DEBSWANA DIAMOND COMPANY (PROPRIETARY) LIMITED Overvi view: - - PowerPoint PPT Presentation

DEBSWANA DIAMOND COMPANY (PROPRIETARY) LIMITED

Overvi view: Debswana, a 50/50 joint venture between the GRB and De Beers comprises two of the world’s most valuable diamond mines, Jwaneng and Orapa Regime

*Based on the Anglo American Ore Reserves and Mineral Resources Report 2015

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Orap apa a Mine

c.2,300 employees c.2,000 contractors 2015 production 9.9m carats Life of Mine 2029* Reserves 151.4M¢; 171.9Mt* Resources 365.0M¢; 370.0Mt*

Damt mtsh shaa aa Mine

c.300 employees 2015 production 0.2m carats Life of Mine 2032* Reserves 4.7M¢; 25.1Mt* Resources 6.1M¢; 23.3Mt*

Jwanen aneng Mine

c.2,000 employees c.3,000 contractors 2015 production 9.8m carats Life of Mine 2035* Reserves 149.2M¢; 113.0Mt* Resources 224.0M¢; 250.9Mt*

Debsw bswana a Corpor

• rat

ate Centr tre (Gabo borone)

• ne)

Let etlhak hakane ane Mine

c.400 employees 2015 production 0.5m carats Life of Mine 2040 (tailings)* Reserves 8.5M¢; 35.4Mt* Resources 21.1M¢; 76.2Mt*

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Orap apa a Regim ime

Albert Milton GM Jwaneng Mine Lynette Armstrong CFO Bokani Motlhabani GM OLDM Esther Kanaimba- Senai Head of CA Bonny Thebenyane Head of Secretarial & Legal Ntoti Mosetlhe Head of HR Keith Blanchard Head of Tech Services Lephimotwe Boyce Sebetela Head of Strategy and BI Balisi Bonyongo MD 3

Our company leadership live our values by setting the highest standards, encouraging innovation and pursuing brilliance in all areas, while creating a great place to work

Rory Greyvensteyn Snr Manager Mining-Projects Sed Serumola Snr Ore Processing Manager Philip Lisindi Snr Finance Manager Tshepang Mazwigwila Snr HR Manager Dr Mwamba Nsebola Hospital Superintendent Kean McCallum Snr MRM Manager Thatayaone Keitumetse Snr Security Manager Albert Milton GM Tumelo Ntlhayakgosi Snr S&SD Manager Neville Pollard Snr Engineering Manager 4

Jwaneng Mine management is committed to making Jwaneng the world’s leading diamond mine in every respect

Koolatotse Koolatotse Snr Mining Manager

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 10 20 30 40 50 60 70 80 90 100 2010 2011 2012 2013 2014 2015 2016 Fatal LTI RWI LTIFR CIFR TRIFR

Safety fety Perfor forman mance e 2010-2016

Debswana (Jwaneng, OLDM and DCC)

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Safe fety ty: our focus is to achieve zero harm at our operations through our behaviour-based programmes and focus on critical controls

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Meet eting sharehold

• lder

r and customer er needs: s: Debswana continues to improve its efficiency and is delivering strong shareholder returns. Debswana’s performance is crucial for the GRB, as the Botswana economy relies on diamond revenues

9 11 12 12 12 13 11 9 11 10 8 10 11 10 5 10 15 20 25 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2015 2011 2012 2013 2014 2010 2009 GDP (US$bn) OLDM carats Jwaneng carats

* Data Source: Debswana and World bank

Production down 9% in H1 2016 with planned reductions at Orapa (plant 1 on partial care and maintenance) and Damtshaa (on care and maintenance)

Jwaneng Letlhakane Orapa Damtshaa

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Pro roductio tion: n: In 2015 Debswana reduced production in line with demand

0.9 1.1 1.0 1.6 1.1 12.0 11.8 3.1 2.1 10.9 Mct

5.7 1.9 4.0 6.2 2.8 5.4 2.0 4.5 4.0 1.5 0.3 0.3 Q3 2016

• 9%

9% H2 2015 4.5 H1 2015 11.5 0.1 0.2 H1 2016 10.5 Q3 2015 4.1 0.2 8.8 0.1 0.1

Jwa wane neng ng Mine ne Resource: nicknamed the “Prince of mines”, Jwaneng Mine has one of the richest kimberlite ore bodies, by value, in the world

Jwanen aneng Mine e Pit

• 1.4km width
• 2km length
• ≈410m deep
• Three main pipes (Centre, North and South)
• Life of mine 2035*
• Open pit reserves 149.2M¢ from 113Mt of ore, grade 132.0cpht(1)
• Open pit resource 207.5M¢ from 187.5Mt of ore, grade

110.7cpht(1)

• Cut-6/7 and 8
• Cut-8 accounts for 93M¢ from 84Mt of ore
• Tailings 16.5M¢ from 35.8Mt of ore
• Average revenue per carat H1 2016 US$196/¢ (100% of SSV)
• Average cash cost per carat recovered H1 2016 US$19/¢(2)
• Anglo American operating model launched at Jwaneng in September

