Investor Presentation October 2014 Disclaimer The information - - PowerPoint PPT Presentation
Investor Presentation October 2014 Disclaimer The information - - PowerPoint PPT Presentation
Investor Presentation October 2014 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
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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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Table of contents
- I. Introducing ALROSA
4
- II. Overview of the Diamond Industry
10
- III. Sales and Marketing Overview of ALROSA
16
- IV. Latest Financial Results
19 Appendix 24
4
- I. Introducing ALROSA
5
Global leader in rough diamond production with largest reserve base…
28% 27% 28% 26% 22% 24% 10% 10% 12% 36% 41% 35% 128 mln cts 123 mln cts 130 mln cts 2011 2012 2013 ALROSA De Beers Rio Tinto Others
Unique pure play diamond opportunity Since 2009 the world’s largest rough diamond producer by volume In 2013 diamond production was 36.9 mln cts representing 28% in the global diamond output 608 mln cts (JORC) of reserves, which is about one-third
- f global reserves reported by major industry players
Reserves are sufficient to support production for at least 17 years ALROSA – world’s largest diamond producer…
17 22 12 12 10
Petra Diamonds ALROSA Rio Tinto De Beers Dominion Diamond Corp. Source: Сompanies’ public reports; Micon report as at 01 July 2013; AWDC’s and Bain & Company’s 2013 report – “Journey through the Value Chain”; Kimberley Process statistics; publication analysis; expert interviews, Company data
608 339 198 73 48 365 846 198 94 255 973 1,185 396 167 302
ALROSA De Beers Rio Tinto Dominion Diamond Corp. Petra Diamonds
Measured, Indicated and Inferred Resources (excl. Reserves) Proved and Probable Reserves
…with the world’s largest reserves…
Reserves and resources (JORC), mln cts
… and one of the longest expected LOM among major players
Years
44% The Russian
Federation
25% The Republic of Sakha
(Yakutia)
8% Yakutian municipal districts 23% Free float
6
…and strong financial profile
ALROSA is a public diamond mining company with 23% free-float on the Moscow Exchange Strong financial performance resulting in 12% y-o-y revenue growth to $5.3 bn and solid EBITDA(1) margin of 41% in 2013 Robust cash flow performance with $500 mln in 2013 ALROSA’s shareholder structure
4,868 5,287 1,999 2,170 41% 41% 2012 2013 Revenue, $ mln EBITDA, $ mln EBITDA margin, %
Financial summary
1,357 1,681 (967) (1,192) 390 489 2012 2013 Net Operating Cash Flow Capex Free Cash Flow
Strong adjusted cash flow generation
$ mln
Note: (1) As used in this presentation, EBITDA is adjusted for loss on disposal of property plant and equipment, impairment / (reversal of impairment) of property, plant and equipment, net (gain) / loss from cross currency interest rate swap contracts, (gain) / loss from change of fair value of put options granted by the Group to the buyers of ZAO Geotransgaz and OOO Urengoyskaya Gazovaya Company, net (gain) / loss from foreign exchange forward contracts (2) As used in this presentation, Free cash flow is defined as net cash inflow from operating activities less purchase of property plant and equipment (2)
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Source: Company data, JORC as of 01 July 2013 (Micon) Note: (1) Resources are inclusive of reserves. Reserves and resources data in this presentation do not include reserves or resources of Catoca, which is a 32.8% investment and is not consolidated in ALROSA’s financial statements (2) GKZ (the Russian State Commission for Mineral Reserves) as of 01 July 2013. Includes GKZ off-balance reserves of 27.2 mln cts (3) JORC as of 01 July 2013 (Micon). The Micon report as of 01 July 2013 covered all major deposits of ALROSA, excluding certain alluvial deposits and undeveloped resources
