New York, 21 March 2016 London, 23 March 2016
Investor Day New York, 21 March 2016 London, 23 March 2016 - - PowerPoint PPT Presentation
Investor Day New York, 21 March 2016 London, 23 March 2016 - - PowerPoint PPT Presentation
Investor Day New York, 21 March 2016 London, 23 March 2016 Disclaimer The information contained herein has been prepared for the use in this Presentation (the Presentation) and has not been independently verified. Such information is
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Disclaimer
The information contained herein has been prepared for the use in this Presentation (the “Presentation”) and has not been independently verified. Such information is confidential and is being provided to you solely for your information and may not be reproduced, retransmitted, further distributed to any other person or published, in whole or in part, for any purpose. The opinions presented herein are based on general information gathered at the time of writing and are subject to change without notice. Certain industry, market and competitive position data contained in this Prospectus come from official or third party sources believed to be reliable but ALROSA does not guarantee its accuracy or completeness. This Presentation contains statements about future events and expectations that are forward-looking statements. Any statement in this Presentation that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause the ALROSA’s actual results, performance
- r achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Past performance
should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance. ALROSA assumes no obligation to update, supplement or revise forward-looking or any other statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements. ALROSA does not intend or have any duty or obligation to update or to keep current any information contained in this Presentation. The diamond resources and reserves estimates provided in this Presentation have been prepared and presented in accordance with the standards and classifications of the JORC Code (the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves as promulgated by the Australasian Joint Ore Reserves Committee), which differ in significant respects from the standards and classifications applicable to the disclosure of mineral resources and reserves under the laws and regulations of certain other jurisdictions, including the regulations of the U.S. Securities Exchange Commission (the “SEC”) with respect to registration statements and other documents filed with the SEC. Among other things, in accordance with the JORC Code, this Presentation provides certain mineral resources estimates classified as “inferred”, “indicated” or “measured”, which differ in significant respects from “probable” and “proven” mineral reserves estimates and are not disclosed in certain jurisdictions, including in SEC filings. There can be significant uncertainty as to whether mineral resources can ever be feasibly and commercially mined. For further explanation of the JORC Code, see the JORC website at www.jorc.org. This Presentation does not constitute an offer to sell, or any solicitation of any offer to subscribe for or purchase, any securities. No part of this Presentation, nor the fact of its distribution, should form any basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information in this Presentation is subject to verification, completion and change. No representation or warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the accuracy or completeness of the information or opinions contained in this Presentation. None of ALROSA nor any of its shareholders, directors,
- fficers or employees, affiliates, advisors, representatives nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this Presentation
- r its contents or otherwise arising in connection therewith.
This Presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. This Presentation is not for distribution, directly or indirectly, to the public in the United States (including its territories and possessions, any State of the United States and the District of Columbia). These materials are not an offer or solicitation to purchase or subscribe for securities in the United States or any other jurisdiction. Securities may not be
- ffered or sold in the United States absent registration with the U.S. Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of
1933, as amended. ALROSA does not intend to register any part of any offering in the United States or to conduct a public offering of any of its securities in the United States. By attending a meeting where this Presentation is made or reviewing this Presentation you acknowledge and agree to be bound by the foregoing.
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Andrey Zharkov Andrey Rodionov
CEO
Igor Sobolev
