RBC Diamond Day

1
RBC Diamond Day

• May 2008

2
Disclaimer
This presentation and the information contained
herein are not an offer of securities for sale in
the United States. This presentation is an
advertisement and does not constitute or form
part of, and should not be construed as, any
offer for sale or subscription of, or
solicitation of any offer to buy or subscribe
for, any securities of Namakwa Diamonds Limited
(Namakwa or the Company) nor should it or any
part of it form the basis of or be relied on in
connection with, any contract or commitment
whatsoever. Statements contained within this
presentation may contain forward-looking
comments, which involve risks and uncertainties
that may cause actual results to vary from those
contained in the forward-looking statements. In
some cases, you can identify such forward-looking
statements by terminology such as 'may', 'will',
'could', 'forecasts', 'expects', 'plans',
'anticipates', 'believes', 'estimates',
'predicts', 'potential', or 'continue'. Forward
projections reflect management's best estimates
based on information available at the time of
issue. This Presentation and its contents are
confidential and may not be further distributed
or passed onto any other person or published or
reproduced, in whole or in part, by any medium or
in any form for any purpose.
3
Overview
Issuer / Ticker

• Namakwa Diamonds Limited / NAD

• Full listing on London Stock Exchange main board

Listing location
Listing Date

• December 2007

Market Cap

• 200.25m

Outstanding Shares

• 116.386m (125,5 million including the A shares
  in issue)

Shareholder Base

• Founders, Management and Employees retain circa
  20
• 20 UK Institutional Shareholders
• 3 Swiss Institutional Shareholders
• 1 North American Shareholder
• Recent inclusion in indices results in increasing
  institutional interest

• Expand existing producing mining operations
• Bring into production selected development
  projects
• Pursue further growth and consolidation
  opportunities
• Increase beneficiation inventory and expand
  diamond trading operation
• Repay existing debt and finance general corporate
  activities

Use of proceeds
as of April 28, 2008
4
Namakwas Non-Executive Board

• Board is committed to be fully UK combined code
  compliant within 12 months of listing

5
Strong, Experienced Management Team
ApproximateExperience
Prior Experience
Name
Position

• Corporate
• Nico Kruger 10 years CEO Corporate finance and
  investment banking in diamond related projects
• Jean Nel 10 years CFO Corporate finance at
  Investec Bank and SA resource sector
• Jacques Conradie 16 years Financial
  Manager Financial director of African Portland
  Industrial Holdings
• Mining
• Altie Krige 26 years COO Geologist and director
  of land operations at Trans Hex
• Richard Hall 22 years Chief Geologist Exploration
  manager at De Beers, Namaqualand Mines,
  considered to be the single biggest alluvial
  mining operation in the world
• Noel Botha 23 years Chief Metallurgist Metallurgic
  al manager at De Beers and Trans Hex
• Keith McCulloch 32 years General Manager
  Mining General mining manager at Trans Hex,
  experience in Angola
• Andre Appel 26 years Regional Manager
  NW Engineering Manager, Business Unit Manager and
  General Manager Trans Hex Engineering Manager
  First Uranium
• Beneficiation
• Tom Kruger 30 years Deputy Chairman
  Founder Founding member of the South African
  Rough Dealers Association with extensive
  experience in South African rough diamond trading
  
• Heno Kruger 12 years Head of Beneficiation Benefic
  iation business at Namakwa
• Andries Janzen 27 years Head of Cutting
  Polishing Managing director at Ochta Diamonds,
  founded Elite Diamonds in 1980 and currently
  manages Elite Diamonds
• Louis Janzen 6 years Sales of Polished
  Diamonds Works at Elite Diamonds focusing on
  acquisition of polished diamonds
• Fred Strous 13 years Global Manager Rough
  Diamonds Manager of buying stations in the DRC
  and in Angola for R. Steinmetz Sons

Average of almost 20 years experience
6
Focus on Large, Gem Quality Fine Diamonds
7
Focus on Large, Gem Quality Fine Diamonds
8
Namakwas Consistent Strategy for Growth
Vision Summary