Republic of Sakha (Yakutia)
Russian Federation
Yakutsk Moscow 6 open pit mines 4 underground mines 13 alluvial placers Total resources(1) GKZ: 1,181 mln cts(2) JORC: 973 mln cts(3)
Angola Activities in AFRICA
Open Underground Alluvial
Catoca Mining (32.8%) 8
Arkhangelsk
Severalmaz 7 Nyurba Division 2 Mirny Division 1 Aikhal Division 4 Nizhne-Lenskoe 6 Almazy Anabara 5 Udachny Division 3
Diversified operational platform
Well-balanced portfolio of the mining assets in one of the resource richest regions of Russia
8
Notes: (1) Proven and probable reserves (2) Measured, indicated and inferred resources. Resources are inclusive of reserves (3) Only pipes/placers currently in operations are shown (4) Includes reserves and resources for Udachny ore stockpile and Udachny underground mine (5) Reserves and resources for Nizhne-Lenskoe, which was acquired by ALROSA in 2013, are based on GKZ classification and have not been verified according to JORC standards (6) Not consolidated, ALROSA owns a 32.8% interest
Diversified portfolio of high grade diamond mining assets
cts/t
Grade per type of mining in 2013
Source: Company data, JORC as of 01 July 2013 (Micon) Source: Company data
Production Method Reserves (mct)(1) Resources (mct)(2) 2013 Production (mct) % of 2013 Production Number of Pipes/ Placers
Mirny Division 133.8 186.8 7.4 20% 2/3 Nyurba Division 123.2 175.9 7.4 20% 1/1 Udachny Division(4) 132.4 239.8 4.9 13% 2/0 Aikhal Division 121.6 218.7 12.1 33% 3/0 Almazy Anabara 26.7 29.6 2.5 7% 0/5 Severalmaz 64.1 115.5 0.6 2% 1/0 Solur-Vostochnaya Placer 5.7 6.8 NA NA 0/0 Consolidated Total (JORC, excl. Nizhne-Lenskoe) 607.5 973.0 34.9 95% 9/9 Nizhne-Lenskoe(5) NA NA 2.0 5% 0/4 Consolidated Total (incl. Nizhne- Lenskoe) NA NA 36.9 100% 9/13 Catoca Limited(6) NA NA 6.7 NA 1/0 Open Underground Alluvial
Production by type of operations
mln cts
Source: Company data
(3)
Large diversified resource base
74% 57% 47% 18% 26% 34% 8% 17% 19% 34.3 2010A 2013A 2021 Target Open pit mining Underground mining Alluvial mining 36.9 41.3 1,0 1,2 5,7 0,4 Total Open-pit Underground Alluvial
9
Attractive future growth prospects
5,8 4,9 3,5 4,3 4,6 5,1 6,4 8,1 8,0 8,3 8,9 12,1 12,5 12,0 12,1 10,4 10,1 10,2 10,1 10,1 8,7 7,4 6.3 7,5 8,1 7,7 7,2 7,4 7,0 6,6 8,0 7,4 7,4 7,5 8,0 7,9 7,9 6,9 6,6 6,4 2,4 2,5 3,0 3,0 3,5 4,3 4,6 4,6 4,8 4,8 0,6 0,6 1,7 2,0 2,1 2,5 3,7 4,3 4,6 5,1 1,5 2,0 1,8 1,9 1,4 1,2 35,9 36,9 36.0 38,2 39,8 39,1 39,9 41,5 41,2 41,3 2012 2013 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F Udachny Division Aikhal Division Mirny Division Nyurba Division Almazy Anabara Severalmaz Nizhne-Lenskoye
Production forecast by mining complex
mln cts
CAGR 12–21F 1.5% 27.9% 8.0% (2.4%) (3.1%) 1.4% 3.9%
Planned Capex by mining complex
0.3 0.3 0.3 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.03 0.1 0.2 0.1 0.1 0.1 0.2 0.1 0.1 0.1 0.1 0.02 0.04 0.1 0.1 0.1 0.05 0.1 0.1 0.03 0.01 0.03 0.1 0.04 0.1 0.1 0.1 0.04 0.04 0.1 0.1 0.04 0.3 0.3 0.2 0.2 0.1 0.2 0.2 0.3
1.2 1.0 0.8 0.7 0.6 0.7 0.7 0.6 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F Udachny Division Aikhal Division Mirny Division Nyurba Division Severalmaz Almazy Anabara Industrial infrastructure and other
$ bn
Source: Company data Note: (1) Includes 1.5 mln cts produced by Nizhne-Lenskoe in 2012 (prior to acquisition in 2013)
(1)
0.01 0.02