First Vice-President – Chief Operating Officer Advisor to CEO
Presenting team
Igor Kulichik
CFO, Vice President
4
ALROSA Today and Tomorrow 1 5 Production Overview 2 16 Financial Overview 3 24
Contents
5
ALROSA Today and Tomorrow
6 ALROSA Today and Tomorrow
ALROSA is a global leader in rough diamond production with a strong financial profile
44% The Russian Federation 25% The Republic of Sakha
(Yakutia)
8% Yakutian municipal districts 23% Free float
ALROSA’s shareholder structure
169 207 225 69 94 118 17 42 41 50 100 150 200 2013 2014 2015
Revenue, RUB bn EBITDA, RUB bn Free Cash Flow
Financial summary Global diamond production
- ALROSA is a public diamond mining company with 23%
free-float on the Moscow Exchange
- ALROSA’ production totalled 38.3 mln cts in 2015
representing 29% in global diamond output
- Strong financial performance resulting in 8% y-o-y
revenue growth to RUB 225 bn, 25% y-o-y EBITDA growth to RUB 118 bn and EBITDA margin of 53%
- Robust free cash flow generation of RUB 41 bn and
strong balance sheet with leverage reduction to 1.7x
29% ALROSA 26% De Beers 11% Rio Tinto 34% Others 129
mln cts
41% 45% 53% EBITDA margin, %
1.9x 1.9x 1.7x
Net debt/EBITDA
2012 2013 2014 2015
34%
3% 9% 4% (6%) 9% 0% 5% 2% 6% 9% 7% (8%) 7%
6%
2%
4%
1-2% 5% 35% 34% 35% 31% 9% 19% 5% 32% 8% 21% 5% 31% 8% 21% 5% 31% 9% 20% 5% 272 288 298 302 North and South America Europe Japan Asia-Pacific Other World
Global luxury goods market by main regions
7
$ bn
In 2015, global luxury goods market continued to grow, albeit at a slower rate, due to lower demand in Asia-Pacific
ALROSA Today and Tomorrow
8
Jewelry segment followed luxury goods market dynamics, slowing down after solid growth in 2013-2014
ALROSA Today and Tomorrow
2012 2013 2014 2015 27% 2% 2% 2% 1% 0% 2% 3% 1% 6% 4% 8% 7% 3% 6% 8% 4% 1-2% 0% 27% 28% 28% 25% 23% 20% 4% 25% 24% 20% 4% 25% 24% 20% 4% 26% 24% 20% 4% 272 288 298 302 Apparel Accessories Jewelry and watches Beauty Other World
Global luxury goods market by main segments
$ bn
In 2015, polished diamond sales from accumulated inventory surplus amounted to $2.6 bn, reducing excess inventories to a minimum level
9
Source: Gem Jewellery Export Promotion Council, Company estimation
Sales of India-produced polished diamonds
$ bn 13.5 18.0 20.6 2.6 Rough diamond import to India in 2015 Rough diamond polishing Polished diamond sales from inventories Polished diamond export from India in 2015
16.3 17.8 17.7 18.6 19.4 14.2
13.2 14.7 17.0 16.8 16.7 14.1 3.1 3.1 0.7 1.8 2.7 0.1 2010 2011 2012 2013 2014 2015 Technological inventories Accumulated inventory excess
Inventories in polishing segment
$ bn
ALROSA Today and Tomorrow
10
Declining demand for rough diamonds in 2015 impacted diamond prices and sales volumes
2010 2011 2012 2013 2014 2015 Sales 39.4 32.9 33.2 38.0 39.6 30.0 Production 34.3 34.6 34.4 36.9 36.2 38.3 Sales above/(below) production from inventories 5.1 (1.7) (1.2) 1.1 3.4 (8.3)
ALROSA rough diamond sales and production
2010 2014 2015 2011 2012 2013 +21% +46% (20%) 0% +7% (15%)
mln cts
ALROSA rough diamond price index under long-term agreements and sales on spot
ALROSA Today and Tomorrow
Global diamond jewelry sales dynamics forecast
y-o-y, CAGR
Demand for diamond jewelry is expected to grow at ~2-4% annually in 2016-2025
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
2-7% 0% ~2-4%
Major assumptions of global diamond jewelry demand forecast
The Americas 31% Asia-Pacific Region 19% Europe 35% Japan 9% Other countries 5%
Luxury goods sales in 2015, breakdown by region
11
4-6% annual growth with volatility in short-term USA Asia Europe Japan moderate growth of 3-4% annually conservative growth of 1% annually growth of less than 1% annually
ALROSA Today and Tomorrow
12
Despite production increases announced by mining companies in the recent years global rough diamond production has remained relatively flat
Global rough diamond production historical data
mln cts 176 168 163 120 128 123 128 130 125 129
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Existing mines New mines
Global diamond production (based in Companies’ plans and life of mines periods)
mln cts, y-o-y CAGR 129 156 ~2% 126 mln cts 169 mln cts
ALROSA Today and Tomorrow
13
Rough diamonds market is expected to be balanced in the mid-term; demand is expected to exceed supply after 2019
ALROSA Today and Tomorrow 10 15 20 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Rough diamonds demand Rough diamonds deliveries to the market in the amount of production Rough diamonds deliveries to the market including sales from inventories Rough diamonds sales from inventories
13
Global demand and supply imbalance
$ bn
Imbalance emerge The market is balanced
Major diamond mining companies accumulated inventories in 2015, which may become an additional source of supply for the diamond market in the mid-term Demand-supply imbalance is expected after 2019