• Key differentiator
• Increased margins
• Trading knowledge adds value across operations
• Blends stability with ability to capture
  opportunities
• Direction of integration crucial to success
  i.e. beneficiation ? mining

Vertical Integration

• Huge opportunities in familiar territories (i.e.
  North West Province of SA)
• BEE adds impetus in SA
• Grow in each segment of diamond value chain
• Small scale alluvial operations
• Long-life mining assets
• Beneficiation operations

Consolidate

• Focus on mining assets with high quality product,
  short lead times and favourable capital intensity
• Grow beneficiation business
• with additional capital
• extending retail distribution
• Stable and attractive pricing due to strong
  demand and inconsistent supply

Gem Quality Focus
Afro-centric

• Significant deposits of target stones
• Focus on southern Africa well known and
  respected family
• Commitment to country of origin beneficiation
• Well established local presence (30 years)

9
Favourable Market Dynamics at IPO
Strong Price Environment

• Supply / Demand

Polished Price Index
Rough Price Index
Source WWW International Diamond Consultants
2007 (Supply of rough diamonds and demand for
diamond jewellery rebased to 100 in 2005)
10
Favourable Market Dynamics Post IPO

• High quality gem diamonds continued price
  increase during the reporting period
• Price increase of 30.2 for polished diamonds
  above 3 carats and 57.9 for polished diamonds
  above 5 carats over 12 months until 29 February
  2008
• Strong price environment expected to continue for
  rough and polished diamonds through 2008
• Disproportionate increase in prices of large and
  high quality diamonds
• Average price for rough diamonds recovered
  through mining operations was US700
  substantially ahead of expectations
• Substantial exposure to rising price of large
  stones
• 80 of US value of the inventory at the end of
  the reporting period comprised of 5 carats and
  larger diamonds

As per the International Diamond and Jewellery
Exchange
11
Well Positioned to Exploit Favourable Market
Dynamics

• Focus on gem quality fine diamonds
• 83 of Namakwas mining revenues are generated by
  27 of produced carats

2006 World Production
Namakwa Production and Purchases¹
Fine Carats
Fine Carats
10ct6
5ct 3
10ct 1
2ct 8
5ct 5
-3gr31
2ct 16
3-6gr 17
-3gr71
3-6gr42
Fine Dollars
Fine Dollars
10ct 5
-3gr4
5ct 12
3-6gr 13
-3gr24
2ct 12
10ct58
2ct 29
3-6gr 30
5ct 13
Source WWW International Diamond Consultants
Ltd, 2007 ¹ Analysis undertaken by WWW
International Diamond Consultants between 28th
March and 13th July 2007
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Vertical Integration Adds Value
Benefits
Diamond Mining Peers
Beneficiation
13.1bn
55.4bn

• Capture larger share of the value chain
• Provide greater volume and range of diamonds for
  beneficiation
• Expand diversified distribution channels
• Strengthen long-term relationships

Capture Product Premium Higher Margins
Namakwa
Source IDEX 2006
13
Diverse Portfolio of Mining Assets at IPO
Country
Project Area
Resource Classification
South Africa North West Province Indicated 122,137
,840 0.0173 1 2,110,196 Inferred 115,732,000 0.
0179 1 2,071,647 Albetros Indicated 5,322,735 0.
094 500,337 Inferred 2,282,700 0.131 298,212
Angola Tchipoia Inferred NA Santechifunga2
Inferred NA Cuangula Inferred NA DRC Kasa
i and Indicated 183,690 13.79 1,266,688 Tshika
pa Rivers Inferred 7,992,200 1.747 5,206,054
Namibia Tidal Diamonds Indicated NA NA3
212,009 Inferred NA NA4 4,891,258 Total I
ndicated 4,089,230 Inferred 12,467,171
Indicated Inferred 16,556,401
1 Recovered grade equivalent to 0.865 cpht for
indicated resources and 0.895 cpht for inferred
resources 2 Santechifunga licence expires in Q1
CY2008. Namakwa is unlikely to apply for the
renewal of this licence 3 Recovered grade of
0.114 ct/m2 4 Recovered grade of 0.147 ct/m2
Source Venmyn Rand (Pty) Ltd December 2007
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Consolidation Opportunities