For reference: 29.0 35.6 38.5 RUB bn 25.4 21.8 25.8 24.1 22.7
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- II. Overview of the Diamond Industry
Source: Company data, public sources Note: (1) ALROSA’s subsidiary Severalmaz (2) Largest mine in Angola Catoca is 32.8% owned by ALROSA
11
Global diamond market footprint
Largest global diamond assets
Australia
Argyle (Rio Tinto)
Diamond assets of ALROSA Diamond assets of other companies Tanzania
Williamson (Petra Diamonds)
Yakutia (ALROSA) (5 mining divisions)
5 open pit mines 4 underground mines 13 alluvial placers
Botswana
Jwaneng (De Beers) Orapa (De Beers) Gope (Gem Diamonds) Karowe (Lucara Diamonds)
Angola (ALROSA)
Catoca (32.8%)(2)
Canada
Ekati (Dominion Diamond Corp.) Diavik (Rio Tinto / Dominion Diamond Corp.) Victor (De Beers) Gahcho Kue (De Beers / Mountain Province) Snap Lake (De Beers) Renard (Stornoway) Star (Shore Gold / Newmont)
Democratic Republic of Congo
Mbuyi-Mayi
Arkhangelsk diamond province (1 mining division)
Lomonosov deposit (ALROSA) (1)
Arkhangelsk diamond province
Grib (LUKOIL)
Zimbabwe
Marange (ZMDC)
Namibia
Debmarine (De Beers)
South Africa and Lesotho
Venetia (De Beers) Finsch (Petra Diamonds) Cullinan (Petra Diamonds) Lace (DiamondCorp) Kao (Namakwa Diamonds) Lighobong (Firestone) Letseng (Gem Diamonds)
973 1,185 396 167 302 1,787
ALROSA De Beers Rio Tinto Dominion Diamond Corp. Petra Diamonds Others
12
African countries and Russia account for 79% of the world diamond resources
1,277
316 477
103
123 Canada Brazil
40
91
921
393 260
50 40
180 200 294
Russia Australia South Africa Lesotho Zimbabwe Tanzania Botswana Namibia Angola
45 Cameroon
DRC Ghana Guinea Other countries
Note: (1) Data for Russian reserves is measured as Balance Reserves A+B+C1 in accordance with GKZ metrics (Russian standards); all other reserves are measured as Proven + Probable in accordance with international standardized system CRIRSCO; other countries include India, Venezuela, Sierra Leone, Liberia, Guinea, Lesotho; Namibia – including offshore diamond resources, of which reserves contain 55 mln cts Source: Analytical Center Mineral; Bain analysis
Global diamond Resources (incl. Reserves) in 2012 (breakdown by country)
mln cts
2000 2012
4,810 5,439
African countries Russia(1) Canada Australia Brazil 79% Other countries
Reserves and Resources (JORC), mln cts
Global diamond Resources (incl. Reserves) in 2012 (breakdown by company)
45%
4,810
Proved and Probable Reserves Measured, Indicated and Inferred Resources (excl. Reserves)
13
In next decade global diamond production is expected to grow with 1.6% CAGR
During the crisis, in 2009, world diamond production dropped by 26% mainly due to De Beers production cut In the medium term global diamond production is expected to grow with 4.7% CAGR due to rebound of production mainly at Grib and Karpinskogo-1 (Russia), Argyle (Australia) and Gahcho Kue (Canada) After 2018, global diamond production is expected to decline with -2.0% CAGR mainly because of Argyle (Rio Tinto), Diavik (60% Rio Tinto and 40% Dominion Diamond Corp.) and Ekati (80% Dominion Diamond Corp.) depletion
Source: AWDC’s and Bain & Company’s 2013 report – “Journey through the Value Chain”
127 130 141 143 147 155 155 153 151 143 144 141 168 163 120 128 123 128 133 146 152 159 168 169 166 165 156 155 153
2007 2008 2009 2010 2011 2012 2013E 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F
Existing mines New mines
Global diamond production forecast
CAGR 12-18F 4.7% CAGR 18F-23F
- 2.0%
CAGR 12-23F 1.6% mln cts
14
Prospects of new diamond deposits discovery in the next 10 years is very low