Rough diamonds demand: 0-2% annually Rough diamonds deliveries to the market: 0-2% annually Rough diamonds demand: 2-4% annually Rough diamonds deliveries to the market: 1-2% annually
$ bn
14
While 2015 ALROSA’s diamond sales in 2015 decreased by 30%, in line with diamond market, preliminary sales results for January-February 2016 point to a market rebound
ALROSA Today and Tomorrow
2013 2014 January - February 2015 March 2015 Q2 2015 Q3 2015 Q4 2015 2015 January - February 2016
ALROSA rough diamond sales
$ mln 4,793 4,901 1,021 568 701 3,437 620 776 527
+25%
Strategic directions for development Focus on diamond mining Operational efficiency Geological exploration Marketing and brand Non-core assets divestment
ALROSA IS ABOUT
15 ALROSA Today and Tomorrow
16 16 16
Production Overview
17
Source: Company data, JORC as of 01 July 2013 (Micon)
ALROSA’ diamond production is well-diversified among divisions and types of mining
Severalmaz
Note: percentage and absolute figures indicate the share of division in 2015 ALROSA diamond production
ALROSA Total
Aikhal Division 18% 11% 9% 5% Nyurba Division Mirny Division Udachny Division Almazy Anabara Nizhne-Lenskoe
Aikhal pipe Jubilee pipe Komsomolskaya pipe Nyurbinskaya pipe Botuobinskaya pipe Alluvial deposits (1) Mir pipe International pipe Alluvial deposits (3) Udachny pipe Zarnitsa pipe Alluvial deposits (2) Alluvial deposits (7) Alluvial deposits (3) Arkhangelskaya pipe Karpinskogo-1 pipe
973 mln cts
Total resources,
- incl. reserves
608 mln cts
Total reserves Share of open-pit mining from 7 mines in 2015 production Share of underground mining from 4 mines in 2015 production Share of alluvial mining from 16 alluvial placers in 2015 production
32% 20% 5%
55% 25% 21%
Geography of ALROSA’ production assets
Republic of Sakha (Yakutia) Arkhangelsk region Russian Federation 2.0
mln cts
12.3
mln cts
7.5
mln cts
6.9
mln cts
4.3
mln cts
3.3
mln cts
2.0
mln cts Production Overview
18
ALROSA intends to increase diamond production to over 41 mln cts by 2019 Severalmaz and Udachny are the key production growth drivers
Source: Company data * others include Mirny division, Nyurba division, Aikhal division, Almazy Anabara, Nizhne-Lenskoye and Udachny division excluding Udachny pipe production
ALROSA production forecast
mln cts CAGR 15–21F 17% 5% (1%) 32.4 33.7 32.0 32.1 31.7 31.0 30.4 3.9 3.3 5.5 4.6 5.4 5.5 5.7 2.0 2.0 2.4 3.2 4.3 4.6 5.1
2015 2016F 2017F 2018F 2019F 2020F 2021F
38.3 39.0 39.9 41.3 41.2 41.5 39.9
1% *
1.03 1.05 1.00 0.97 0.94 0.91 0.90
Grade (ct/t)
Severalmaz Udachny pipe Others Production Overview
19
Udachny underground mine
On June 27, 2014 ALROSA started to mine ore from Udachny underground mine
Severalmaz
On March 14, 2014 processing plant with annual capacity
- f 3 mln tons of ore was put into operation, having increased
total capacity up to 4 mln tons of ore a year 2014 2015 target capacity Ore processed, mln t 0.1 0.3 4.0 Diamond production, mln cts 0.1 0.4 5.4
In 2015, ALROSA continued to develop its core growth projects
Production Overview
2014 2015 target capacity Ore processed, mln t 3.3 4.0 4.0 Diamond production, mln cts 1.6 2.0 4.3
20
Economic efficiency of Udachny underground mine will be fostered by block caving mining method
Next production level Production level Backfilled production level Next production level
Block caving method Traditional cut-and-fill mining
Mir underground mine International underground mine Aikhal underground mine Udachny underground mine
Production Overview
Diamonds produced (mln cts) Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Ore and gravels processed (mln t)
5.4 10.3 13.0 7.3 5.5 10.8 13.5 7.4
Grade (cpt)
1.47 0.78 0.75 1.45 1.52 0.89 0.86 1.17
2015
38.3 mln cts
37.1 mln t 1.03 cpt
2014
36.2 mln cts
35.9 mln t 1.01 cpt
Diamond production
7.9 8.0 9.7 10.6 8.4 9.6 11.6 8.6
21
2015 diamond production totalled 38.3 million carats, an increase of 6% y-o-y Production results were driven by the following factors:
- launch of Botuobinskaya pipe,
- diamond output growth at Karpinskogo-1 pipe of Lomonosov deposit (Severalmaz),
- growth in diamond production at the Mir underground mine as a result of measures to stabilize its hydrogeological conditions,
- the Udachny underground mine development
+6%
ALROSA’s operational results in 2015 are in line with its long-term strategy
21 Production Overview
ALROSA continues to streamline its operations to focus on diamond mining
Number of subsidiaries
22
70 39 34 25 20
01.01.2009 01.01.2015 01.01.2016 01.01.2017 01.01.2020
- Timir iron ore project
- Irelyakhneft oil project
- ALROSA Insurance
Company Prior to 2015, ALROSA sold 31 non-core assets with total proceedes of more than RUB 7 bn, incl.:
- ALROSA-VGS
- MAK-Bank
- Nikonovka
- M&Diamond
- Suntarceolit
In 2015, ALROSA sold 5 non-core assets with total proceeds of RUB 0.3 bn , incl.:
- Viluiskaya-3 HPP
- HIDROCHICAPA
- Arcos Ltd.
