Annual Results Presentation For the year ended 31 March 2017 - PowerPoint PPT Presentation

Annual Results Presentation For the year ended 31 March 2017

CONTENTS • Financial overview • Wholly owned South African operations • West Coast Resources operations • Angolan operations • Conclusion Trans Hex Group Annual Results Presentation 2017

Financial Overview

FINANCIAL OVERVIEW March 2017 March 2016 Rand revenue (Rm) 540,2 671,4 Cost of goods sold (Rm) (631,7) (678,2) Share of results of associates* (19,0) (29,4) Impairments # (Rm) (27,4) (55,1) Loss from continuing operations (Rm) (211,5) (124,8) Profit from discontinued operations (Rm) 28,9 24,0 Loss for the year (Rm) (182,6) (100,8) Headline loss per share (cents) (114,6) (56,9) Cash position (Rm) 225,4 353,5 Net asset value per share (cents) 337 506 * Including the Group’s share of an impairment charge to mining rights, after tax, of R43,4 million. # Impairment tests on the Group’s assets resulted in the ageing Baken and Bloeddrif mines being impaired to the value of R27,4 million (2016: R55,1 million). Trans Hex Group Annual Results Presentation 2017

GROUP PROFIT/LOSS AFTER TAX 180 150 120 90 60 30 0 -30 -60 -90 -120 -150 -180 -210 -240 2013 2014 2015 2016 2017 R million 85 23 191 -101 -183 2017: Loss includes impairment costs of R27,4 million. Trans Hex Group Annual Results Presentation 2017

Wholly owned South African operations

SA PRODUCTION 100 000 90 000 80 000 70 000 60 000 50 000 40 000 30 000 20 000 10 000 0 2013 2014 2015 2016 2017 Carats 67 115 52 081 61 688 48 435 36 532 Trans Hex Group Annual Results Presentation 2017

LOWER ORANGE RIVER – AVERAGE GRADE 2.50 2.00 1.50 1.00 0.50 0.00 2013 2014 2015 2016 2017 Average grade 1.05 0.92 1.29 1.22 1.75 2017: Average grade increased mainly due to the re-evaluation of ore accounting policies. Trans Hex Group Annual Results Presentation 2017

SA DIAMOND PRICES $1 400 $1 200 $1 000 $800 $600 $400 $200 $0 2013 2014 2015 2016 2017 Price/carat $1 334 $1 238 $1 353 $981 $959 2017: Diamond prices declined mainly due to a decrease in average stone size to 0,70 carats per stone (2016: 0,97 carats per stone). Trans Hex Group Annual Results Presentation 2017

SA UNIT COST 300 6000 5000 250 Gravel treated m3 ('000) 4000 Unit cost Rand/m3 200 3000 150 2000 100 1000 50 0 2013 2014 2015 2016 2017 Unit cost Gravel 2017: Operating cost at the LOR operations decreased by 11,6%, however the unit cost of production increased by 93,8% due to a 55,0% decline in volumes treated. Trans Hex Group Annual Results Presentation 2017

SA OUTLOOK • Stripping operations in the Baken central channel will continue until the economically viable gravel in the main channel has been exhausted, which is expected to be towards the end of the 2018 financial year. • Bloeddrif Mine has been placed under care and maintenance. • Production from the wholly owned South African operations for the 2018 financial year is expected to be in the order of 37 000 carats. • Firm prices are expected in the short-term as market sentiment remains solid in the commercial and manufacturing sectors. Trans Hex Group Annual Results Presentation 2017

West Coast Resources operations

WEST COAST RESOURCES OPERATIONS • During the period, mining activities produced 79 041 carats at an average grade of 32,73 carats/100 m 3 compared to 16 517 carats at an average grade of 30,48 carats/100 m 3 in 2016. In addition, the final recovery plant treated final recovery tailings and produced 1 465 carats (2016: 8 413 carats). • Sales amounted to R172,1 million at an average price of US$166 per carat (2016: sales of R49,4 million at an average price of US$208). • The 40% equity accounted loss for the year amounted to R71,3 million (2016: loss of R13,6 million). Included in the results is the Group’s share of an impairment charge to mining rights, after tax, of R43,4 million. Trans Hex Group Annual Results Presentation 2017

WEST COAST RESOURCES OPERATIONS (cont.) • The average grade decreased by 38% from 53,34 carats/100 m 3 in 2016 to 33,28 carats/100 m 3 in 2017 due to the treated gravel originating mainly (98,2%) from mining operations. The average stone size amounted to 0,27 carats per stone (2016: 0,30 carats per stone). • Prospecting will continue to target high-priority areas that may identify additional resources for mining. • Mining activities will remain focused on the Langklip area and on other sections of the Koingnaas area. • Production for the 2018 financial year is expected to be in the order of 150 000 carats, compared to 2017 actual production of 80 506 carats. Trans Hex Group Annual Results Presentation 2017

Angolan operations

SOMILUANA PRODUCTION 140 000 130 000 120 000 110 000 100 000 90 000 80 000 70 000 60 000 50 000 40 000 30 000 20 000 10 000 0 2013 2014 2015 2016 2017 Carats 41 313 72 041 94 483 99 572 137 219 Trans Hex Group Annual Results Presentation 2017

SOMILUANA AVERAGE GRADE 50 45 40 35 30 25 20 15 10 5 0 2013 2014 2015 2016 2017 Average grade 16.60 23.95 27.99 31.96 46.38 Trans Hex Group Annual Results Presentation 2017

SOMILUANA DIAMOND PRICES $550 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 2013 2014 2015 2016 2017 Price/carat $352 $478 $458 $351 $500 Trans Hex Group Annual Results Presentation 2017

ANGOLAN OUTLOOK • During the coming year, mining operations will continue on the east bank of the Luana River at Nzagi, in the south-west at Lulau, and at other areas currently being evaluated. • Production results and geological work through drilling and bulk sampling indicate that carat production for the 2018 financial year is expected to be in the order of 120 000 carats. Trans Hex Group Annual Results Presentation 2017

Conclusion

CONCLUSION • South African production for 2018 is expected to be in the order of 37 000 carats. • Operational and infrastructure improvements are continuing at West Coast Resources. Production for the 2018 financial year is expected to be in the order of 150 000 carats. • Results at Somiluana Mine in Angola continue to exceed expectations and production for 2018 is expected to be in the order of 120 000 carats. • Tight controls over cash and costs will continue to be exercised in all areas of the Group’s business. • In respect of new business opportunities, the Group is actively evaluating potential new diamond properties and pursuing opportunities to expand its diamond-marketing activities. Trans Hex Group Annual Results Presentation 2017

www.transhex.co.za Disclaimer: This presentation contains forward-looking statements about the Company ’s operations, exploration activities and financial conditions. They are based on Trans Hex Group ’ s best estimates and information at the time of writing. They are nonetheless subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Unanticipated events will occur and actual future events may differ materially from current expectations due to explorations results, new business opportunities, changes in priorities by the Company or its joint ventures, as well as other factors. Any of these factors may materially affect the Company ’s future business activities and its ongoing financial results.