The last major deposits were discovered 15–20 years ago
13 12 10 10 9 7 6 6 6 5 4 4 1980 2010 2000 1990 1980 Venetia (~9 mln cts/year) 1985 Catoca (~8 mln cts/year) 1992 Ekati (~5 mln cts/year) 1994 Diavik (~12 mln cts/year) 1996 Nyurbinskaya (~5 mln cts/year) 1997 Murowa (~0.5 mln cts/year)
Discovery-to-production period, In years
It takes up to 13 years to start production at a mine
Source: AWDC’s and Bain & Company’s 2011 report – “The Global Diamond Industry (Lifting the Veil of Mystery)”; Company data
Year discovered
1954- 1956 1960 1969 1974- 1975 1994 1996 2006
I II III
Aikhal International Jubilee
Discovery of new kimberlites is much more challenging now
Botuobinskaya Nyurbinskaya Maiyskaya
Host rocks Sandstones Kimberlite pipes
Diamond exploration is a challenging activity Finding an economically viable diamond deposit requires careful area selection, technical expertise, experience, skill, persistence and capital investment Approximately 15% of kimberlites discovered are diamond-bearing, with 1% of these typically becoming producing mines No more easily accessible from the surface kimberlite pipes left The last major deposits were discovered 15–20 years ago Since 1960, the average time from discovery to production for significant diamond mines is approximately 10 years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Other Gulf Europe Japan India China USA
15
Diamond jewelry sales is expected to grow at 6.4% CAGR in the long-term
World demand for rough diamonds is driven by diamond jewelry sales Today, USA accounts for 37% of the global diamond jewelry market, China – for 15% and India – for 11% Overall diamond jewelry sales growth would be driven by China and India
USA 45 41 29 27 25 27 28 30 31 32 33 34 35 35 36 37 38 China 5 7 6 8 9 11 12 14 16 17 19 20 22 23 25 27 28 India 8 9 7 7 8 8 10 12 13 15 16 17 19 21 22 24 26 Total 100 95 74 73 67 72 80 87 94 98 103 108 113 118 124 129 136
CAGR 12-23F
USA 3.2% China 9.1%
Diamond jewelry sales forecast (2012-2023F)
India 11.4%
Source: AWDC’s and Bain & Company’s 2013 report – “Journey through the Value Chain”; Company’s forecast
$ bn
Japan 1.9%
CAGR 12-23F 6.4%
Europe 2.3% Gulf 7.5% Other 6.0%
100 95 74 73 72 67 80 87 94 98 103 108 113 118 124 136 129
16
- III. Sales and Marketing Overview of ALROSA
17
Successful marketing strategy
ALROSA is constantly improving and developing geographic and contract structure of its revenue
2013 ALROSA rough diamond sales by channel
After ceasing rough diamond sales to De Beers in 2008, ALROSA has fully switched to direct sales to its customers and has been implementing a 3 channel distribution strategy that is focusing on long-term contracts to improve stability of cash flows Currently ALROSA has 48 clients under long- term contracts, which stipulate for the supply of rough diamonds consisting of the pre-agreed assortment and volume on a monthly basis and 291 spot clients Spot and long-term clients are being selected based
- n
their compliance with the requirements for a stable business reputation, historical diamond purchasing volumes, stable financial position, size
- f
turnover and debt/equity ratio
Geography of ALROSA sales in 2013
64% Long-term contracts 21% Spot sales 15% Auctions 46% Belgium 24% Russia 13% India 3% China 10% Israel 2% United Arab Emirates 1% USA 1% Others
18
Gem-quality diamond sales account for 70% of total sales volume and 98% of sales value
Source: Company data
2013 rough diamond sales structure Sales of industrial diamonds account for 30% of total carat sales, but only 2% of revenue Sales of +10,8 ct gem-quality diamonds represent less then 1% of carat sales (around 0.2 million carats), but contribute 12% of total sales value