In 2016, ALROSA is planning to sell 9 non-core assets, incl.:
Production Overview
23
ALROSA continues optimization and increase in efficiency of selected non-core businesses
Restructuring of airline operations
Reduction of losses by ~RUB300 mln as a result of transferring of 6 airports to federal
- wnership
Restructuring of kindergarten education centres
Subsidies ~RUB450 mln
Restructuring of housing services and utilities Subsidies from Yakutian budget for housing and utilities, agriculture
1,728 1,741 1,854
2014 2015 2016
1 2 3
RUB mln
Production Overview
24 24
Financial Overview
25
Financial results
RUB mln 2015 2014 2015 vs. 2014 Operating performance Production, mln cts 38.3 36.2 6% Sales, mln cts, incl.: 30.0 39.6 (24%) gem quality diamonds sales, mln cts 19.7 27.7 (29%) industrial quality diamonds sales, mln cts 10.3 11.9 (13%) IFRS income statement of profit or loss and other comprehensive income Revenue 224,524 207,159 8% Cost of sales (93,240) (99,334) (6%) EBITDA 118,498 93,857 26% EBITDA margin 53% 45%
- Net profit / (loss)
32,192 (16,832)
- Net profit margin
14%
- EPS, RUB
4.17 (2.44)
- IFRS statement of financial position
Cash and cash equivalents 20,503 21,693 (5%) Total debt 223,159 197,160 13% Net debt 202,656 175,467 15% Net debt / EBITDA 1.7х 1.9х
- Equity attributable to owners of PJSC ALROSA
151,742 137,051 11% IFRS statement of cash flows Cash inflow from operating activities before changes in working capital 119,980 94,840 27% Income tax paid (10,345) (12,379) (16%) Changes in working capital (34,094) (4,346) 7.8x Net cash inflow from operating activities 75,541 78,115 (3%) Purchase of property, plant and equipment (34,241) (36,056) (5%) Free cash flow 41,300 42,059 (2%) ROIC 27% 22%
- Financial Overview
26
ALROSA’s financial results are impacted by foreign exchange rates fluctuations
Financial Overview
- 10 RUB/USD
2015 +10 RUB/USD Revenue 191,716 224,524 257,332 received in USD
as diamond prices are set in USD
(14.61%) +14.61%
Cost of sales (90,330) (93,240) (96,150) are driven by USD
as MET is calculated on USD diamond prices
(3.12%) +3.12%
EBITDA 88,601 118,498 148,395 linked to USD
(25.23%) +25.23%
Capital expenditures (33,794) (34,241) (34,688) USD-denominated
(1.30%) +1.30%
RUB mln
Sensitivity analysis
<10% RUB/USD
Exchange rate
70% 20% 90%
31.12.2013 31.12.2014 31.12.2015 15.03.2016
average 38.60 min 32.66 max 67.79 average 61.32 min 49.18 max 72.88 average 76.61 min 70.15 max 83.59
72.88 70.15 56.26 32.73
72% 30% (4%)
27
Ruble depreciation offset decreases in volumes and prices, resulting in growth of gem-quality rough diamond sales in 2015
Financial Overview
Gem-quality rough diamond sales in 2014 Ruble depreciation Sales volume decrease Decrease in average price of gem- quality diamonds Gem-quality rough diamond sales in 2015
+9% 169,928 66,523 (49,265) (1,310) 185,876
Gem-quality rough diamond revenue analysis
RUB mln
Gem-quality rough diamond average price, $/ct
171 169
28
Cost of production increase was impacted by extraction tax, wages, salaries and other staff costs and fuel and energy costs
Financial Overview
Operating activities
ALROSA has already implemented certain saving initiatives in 2016 and has cut cost for operating activities by RUB3.4 bn, for investing activities by RUB5.0 bn and for financial activities by RUB3.5 bn – totaled RUB11.9 bn
Investing activities Financing activities
–11.9
RUB bn
–3.4
RUB bn
–5.0
RUB bn
–3.5
RUB bn 2015 2014 2015 vs. 2014 Wages, salaries and other staff costs 40,253 34,279 17% Extraction tax 23,323 14,697 59% Depreciation 19,096 18,452 3% Fuel and energy 17,610 13,686 29% Materials 12,098 9,569 26% Services 5,748 5,138 12% Transport 2,118 2,474 (14%) Other 1,568 1,058 48% Cost of production 121,814 99,353 23% Movement in inventory of diamonds, ores and concentrates (29,832) (898) 33.2x Cost of diamonds for resale 1,258 879 43% Cost of sales 93,240 99,334 (6%)