• Independent status, relationships and experience
  in beneficiation support mine sourcing,
  acquisition and execution capabilities
• Managements track record of purchasing
  production from mines across southern Africa,
  enhanced by advanced geological techniques
• Consolidating contiguous properties
• Have developed attractive land position in North
  West Province

North West Province (SA) Pre-Consolidation Phase
North West Province (SA) Consolidation Phase
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May 2007
February 2008
15
North West Province Resource Nodes Consolidation
Phases Post-IPO
14
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How We Have Unlocked Value
Planned Value Creation Post IPO
Value Creation Pre IPO

• Acquisition of North West four producing assets,
  grouped in nodes
• Namakwas four producing nodes increased
  production over 20 times since April 2007
• From 111 carats in April 2007 to 2,425 carats in
  August 2007 (almost 25,000 to 30,000 carats
  annualised)
• Equipment capacity doubled to 2,115 tph from
  1,306 tph
• Significant value creation in the DRC by
  consolidation and resource development
• Completion of vertical integration strategy and
  increasing beneficiation volumes and margin

• Expand existing production and bring into
  production selected development projects
• Expand production projects in the North West
  Province
• Bring into production selected longer term
  development projects in South Africa, Angola, the
  DRC and Namibia
• Again double equipment capacity to 3,915 tph
• Pursue further growth and consolidation
  opportunities
• Increase beneficiation inventory and expand
  diamond trading operations
• Inventory scale to facilitate differentiated
  parcels of diamonds
• Develop the cutting and polishing business

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1. Beneficiation Business Overview2. Mining
Business Overview3. Interim Results Overview4.
Financials and OtherAppendix Relevant
Information
18
Beneficiation Value Chain
Rough Diamond
Polished Diamond
Diamond Pipeline
Diamond Pipeline 2006

• Cost ofDiamondProduction
• US5.0bn

RoughDiamondSales US13.1bn
Value ofPolishedEx-Production US18.7bn
Polished Diamond Content in Sales US18.5bn
Retail Sales of Diamond Jewellery US68.5bn
Value Chain Themes

• Inefficiencies caused by limited information flow
  for margin protection
• Margins, inventory holding period, working
  capital and cost increase down the chain
• Beneficiation link necessary for successful
  integration from mines to luxury goods

Source IDEX 2006
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Beneficiation Overview

• Diamond value chain margins
• Key differentiating factor
• Value maximization

Relationships
Product Knowledge
Market Insight
Distribution Channels
Diamond Information Chain
InformationFlow
IncreasedMargins
IndustryIntegration
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1. Beneficiation Business Overview2. Mining
Business Overview3. Interim Results Overview4.
Financials and OtherAppendix Relevant
Information
21
North West Province Overview
North West Province
Consolidation in the North West ProvincePhase 2
Northern Node
North-Eastern Node
Western-Node
Central Node
Bamboesspruit Run
Soutpan Run
South-Eastern Node
Mooifontein Run
Sewefontein Run
Southern Node
North West Province, North West South Africa
Location
South Western-Node
100
Effective Interest1
Comprises of 8 regions (7 nodes and the Pypklip
area). There are four producing mines in four of
the nodes. Resources 2.110 m cts indicated and
2.072m cts inferred
Description
Consolidation in the North West ProvincePhase 3
Production start date
2006
Northern Node
Open cast alluvial, DMS plants
Mining type/ Plants
Capex2
76.0m for 2008-2012 (38.7m in 2008)
Production
cts (000)
/cts
1. Source Venmyn Rand (Pty) Ltd 2. Based on
Venmyn Rand (Pty) Ltd. Capex is calculated based
onl forecasted Capex in rand terms and forecasted
FX rate (US/ZAR)
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DRC Overview
Start of exploration 641
DRC Concession Map
Northern Node
Western-Node
South Western-Node
Tshikapa Triangle, DRC
Location
Highly prospective flats on 2306
50 to 100
Effective Interest1
Description
Comprises of 27 concessions which covers almost
1000 km2. There are four nodal areas for
exploration.
Exploration moving to production, bulk sampling
end 2008
Production start date
Open cast alluvial, DMS plants
Mining type/ Plants
34.0m for 2008-2009
Capex2
23
1. Beneficiation Business Overview2. Mining
Business Overview3. Interim Results Overview4.
Financials and OtherAppendix Relevant
Information
24
Strategic Highlights

