kalahari diamond resources plc - allan hochreiter · 4 • john bristow, phd – geologist, ex de...
TRANSCRIPT
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Investor Presentation European Road TripJanuary-February 2007
John BristowJames Allan
TSX Venture: RVIOTCBB: RVINF
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This presentation includes certain statements and other information that may be deemed "forward-looking". Other than statements of historical fact all statements in this presentation that address future production, reserve or resource potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward- looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. For more information on Rockwell, Investors should review Rockwell’s annual Form 20-F filing with the United States Securities and Exchange Commission www.sec.com and the Company's home jurisdiction filings that are available at www.sedar.com.
Disclaimer
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• Established alluvial diamond miner
• Three existing mining operations in Kimberley district of South Africa
• Producer of world’s highest value gemstones (~US$1500 to $2000 per carat)
• Exceptional geological and operational skill set
• Acquisition opportunities capable of doubling production in short term
RVI – unique diamond opportunity …
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• John Bristow, PhD – geologist, ex De Beers, 25 years in alluvial diamond mining and kimberlite development.
• Hennie Van Wyk – 15 years experience in start-up, development and operation of the alluvial diamond projects.
• Jeremy Crozier, MBA – geologist, ex De Beers, African operational experience in kimberlites and alluvial diamonds.
• Jeffrey Brenner – rough diamond expert, international trader and manufacturer.
• Dave Copeland, P. Eng – principal of HDI and a geological engineer
• James Allan, BSc Eng, MBA- extensive diamond industry experience
Management Expertise
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Demand-Supply Projections
6,000
10,000
14,000
18,000
1994
1997
2000
2003
2006
2009
2012
2015Ro
ugh
dem
and
/ sup
ply (
US$m
) Rough DemandRough Supply
BHPB Projections 2003-2015:3.6% Demand0.8% Supply
Demand-Supply Projections(with current resources)
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Diamond Price Appreciation
Source: De Beers
0
Diamond Index (1948=100)Gold Index (1948=100)
1948
1952
1956
1960
1964
1968
1972
1976
1980
1984
1988
1992
1996
2000
2004
2008
2012
500
1000
1500
2000
2500
3000
3500
Diamond Index ForecastInd e
x
Year
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RVI
DPI Holding Company
Klipdam Diamond Mining(Klipdam operations, SA)
H C van Wyk Diamonds(“HCVWD”, Holpan and Wouterspan operations, SA)
100%
51%
51%
Galputs(SA diamond bearing deposits - trial mining)
100%
Midamines Concession(Cuango River, DRC Feasibility)
80%*
* A net profit interest subject to exploration program and feasibility study
Staged acquisitionto 74% ownership
with 26% BEE partner
Staged acquisitionto 74% ownership
with 26% BEE partner
First Acquisition Completed
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SpringbokSpringbok
KoaValleyKoaValley
Lower OrangeLower Orange
PrieskaPrieska
WouterspanWouterspan
DouglasDouglas
Middle OrangeMiddle Orange
KimberleyKimberleyBloemfonteinBloemfontein
Vaal RiverVaal RiverBloemhofBloemhof
JohannesburgJohannesburgVentersdorpVentersdorp
PretoriaPretoria
LimpopoLimpopo
BotswanaBotswana
NamibiaNamibia
ZimbabweZimbabwe
SwazilandSwaziland
LesothoLesotho
RSARSA
00 300300
KilometresKilometres
NN
Limpopo R
iver
Vaal River
Molopo
River
RietRiver
RietRiver
OrangeRiver
OrangeRiver
Holpan-KlipdamHolpan-Klipdam
GalputsGalputs
Southern AfricaAlluvial Diamond Deposits
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Size : Frequency Distribution - Middle Orange River
1
102030
50
90
98
99.990.01 0.1 1 10 100 200 300
0.01Percent carats larger than Z
Diamond Distribution of Saxendrift
Mining & exploration
Statistically inadequate to be used in the plot
Carats per stone
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156 caratsFlawless D US$5.7M
(US$37,000/carat)
39 caratsFlawless DUS$858,000
(US$22,000/carat)
152 caratsFlawless DUS$4.3M
(US$28,000/carat)
132 caratsIntense Yellow
US$1.6M (US$12,200/carat)
Recent Production From Operations
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• 90% of stones are above 1 carat
• >30% of stones are above 10 carats
• Approximately 3% of stones are above 100 carats
The area is known for recovery of large, exceptional quality stones average price >US$1500 per carat.