Cost of production
RUB mln
Cash costs by mining method
RUB/ct
1,733 2,191 1,420 2,132 2,139 2,431 1,879 2,477
ALROSA Underground Open-pit Alluvial 2014 2015
In 2015, EBITDA increased primarily due to growth in gross profit from diamond sales
RUB mln
EBITDA margin
EBITDA analysis
29
Note: (1) gross profit net of depreciation
Financial Overview
EBITDA 2014 Increase in gross profit (1) Increase in other profits Decrease in social costs Decrease in exploration costs Increase in SG&A EBITDA 2015
93,857 23,844 671 297 272 (443) 118,498 53% 45% +26%
30
ALROSA’s long-term capital expenditure forecast
Financial Overview
Planned vs Actual Capex
RUB bn
5.0 7.8 6.1 5.4 3.1 3.6 3.6 2.5 20.5 18.4 25.6 20.0 12.2 20.7 20.8 27.2 7.9 6.5 6.8 5.6 5.1 3.0 4.6 2.1 2.6 1.5 0,4 1,0 0,5 1,2 2.4 1.5 2014 2015 2016F 2017F 2018F 2019F 2020F 2021F
Industrial and social infrastructure Mining operations Udachny division Severalmaz Actual vs estimated capex
1.2 0.5 1.0 0.4
38.5 35.6 38.9 32.0 20.9 28.5 31.4 33.3
- 1.4
- 2.5
36.0 34.2
350 1,090 600 2016 2017 2018 2019 2020 Bank loans Eurobonds 1,000 31
ALROSA’s debt structure
67% Bank loans 33% Eurobonds 100% US dollar-denominated debt 88% Long-term debt 12% Short-term debt 3,496 3,130 2,866 3,871 4,127 3,505 3,040 2009 2010 2011 2012 2013 2014 2015 Total debt/ EBITDA 6.1x 2.9x 1.5x 2.0x 2.0x 2.1x 1.9x
Loans and borrowings Loans and borrowings breakdown
$ mln As at 31 December 2015
Maturity profile of loans and borrowings
$ mln
.
Financial Overview Average interest rate 12.6% 7.8% 7.8% 7.1% 5.7% 6.1% 5.8%
32
ALROSA has a track record of strong cash flows and dividends
Operating cash flow, capital expenditures, free cash flow and dividends
42,007 11,957 8,175 53,533 15,368 10,826 78,115 42,059 10,826 75,541 41,300 (30,050) (38,165) (36,056) (34,241)
OCF 2012 CapEx 2012 FCF 2012 Dividends 2012 OCF 2013 CapEx 2013 FCF 2013 Dividends 2013 OCF 2014 CapEx 2014 FCF 2014 Dividends 2014 OCF 2015 CapEx 2015 FCF 2015
1.11
Dividends per share, RUB
1.47 1.47
Financial Overview
33
Appendix
34
Management team overview
Operational Team Executive Team
CEO
Andrey Zharkov President - chief executive officer
- Joined the Company in 2015
- Deputy head of Gokhran (2010–2015)
- Chief commercial officer at Prioksky non-ferrous metals plant (2009–2010)
- Held various management positions in Russian metals and mining
companies, such as Norilsk Nickel and RUSAL (2001–2009)
Finance and economy
Ilya Ryashchin First vice-president for finance and economy
- Joined the Company in 2012
- Head of planning and budgeting department at Russian Railways (since
2006)
- Deputy Head of finance department, Ministry of Railways of Russia (since
2001)
COO
Igor Sobolev First vice-president – chief operating officer
- Joined the Company in 2007
- Head of Capital construction division, mining & metallurgical directorate,
Norilsk Nickel (2000-2007)
CFO
Igor Kulichik Vice-president - chief financial officer
- Joined the Company in 2002
- Vice-president and CFO of ALROSA since August 2009
Sales
Yuri Okoyomov Vice-president for sales
- Joined the Company in 1993
- Vice-president of ALROSA for marketing and sales since August 2009
Mirny division
Mikhail Lopatinsky Director, Mirny mining and processing division
- Joined the Company in 1992
- Over 23 years of industry experience
Udachny division
Alexander Makhrachev Director, Udachny mining and processing division
- Joined the Company in 1979
- Over 36 years of industry experience
Aikhal division
Ravil Sanatulov Director, Aikhal mining and processing division
- Joined the Company in 1986
- Over 29 years of industry experience
Nyurba division
Igor Uvarov Director, Nyurba mining and processing division
- Joined the Company in 1989
- Over 26 years of industry experience
Almazy Anabara
Matvey Yevseev CEO Almazy Anabara
- Joined the Company in 1997
