DEBSWANA DIAMOND COMPANY (PROPRIETARY) LIMITED
Overvi view: Debswana, a 50/50 joint venture between the GRB and De Beers comprises two of the world’s most valuable diamond mines, Jwaneng and Orapa Regime Damt mtsh shaa aa Mine Orap apa a Mine c.300 employees c.2,300 employees 2015 production 0.2m carats c.2,000 contractors Life of Mine 2032* 2015 production 9.9m carats Reserves 4.7M¢; 25.1Mt* Life of Mine 2029* Resources 6.1M¢; 23.3Mt* Reserves 151.4M¢; 171.9Mt* Resources 365.0M¢; 370.0Mt* 3 1 2 Let etlhak hakane ane Mine c.400 employees Orap apa a 2015 production 0.5m carats Regim ime Jwanen aneng Mine Life of Mine 2040 (tailings)* c.2,000 employees Reserves 8.5M¢; 35.4Mt* c.3,000 contractors Resources 21.1M¢; 76.2Mt* 2015 production 9.8m carats Life of Mine 2035* 5 Reserves 149.2M¢; 113.0Mt* 4 Resources 224.0M¢; 250.9Mt* Debsw bswana a Corpor orat ate Centr tre (Gabo borone) one) 2 *Based on the Anglo American Ore Reserves and Mineral Resources Report 2015
Our company leadership live our values by setting the highest standards, encouraging innovation and pursuing brilliance in all areas, while creating a great place to work Balisi Bonyongo MD Albert Milton Bokani Esther Bonny Ntoti Mosetlhe Keith Blanchard Lephimotwe Lynette Motlhabani Kanaimba- Senai Thebenyane Boyce Sebetela Armstrong GM Head of HR Head of Tech GM Head of CA Head of Services Head of Strategy CFO Jwaneng Mine Secretarial & and BI OLDM Legal 3
Jwaneng Mine management is committed to making Jwaneng the world’s leading diamond mine in every respect Albert Milton GM Sed Serumola Philip Lisindi Tshepang Dr Mwamba Kean McCallum Thatayaone Tumelo Koolatotse Rory Neville Pollard Mazwigwila Nsebola Keitumetse Ntlhayakgosi Koolatotse Greyvensteyn Snr Ore Snr Finance Snr MRM Snr Engineering Processing Snr Manager Manager Snr HR Manager Hospital Manager Snr Security Snr S&SD Snr Mining Manager Manager Superintendent Manager Manager Manager Mining-Projects 4
Safe fety ty: our focus is to achieve zero harm at our operations through our behaviour-based programmes and focus on critical controls Safety fety Perfor forman mance e 2010-2016 Debswana (Jwaneng, OLDM and DCC) 100 1.60 90 1.40 80 1.20 70 1.00 60 50 0.80 40 0.60 30 0.40 20 0.20 10 0 0.00 2010 2011 2012 2013 2014 2015 2016 Fatal LTI RWI LTIFR CIFR TRIFR 5
Meet eting sharehold older r and customer er needs: s: Debswana continues to improve its efficiency and is delivering strong shareholder returns. Debswana’s performance is crucial for the GRB, as the Botswana economy relies on diamond revenues 25 16,000 14,000 20 12,000 11 10 10 11 8 10,000 10 15 9 8,000 10 6,000 13 12 4,000 12 12 11 11 GDP 5 9 (US$bn) 2,000 Jwaneng carats 0 0 OLDM 2009 2010 2011 2012 2013 2014 2015 carats 6 * Data Source: Debswana and World bank
Pro roductio tion: n: In 2015 Debswana reduced production in line with demand Production down 9% in H1 2016 with planned reductions at Orapa (plant 1 on partial care and maintenance) and Damtshaa (on care and maintenance) Mct 0.1 H1 5.7 5.4 11.5 10.9 1.6 0.9 2015 0.3 Q3 1.9 2.0 0.1 4.1 2015 11.8 3.1 1.1 -9% 9% 0.1 H2 4.0 4.5 8.8 2015 0.2 12.0 2.1 1.0 H1 6.2 4.0 10.5 0.3 2016 1.1 Q3 2.8 1.5 0.2 4.5 2016 Jwaneng Orapa Damtshaa Letlhakane 7
Jwa wane neng ng Mine ne Resource : nicknamed the “Prince of mines”, Jwaneng Mine has one of the richest kimberlite ore bodies, by value, in the world • Three main pipes (Centre, North and South) • Life of mine 2035* • Open pit reserves 149.2M¢ from 113Mt of ore, grade 132.0cpht (1) • Open pit resource 207.5M¢ from 187.5Mt of ore, grade 110.7cpht (1) • Cut-6/7 and 8 • Cut-8 accounts for 93M¢ from 84Mt of ore • Tailings 16.5M¢ from 35.8Mt of ore • Average revenue per carat H1 2016 US$196/¢ (100% of SSV) • Average cash cost per carat recovered H1 2016 US$19/¢ (2) Jwanen aneng Mine e Pit • Anglo American operating model launched at Jwaneng in September 2016 • 1.4km width • 2km length • Potential life extension projects post Cut-8 to extend life of mine to well ≈410m deep • beyond 2040 (1) Cpht = carats per hundred tonnes of ore 8 *Based on the Anglo American Ore Reserves and Mineral Resources Report 2015 (2) Total cash cost per carat recovered ($/ct). This represents the total production and operating costs before operating special items (excluding depreciation and capex), divided by carats recovered