• Enhancement of vertically integrated model
• Concluded marketing agreement with Harry Winston
  Inc
• Provides access to retail network and end
  customer requirements
• Margin and volume enhancement
• Beneficiation margin outperformance
• Leveraging in-depth knowledge of diamond value
  chain
• Strong pricing environment for rough and polished
  diamonds
• Economies of scale increase margin
• Strengthening and broadening customer and
  supplier relationships
• Continued consolidation progress
• Acquired significant alluvial deposit close to
  North West Operations
• Consistent with stated alluvial consolidation
  objectives

Namakwa Delivering on its Strategic Objectives
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Harry Winston Agreement

• Entered into marketing agreement with Harry
  Winston Inc. in March 2008
• Namakwa to provide Harry Winston with high value
  polished diamonds for sale through its stores
• Namakwa shares in the retail margin achieved for
  specific stones
• Product profile suited to Namakwas production
  profile and buying expertise

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Key Events for the Reporting Period

• Completion of IPO raising 87m of primary capital
  before costs
• North-West mining operations adversely impacted
  by Eskom electricity outages, unusual heavy
  rainfall and mining dilution
• Substantial progress made in expansion of
  North-West mining operations
• First DMS plant scheduled to recover diamonds
  before the end of 2008
• DRC infrastructure and delineation programme on
  track
• Achieved a trading margin of 10 for rough
  diamonds and 13 for polished diamonds exceeding
  management expectations
• Improvement in quality and quantity of gem
  diamond inventory

Underperformance of mining segment mitigated by
beneficiation operations
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North West Production Adversely Impacted

• Mining segment produced 9,517 carats at a cost of
  R19.01 (2.71) per tonne
• Reduced production levels partly offset by higher
  received prices - 700 per carat before
  beneficiation margin
• Production impacted by Eskom interruptions,
  unusual level of rainfall and resulting mining
  dilution
• Significant increase post interim period through
• Installation of stand-by generators at all four
  mining operations
• Appointment of ore quality controllers to improve
  quality of ore mined and processed
• Scheduled introduction of DMS plants during 2008
  and 2009 will increase throughput and recovery
  capacity
• Improved roads, mining equipment and production
  planning measures

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North West Expansion Progress

• Namakwas intention to ramp up production to
  100,000 carats in FY2009 has been affected by
  power shortages across South Africa
• Namakwa expects to be able to install 3 of the 6
  planned DMS plants within the stated timeline
• If DMS installation is delayed
• Continue to use existing rotary pan plant fleet
• Increase production by using mining contractors
• Acquired mineral rights over significant alluvial
  deposit in the North-West Province close to
  current mining operations (2121 hectares)
• Aim to commence production on this property
  before end of CY2008
• Currently assessing a number of opportunities in
  the North West

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DRC Development on Track

• Currently engaged in resource delineation
  programme moving into bulk sampling and small
  scale production in 2009
• Key Milestones
• Board sub-committee chaired by Dr. Con Fauconnier
  oversees capex programme
• Significantly increased management capacity
• Established infrastructure in DRC to provide base
  for development
• Local contractor appointed and started work on
  upgrading road infrastructure
• Geological contractor employed to define ore
  bodies on four concession nodes
• Installation of small sample plants to improve
  grade confidence towards increased indicated
  resources
• Earthmoving equipment procured and shipped
• Alternative technology for economically mining
  the Lizeria being developed
• Commence small scale production and bulk sampling
  Due Jan 2009