- Over 18 years of industry experience
Severalmaz
Andrey Pismenny CEO Severalmaz
- Joined the Company in 1997
- Over 18 years of industry experience
- Chief engineer of ALROSA in 2010-2015
35 Anton Siluanov Finance Minister of the Russian Federation Chairman of the Board of directors Yegor Borisov President of the Republic of Sakha (Yakutia) First Deputy Chairman of the Supervisory Board Alexander Galushka Minister for the Development
- f the Russian Far East
Deputy Chairman of the Supervisory Board Andrey Zharkov President (CEO) of ALROSA Nominated by: Russian Federation Nominated by: Republic of Sakha (Yakutia) Nominated by: Russian Federation Nominated by: Russian Federation Previously held positions include
- 2005 – 2011 – Deputy Minister of
Finance of the Russian Federation
- Since 2011 – Minister of Finance of the
Russian Federation Previously held positions include
- 2003 – 2010 – Chairman of the
Government of the Republic of Sakha (Yakutia)
- 2010 – 2014 – President of the
Republic of Sakha (Yakutia)
- Since 2014 – Head of the Republic of
Sakha (Yakutia) Previously held positions include:
- 2004 – 2010 – President of Non-Profit
Partnership “Russian Collegium of Appraisers”
- 2010 – 2012 – President, Co-chairman
- f All-Russian public organisation
Delovaya Rossiya
- 2011 – 2012 – member of state
commission on the socio-economic development of the Far East, the Republic of Buryatia, the Zabaikalye and Irtutsk regions
- Since 2013 – Minister of the Russian
Federation for the Development of the Far East Previously held positions include
- 2009 – 2010 – Сhief Commercial
Officer at Prioksky Non-Ferrous Metals Plant
- 2010 – 2015 – Deputy Head of
Gokhran under the Russian Ministry of Finance
- Since 2015 – President (CEO) of
ALROSA Oleg Fedorov Adviser to the Head of the Federal Agency for State Property Management Sergey Barsukov Director, Financial Policy Department, Ministry of Finance
- f the Russian Federation
Maria Gordon Chief portfolio manager at Pacific Investment Management Co. (PIMCO) until 2014 Alexey Chekunkov CEO of Far East and Baikal Region Development Fund Nominated by: Russian Federation Nominated by: Russian Federation Nominated by: minority shareholders Nominated by: Russian Federation Previously held positions include:
- 2009 – 2012 – Head, Department for
cooperation with governmental authorities and companies with government participation, department of investment and banking on global markets, VTB Capital
- Since 2012 – Adviser to the Head of the
Federal Agency for State Property Management Previously held positions include
- 2007 – 2008 – First Deputy General
Director, Agency for Housing Mortgage Lending (AHML)
- 2008 – 2010 – Assistant to Vice
Chairman of the Russian Federation Government – Russian Federation Minister of Finance
- Since 2010 – Director, Financial Policy
Department, Ministry of Finance of the Russian Federation Previously held positions include
- 1998 – 2010 – Goldman Sachs,
investment activity
- 2010 – 2014 – PIMCO, investment
activity Previously held positions include
- 2009 – 2011 – Head of New Nations
Capital Investment Company
- 2011 – 2013 – Director, member of the
board, member of investment committee of the Russian Direct Investment Fund
- Since 2014 – Director of the Far East
Development Fund
Supervisory Board overview (1/2)
2 3 4 1 5 6 7 8
Oleg Grinko Chairman of the Board of Directors at Sberinvest Asset Management Pavel Ulyanov Head of Energy Division at RUSAL Global Management B.V. Valentin Nikiforov Head of representative office
- f Nyurbinsky district in
Yakutsk Galina Danchikova Chairwoman of the Government
- f the Republic of Sakha
(Yakutia) Nominated by: Russian Federation as an independent director Nominated by: Russia Federation as an independent director Nominated by: minority shareholders as an independent director Nominated by: Republic of Sakha (Yakutia) Previously held positions include
