Petra Diamonds Finsch mine
JOHANNESBURG (miningweekly.com) – LSE-listed Petra Diamonds’ production for the six months ended December 31 was expected to increase by 31% to 1.64-million carats, remaining on track to meet the company’s full-year guidance of three-million carats.
The increase was mainly owing to increased production at Petra’s Finsch operation, in the Northern Cape, and the continued ramp-up of tailings production at its Cullinan mine, in Gauteng, Petra said on Thursday in a trading statement.
Revenue was also up 19% to $185.5-million, with strong second-half revenue expected owing to the timing of Petra’s diamond tenders and the sale proceeds from the 29.6 ct blue diamond recovered at the Cullinan mine.
"Petra has delivered a strong first half of the 2014 financial year, with production firmly on track to meet our original full-year guidance of three-million carats. The rough diamond market has also strengthened over recent months and we expect this firmer market to continue into the second half of the year, when the larger part of our diamond sales for the year take place,” Petra CEO Johan Dippenaar commented.
Liberum Capital shared this view, stating that the second half of the year should show a significant improvement for Petra with higher proportion of sales, a strengthened market for rough diamonds and the recent discovery of the 29.6 ct blue diamond that would boost revenue considerably.
Further, the company’s costs remained well controlled and in line with guidance. Capital expenditure amounted to $85.3-million, in accordance with the roll-out of the group’s expansion programmes, with full-year spend on track to be in line with the financial year guidance.
Liberium added that the company’s costs would continue to benefit from the collapsing rand.
Net debt of $118.1-million for the six-month period was also in line with expectations.
“Increased production and associated cash flows place the group in a robust position as we continue to deliver on our growth plans to achieve five-million carats yearly production by the 2019 financial year,” Dippenaar stated.
“Diamonds remain one of our preferred commodities and the South African Rand one of the most fragile emerging market currencies, Petra is well placed to benefit from both as long as they can avoid further industrial action,” Liberum said.