Mining Indaba, Cape Town. February 2016

Transcription

1 Mining Indaba, Cape Town February 2016

2 Disclaimer The document attached hereto and the presentation of which it forms part (together the Materials ) have been prepared by DiamondCorp plc ( DiamondCorp or the Company ) and are confidential and personal to you and the Materials are furnished to you as background information to provide a basis for potential investors to consider whether to pursue an acquisition of shares in the Company and do not constitute an offer or invitation for the sale or purchase of any securities, nor do they, nor do they purport to, set out or refer to all or any of the information an investor might require or expect in making a decision as to whether or not to deal in shares in the Company. The Materials do not constitute and are not a prospectus or listing particulars (under either the Prospectus Regulations 2005 (as amended), the Financial Services and Markets Act 2000 ( FSMA ) or the Prospectus Rules of the Financial Services Authority) nor do they comprise an AIM admission document for the Rules of AIM, a market operated by the London Stock Exchange plc and should not be construed as such. No representation or warranty or other assurance, express or implied, is made by or on behalf of the Company or any of their respective directors, officers, employees, advisers or any other persons as to the fairness, accuracy or completeness of the information or estimates or opinions or other statements about the future prospects of the Company or any of their respective businesses contained in the Materials or referred to in the presentation given in connection therewith and no responsibility, liability or duty of care whatsoever is accepted by any such person in relation to any such information, projection, forecast, opinion, estimate or statement. The Company s Nomad Panmure Gordon (UK) Limited ( Panmure Gordon ) has not approved the Materials as a financial promotion for the purposes of section 21 of FSMA or otherwise. Members of the public are not eligible to take part in the presentation or be provided with the Materials. In the United Kingdom, the Materials are only being directed at persons (i) reasonably believed by the Company to be investment professionals within the meaning of paragraph (5) of Article 19 or to high net worth companies or unincorporated associations within the meaning of paragraph (2) of Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529), as amended and (ii) who are qualified investors within the meaning of section 86(7) of FSMA or otherwise in circumstances that will not have resulted and will not result in an offer of transferable securities to the public in the United Kingdom within the meaning of section 102B of FSMA. The investment or investment activity to which the Materials relate are available only to such persons and will be engaged with only with such persons. If you are not such a person (i) you should not take part in the presentation and nor should you have received the Materials, (ii) please return this document to the Company s registered office or representative at the presentation as soon as possible and take no other action, (iii) please leave the presentation immediately after returning the Materials and (iv) you may not rely on or act upon the matters communicated by the Materials. Neither this presentation nor any copy of it or any of the Materials may be (i) taken or transmitted into the United States of America, (ii) distributed, directly or indirectly, in the United States of America or to any US person (within the meaning of regulations made under the Securities Act 1933, as amended), (iii) taken or transmitted into or distributed in Canada, Australia, the Republic of Ireland or the Republic of South Africa or to any resident thereof, or (iv) taken or transmitted into or distributed in Japan or to any resident thereof. Any failure to comply with these restrictions may constitute a violation of the securities laws or the laws of any such jurisdiction. The distribution of this document in other jurisdictions may be restricted by law and the persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. The Materials are being made available on the basis that the recipients keep confidential any information contained therein, whether orally or in writing, in connection with the Company. The Materials are confidential and must not be copied, reproduced, published, distributed, disclosed or passed to any other person at any time without the prior written consent of Panmure Gordon, as agent for the Company. By attending the presentation and/or accepting a copy of the Materials you agree to be bound by the foregoing provisions. Forward-looking Statements The Materials contain forward-looking statements. These statements relate to the future prospects, developments and business strategies of the Company and its subsidiaries (the Group ). Forward-looking statements are identified by the use of such terms as believe, could, envisage, estimate, potential, intend, may, plan, will or the negative of those, variations or comparable expressions, including references to assumptions. The forward-looking statements contained in the Materials are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. If one or more of these risks or uncertainties materialises, or if underlying assumptions prove incorrect, the Group s actual results may vary materially from those expected, estimated or projected. Given these risks and uncertainties, potential investors should not place any reliance on forward-looking statements. These forward-looking statements speak only as at the date of the Materials. Competent Person The Competent Person responsible for the technical information contained in this presentation is Mr Paul Zweistra (Pr. Sci. Nat., Registration number /93) a full-time employee of VP3 Geoservices (Pty) Limited. VP3 and Mr Zweistra have given their permission for their work to be quoted in this presentation. Page 2

3 Overview 36 months share price history (UK p/share) Listed on AIM (DCP) and JSE Alt-X (DMC) Market cap million (R780m) at 7p per share Net debt 30 December 2015: 17.9 million - R258m project finance to IDC - $6m debt for offtake to Tiffany 2015 Year End Cash: 2.4 million Lace Mine, Free State (74% DCP, 26% BEE) m carats at 40 cpht - High proportion of top colour whites (D,E,F) - Type IIa, pink and purple stones - $1.7 billion in-ground value - +50% operating margin year underground mine life producing up to 540,000 carats p.a. Commercial production ramp-up H Project cashflow positive from Q Aggressive return of capital planned. Page 3

