Investor update May 2018 Pallinghurst Resources Limited t/a - - PowerPoint PPT Presentation

GEMF IELDS 1

Investor update May 2018

Pallinghurst Resources Limited t/a Gemfields Group

2

IMPORTANT NOTICE & DISCLAIMER

This document, which has been compiled by Pallinghurst Resources Limited (the “Company”), comprises the written materials/slides for a presentation concerning the Company, including its business, results of operations and prospects. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company, its shareholders or affiliates, in the United Kingdom, the United States nor any other country, nor may it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract

• r investment decision in relation thereto, nor does it constitute a recommendation regarding the shares of any Group member

No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness, or lack thereof. In particular, any data or figures presented in this document may not have been audited and should therefore be treated with due caution. No representation or warranty, express

• r implied, is given by or on behalf of the Company, the Group their respective advisors or representatives as to the accuracy or completeness of the information
• r opinions contained in this presentation. None of the Company, the Group, their advisors or representatives shall have any liability whatsoever (in negligence
• r otherwise) for any loss whatsoever arising from any use of this document, or its contents, or otherwise arising in connection with this document. This

document and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose. Certain statements in this presentation, or given in response to questions, may constitute forward-looking statements. These statements relate to future events or future performance and reflect the Company’s assumptions regarding the growth, results of operations, performance and business prospects and opportunities of the Company. In particular, statements regarding the Company’s objectives, plans and goals involve forward-looking statements. We caution you that any forward-looking statements are just estimates. They are not guarantees of future performance and involve manifold risks and uncertainties. A number of factors could cause actual events, performance or results to differ materially from what is indicated in the forward-looking statements. There can be no assurance that actual events, performance or results will be consistent with these forward-looking statements, and the Company’s assumptions may prove to be incorrect. The Company does not intend, and, subject to any legal or regulatory requirements, does not assume any obligation, to update or revise forward-looking statements to reflect new events or circumstances.

Pallinghurst Resources Limited t/a Gemfields Group

3

The Transition From Pallinghurst Resources Limited To The New ‘Gemfields Group’ Structure

Pallinghurst Resources Limited t/a Gemfields Group

4

75%

FABERGÉ Kagem Mining Ltd (EMERALD) ZAMBIA Montepuez Ruby Mining Lda (RUBY) MOZAMBIQUE Other Gem Licences for Exploration & Development

75-100% 75% 75%

GEMFIELDS

The world’s leading miner of responsibly sourced precious coloured gemstones. Africa-focussed, with three principal activities: mining, grading and marketing. 100% owned by Pallinghurst Resources Ltd (JSE:PGL)

Web Gemstone Mining plc (EMERALD) ETHIOPIA

100%

Megaruma Mining Lda (RUBY) MOZAMBIQUE

75%

• World’s largest

emerald mine.

• Acquired by

Gemfields in 2008.

• Zambian

Government, a 25% shareholder, has received more than USD 100 million since 2008.

• >USD 3 million

invested at 31 December 2017.

• Initial exploration

(pits, trenches and drilling) completed.

• Bulk sampling

commenced August 2017.

• Key infrastructure in

place.

• World’s largest ruby

mine.

• Licence granted
• 2012. First ruby

auction June 2014.

• Mozambican

Government’s royalties and corporation tax exceed USD 80 million to 31 December 2017

• Bulk sampling to

commence calendar Q2 2018.

• USD 4 million

invested to 31 December 2017.

• Adjacent to

Montepuez Ruby Mining Licences.

• Exploration licences

in Madagascar, Mozambique and Zambia.

• World-famous brand

first founded in 1842.

• Promotes the

positioning and perception of precious coloured gemstones by producing jewellery, timepieces and

• bjects.

