PRODUCING EXCEPTIONAL QUALITY DIAMONDS Shareholder Call 29 January - - PowerPoint PPT Presentation

PRODUCING EXCEPTIONAL QUALITY DIAMONDS

Shareholder Call 29 January 2020

IMPROVED PRODUCTION VOLUMES & GRADE

Shareholder Call - 29 January 2020

1

• The new management team took over in May 2019
• May and June 2019 saw an immediate increase in

production compared with the previous year

• Recent Q4 update showed improved production

volumes:

• FY 2019 up 70% to 323,000 tonnes (FY 2018: 190,000)
• Q4 2019 up 108% to 110,000 tonnes (Q4 2018: 53,000)
• Q4 update showed improved grade:
• FY 2019 4.34 cpht (FY 2018: 3.28 cpht)
• Q4 2019 4.65 cpht (Q4 2018: 4.01 cpht)
• Q4 update also showed increased average price per carat
• FY 2019 up 24% to USD415 per carat (FY 2018: USD334)
• Q4 2019 up 30% to USD410 per carat (Q4 2018: USD316)
• Ongoing improvements almost entirely due to the

introduction of a highly competent technical team, which understand the challenges and has the capacity to resolve them

50,000 100,000 150,000 200,000 250,000 2018 H1 2018 H2 2019 H1 2019 H2

Volume 000 tonnes

COST PER CARAT

Shareholder Call - 29 January 2020

2

• Unaudited cost per carat produced in H2 2019

fell to USD275 per carat and in 2018 this was above USD400 per carat

• Cost per carat linked to:
• Economies of scale
• Improved operational management & employee

commitment

• Partnership with professional major contractors
• Cost control
• Management continues to investigate cost

reduction opportunities to impact positively on Life of Mine economies:

• Linking up to the electricity grid
• Materially increasing volumes
• Delivering higher recoveries – 70% to +90%

THE RESOURCE

• Life of Mine currently around 10 years
• Management believe that the resource can sustain increased production
• KV1 and KV2 to be mined as one pit
• KV5 operational in 2020
• KV3 to be selectively mined – starting with a trial trench in 2020

Corporate Presentation Q4 2019

3

INFERRED RESOURCE NOVEMBER 2018

Pipe Volume (m3) Tonnes Carats (+1mm) Grade (cpht +1mm) KVW01 605 800 1 561 400 97 000 6.2 KVW02 734 000 1 909 700 86 600 4.5 KVW03 1 461 600 3 629 200 152 000 4.2 KVW05 253 400 644 300 31 400 4.9 TOTAL 3 054 800 7 744 600 367 000 4.7

FUTURE PLANS – A THREE STEP APPROACH

Corporate Presentation Q3 2019

4

Step 1

Achieve operational profitability through enhanced production

Currently focussing operational stability and discipline with Initial indications being positive

• Operate profitably

Step 2

Achieve & optimise profitability through internal growth

Evaluation of how best to optimise the value of Kareevlei

• Assess increased monthly/yearly

volumes above guidance level versus capital cost

• Evaluate how best to mine the

resource to get maximum value

Step 3

Growth

Capacity in executive team and Board to:

• Evaluate other diamond mining
• pportunities in Africa
• Evaluate other mining opportunities in

Africa

St Step 1 - me met St Step 2 - unde underway

• New management team with strong technical capacity
• Met & exceeded all production targets for 2019
• Operationally profitable in H2 2019
• Share price:
• Doubled since the fundraising in May 2019
• Outperformed benchmark indices
• Has not reflected the recent successes
• Step 2 of growth strategy under way:
• Develop plans to increase production
• Focus on reducing costs further
• Step

3

• f

growth strategy to maximise value to shareholders:

• Acquire other high growth assets; and/or
• Introduce a progressive dividend policy
• Potential future Company revaluation
• Average price per carat of +USD380
• Lower cost – USD275
• Potential to increase production
• Improved recovery of in-situ diamonds from 70% to +90%

(higher revenue outweighs lower average price)

SUMMARY

Shareholder Call - 29 January 2020

5