategic group corporate development,
mine management
Formerly Head of Diamond Exploration for Rio Tinto across Southern Africa
Instrumental in raising funds to help finance and structure early stage mining companies in Africa
Merger with Petra in 2005 –now at helm of AIM’s largest diamond company
including acquisitions and joint ventures As Technical Director of Crown
Diamonds, managed specialist underground fissure mines over a decade
2121
Africa a decade
Reserves And Resources
A ib bl b Total carat baseAttributable carat base
Fissures - 4.7
Kimberley - 6 9
Fissures - 4.5
Kimberley - 5.2Kimberley - 6.9
Koffiefontein - 5.9Koffiefontein -4.2Williamson -
Williamson - 40.1
Cullinan - 204.6
a so30.0Cullinan - 151.3
195 million carats 262 million carats
22
Fissures (Helam, Sedibeng, Star)
Ownership Sedibeng: Petra 74.5%/BEE 25.5%Helam & Star: Petra 100% Helam: Full shrinkage overhand stoping
Mining typeHelam: Full shrinkage overhand stopingSedibeng: Full shrinkage overhand stopingStar: Open stope underhand
FY09 production 71,274 caratsp ,ROM values* US$180 per caratOn-mine cost per tonne* R415 per ROM tonneMi lif C bi d 20
• Helam mine has returned to higher levels of production• Narrow vein, low
tonnage ‘fissure’ operations
Mine life Combined +20 years
• New production areas being established on Level 17 in Sedibeng mine – production to commence early 2010
• Future production from portfolio planned to be in excess of 120,000 ctpa
operations• High value
kimberlite mines in comparison to world average
* Company forecasts
23Expansion plan to increase production from 70,000 ctpa to 120,000 ctpa
CAPEX Profile
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Financial�Year
New capital lays foundation for growth
Operation AreaBAW/BB1E/AUCGap�FillersAUC�SouthBAW�Phase�1C�Cut�Phase�1
Cullinan
Total�Tonnes�(Mt) 2.200 2.400 2.400 2.400 2.426 2.680 2.845 3.145 3.150 4.000Total�Carats�(Mcts) 0.957 1.117 1.239 1.314 1.520 1.649 1.801 2.018 2.133 2.600Expansion�Capex�(US$m) 18.0 47.6 45.4 17.7 26.6 28.1 32.9 50.3 55.3 26.6
�������������� ��������������Total�Tonnes�(Mt) 1.231 0.000 0.000 5.000 10.000 10.000 10.000 10.000 10.000 10.000Total�Carats�(Mcts) 0.066 0.000 0.000 0.300 0.600 0.600 0.600 0.600 0.600 0.600
Williamson
Expansion�Capex�(US$m) 16.3 20.1 14.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0Current�OperationNew�Block�CaveTotal�Tonnes�(Mt) 0.948 0.948 0.948 0.948 0.948 1.000 1.100 1.200 1.200 1.200Total�Carats�(Mcts) 0.076 0.080 0.080 0.080 0.080 0.100 0.108 0.114 0.114 0.114Expansion�Capex�(US$m) 1.7 3.1 3.1 3.1 3.1 1.9 1.9 1.9 5.0 5.0
Kofffiefontein
p p ( $ )Bultfontein���845�BCDutoitspan���870�BCDutoitspan���NW�cornerWesselton���995�BCTotal�Tonnes�(Mt) 0.746 0.780 0.916 1.000 1.000 1.000 1.000 1.000 1.000 0.919Total Carats (Mcts) 0 065 0 217 0 223 0 200 0 181 0 181 0 181 0 181 0 181 0 163
Kimberley�U/G
Total�Carats�(Mcts) 0.065 0.217 0.223 0.200 0.181 0.181 0.181 0.181 0.181 0.163Expansion�Capex�(US$m) 5.1 13.1 2.6 1.3 0.0 0.0 0.0 0.0 0.0 0.0Total�Tonnes�(Mt) 0.247 0.266 0.276 0.284 0.291 0.304 0.304 0.304 0.304 0.304Total�Carats�(Mcts) 0.126 0.138 0.144 0.148 0.155 0.165 0.165 0.165 0.165 0.165Expansion�Capex�(US$m) 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
Petra�Diamonds Total�Tonnes�(Mt)1 5.372 4.394 4.540 9.632 14.665 14.984 15.249 15.648 15.654 16.423
(G b ) T l C (M )1 29 2 686 2 0 2 2 3 2 69 2 8 3 0 8 3 93 3 6 3
Fissures
24
(Gross�Numbers) Total�Carats�(Mcts)1 1.291 1.552 1.686 2.042 2.535 2.695 2.855 3.078 3.193 3.643Expansion�Capex�(US$m)2 41.1 84.0 65.7 22.2 29.7 30.0 34.8 52.2 60.3 31.6
1.�Excludes�production�form�tailings�retreatment�operations2.�Expansion�capital�expenditure�stated�in�2009�money�terms����������������Williamson�plant�and�infrastructure�upgrade
Petra DiamondsCathy Roberts
cathyr@petradiamonds [email protected]+44 20 7318 0452
www.petradiamonds.com