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Petra Group has made a strong start to FY 2017 delivering close to 1.1 Mcts for Q1
They expect full year production of 4.4 to 4.6 Mcts
By: Diamond World News Service
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Oct 26 2016 6:57PM
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Reference: 13563  

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 Petra Diamonds Limited announces the following trading update (unaudited) for the period from 
1 July 2016 to 21 October 2016, covering production and sales from 1 July 2016 to 30 September 2016 (“Q1 FY 2017” or “Q1” or the “Period”).

  • Q1 production up 30% to 1,097,523 carats (Q1 FY 2016: 842,796 carats), due to increased contribution from undiluted ROM ore, improving ROM grades and additional tailings production from Kimberley Ekapa Mining.
  • Q1 revenue US$94.7 million from 745,447 carats sold (Q1 FY 2016: no tender held).
  • Following the Period end, Petra closed its second tender of FY 2017 yielding ca. US$66.4 million (ca. 574 kcts sold), with a third and final tender for H1 FY 2017 scheduled for early December 2016. Prices achieved during the second tender held firm with year-to-date rough diamond prices remaining flat on a like for like basis in comparison to H2 FY 2016.
  • Expansion programmes, including the Cullinan plant project, remain on track and in line with expectations. The new caves being installed at Cullinan and Finsch are both starting to deliver undiluted ore and will result in a continued increasing ROM grade profile and improved product mix.
  • Net debt at Period end of US$463.9 million (30 June 2016: US$384.8 million) within expected levels and excludes cash from the October diamond tender. The Company has undrawn bank facilities of US$70.0 million (30 June 2016: US$110.0 million), with an additional unrestricted cash balance of US$30 million (30 June 2016: US$36.7 million) available at Period end. Petra remains on track to become free cash flow positive from H2 FY 2017 onwards.
  • Tragically, despite historically having an exceptional safety record, it is with deep regret that the Company announces that three unrelated incidents lead to four Petra employees being fatally injured during the Period.

Johan Dippenaar, Chief Executive Officer, commented: “Operationally, the Group has made a strong start to FY 2017 delivering close to 1.1 Mcts for Q1 and we continue to expect full year production of 4.4 to 4.6 Mcts, in line with earlier guidance. The newly established caves at both Finsch and Cullinan, accessing higher grade undiluted areas, are starting to meaningfully contribute to ROM production, which is continuing to ramp-up in line with expectations. 

The diamond market is holding firm with prices on a like for like basis matching those realised in the period January to June 2016 (our H2 FY 2016). 

Petra has always taken pride in excellent safety results posted by its operations. It is therefore with deep regret that we report fatal injuries suffered by four of our employees. Across the Group, we have embarked upon renewed safety drives to reiterate our zero-tolerance approach to unsafe acts and working conditions with an aim of zero harm to our workforce and contractors. 

“Petra’s focus remains on the health and safety of our workforce, maintenance of a healthy balance sheet, the tight control of costs and the successful roll-out of our expansion plans, which will continue to deliver increased contributions from higher quality production areas.”

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