Megan Wyngaardt\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a029th January 2018<\/p>\n
In the six months to December 31, LSE-listed\u00a0Petra Diamonds<\/a>\u00a0saw a 10% production increase to 2.2-million carats across its\u00a0operations<\/a>, which was in line with guidance.<\/p>\n This represented record production for any six-month period for the company.<\/p>\n This year, Petra is guiding for a lower grade at Cullinan, largely offset by a higher average diamond price, resulting in the revenue per tonne remaining materially in line with expectations.<\/p>\n Meanwhile, the miner noted that recoveries at Cullinan’s new plant to date indicated that a steady-state higher grade could be achieved by recovering larger quantities of small, low value\u00a0diamonds<\/a>; however, it would be uneconomic to do so and would not be in line with the company’s strategic focus on value rather than volume production.<\/p>\n For this reason, Petra’s full-year revenue is expected to remain in line with current consensus. Production guidance has been reduced to around 4.7-million carats, from around five-million carats, owing to the lowered grade guidance at Cullinan as well as the labour action at Petra’s South African mines in the first quarter.<\/p>\n Earnings before interest, taxes, depreciation and amortisation (Ebitda) were also expected to be negatively affected by around 15% versus the current consensus, primarily owing to the recent strengthening of the rand and its potential impact on Petra’s cost base in dollar terms; operating costs otherwise remain well controlled.<\/p>\n Meanwhile, owing to ongoing constraints in\u00a0Tanzania<\/a>, such as the government blocking a 71 000 ct parcel from its\u00a0Williamson mine<\/a>, Petra has reported a 1% decline in its revenue to $225.2-million, while the\u00a0diamonds<\/a>\u00a0sold decreased by 5% to 1.81-million carats, also impacted on by\u00a0Williamson<\/a>‘s first parcel not being sold.<\/p>\n Rough diamond prices on a like-for-like basis were also down 3.5%. However, higher average values were realised at\u00a0Finsch<\/a>, Cullinan and Koffiefontein owing to the improved\u00a0product<\/a>\u00a0mix associated with the higher production levels of undiluted ore and the lower contribution of tailings carats.<\/p>\n Underground<\/a>\u00a0expansion\u00a0projects<\/a>\u00a0at\u00a0Finsch<\/a>\u00a0and Cullinan continued to deliver increased volumes of undiluted ore from newly established\u00a0mining<\/a>\u00a0areas.<\/p>\n Throughput ramp-up at the new\u00a0Cullinan plant<\/a>\u00a0is also progressing well, with one-million tonnes run-of-mine (RoM) treated during the second quarter, achieving planned RoM capacity.<\/p>\n Five stones larger than 100 ct – though of poor quality – were recovered through the new plant in the first half. These include a 574.15 ct stone, which is the largest stone recovered by Petra at Cullinan to date, and a number of other higher-value stones; this is in line with the expected increase in special stones as indicated by historical records, as\u00a0mining<\/a>\u00a0from the Western side of the orebody increases. Plant process optimisation is ongoing.<\/p>\n Meanwhile, the miner expects to be in breach of its December 31, 2017 Ebitda-related covenant\u00a0measurement<\/a>\u00a0ratios associated with its banking facilities. The company has, therefore, started formal discussions with its lender group, evaluating both the December 2017 and June 2018 measurements,\u00a0bearing<\/a>\u00a0in mind the risks to covenant compliance associated with potentially not selling the blocked\u00a0Williamson<\/a>\u00a0parcel and the potential further strengthening of the rand.<\/p>\n These discussions were expected to be concluded during the third quarter, with Petra remaining confident that the lender group would continue to support the company as it progressed towards its targeted production profile.<\/p>\n More Info\u00a0Petra Diamonds<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Megan Wyngaardt\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a029th January 2018 … Continue reading Petra Diamonds delivers record production<\/span>