Prices firming in 2007-2008
(www.allanhochreiter.co.za)
Recent Production From Operations
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0 %5 %
1 0 %1 5 %2 0 %2 5 %3 0 %3 5 %4 0 %4 5 %5 0 %
+ 2 c ts + 1 1 + 9 + 7 -7
P ro d u c tio n b y v a lu e
0 %5 %
1 0 %1 5 %2 0 %2 5 %3 0 %3 5 %4 0 %
+ 2 c ts + 1 1 + 9 + 7 -7
P ro d u c tio n b y vo lu m e :
8 .4m c ts
3 4 .8m c ts
1 8 .0m c ts1 4 .4m c ts
4 4 .4m c ts
2carats + ; ~ 45% world diamond production by value
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• Processing via 200tph Bateman DMS plant
• Final recovery via hands-off X-ray flow sort
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• Conventional earth- moving operation
Site Operations
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• Emphasis on ‘hands-off’ recovery systems
• Regular review of procedures
• Ownership
Security – Key Focus
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Holpan & Klipdam Wouterspan
Diamondiferous gravel (million tonnes)* 24 60
Grade (carats per hundred tonnes) 0.53 0.3
Average diamond value (US$ per carat) 900 1250
Revenue per tonne (US$ per tonne) 4.75 3.75
Costs (US$ per tonne) 2.25 2.00
EBITDA Margin 52% 47%
Project Summary: Established Profitable Operations
* R.H. De Decker, Pr.Sci.Nat., is the Qualified Person responsible for the resource estimate.
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Black Economic Empowerment
• Paying their way
• African Vanguard Resources (“AVR”) may acquire up to 26% of H C van Wyk Diamonds
• Broad based BEE vehicle with existing interests in mining (Harmony and Aflease)
• Good knowledge of diamonds with additional projects identified
• Principals• Sandile Zungu (BSc Eng, MBA)• Darryll Castle (BSc Eng, MBA)
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Growth Strategy – ‘2 part’
1: Organic growth:
• Optimize/expand existing Holpan-Klipdam & Wouterspan operations
• ~20% leverage ability in short term with existing plant & equipment (ie. 2000 to 2400 carats per month)
• Evaluate/develop other properties already held in South Africa
• Develop DRC enterprise ~30km of 60km-long concession
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Growth Strategy – ‘2 part’
2: Acquisitive growth:
• Pursuing two established diamond operations with significant resources (+90M tonnes) in RSA
• Other private & listed diamond companies in RSA (via cash or ‘paper’)
• Double production (2000 to 4000 carats per month) in medium term (12 months)
• ‘Earmarked’ several ‘established’ ventures in other southern African countries
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Growth Opportunities – Holpan/Klipdam
PrieskaPrieska
WouterspanWouterspan
DouglasDouglas
Middle OrangeMiddle Orange
KimberleyKimberleyBloemfonteinBloemfontein
Vaal RiverVaal RiverBloemhofBloemhof
JohannesburgJohannesburgVentersdorpVentersdorp
PretoriaPretoria
BotswanaBotswana
LesothoLesotho
RSARSA
00 300300
KilometresKilometres
NN
Limpopo R
iver
Molopo
River
RietRiver
RietRiver
OrangeRiver
OrangeRiver
Holpan-KlipdamHolpan-Klipdam
Potential AcquisitionPotential
Acquisition
Potential AcquisitionPotential
Acquisition
RSARSA
60km-longOpportunity60km-long
Opportunity
Holpan+Klipdam
Wakefords
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Growth Opportunities-Middle Orange River
Wouterspan
xx
x
x
x
x
$$
$
$
$
10 kmsPrieska
Douglas
$ North-bank Terraces
X South-bank Terraces
(Trans Hex Group)
152 carats
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MidaminesConcession
Democratic Republic of Congo
Knownkimberlites
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September 2005 Production: (2,700c @ ~$120/c)
• Extensive Midamines concession (66km north-south) along Cuango River
• Current small scale production
• Downstream of rich Angolan alluvial deposits and diamondiferous kimberlites
• Interpolated grades ~ 5 to 6 carats per tonne
• Diamond value US$110/ct – 120/ct
Project Summary: DRC Exploration
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DRC Cuango River Site
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Future:• Delineation of channels through
geophysics and prospecting• Large scale earth moving as per
ITM & SDM operations upstream on Cuango River in Angola
DRC: Cuango River Project
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Key Investment Highlights
• Proven operations - scaleable capacity, long-life resources, excellent operational skills
• Operating margins approximately 50%
• Predominantly +2 carats large gemstones of exceptional quality
• Current production 2000 carats (US$3M) per month
• Equivalent to 300,000 carats per annum of kimberlite production
• Leverage opportunity (~20%) in existing operations
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Key Opportunities
Acquisitions with history of production, delineated resources and high value diamonds (RSA)
• MOR area: ~90M tonnes with established infrastructure and similar deposits to Wouterspan
• NW Province: established mining operation with significant resources
• Double production in short term from 2000 to 4000 carats per month
• Increase economies of scale, optimize overheads, reduce unit costs
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Capital Structure
Listed TSXV – RVI OTCBB – RVINF
Shares Issued 68.3 million
Fully Diluted Shares 121 million
Principals Control 20%
Working Capital C$10 million
Cash From Dilutables C$25 - 42 million
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PRODUCER
VALUE ADDERStrategic
Beneficiation & Marketing
Evaluation(Exploration)
CONSOLIDATOR
RVI Strategy