4 DCP Operating Model Kimberlite mining in Southern Africa Unique underground skill set for a junior High hurdle rate for project selection. >50% operating margin, >50% IRR Unconventional but radically rational management style Head Office and management based on the mine No contractors owner operated fleet Aggressive return of capital planned Page 4

5 Diamond Market Long-term demand for gem diamonds forecast to outstrip supply. Major mine closures in the next 10 years will result in a steady decline in diamond supply. Medium term headwinds as Belgium and India banking issues have resulted in overhang of polished goods. Decision by major producers to hold back rough diamonds is resulting in growing rough inventories at the producer level. Small producers have no trouble selling as large manufacturers still require rough after deferring DTC boxes. Rough prices down 15% in January 2016 sentiment better in smaller size fractions Page 5

6 Corporate Structure Broad-based Black Economic Empowerment ( BBBEE ) UK incorporated 100% SA operating subsidiary Lace Diamond Mines (Pty) Ltd is owned 74% by DiamondCorp plc, 13% by Shanduka Resources and 13% by Sphere Investments. Shanduka Resources (BBBEE) Sphere Investments (BBBEE) 13% 13% DiamondCorp Holdings Limited BVI incorporated 74% Soapstone Investments (Pty) Limited RSA incorporated R420 Mn shareholder loan Lace Diamond Mines (Pty) Limited RSA incorporated 100% 100% Shanduka Resources, a company founded in 2001 by Cyril Ramaphosa. Now a subsidiary of Pembani Group, a BBBEE company founded by former MTN CEO, Phuthuma Nhleko. Sphere Investments is a black controlled and managed investment company founded by Itumeleng Kgaboesele and Pulane Kingston in Lace Diamond Mines (Pty) Ltd is a certified Level 4 contributor to BBBEE and fully compliant with the BBBEE objectives under the Mining Charter. Lace Mine Mining Right Fully empowered, permitted and compliant with the Mining Charter Page 6

7 Project History Lace Diamond Mining Crown Mines cpht De Beers Purchased as part of supply-side control Shaft plugged, mine flooded Christiaan Potgieter Lace Diamond Mines 2005-present 1.5 Mt tailings 7 cpht 33 Mt 40 cpht drilled to 855m Fully permitted mine development >3.5km decline and tunnelling completed Grade improves to +55 cpht at depth Upper K4 Block longhole stoping L block cave development 2017

8 Location Page 8

9 Resource Statement Depth (m) Type & Category Tonnage (Mt) Grade (cpht) Carats (Mct) Main Pipe Satellite Pipe Total Main Pipe Satellite Pipe Main Pipe Satellite Pipe Total VK Indicated VK Inferred CK Inferred VK Inferred CK Inferred Unknown - Unknown Unknown - Unknown - Total Resource statement prepared March 2012 by VP3 Geoservices (Pty) Limited in accordance with the SAMREC Reporting Code. Page 9

10 High Quality Gems High quality gem diamonds up to 23 ct from development 35 ct, 18 ct and 15 ct stones recovered from dumps History of large stones: 122ct, 72ct, 53ct and 47ct Potential for pinks and lilac diamonds, and Type IIa whites Page 10 Page 10

11 K6 CRB K4 Three block caves over the life of the mine. K4 kimberlite dominates as you go deeper. Page 11

12 Mine Development Page 12

13 Upper K4 Block Mining Sandvik 421 longhole drill rig Bottom up longhole stoping Mining rate 30kt per month from H Revenue base case budget 35 cpht and $145/ct. Mining and processing costs budgeted at R250/t (70% margin) Page 14

14 50 L Block Cave Layout Page 15

15 1.2m tpa Recovery Plant 200tph diamond recovery plant fully commissioned Tailings retreatment being undertaken in conjunction with kimberlite mining. Separate fines (+1.25mm -8mm) and coarse (+8mm 28mm) DMS to maximise small diamond recovery. Page 16

16 400 tph Conveyor Belts 400 tph conveyor belt capacity from underground. Belt capacity is double the front end plant capacity. Reduction in load and haul costs. Page 17

17 Stone Size Distribution = $/ct % Bottom screen size changed from 1.0mm to 1.25mm and sand fraction removed by de-grit circuit. ± 15% of diamonds go to tails but smallest size fractions ($15/ct). Additional 10% of head feed removed ahead of DMS. $/ct up ± 15% Jul-15 Predicted CT 100 CT 60 CT 45 CT 30 CT 20 CT 15 CT 10 CT 9 CT 8 CT 7 CT 6 CT 5 CT 4 CT 3 CT 10 8 GRN 6 GRN 5 GRN 4 GRN 3 GRN 2 GRN Page 18

18 Waste Sorter Bulk Test Mature cave can be drawn 50-60% faster than proposed but process water supply is a constraint. De-grit has reduced DMS consumption from 1 m 3 of water for each tonne of ore to 0.7 m 3. K6 kimberlite contains up to 85% internal waste. K4 kimberlite contains up to 45% internal waste. X-ray/Optical waste sorting has the potential to remove +75% of the waste before the DMS. Clean waste could potentially be dumped into the pit. 400 tph conveyor belt capacity from underground means hoisting will not be a mining constraint. Page 19

19 Shareholders Issued Shares (31 December 2015) 411,076,580 Options 12,845,000 Top shareholders % Page 20