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Beneficiation Segment Outperformance

• Acquired 9,533 carats of rough diamonds from
  South African, Indonesian and DRC based third
  party producers at an average price of US 785
  p.c.
• Acquired 9,517 carats from the Namakwa mining
  segment at average value of US 700 p.c.
• During the period Namakwa sold predominantly
  lower value diamonds at higher than expected
  margins
• Sold 13,098 carats of rough diamonds at an
  average value of US481 per carat
• Trading margin of 10 for rough diamonds and 13
  for polished diamonds
• AIM Namakwa continues to increase the quality of
  its diamond inventory
• Efforts continue to expand and further develop
  beneficiation operations
• Namakwa experiencing higher margins than market
  through
• Critical mass, access to funding, knowledge of
  industry and strong pricing environment

31
1. Beneficiation Business Overview2. Mining
Business Overview3. Interim Results Overview4.
Financials and OtherAppendix Relevant
Information
32
Salient Profit Loss Statement
33
Balance Sheet
34
Cash Flow Statement
35
Questions
Favourable market dynamics, notably for gem
quality diamonds
Track record of value creation
Unique vertically integrated mining group
Capability to consolidate alluvial mining (BEE
compliant)
Experienced management team
Alluvial mining focus
Diverse portfolio of high quality, long-life
mining assets
36
1. Beneficiation Business Overview2. Mining
Business Overview3. Interim Results Overview4.
Financials and OtherAppendix Relevant
Information
37
Further Management Expertise
Position
ApproximateExperience
Prior Experience
Name

• Mining
• Neil Shadwell 22 years Project Manager -
  DRC Engineering Manager with Ingwe Coal (BHP) and
  Chief Engineer ITM Angola
• Lourens Myburg 12 years Geological Manager - West
  Coast Geologist Snr Geologist Namaqualand Mines
  
• Colyn Purdon 29 years Metallurgical
  Manager Metallurgical Manager Sheba Snr Manager
  Metallurgical Projects, Trans Hex Principal
  Engineer Bateman                     
• Louis Pienaar 44 years Geological Manager -
  NW Marine diamonds in Namibia, Grasdrif and Oena
  mines, Orange River
• Deon Bowers 16 years Geological Manager-NW
  Production Ore-Quality Controller Senior
  Geologist Koingnaas Mines (De Beers)
• Human Resources
• Edward Monoketsi 13 years Human Resource Manager
  NW Snr Human Resource Office, Human Resource
  Superintendent, Trans Hex Group
• Basil Andrews 13 years Chief Safety
  Officer Safety Officer, Chief Safety Officer
  Trans Hex Group

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A Significant Development Project Pipeline
North West
DRC
Albetros
Angola
Namibia
North West, South Africa
South West of DRC near Tshikapa town
Namaqualand, South Africa
North East of Angola
55 km North of Port Luderitz, Namibia
Location
Effective Interest1
50 100
90 95
50 90
37 70
100
Resources (k cts)
1,440 inferred
500 indicated and 298 inferred
1,267 indicated and 5,206 inferred
NA
212 indicated and 4,891 inferred
1. Source Venmyn Rand (Pty) Ltd.
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Beneficiation Overview
Beneficiation Strategy
Distribution Channels

• Understanding demand supply dynamics
• Market intelligence for ultimate value creation
• Strategy is a function of
• Cashflow
• Market dynamics
• Product mix
• Distribution channels
• Beneficiation pressures in country of origin
• Procurement knowledge

• Tender process
• Open Market
• Relationship driven sales
• Wholesale
• Partnerships
• Jewellery high diamond content
• Luxury goods markets
• Branding opportunities

Function of Product Type Understand Destinations
Production Planning Value Maximisation Informat
ion Flow
Rough
Customers
Strategy Decision
Polished
40
Production Distribution Profile
Size Frequency Distribution Curves for the
Operational Nodes
Size Revenue Distribution Curves for the
Operation Nodes
Source Venmyn Rand (Pty) Ltd
41
A share salient terms

