JOHANNESBURG (miningweekly.com) – Diamond miner Petra Diamonds has tabled a production guidance for the 2018 financial year of between 4.8-million and five-million carats, up 23% on the year ended June 30, 2017, on the back of the continued roll-out of expansion programmes.
With continual increases in production, the company set a further guidance of between five-million and 5.3-million carats for the 2019 financial year.
This followed the 8% increase in diamond output to a record four-million carats during the 2017 financial year – albeit below the original 2017 guidance of 4.4-million carats – owing to an increased contribution from undiluted run-of-mine (RoM) ore and the inclusion of the Kimberley Ekapa mining joint venture for the full year.
“Record levels of production and revenue have been reached in the 2017 financial year and, while certain expansion programmes have taken longer than expected to ramp up, we have now attained the required production levels which will see production rise again substantially in the 2018 financial year,” explained Petra CEO Johan Dippenaar.
The mine planning process remains focused on maximising overall value, as opposed to maximising production volumes; however, production in 2018 is expected to have a marked increase in the proportion of higher-value RoM carat production, as opposed to lower-value tailings carat production.
"The improvement in RoM grades across our operations demonstrates the increasing contribution of undiluted ore from the new production areas.
“The 2018 financial year will mark the first year where Petra will source the majority of its underground tonnages from undiluted ore, leading to a further improvement in grades, product mix and consequent higher average value per carat, without the need for improved market conditions,” he commented.
Meanwhile, revenue for 2017 increased 11% to a record $477-million, owing to increased production and increased volumes sold.
Carats sold for the year ended June 30, increased 16% to just over four-million carats, with rough diamond prices on a like-for-like basis up 2% for the year under review.
Petra reported cash at bank of $205-million by year-end, compared with the $46.1-million recorded in the prior year, with net debt as at June 30 sitting at $554.4-million, up from $382.8-million in 2016.
"The company has a strong balance sheet in place to deliver on the final stages of its expansion programmes. Petra's investment case, therefore, remains the same, as the forthcoming step-change in production and revenue is expected to see debt levels start to fall in 2018 and the company become free cash flow positive during the year,” Dippenaar concluded.