DEBSWANA DIAMOND COMPANY (PROPRIETARY) LIMITED Overview: 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
Damtshaa Mine Orapa 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*
1 3 2 Letlhakane Mine Orapa c.400 employees Regime 2015 production 0.5m carats Jwaneng 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* Debswana Corporate Centre (Gaborone)
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 Lynette Bokani Esther Bonny Ntoti Mosetlhe Keith Blanchard Lephimotwe GM Armstrong Motlhabani Kanaimba- Senai Thebenyane Head of HR Head of Tech Boyce Sebetela Jwaneng Mine CFO GM Head of CA Head of Services Head of Strategy OLDM Secretarial & and BI Legal 3 Jwaneng Mine management is committed to making Jwaneng the world’s leading diamond mine in every respect
Albert Milton GM
Sed Serumola Rory Philip Lisindi Tshepang Dr Mwamba Kean McCallum Thatayaone Neville Pollard Tumelo Koolatotse Greyvensteyn Mazwigwila Nsebola Keitumetse Ntlhayakgosi Koolatotse Snr Ore Snr Finance Snr MRM Snr Engineering Processing Snr Manager Manager Snr HR Manager Hospital Manager Snr Security Manager Snr S&SD Snr Mining Manager Mining-Projects Superintendent Manager Manager Manager
4 Safety: our focus is to achieve zero harm at our operations through our behaviour-based programmes and focus on critical controls
Safety Performance 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 Meeting shareholder and customer needs: 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 11 12,000 10 10 11 8 10 10,000 15 9 8,000
10 6,000
12 12 12 13 4,000 5 11 11 GDP 9 (US$bn) 2,000 Jwaneng carats 0 0 2009 2010 2011 2012 2013 2014 2015 OLDM carats * Data Source: Debswana and World bank 6 Production: 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
H1 0.1 5.7 10.9 1.6 0.9 5.4 11.5 2015 0.3
Q3 1.9 2.0 0.1 4.1 2015 11.8 3.1 1.1 -9%
H2 0.1 4.0 4.5 8.8 2015 0.2 12.0 2.1 1.0
H1 6.2 4.0 0.3 10.5 2016
1.1
Q3 2.8 1.5 0.2 4.5 2016
Jwaneng Orapa Letlhakane Damtshaa 7 Jwaneng Mine 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$19/¢(2) Jwaneng Mine Pit • Anglo American operating model launched at Jwaneng in September 2016 • 1.4km width • 2km length • Potential life extension projects post Cut-8 to extend life of mine to well • ≈410m deep beyond 2040
(1) Cpht = carats per hundred tonnes of ore (2) Total cash cost per carat recovered ($/ct). This represents the total production and operating costs before operating special items (excluding *Based on the Anglo American Ore Reserves and Mineral Resources Report 2015 8 depreciation and capex), divided by carats recovered Cash Containment: 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
Operating 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
Operational efficiency 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 Total opex savings 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$8 million
9 Jwaneng efficiency improvements
Shovels (t/hr) Loading cycle (mins) Average tyre life (hours)
Target Target Target +12% +21% Actual -17% Actual Actual 1,700 4.2 6,000 28 213
1,672 5,787 3.5 1,514 3.6 4,940
-0.1 2015 2016 2015 2016 2015 2016 YTD YTD YTD
10 Jwaneng Cut-8 approaching first ore in 2017
Jwaneng 109,813 110,000 FY 2015 H1 2016
53,066
9,764
8,000 7,695 7,603 6,199 6,000 4,855 4,253 4,000
2,000
0 Waste mined Ore mined Tonnes treated Carats recovered (tonnes ‘000s) (tonnes ‘000s) (tonnes ‘000s) (cts ‘000s)
• Cut-8: ~80% of the 500 million tonnes of waste stripping required to expose first ore (in 2017) has been mined • Jwaneng tailings plant commissioned in 2014, increasing flexibility
11 Investing in the future: development for future production through waste capitalisation forms a major part of capital expenditure, primarily at Jwaneng
Capex overview (100% basis)
US$m Stay in Business (SIB) Waste Expansionary
FY 2014 318 220 57 595
FY 2015 212 240 72 524
H1 2016 81 96 43 220
Waste capitalised driven by Jwaneng Cut-8 SIB driven by Orapa US$m US$m
FY 2014 205 15 220 FY 2014 82 146 11 79 318 9 21
FY 2015 215 25 240 FY 2015 72 110 17 13 212
H1 2016 95 1 96 H1 2016 21 39 2 19 81
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 Production flexibility: Tailings Processing Plants provide ability to respond effectively to market conditions at lower cost
Jwaneng Modular Tailings Plant Letlhakane Modular Tailings Plant . 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 Main treatment plant Recrush plant
Diamond Trading Company Botswana Aquarium Tailings dumps and slimes dams
Orapa, Letlhakane and Damtshaa Mines Sources 14