2016

• Potential life extension projects post Cut-8 to extend life of mine to well

beyond 2040

*Based on the Anglo American Ore Reserves and Mineral Resources Report 2015 (1) Cpht = carats per hundred tonnes of ore (2) Total cash cost per carat recovered ($/ct). This represents the total production and operating costs before operating special items (excluding depreciation and capex), divided by carats recovered

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Jwaneng

Operati ating ng model Improved scheduling and resourcing of planned activities resulting in improved operational stability and efficiency

• YTD pula/tonne cost moved 10% favourable to target
• YTD production cash costs 10% favourable to target

Operati ationa nal effici cienc ency Improved pit conditions and standards

• Tyre life 17% improvement versus 2015
• Shovel t/h 10% improvement versus 2015
• Truck ton-km/hr 10% improvement versus 2015

Tot

• tal opex savi

vings ngs YTD

• Efficiency improvements – US$11 million
• Cut-9 waste dump redesign – US$14 million
• Cut-8 schedule optimisation – US$5 million
• Cut-8 North east corner rates – US$4 million
• Cut-8 contractor management (tyres) – US$8 million

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Cash Contai tainm nment: nt: By focusing on operational efficiencies and other cost containment opportunities, management has saved US$60 million (100% basis) YTD October 2016, of which US$42 million is from Jwaneng

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Jwaneng efficiency improvements

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+12% 2016 YTD 1,700 1,672 2015 1,514 Shovels els (t/hr hr)

• 0.1

2015 4.2 2016 YTD

• 17%

3.5 3.6

213

2015 5,787 6,000 2016 YTD +21% 4,940 Average verage tyre life e (hours) Loading ding cycle le (mins ns) Target Actual Actual Target Actual Target

Jwanen eng

• Cut-8: ~80% of the 500 million tonnes of waste stripping required to expose first ore (in 2017) has been mined
• Jwaneng tailings plant commissioned in 2014, increasing flexibility

9,764 7,603 7,695 6,199 4,253 4,855 2,000 4,000 6,000 8,000 110,000 Carats recovered (cts ‘000s) 53,066 109,813 Waste mined (tonnes ‘000s) Tonnes treated (tonnes ‘000s) Ore mined (tonnes ‘000s) FY 2015 H1 2016

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Jwaneng Cut-8 approaching first ore in 2017

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Capex overview (100% basis)

US$m

Waste capitalised driven by Jwaneng Cut-8 SIB driven by Orapa

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US$m US$m 205 215 95 15 25 FY 2014 Orapa Jwaneng H1 2016 96 96 1 FY 2015 240 240 220 220 82 72 21 146 110 39 11 17 79 13 19 318 318 Orapa Jwaneng Other Morupule H1 2016 81 81 2 FY 2015 212 212 FY 2014 81 212 318 96 240 220 43 72 57 H1 2016 220 220 FY 2015 524 524 FY 2014 595 595 Expansionary Stay in Business (SIB) Waste Capital funding is based on the same pre-tax profit share of GRB 80.8%:19.2% De Beers

Capex evolution Capitalised waste will tail off as the Jwaneng Cut-8 stripping ratio declines, with first ore achieved in 2017. With long life of mines, stay in business capital expenditure will remain relatively stable over the medium term, following a short term increase related to Cut-8 once first ore is reached. Current approved expansion project expenditure will tail off as projects reach completion, including the Letlhakane tailings facility in 2017. Potential expansion opportunities post Jwaneng Cut-8 and Orapa Cut-2 may result in increased capital expenditure,

• nce studies reach an acceptable level of confidence.

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Investing ting in the future re: : development for future production through waste capitalisation forms a major part of capital expenditure, primarily at Jwaneng

Jwanen eng g Modular ular Tailings lings Plant nt

• Commissioned in 2014
• A total of US$103m (100% basis) worth of CAPEX

incurred in the development of the plant

• Processes old tailings deposited between 1982 and

1992

• Processes up to 2 million tonnes, recovering up to

900,000 carats per annum

• Offers flexibility to increase or reduce production to

respond to changes in the market

• Payback period = 3-4 years (from first capital)

Letlhak lhakane ane Modular ular Tailings lings Plant nt

• Funding for construction approved in Nov 2014
• A total of US$236m worth of CAPEX will be incurred

in the development of the plant

• Construction started in Q1 2015 and will be

commissioned by end of Q2 2017

• Recovers diamonds from tailings through the use of

new and improved recovery technologies

• Capacity of up to 800,000 carats per annum
• Extends the life of the mine by 20 years
• Payback period = 2-3 years (from first capital)

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Pro roductio tion n flexi xibility: : Tailings Processing Plants provide ability to respond effectively to market conditions at lower cost

Diamond Trading Company Botswana Aquarium Tailings dumps and slimes dams

Orapa, Letlhakane and Damtshaa Mines Sources

14 Open pit Main treatment plant Recrush plant

Your tour: : Following the diamonds