- Since 2004 – Chairman of the Board of
Directors at Sberinvest Asset Management
- Since 2006 – Adviser to Director of
investment and external communications in Peresvet-Invest group Previously held positions include
- Since 2007 – Head of Energy Division
at RUSAL Global Management B.V. Previously held positions include
- Since 2009 – Head of representative
- ffice of Nyurbinsky district in Yakutsk
Previously held positions include:
- 2007 – 2010 – Deputy Chairman of the
Government of the Republic of Sakha (Yakutia)
- Since 2010 – Chairman of the
Government of the Republic of Sakha (Yakutia) Yevgenia Grigoryeva Minister of Property and Land Relations of the Republic of Sakha (Yakutia) Valentina Kondratyeva Head of state autonomous agency Center for Strategic Research of the Republic of Sakha (Yakutia) Peter Alekseyev CEO of Republican Investment Company Nominated by: Republic of Sakha (Yakutia) Nominated by: Republic of Sakha (Yakutia) Nominated by: Republic of Sakha (Yakutia) Previously held positions include
- 2007 – 2011 – First Deputy Minister of
Property Relations of the Republic of Sakha (Yakutia)
- Since 2011 – Minister of Property and
Land Relations of the Republic of Sakha (Yakutia) Previously held positions include
- 2003 – 2013 – First Deputy Minister for
Economic Development of the Republic
- f Sakha (Yakutia)
- Since 2013 – Head of state
autonomous agency Center for Strategic Research of the Republic of Sakha (Yakutia) Previously held positions include
- 2009 – 2013 – Deputy Head, Head of
Department of state and legal affairs in Presidential Administration and the Government of the Republic of Sakha (Yakutia)
- Since 2013 – CEO of OJSC Republican
Investment Company 36
Supervisory Board overview (2/2)
13 14 15 9 10 11 12
37
Latest operational results
Type of mining Ore and sands processing (‘000 t) Diamond production (‘000 cts) Grade (ct/t) Cash costs per ton
- f ore,
(RUB) Cash costs per carat, (RUB) Grade (ct/t) Cash costs per ton
- f ore,
(RUB) Cash costs per carat, (RUB)
2014 2015 2014 2015 2014 2015 Aikhal Division 9,478 9,141 12,565 12,322 1.33 1,962 1,480 1.35 2,487 1,845 Jubilee pipe
- pen-pit
8,506 8,355 9,122 9,405 1.07 1,445 1,347 1.13 2,014 1,789 Aikhal underground mine underground 589 526 3,292 2,841 5.59 8,556 1,531 5.40 8,193 1,517 Komsomolskaya pipe
- pen-pit
383 260 152 77 0.40 3,312 8,360 0.29 6,166 20,915 Mirny Division 4,903 5,706 6,088 6,908 1.24 2,857 2,301 1.21 3,342 2,567 International underground mine underground 445 486 3,862 4,024 8.61 14,047 1,632 8.28 16,303 2,000 Mir underground mine underground 481 647 1,463 2,198 3.04 12,180 4,002 3.40 10,680 3,143 Alluvial and technogenic deposits alluvial 3,978 4,574 764 686 0.19 466 2,422 0.15 666 4,043 Udachny Division 4,814 5,377 3,679 4,297 0.76 2,163 2,831 0.80 2,714 3,396 Udachnaya pipe
- pen-pit
3,710 3,250 3,390 3,515 0.91 1,802 1,972 1.08 2,253 2,084 Udachnaya underground mine underground 89 262 114 413 1.28 21,687 16,970 1.58 14,404 9,142 Zarnitsa pipe
- pen-pit
1,015 993 176 225 0.17 1,771 10,241 0.23 2,267 10,025 Alluvial deposits alluvial
- 872
- 145
- 0.17
1,429 8,573 Nyurba Division 2,000 2,040 7,363 7,510 3.68 4,776 1,297 3.68 6,371 1,731 Nyurbinskaya pipe
- pen-pit
1,255 978 6,542 4,809 5.21 4,776 916 4.92 6,371 1,296 Botuobinskaya pipe
- pen-pit
- 135
- 942
- 6.97
6,371 913 Alluvial deposits alluvial 745 927 821 1,759 1.10 4,776 4,334 1.90 6,371 3,358 Lomonosov Division (Severalmaz) 3,309 3,988 1,639 1,950 0.50 547 1,105 0.49 1,059 2,166 Almazy Anabara alluvial 5,604 5,222 3,059 3,309 0.55 936 1,715 0.63 817 1,290 Nizhne-Lenskoye alluvial 5,814 5,640 1,818 1,964 0.31 537 1,718 0.35 937 2,691 ALROSA 35,922 37,114 36,212 38,260 1.01 1,747 1,733 1.04 2,229 2,139 underground 1,607 1,921 8,730 9,476 5.43 11,900 2,191 4.91 11,947 2,431
- pen-pit
