Petra revises guidance of 2.75-2.85 mn cts

Apr 20, 2023

Petra Diamonds – HOH Sorting Floor Kimberley

Richard Duffy, Chief Executive Officer of Petra, commented, “We are pleased to report higher diamond production following improved ROM grades and tailings production at Cullinan Mine and increased throughput at Finsch. We expect to deliver on our revised guidance of 2.75-2.85 Mcts for FY 2023. With Williamson targeted to resume production in Q1 FY 2024, we are well positioned to increase production by c.1Mct to 3.6-3.9 Mcts in FY 2025.

The key mitigating actions initiated over the last 6 months have been successful and occurred against a backdrop of recently improved diamond pricing which we largely attribute to a post-COVID 19 recovery in demand from China. We continue to expect a supportive diamond market in the medium to longer-term as a result of the structural supply deficit, while noting potential volatility in the near-term owing to recent geopolitical and macroeconomic uncertainty.”

According to the key takeaways of 3Q over 2Q 2023 are,

1: total diamond production increased 3% to 653,700 carats as production improved 14% at Finsch following the introduction of new equipment, despite some ground handling challenges.

Production at the Cullinan Mine increased by 7%, supported by higher tailings and ROM grades. Together, this more than offset the temporary suspension of production at Williamson and the placing of Koffiefontein on care and maintenance

2: Support from a weaker Rand and more stable diamond pricing continued throughout the quarter! Revenue amounted to US$67.8 million (Q2 FY 2023: US$107.8 million) as higher pricing at the Cullinan Mine and Finsch in the quarter was more than offset by tender cycle timings (one tender in Q3 FY 2023 vs two in Q2 FY 2023); the resultant inventory build is expected to be released in Q4 FY 2023.

3: Gross debt increased to US$248.5 million (31 December 2022: US$241.7 million), reflecting the accrued interest charges for the three months to 31 March 2023. Consolidated net debt of US$124.7 million (31 December 2022: US$90.8 million) increased due to the timing of the Company’s diamond sales tenders, coupled with the previously announced capital expenditure programmes for the expansion projects at the Cullinan Mine and Finsch

Petra said, the outlook is ongoing actions taken to strengthen the business and improve cash flow generation, together with capital discipline, enable Petra to take advantage of the current supportive diamond market fundamentals.

Petra’s projects remain on track to deliver a c.1Mct annual increase in FY 2025, with work commencing on the C-Cut extension to unlock a further 2.3Mct from FY 2025 through to FY 2033, as the Company develops the long-term potential of its resource base.

Petra continues to strive to create a zero harm environment. The Company is increasing its focus on identifying and mitigating safety risks with behaviour-focused intervention programmes.

You May Also Like