Firestone Diamonds June 2016 - Junior Indaba
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Firestone Diamonds June 2016
Disclaimer
The information contained in this presentation (“Presentation”) has been prepared by Firestone Diamonds plc (the “Company”) and has been prepared for the purpose of
providing general information about, and an overview of, the Company and its operations. It is not meant to be a complete review of all matters concerning the Company.
Whilst the Company has taken all reasonable care to ensure the information and facts contained in this Presentation are accurate and up-to-date, it does not make any
representation or warranty, express or implied as to the accuracy or completeness of any information included in this Presentation.
This Presentation does not constitute an invitation or inducement to engage in investment activity in the ordinary shares of the Company nor does it form part of any offer or
invitation to purchase, sell or subscribe for, or any solicitation of any such offer to purchase, sell or subscribe for, any securities in the Company nor shall this Presentation or any
part of it, or the fact of its distribution, form the basis of, or be relied upon in connection with, making any such investment decisions. If you require any advice, please consult an
authorised person specialising in advising on investments.
No reliance may be placed, for any purposes whatsoever, on the information, representations, estimates or opinions contained in this Presentation or on their completeness,
fairness or accuracy thereof and this Presentation should not be considered a recommendation by the Company or any of their respective affiliates in relation to any purchase
of the ordinary shares in the Company. While the information contained herein has been prepared in good faith, no representation or warranty, express or implied, is given by
or on behalf of the Company, or any of their respective directors, partners, officers, employees, advisers or any other persons as to the completeness, accuracy or fairness of the
information or opinions contained in this Presentation and none of the information contained in this Presentation has been independently verified or approved by any other
person and is subject to updating, revision and further amendment. Save in the case of fraud, no liability or responsibility is accepted for any errors, omission or inaccuracies in
such information or opinions.
This Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates.
Forward-looking statements concern future circumstances and result and other statements that are not historical facts, sometimes identified by the words "believes", "expects",
"predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward looking statements, including assumptions,
opinions and views of the Company or cited from third party sources, contained in this Presentation are solely opinions and forecasts which are uncertain and subject to risks.
A multitude of factors can cause actual events to differ significantly from any anticipated development. The Company offers no guarantee that the assumptions underlying such
forward-looking statements are free from errors nor does the Company accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the
actual occurrence of the forecasted developments.
This Presentation is confidential and must not be copied, reproduced, published, distributed, disclosed or passed to any other person at any time without the prior written
consent of the Company.
Neither this Presentation nor any copy of it may be distributed, published or reproduced, in whole or in part, by you or any other person for any purpose. Neither these slides
nor any copy of them may be taken or transmitted into the United States of America or its territories or possessions (the "United States"), or distributed, directly or indirectly,
in the United States, or to any U.S. Person as defined in Regulation S under the Securities Act 1933 as amended, including U.S. resident corporations, or other entities organised
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Paul Bosma, (Pr. Sci. Nat. Reg. nr. 400259/04) who is the Company’s Mineral Resource Manager and holds a B.Sc. Hons degree in Geology and a MBA, has reviewed and approved the
technical information contained within this presentation. Paul Bosma has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to
the activity that he is undertaking and is a qualified person as defined in the AIM Rules.
By receiving this Presentation, you agree that you have read this notice and are bound by its terms.
2 June 2016
Introduction and Company Overview June 2016
Company overview
Share price performance since May 2015 Analyst forecasts Target Price
FinnCap – February 2016 51p
Macquarie – January 2016 30p
Mirabaud – February 2016 46p
Panmure Gordon – April 2016 34p
RBC Capital Markets – March 2016 35p
SP Angel – February 2016 28p
London Listed AIM: FDI
Current Share Price – 26 May 2016 30p
Source: London Stock Exchange
Issued Shares 312,574,644
52 week high-low 34.3 – 15.5p
Significant Shareholders (as at April 2016) Market Capitalisation (£) 93.8m
Pacific Road Resources 23.2% Advisers
Resource Capital Fund VI L.P. 23.2% Nomad Strand Hanson
Edwards Family Holdings Ltd 9.1% Joint Broker Mirabaud Securities LLP
FIL Ltd 5.0% Joint Broker Macquarie
Sustainable Capital Ltd 5.0% Auditor BDO LLP
