Petra Diamonds Limited reported, Final sales results for Tenders 1 and 2 FY 2025. Sales for the first and second tender cycles of FY 2025 closed this week, yielding US$76 million from 600 kcts sold. Average prices increased 13% over Tender 7 FY 2024, with product mix contributing 22%, partially offset by a 9% decrease in like-for-like prices with weakness evident in the smaller size fractions.
Richard Duffy, Chief Executive Officer of Petra, commented, Following changes to the mine plans announced at our Investor Day, diamond production increased 7% from the previous quarter on the back of solid performances from Cullinan Mine and Williamson, with Finsch transitioning from continuous to a two-shift operation.
We recorded 4 LTIs, resulting in our LTIFR rate increasing to 0.28 from 0.13 in the previous quarter. This is of concern to us given our focus on delivering zero-harm workplaces, and we have implemented a number of behaviour-based interventions aimed at improving our health and safety performance.
Reflecting our agility to respond to weaker market conditions, we announced the decision to defer the sale of the majority of our South African goods from Tender 1 in August/September to support steps taken by major producers to manage supply. Our combined first and second tenders indicate continued weakness in the rough diamond market, more than offset by Petra’s product mix.
Overall average prices increased 13% compared to the previous tender, with product mix contributing 22%, partially offset by a 9% decrease in like-for-like prices.
Product mix showed improvement across the operations, with Cullinan Mine, in particular, benefitting from an 18.85ct blue diamond, of exceptional quality in terms of colour and clarity, that was sold in Q1 FY2025 for US$8.5 million into a partnership agreement and a top light brown 405ct diamond, of exceptional clarity, from Cullinan Mine that was sold for US$4.7 million.
Product mix also benefitted from withdrawal of ca. 88kcts (ca. US$3 million) of brown goods as a result of poor demand for that particular category.
Revenue recorded in Q1 FY 2025 only reflects the proceeds of US$8.5 million for the 18.85ct blue diamond at Cullinan Mine and US$14 million for Williamson. We drew down US$48 million from our Revolving Credit Facility (RCF), which will reduce once the proceeds from the recently closed combined Tenders 1 and 2 are received.
We have continued with the open market repurchase (OMR) of our 2026 2L Notes, cancelling US$8 million during the quarter. This brings the total of 2L Notes cancelled as at 30 September 2024 to US$13 million. We will continue to look at opportunities to further reduce our 2L debt through the OMR programme as we consider our options to refinance the 2L Notes ahead of their maturity in March 2026.
I am pleased to confirm completion of the sale of Koffiefontein to Stargems Group, which will enable economic activity to continue under new ownership. As a result, Petra will avoid incurring closure-related costs of US$15-18 million. I would like to extend my thanks and appreciation to all our employees, community members and regulatory bodies for their support in concluding this transaction and wish the new owners every success going forward.
A further review of cash generation opportunities is currently underway to mitigate the impact of ongoing weakness in the diamond market and a stronger Rand, and we remain committed to our target of net cash generation for the full year in FY 2025. We continue to expect prices to show some improvement in CY 2025, with market fundamentals being supportive in the medium-to-longer term.
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