Pallinghurst Resources Limited t/a Gemfields Group

G E M F I E L D S / P A L L I N G H U R S T S H A R E P R I C E P E R F O R M A N C E

5

20 40 60 80 100 120 140 160

01-Jun-14 01-Jul-14 01-Aug-14 01-Sep-14 01-Oct-14 01-Nov-14 01-Dec-14 01-Jan-15 01-Feb-15 01-Mar-15 01-Apr-15 01-May-15 01-Jun-15 01-Jul-15 01-Aug-15 01-Sep-15 01-Oct-15 01-Nov-15 01-Dec-15 01-Jan-16 01-Feb-16 01-Mar-16 01-Apr-16 01-May-16 01-Jun-16 01-Jul-16 01-Aug-16 01-Sep-16 01-Oct-16 01-Nov-16 01-Dec-16 01-Jan-17 01-Feb-17 01-Mar-17 01-Apr-17 01-May-17 01-Jun-17 01-Jul-17 01-Aug-17 01-Sep-17 01-Oct-17 01-Nov-17 01-Dec-17 01-Jan-18 01-Feb-18 01-Mar-18 01-Apr-18

Rebased to 100 at 1 June 2014

Pallinghurst Resources Limited Share Price vs Gemfields Share Price

Pallinghurst Resources Limited Gemfields plc Gemfields delisted from AIM 28 July

Pallinghurst Resources Limited t/a Gemfields Group

G E M F I E L D S / P A L L I N G H U R S T S H A R E P R I C E P E R F O R M A N C E

6

10 20 30 40 50 60 70 80 90 100 01-Jun-14 01-Jul-14 01-Aug-14 01-Sep-14 01-Oct-14 01-Nov-14 01-Dec-14 01-Jan-15 01-Feb-15 01-Mar-15 01-Apr-15 01-May-15 01-Jun-15 01-Jul-15 01-Aug-15 01-Sep-15 01-Oct-15 01-Nov-15 01-Dec-15 01-Jan-16 01-Feb-16 01-Mar-16 01-Apr-16 01-May-16 01-Jun-16 01-Jul-16 01-Aug-16 01-Sep-16 01-Oct-16 01-Nov-16 01-Dec-16 01-Jan-17 01-Feb-17 01-Mar-17 01-Apr-17 01-May-17 01-Jun-17 01-Jul-17 01-Aug-17 01-Sep-17 01-Oct-17 01-Nov-17 01-Dec-17 01-Jan-18 01-Feb-18 01-Mar-18 01-Apr-18

USD cents

Pallinghurst Resources Limited Share Price vs Gemfields Share Price (converted to USD cents at 30 April 18)

Pallinghurst Resources Limited Gemfields plc Gemfields delisted from AIM 28 July 2017

Pallinghurst Resources Limited t/a Gemfields Group

C O N S O L I D A T E D I N C O M E S T A T E M E N T F O R T H E Y E A R E N D E D 3 1 D e c e m b e r 2 0 1 7

7

Pallinghurst Resources Limited t/a Gemfields Group

GEMFIELDS 8

G R O U P F R E E C A S H F L O W P E R F O R M A N C E

Free Cashflow is calculated as cashflows from operations less taxation, capital expenditure, stripping activity costs and includes proceeds from share-buys and disposals at Pallinghurst level. December 2017 includes $5.0m contribution from the Jupiter buy-back programme.

14,243 18,494 19,641 (13,969) (44,621) 8,591 25,786 4,340 (29,340) (4,590) 23,182 (34,199) (21,326) 3,640

(50,000) (40,000) (30,000) (20,000) (10,000)

• 10,000

20,000 30,000 40,000 50,000 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 USD ('000)

Group Free Cashflow

Pallinghurst Resources Limited t/a Gemfields Group

G R O S S D E B T A N A L Y S I S

9

Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Barclays - Kagem 3,506 2,917 7,870 11,595 8,881 6,762 15,256 20,000 30,000 25,000 30,000 35,000 35,000 Pallinghurst - Limited 9,936 15,000 10,000 6,662 4,916 Macquarie - Limited 24,699 14,702 19,812 10,002 Gordon Brothers - Faberge 19,788 17,977 BCI Leasing - MRM 4,103 12,483 10,493 BCI overdraft - MRM 7,038 Barclays overdraft - MRM 2,229 Total 3,506 2,917 7,870 11,595 8,881 16,698 30,256 44,699 54,702 51,474 58,288 67,271 63,470