Julian Treger 4.5% Financial PR Tavistock Ltd
4 June 2016
Cash position – March 2016
US$m
Cash on hand - end March 2016 16.3
ABSA Capital project finance facility 47.0
Total remaining project funding 63.3
Remaining project and group costs 54.0
Available headroom end December 2016 9.3
Available headroom including standby facility end December 2016 24.3
5 Update Junior indaba June 2016
Firestone Diamonds plc
Key Facts
• Firestone Diamonds a focused diamond mine developer – soon to join the short list of
diamond producers
• Purchased Kopane Diamonds in 2010 owned 75% of Liqhobong Mining Development
Company in Lesotho, Government of Lesotho holds 25%
• H1 2014 – raised project financing package of US$112.4 million and equity of US$112
million - April 2015 – US$15 million standby facility in place
• Senior management team in place with extensive, project, construction and diamond
mining experience
• Revised Mine Plan completed October 2015, base case project economics reconfirmed:
• Base case post financing NPV at an 8% discount rate of US$389 million
• Project IRR of 42% versus
• Payback period of 4.1 years
• 15 year life of mine – open pit to 383m
6 June 2016
Location, location, location
Kimberlite Bodies
• Satellite pipe 1.6 ha
• Main pipe 8.6 ha
• Discovery blow 0.15 ha
• Blow ~ 0.1 ha
• Dyke 2.5 km strike
7 June 2016
Liqhobong Mining Development Company
Diamond Mine
Key Facts
• Ore bodies were discovered in the 1950s by De Beers in the Maluti Mountains of northern
Lesotho
• Owned 75% by Firestone Diamonds plc, 25% by Government of Lesotho (GoL)
• Fully funded to post planned production ramp up
• Initial production expected during Q4 2016, construction commenced in July 2014
• Target to treat 3.6 million tonnes of ore and recover 1 million carats per year
• Comprises Satellite and Main pipes, with associates dykes
• Potential for large and fancy yellow stones
• 8.6-hectare kimberlite pipe, contains a probable Diamond Reserve of 9.5Mct
• Trial mining conducted from 2011 to 2013 using Pilot Plant – 1.18 Mt mined yielding over
325,000 carats
• Mine plan is for open pit mining to 383 metres over 15 years
8 June 2016
Liqhobong diamond examples
Exceptional & large stone potential
74 carat 26 carat
US$8,500/ct US$13,500/ct
Light yellow makeable White makeable
9 carat 39 carat
US$10,000/ct US$3,500/ct
Fancy yellow Light yellow makeable
Besides the potential for large stones,
Liqhobong has a high incidence of fancy yellow stones.
9 June 2016
Why invest in Firestone
• Diamonds valued at Liqhobong at an average of US$131 per carat, giving a gross in situ
value of US$3.4 billion
• Highly experienced management and project team with proven track record in the
diamond industry
• Project on schedule and within budget for initial production in October 2016
• Construction 72% complete as at the end of March 2016
• Project NPV of US$ 389m at 8% discount and IRR of 42%, using conservative
Rand/US$ rates of 13.27 to 1 US$
• Exceptional & large stone potential with high incidence of fancy yellow stones drives
significant potential beyond the base NPV
10 June 2016Safety, Health, Environment and Community • Zero lost time injuries with over 2.3 million man hours worked to end of March 2016 • Total workforce currently 795 (December 952) employees and contractors • Approved environmental management plan in place • New access road fully operational • Water storage capacity complete for first year mining, water fully harvested • Compensation payment structure for loss of grazing and farming land agreed with local community • Community improvement projects in process • Relocation of 28 families nearly complete, 26 houses finished 11 June 2016
Project schedule and progress
Cost vs Completion Date Accelerated Current project
completion cost R2.1 billion
120,00% 3
potential end
ZAR Billions
October 2016
Original project
100,00% 72% complete March cost R1.85 billion 2,5
2016, current expenditure
R1.5 billion
80,00% 2
60,00% 1,5
40,00% 1
20,00% 0,5
0,00% 0
Jul-15
Jan-17
Jun-14
Jul-14
Jan-15
Jun-15
Jan-16
Jun-16
Jul-16
Mar-17
Mar-15
Mar-16
Feb-17
Feb-15
Feb-16
Dec-16
Aug-14
Sep-14
Nov-14
Dec-14
Aug-15
Sep-15
Nov-15
Dec-15
Aug-16
Sep-16
Nov-16
Oct-14
Oct-15
Oct-16
Apr-15
May-15
Apr-16
May-16
Original Planned Cost Revised Planned Cost Planned Revised Planned Actual
12 June 2016Construction progress
Site overview – April 2015
13 June 2016Construction progress
Site overview – April 2016
14 June 2016Construction progress
Earthworks - Residue Storage Facility
Residue Storage Facility Residue Storage Facility
September 2015 April 2016
September
2015
15 June 2016Summary
• Project construction 72% complete, as at end of March 2016 and on track for initial
ramp up start of production in Q4 2016
• Parts of the plant being commissioned already
• Zero lost time injury record maintained, with over 2.3 million man hours worked to end
of March 2016
• Project de-risked from water and materials handling perspective
• Capital budget to commencement of production of ZAR2.1 billion, remains within the
original US$185.4 million budget
• Sufficient funding with additional $15m stand-by available
• Operational readiness work stream started
16 June 2016Contact Us Firestone Diamonds plc The Triangle 5-17 Hammersmith Grove London W6 0LG Tel: +44 (0)20 8741 7810 Fax: +44 (0)20 8748 3261 info@firestonediamonds.com
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