Business Fundamentals

The two main organic growth initiatives at Letšeng and Ghaghoo will require careful and skilful implementation over the next few years and management is confident in its ability and experience to deliver these two projects on time and within budget. This will result in an effective doubling of the carat production at Letšeng together with very attractive production and recovery efficiencies.

The Letšeng mine has been developed into a world-class diamond asset. The Company's 70% stake in this mine was acquired in 2006 for a net consideration of US$118 million. It is testimony to the hard work, experience and skill of management that the Letšeng mine is expected to have a net present value (NPV) of some US$1.6 billion1 (attributable) including the expansion project, Kholo, which is planned to be completed in the second half of 2014.

During 2011, Letšeng continued to demonstrate its status as the foremost producer of the world's largest high quality rough diamonds by producing the 550 carat, Type IIa, Letšeng Star.