30% 2% 45% 24% 15% 15% 5% 13% 5% 34% 12%
by sales volume by sales value
>10.8 ct <1% 1.8-10.8 ct 0.9-1.8 ct 0.3-0.9 ct 0.03-0.3 ct Industrial (less than 0.03 ct or less than 1.5 mm) 38 mln cts $ 4,793 mln Weight
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- IV. Latest Financial Results
20
Financial Results
RUB mln 2013 2012 2011 2013 vs. 2012 Operational Figures Production, mln cts 36.9 34.4 34.6 7% Sales, mln cts 38.0 33.2 33.2 15% IFRS Income Statement Revenue 168,505 150,880 137,732 12% Cost of sales (81,737) (68,467) (56,005) 19% EBITDA 69,100 61,950 65,227 12% EBITDA margin 41% 41% 47%
- Net profit
31,837 33,634 26,658 (5%) Net profit margin 19% 22% 19%
- EPS, RUB
4.26 4.52 3.69 (6%) IFRS Balance Sheet Cash and cash equivalents 9,270 6,242 12,014 49% Total debt 138,591 122,701 95,553 13% Total debt / EBITDA 2.0x 2.0x 1.5x
- Equity attributable to owners of OJSC ALROSA
159,800 131,013 113,814 22% IFRS Cash Flow Statement Cash inflow from operating activities before changes in working capital 67,423 61,830 62,189 9% Income tax paid (10,715) (10,951) (9,232) (2%) Changes in working capital (3,175) (8,872) (3,775) (64%) Net cash inflow from operating activities 53,533 42,007 49,182 27% Purchase of property, plant and equipment (38,165) (30,050) (21,420) 27% Free cash flow 15,368 11,957 27,762 29%
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H1 2014 financial results were driven by the ruble weakening, supplemented with diamond sales from inventories and diamond prices growth
EBITDA margin Revenue Net profit EBITDA Free cash flow
45% 104.8
RUB bn
+27%
47.3
RUB bn
+34%
23.1
RUB bn
+58%
H1 2013: 43% H1 2013: RUB 82.2 bn H1 2013: RUB 14.6 bn H1 2013: RUB 35.2 bn H1 2013: RUB 9.1 bn
20.6
RUB bn
Growth by
2.3 times
Diamond sales
21.1
mln cts
+10%
H1 2013: 19.1 mln cts
4,130 3,767 4,221 4,177
31.12.2013 31.03.2014 30.06.2014 today 22
The share of long-term debt is 81%, debt increased to create a liquidity source for upcoming Eurobond repayment in 2014
Dynamics of bank loans and public debt instruments
552 600 500 1,152 435 1,090 1,000 Q4 2014 2015 2016 2017 2020 Bank loans Ruble bonds Eurobonds
Bank loans and public debt instruments breakdown
As of 29 August 2014 49% public debt instruments 51% Bank loans 36% Eurobonds 13% Ruble bonds 13% Ruble-denominated debt 87% US dollar-denominated debt 81% long-term debt 19% short-term debt
Debt maturity profile of bank loans and public debt instruments
$ mln As of 29 August 2014, $ mln 29.08.2014 For reference: ALROSA net debt 112,676 120,788 129,321 RUB mln
23
The minimum payout was increased to 35% of net profit under IFRS after new dividend policy was approved in November 2013
Dividends, Dividends per share(1) and Payout ratio(2)
2,240 250 1,833 7,439 8,175 10,826 14% 7% 16% 28% 24% 35% 0,05 0,1 0,15 0,2 0,25 0,3 0,35 0,4 2007 2008 2009 2010 2011 2012 2013 Dividends, RUB mln Payout ratio, % Dividends per share, RUB 0.30 0.03 0.25 1.01 1.11 1.47
Note: (1) Rebased to account for the share split which occurred in 2011 (2) Payout ratio was calculated as approved dividends for the respective year divided by profit attributable to owners of ALROSA (based on IFRS)
24
Appendix
25
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 (OJSC 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 (OJSC 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 (1) 704,315 1.38 973,041