Cash Contai tainm nment: nt: By focusing on operational efficiencies and other cost containment opportunities, management has saved US$60 million (100% basis) YTD October 2016, of which US$42 million is from Jwaneng Operati ating ng model Improved scheduling and resourcing of planned activities resulting in improved operational stability and efficiency • YTD pula/tonne cost moved 10% favourable to target • YTD production cash costs 10% favourable to target Operati ationa nal effici cienc ency Improved pit conditions and standards • Tyre life 17% improvement versus 2015 • Shovel t/h 10% improvement versus 2015 • Truck ton-km/hr 10% improvement versus 2015 Jwaneng Tot otal opex savi vings ngs YTD • Efficiency improvements – US$11 million Cut-9 waste dump redesign – US$14 million • • Cut-8 schedule optimisation – US$5 million • Cut-8 North east corner rates – US$4 million • Cut-8 contractor management (tyres) – US$8 million 9
Jwaneng efficiency improvements Average verage tyre life e (hours) Shovels els (t/hr hr) Loading ding cycle le (mins ns) Target Target Target +12% +21% -17% Actual Actual Actual 1,700 4.2 6,000 28 213 1,672 5,787 3.5 1,514 4,940 3.6 -0.1 2015 2016 2015 2016 2015 2016 YTD YTD YTD 10
Jwaneng Cut-8 approaching first ore in 2017 Jwanen eng 109,813 110,000 FY 2015 H1 2016 53,066 9,764 7,695 7,603 8,000 6,199 6,000 4,855 4,253 4,000 2,000 0 Waste mined Ore mined Tonnes treated Carats recovered (tonnes ‘000s) (tonnes ‘000s) (tonnes ‘000s) (cts ‘000s) • Cut-8: ~80% of the 500 million tonnes of waste stripping required to expose first ore (in 2017) has been mined • Jwaneng tailings plant commissioned in 2014, increasing flexibility 11
Investing ting in the future re: : development for future production through waste capitalisation forms a major part of capital expenditure, primarily at Jwaneng Capex overview (100% basis) US$m Stay in Business (SIB) Waste Expansionary FY 2014 595 595 318 220 57 FY 2015 524 524 212 240 72 H1 2016 220 220 81 96 43 Waste capitalised driven by Jwaneng Cut-8 SIB driven by Orapa US$m US$m FY 2014 318 318 15 82 146 11 79 FY 2014 220 220 205 21 9 25 FY 2015 212 212 FY 2015 215 240 240 72 110 17 13 H1 2016 1 96 96 95 H1 2016 2 81 81 21 39 19 Jwaneng Orapa Jwaneng Orapa Morupule Other Capex evolution Capitalised waste will tail off as the Jwaneng Cut-8 stripping ratio declines, with first ore achieved in 2017. With long life of mines, stay in business capital expenditure will remain relatively stable over the medium term, following a short term increase related to Cut-8 once first ore is reached. Current approved expansion project expenditure will tail off as projects reach completion, including the Letlhakane tailings facility in 2017. Potential expansion opportunities post Jwaneng Cut-8 and Orapa Cut-2 may result in increased capital expenditure, once studies reach an acceptable level of confidence . 12 Capital funding is based on the same pre-tax profit share of GRB 80.8%:19.2% De Beers
Pro roductio tion n flexi xibility: : Tailings Processing Plants provide ability to respond effectively to market conditions at lower cost Jwanen eng g Modular ular Tailings lings Plant nt Letlhak lhakane ane Modular ular Tailings lings Plant nt Commissioned in 2014 Funding for construction approved in Nov 2014 A total of US$103m (100% basis) worth of CAPEX A total of US$236m worth of CAPEX will be incurred incurred in the development of the plant in the development of the plant Processes old tailings deposited between 1982 and Construction started in Q1 2015 and will be 1992 commissioned by end of Q2 2017 Processes up to 2 million tonnes, recovering up to Recovers diamonds from tailings through the use of 900,000 carats per annum new and improved recovery technologies Offers flexibility to increase or reduce production to Capacity of up to 800,000 carats per annum respond to changes in the market Extends the life of the mine by 20 years Payback period = 3-4 years (from first capital) Payback period = 2-3 years (from first capital) 13
Your tour: : Following the diamonds Open pit Recrush plant Main treatment plant Diamond Trading Company Botswana Tailings dumps and slimes dams Aquarium Orapa, Letlhakane and Damtshaa Mines Sources 14
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