• Namakwa designed the A share structure to
  facilitate economic participation in Namakwa by
  SA shareholders
• In terms of South African Exchange Control
  Regulations South African residents are precluded
  from owning shares in non-South African companies
  (save for some exemptions not relevant to
  Namakwa)
• Namakwas South African subsidiary, Namakwa
  Diamond Holdings (Pty) Limited issued 9,05m A
  shares to SA residents
• The A shares mirror the economic benefits
  accruing to Namakwa ordinary shares save that
  dividends and any proceeds from a sale are paid
  in SA in Rands to comply with Exchange Control
  Regulations
• From a valuation perspective Namakwa views the A
  shares as part of the fully diluted share capital
  of Namakwa and hence the number of A shares
  (9,1m) should be added to the ordinary shares of
  Namakwa (116.4m) for total fully diluted number
  of shares for valuation purposes (125.5m)

42
BEE Considerations

• The BEE Requirements require that a New Order
  Prospecting Right applicant must be at least 26
  owned and controlled by historically
  disadvantaged South Africans (HDSAs)
• For New Order Mining Right applications, the
  applicant must show how it will reach the targets
  of 15 BEE participation by May 2009 and 26 by
  May 2014
• Namakwa has a registered HDSA trust for the
  benefit of all HDSA employees which will be the
  anchor project for all South African mining
  operations
• This structure is currently being implemented
  with a view of finalisation by 2008
• BEE requirements for the beneficiation industry
  have not yet been determined once these are
  clear, Namakwa will implement an appropriate
  structure

43
Environmental Responsibility

• Responsibility for the environment is an
  important consideration for Namakwa
• Alluvial mining does not require the use of
  hazardous chemicals
• Environmental liabilities are significantly lower
  than other forms of mining
• Shallow, open cast mines also mitigate ultimate
  environmental liability
• Current environmental liability, net of
  ring-fenced cash, estimated by independent
  consultants to be 1.3m
• Namakwa currently uses borehole water which is
  returned to mined out areas (over 80 returned to
  the water table)
• When DMS plants are installed, water will be
  recirculated and only 20 of required volume will
  be fresh
• Backfill of mined ore is part of current
  processes to ensure low impact mining

Rehabilitation of an Old Mine
Source Company
44
Track Record of Value Generation

• Private placements of equity US3m (July 2006),
  US3.5m (Dec 2006) and US5.1m (Feb 2007) from
  founders, investors and entrepreneurs
• Used to fund acquisitions of additional mining
  concessions
• Preference Share institutional private placement
  US45m (May 2007)
• Expand trading and beneficiation business through
  increase in inventory and acquisition of Elite
  Diamonds
• Supported development of Namakwas projects,
  proving the resources
• Successful Initial Public Offering on the London
  Stock Exchange Raised US185m (Dec 2007)
• Largest institutional holders include Och-Ziff
  Capital Management Group, Capital International,
  Blackrock, Goldman Sachs Principal Strategies and
  Pala Investments amongst others
• Further expand and upgrade mining operations and
  take advantage of consolidation opportunities
• Successful IPO indicative of investor appetite
  for vertically integrated model

US185m IPO Proceeds
US54m Pre-IPO Financing
16.6m ct2Resources Increased beneficiation
activity and margin 30,000 ctsProduction³
5.1m ct1 Resources No Producing Assets
1. Management estimate of attributable resources
as of December 2006 2. Indicated and inferred
resources (Source Venmyn Rand (Pty) Ltd)3.
Annualised August 2007 production
45
Alluvial Diamond Focus

• Lower capital expenditure and shorter development
  time than kimberlite mining
• Alluvial mining involves relatively shallow
  mining operations (
• Cost effective machinery and plant which can be
  operated in remote locations with poor
  infrastructure
• Higher than global average in-situ diamond value
• Low, variable grades mitigated by broader
  production base and high value production
• Very low environmental impact

Time to Production1
¹ Source Company estimate