Source: Micon report as at 01 July 2013 Note: (1) Does not include assets outside of JORC perimeter, with total GKZ reserves of 230 mln cts as at 01/01/2013
26
Diamond production
‘000 cts 2011 2012 2013 Q1 2013 Q2 2013 H1 2013 Q3 2013 Q4 2013 H2 2013 Q1 2014 Q2 2014 H1 2014 Aikhal Division 5,262 8,945 12,088 1,984 3,669 5,653 2,456 3,978 6,434 3,000 2,380 5,380 Jubilee pipe 3,589 6,272 8,975 1,940 2,232 4,172 2,456 2,347 4,803 2,325 2,369 4,694 Aikhal underground mine 1,306 2,520 3,062 1,435 1,435 1,627 1,627 639 639 Komsomolskaya pipe 367 153 50 44 2 46 4 4 36 11 47 Mirny Division 8,138 8,707 7,361 1,792 1,778 3,570 1,885 1,907 3,792 1,477 1,553 3,030 International underground mine 5,912 5,915 4,378 1,082 1,047 2,129 1,099 1,150 2,249 1,312 842 2,154 Mir underground mine 1,321 1,855 2,151 471 597 1,068 518 565 1,083 52 498 550 Alluvial and technogenic deposits 905 936 833 239 134 373 268 192 460 113 212 345 Udachny Division 10,583 5,845 4,892 1,598 1,383 2,981 480 1,430 1,910 1,117 1,039 2,156 Udachnaya pipe 10,374 5,642 4,735 1,557 1,330 2,887 466 1,382 1,848 1,055 1,012 2,067 Zarnitsa pipe 209 203 157 42 53 95 14 48 62 62 27 89 Nyurba Division 7,478 7,956 7,407 1,978 1,076 3,054 2,022 2,331 4,353 2,067 848 2,915 Nyurbinskaya pipe 6,950 7,276 6,591 1,978 801 2,779 1,509 2,303 3,812 2,067 612 2,679 Alluvial deposits 528 680 816 275 275 513 28 541 236 236 Severalmaz 557 559 636 126 142 268 155 213 368 233 394 627 Arkhangelskaya pipe 557 559 636 126 142 268 155 213 368 233 394 627 Almazy Anabara 2,534 2,408 2,521 967 967 1,554 1,554 1,239 1,239 Nizhne-Lenskoye
(1)
1,506 1,521 2,010 612 612 1,398 1,398 590 590 Total 34,552 34,420 36,914 7,478 9,627 17,105 9,949 9,860 19,809 7,894 8,043 15,937
Note: (1) In 2012 and earlier Nizhne-Lenskoye results are not included into ALROSA operational results
27
Ore and sands processing
‘000 t 2011 2012 2013 Q1 2013 Q2 2013 H1 2013 Q3 2013 Q4 2013 H2 2013 Q1 2014 Q2 2014 H1 2014 Aikhal Division 11,165 10,526 9,817 2,605 2,644 5,249 2,040 2,528 4,568 2,436 2,244 4,680 Jubilee pipe 9,833 9,627 9,041 2,405 2,375 4,780 2,040 2,221 4,261 2,225 2,215 4,440 Aikhal underground mine 231 432 560 263 263 297 297 116 116 Komsomolskaya pipe 1,101 467 216 200 6 206 10 10 95 29 124 Mirny Division 3,184 5,354 5,347 516 1,383 1,899 2,135 1,313 3,448 469 1,320 1,789 International underground mine 747 711 489 130 118 248 113 128 241 151 97 248 Mir underground mine 339 508 638 145 184 329 154 156 310 20 141 161 Alluvial and technogenic deposits 2,098 4,136 4,220 242 1,081 1,323 1,868 1,029 2,897 298 1,082 1,380 Udachny Division 6,350 4,619 5,825 1,650 1,858 3,508 597 1,720 2,317 1,570 1,226 2,796 Udachnaya pipe 5,350 3,619 4,825 1,400 1,563 2,963 447 1,415 1,862 1,180 1,055 2,235 Zarnitsa pipe 1,000 1,000 1,000 250 295 545 150 305 455 390 171 561 Nyurba Division 2,100 2,105 2,040 400 375 775 805 460 1,265 410 375 785 Nyurbinskaya pipe 1,350 1,426 1,247 400 124 524 285 438 723 410 113 523 Alluvial deposits 750 679 793 251 251 520 22 540 262 262 Severalmaz 1,066 1,100 1,193 272 279 551 281 361 642 481 808 1,289 Arkhangelskaya pipe 1,066 1,100 1,193 272 279 551 281 361 642 481 808 1,289 Almazy Anabara 5,961 5,768 6,750 1,874 1,874 4,876 4,876 2,200 2,200 Nizhne-Lenskoye
(1)
3,604 3,739 5,338 1,786 1,786 3,552 3,552 2,080 2,080 Total 29,826 29,472 36,310 5,443 10,199 15,642 14,286 6,382 20,668 5,366 10,253 15,619
Note: (1) In 2012 and earlier Nizhne-Lenskoye results are not included into ALROSA operational results
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Corporate Finance and Analytics Investor Relations 1-st Kazachy Per., 10-12 Moscow 119017 Russia Tel.: +7 495 745 58 72 ir@alrosa.ru