18,178 17,960 21,020 20,921 1.16 1,642 1,420 1.16 2,189 1,879 alluvial 16,141 17,235 6,463 7,863 0.40 854 2,132 0.47 1,158 2,477
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The share of underground production will increase from 24% in 2014 to 34% in 2021
ALROSA production forecast, by mining method
mln cts Share in production, 2021F 34% 47% 19% 6,5 7,9 7,4 7,3 7,2 6,9 7,1 7,8 21,0 20,9 19,1 17,5 18,4 19,8 19,6 19,5 8,7 9,5 12,4 15,1 14,3 14,8 14,5 13,9
2014 2015 2016F 2017F 2018F 2019F 2020F 2021F
38.3 36.2 39.0 39.9 41.3 41.2 41.5 39.9
1.01 1.03 1.05 1.00 0.97 0.94 0.91 0.90
Grade (ct/t)
Underground mining Open-pit mining Alluvial mining
Share in production, 2014 24% 58% 18%
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Detailed reserves and resources statement
Deposit JORC Category Tonnage (kt) Reserve Grade (ct/t) Reserve Carats (kct) Udachny Division Udachnaya Pipe, underground mining Probable 83,017 1.31 108,627 Udachnaya Pipe, open pit mining Probable 4,267 1.03 4,407 Udachnaya Pipe, ore stockpile Proven 4,820 1.52 7,329 Zarnitsa Pipe Probable 58,538 0.20 11,995 Aikhal Division Jubilee Pipe Probable 107,163 0.90 96,982 Aikhal Pipe Probable 5,217 4.37 22,789 Komsomolskaya Pipe Probable 4,847 0.37 1,807 Mirny Division Mir Pipe Probable 29,586 3.29 97,230 International Pipe Probable 4,555 8.09 36,585 Solur-Vostochnaya Solur-Vostochnaya Placer Probable 9,348 0.61 5,722 Nyurba Division Nyurbinskaya Pipe Probable 9,875 4.09 40,394 Botuobinskaya Pipe Probable 13,839 5.13 70,971 Nyurbinskaya Placer Probable 6,373 1.85 11,813 Lomonosov Division (PJSC Severalmaz) Archangelsky Pipe Probable 57,087 0.76 43,189 Karpinsky-1 Pipe Probable 18,438 1.13 20,918 Almazy Anabara Ebelyakh and Gusinyy Ruchey Placer Probable 36,319 0.74 26,749 Total OJSC ALROSA JORC Reserves Proven 4,820 1.52 7,329 Probable 448,469 1.34 600,178 Total (1) 453,289 1.34 607,507
Reserves Resources inclusive of Reserves
Deposit JORC Category Tonnage (kt) Resource Grade (ct/t) Resource Carats (kct) Udachny Division Udachnaya Pipe, ore stockpile Measured 4,820 1.52 7,329 Udachnaya Pipe, underground mining Indicated 75,265 1.50 112,782 Inferred 78,305 1.25 98,157 Udachnaya Pipe, open pit mining Indicated 3,785 1.19 4,501 Udachnaya Remnants above -280 m Indicated 3,247 1.54 4,995 Zarnitsa Pipe Indicated 58,554 0.21 12,007 Aikhal Division Jubilee Pipe Indicated 129,017 0.84 108,166 Inferred 65,977 0.62 40,594 Potential 8,431 0.32 2,734 Aikhal Pipe Indicated 7,729 4.68 36,159 Inferred 8,269 3.87 31,967 Komsomolskaya Pipe Indicated 4,812 0.38 1,808 Mirny Division Mir Pipe Indicated 29,211 3.55 103,782 Inferred 10,913 3.11 33,940 International Pipe Indicated 4,208 8.73 36,739 Inferred 1,542 7.98 12,304 Solur-Vostochnaya Solur-Vostochnaya Placer Indicated 7,527 0.78 5,903 Inferred 1,198 0.72 865 Nyurba Division Nyurbinskaya Pipe Indicated 12,264 4.13 50,661 Inferred 1,192 5.42 6,465 Botuobinskaya Pipe Indicated 13,679 5.19 71,044 Inferred 2,685 5.14 13,790 Nyurbinskaya Placer Indicated 6,176 1.91 11,814 Inferred 6,407 1.66 10,638 Botuobinskaya Placer Inferred 1,085 0.49 537 Maiyskoe Kimberlite Body Inferred 3,841 2.86 10,996 Lomonosov Division (PJSC Severalmaz) Arkhangelskaya Pipe Indicated 56,226 0.77 43,406 Inferred 39,408 0.98 38,623 Karpinsky-1 Pipe Indicated 24,988 1.08 26,960 Inferred 5,168 1.26 6,512 Almazy Anabara Ebelyakh and Gusinyy Ruchey Placer Indicated 30,508 0.88 26,749 Inferred 6,308 0.45 2,848 Total for OJSC ALROSA JORC Resources inclusive of Reserves Measured 4,820 1.52 7,329 Indicated 467,197 1,41 657,477 Inferred 232,298 1.33 308,235 Total* 704,315 1.38 973,041
Source: Micon report as at 01 July 2013 * does not include assets outside of JORC perimeter, with total GKZ reserves of 230 mln cts as at 01/01/2013
Thank you!
Corporate Finance and Analytics Investor Relations 1-st Kazachy Per., 10-12 Moscow 119017 Russia Tel.: +7 495 745 5872 ir@alrosa.ru