3,506 2,917 7,870 11,595 8,881 6,762 15,256 20,000 30,000 25,000 30,000 35,000 35,000 9,936 15,000 10,000 6,662 4,916 24,699 14,702 19,812 10,002 19,788 17,977 4,103 12,483 10,493 7,038 2,229

10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17

Gemfields Group - Gross Debt Analysis to 31 December 2017

Barclays - Kagem Pallinghurst - Limited Macquarie - Limited Gordon Brothers - Faberge BCI Leasing - MRM BCI overdraft - MRM Barclays overdraft - MRM

Pallinghurst Resources Limited t/a Gemfields Group

10

K A G E M E M E R A L D P E R F O R M A N C E

5.9 5.6 7.5 19.6 31.6 26.2 26.8 31.5 36.5 34.9 34.7 33.1 22.3 21.5 7.2 10.0 11.0 9.0 15.2 16.4 15.5 14.5 19.2 14.3 10.7 14.5

• 5.0

10.0 15.0 20.0 25.0 30.0 35.0 40.0

Kagem Rough Emerald and Beryl Total Auction Sales (USD million)

High Grade Low Grade

Pallinghurst Resources Limited t/a Gemfields Group

11

K A G E M E M E R A L D P E R F O R M A N C E

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Jul 08 Oct 08 Jan 09 Apr 09 Jul 09 Oct 09 Jan 10 Apr 10 Jul 10 Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Oct 16 Jan 17 Apr 17 Jul 17 Oct 17

Kagem Unit Operating Costs (Actual Cash Cost Basis) USD/carat (Emerald+Beryl)

Pallinghurst Resources Limited t/a Gemfields Group

12

K A G E M E M E R A L D P E R F O R M A N C E 5000 10000 15000 20000 25000 30000 35000 40000 Thousands

Kagem 12 Month Rolling Gemstone Production – Emerald and Beryl (carats)

Beryl Emerald Premium Emerald

Pallinghurst Resources Limited t/a Gemfields Group

13

M O N T E P U E Z R U B Y P E R F O R M A N C E

33.5 44.3 30.5 54.8 55.0 43.3 29.3 28.8 15.9 10 20 30 40 50 60

Montepuez Rough Ruby Total Auction Sales (USD million)

Mixed Quality Higher Quality Commercial Quality

Pallinghurst Resources Limited t/a Gemfields Group

14

M O N T E P U E Z R U B Y P E R F O R M A N C E

5 10 15 20 25 30

Montepuez Monthly Unit Operating Costs (Actual Cash Cost Basis)

USD/carat (Total production)

Pallinghurst Resources Limited t/a Gemfields Group

15

M O N T E P U E Z R U B Y P E R F O R M A N C E 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Thousands Montepuez Rolling 12 Month Overall Gemstone Production (carats)

• a. Production for Nov '12 through Apr '13 is spread evenly across the 6 months
• b. "Sapphire" and "-4.6mm" were only introduced in July '13 and "Low Sapphire" was introduced in June '16

Mixed Low Sapphire Sapphire Corundum

• 4.6mm

Low Ruby Ruby Premium ruby

Pallinghurst Resources Limited t/a Gemfields Group

16

F A B E R G E P E R F O R M A N C E

2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17

12 month rolling Sales Orders Agreed (USD, post any discounts, ALL CHANNELS)

2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17

12 month rolling Operating Costs (USD million)

1 N E W B U R L I N G T O N P L A C E L O N D O N , W 1 S 2 H R U N I T E D K I N G D O M T : + 4 4 ( 0 ) 2 0 7 5 1 8 7 2 8 0 M : + 4 4 ( 0 ) 7 8 8 7 4 2 6 7 9 4

17