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RNS Number : 7641Z Petra Diamonds Limited 16 January 2024
16 January 2024 LSE: PDL
Petra Diamonds Limited
H1 FY 2024 Operating Update
Petra reports its operating results for the first half of FY 2024
Richard Duffy, Chief Executive Officer of Petra, commented:
"Production increased 2% in this period as operations continued to stabilise
at Finsch and Cullinan Mines and Williamson continued its ramp-up to full
production. We remain on track to meet our FY 2024 production guidance of 2.9
- 3.2 Mct although, as announced on 01 November 2023, we expect it will be
towards the lower end of guidance. We continue to make good progress on the
CC1E development project at Cullinan Mine and the 78-Level Phase II
development project at Finsch, and the resumption of the deferred capital
programmes remains on target for July 2024. The replanning and
value-engineering work associated with the deferred capital projects continues
and, once completed, the Company will inform the market of the expected impact
on forward looking guidance.
While we are seeing encouraging indications of price recovery and some
stabilisation in the rough diamond market, following actions taken by both
producers and the mid-stream, we continue to adopt a cautious approach to the
market in the near-term. Once completed, the additional headroom afforded by
our increased Revolving Credit Facility will enable us to continue our
flexible sales approach and position ourselves to take advantage of any market
improvements."
Highlights vs H1 FY 2023
· LTIFR and LTIs decreased to 0.15 and 5 respectively
· Ore processed increased 8% to 5.8Mt largely due to the successful
ramp-up of production at Williamson
· Total diamond production increased 2% to 1.43 million carats mainly
due to resuming operations at Williamson and increased ROM contribution at
Finsch, partially offset by slightly lower grades at the Cullinan Mine
· Support from a weaker South African Rand continued throughout the
period, with the Rand averaging ZAR18.69 : US$1 (H1 FY 2023: ZAR17.32 : US$1)
· Revenue amounted to US$187.8 million (H1 FY 2023: US$208.5 million)
o As announced on 14 December 2023, like-for-like prices were down 13.3%
compared to H1 FY 2023 sales, with the balance of price movements attributable
to product mix
o No profit share uplifts were effected during the period; H1 FY 2023
revenue includes US$1.4 million from profit share arrangements
· Consolidated net debt increased to US$212.3 million as at 31
December 2023 (30 June 2023: US$176.8 million) due to the timing of closing
the Company's sales tenders, the continued lower diamond pricing environment,
working capital funding for the resumption of mining at Williamson and the
increasing capex spend profile, as previously announced, to extend the life of
our operations at Cullinan Mine and Finsch
Operating Summary
Safety, sales and production H1 FY 2024 H1 FY 2023
Unit (restated to exclude Koffiefontein)
Q2 Q1 Total Q2 Q1 Total
Safety
LTIFR - 0.18 0.12 0.15 0.22 0.16 0.19
LTIs Number 3 2 5 4 3 7
Sales
Diamonds sold Carats 727,189 932,431 1,659,620 788,661 516,308 1,304,969
Revenue(1) US$m 90.2 97.6 187.8 105.7 101.4 207.1
Contribution from Exceptional Stones(2) US$m 0.0 0.0 0.0 0.0 0.0 0.0
Production
ROM tonnes Tonnes 2,875,410 2,717,486 5,592,896 2,162,877 2,993,247 5,156,124
Tailings and other tonnes Tonnes 96,235 91,008 187,243 92,375 94,877 187,252
Total tonnes treated Tonnes 2,971,645 2,808,494 5,780,139 2,255,252 3,088,124 5,343,376
ROM diamonds Carats 694,884 652,021 1,346,905 602,055 729,761 1,331,816
Tailings and other diamonds Carats 36,018 44,618 80,636 31,612 29,951 61,563
Total diamonds Carats 730,902 696,639 1,427,541 633,667 759,712 1,393,379
(1) Revenue reflects proceeds from the sale of rough diamonds and excludes
revenue from profit share arrangements (as noted in the text above)
(2) Petra classifies "Exceptional Stones" as rough diamonds which sell for
US$15 million or more each
INVESTOR WEBCASTS
Webcast presentation for institutional investors and analysts
09:30am GMT today
Petra's CEO, Richard Duffy, and CFO, Jacques Breytenbach, will host a webcast
for institutional investors and analysts to discuss this operating update.
Please register at: https://brrmedia.news/PDL_H1FY24OU
Dial in details:
UK-wide +44
(0) 33 0551 0200
UK toll free 0808
109 0700
South Africa toll free 0800 980 512
United States (Local) +1 786 697 3501
09:30am password (if prompted): Petra Diamonds
Link for recording (available later in the day):
https://www.petradiamonds.com/investors/results-reports/
(https://www.petradiamonds.com/investors/results-reports/)
Investor Meet Company webcast at 14.30pm GMT today
Petra's CEO, Richard Duffy, and CFO, Jacques Breytenbach, will also present
these results live on the Investor Meet Company platform, predominantly
aimed at retail investors. To
join: https://www.investormeetcompany.com/petra-diamonds-limited/register-investor
(https://www.investormeetcompany.com/petra-diamonds-limited/register-investor)
FURTHER INFORMATION
Please contact
Petra Diamonds,
London
Telephone: +44 207494 8203
Patrick Pittaway
investorrelations@petradiamonds.com
(mailto:investorrelations@petradiamonds.com)
Julia Stone
Kelsey Traynor
Financial PR (Camarco)
Gordon
Poole
Telephone: +44 20 3757 4980
Owen
Roberts
petradiamonds@camarco.co.uk
(mailto:petradiamonds@camarco.co.uk)
Elfie Kent
ABOUT PETRA DIAMONDS
Petra Diamonds is a leading independent diamond mining group and a supplier of
gem quality rough diamonds to the international market. The Company's
portfolio incorporates interests in three underground mines in South Africa
(Cullinan Mine, Finsch and Koffiefontein) and one open pit mine in Tanzania
(Williamson). The Koffiefontein mine is currently on care and maintenance in
preparation for sale or closure.
Petra's strategy is to focus on value rather than volume production by
optimising recoveries from its high-quality asset base in order to maximise
their efficiency and profitability. The Group has a significant resource base
which supports the potential for long-life operations.
Petra strives to conduct all operations according to the highest ethical
standards and only operates in countries which are members of the Kimberley
Process. The Company aims to generate tangible value for each of its
stakeholders, thereby contributing to the socio-economic development of its
host countries and supporting long-term sustainable operations to the benefit
of its employees, partners and communities.
Petra is quoted with a premium listing on the Main Market of the London Stock
Exchange under the ticker 'PDL'. The Company's loan notes due in 2026 are
listed on the Irish Stock Exchange and admitted to trading on the Global
Exchange Market. For more information, visit www.petradiamonds.com.
Corporate and financial summary 31 December 2023
Unit As at 31 December 2023 As at 31 December As at 30 June
2022 2023
Cash at bank - (including restricted amounts)¹ US$m 75.4 146.6 61.8
Diamond debtors US$m 8.1 4.9 8.9
Diamond inventories(2,3) US$m 53.5 59.9 65.9
Carats 483,142 540,153 715,222
2026 US$336.7m loan notes(4) US$m 249.2 241.7 247.5
Bank loans and borrowings(5) US$m 46.6 - -
Consolidated Net Debt(6) US$m 212.3 90.2 176.8
Bank facilities undrawn(5) US$m 49.2 58.8 53.1
Note: The following exchange rates have been used for this announcement:
average for H1 FY 2024 US$1: ZAR18.69 (H1 FY 2023: US$1: ZAR17.32; FY 2023:
US$1: ZAR17.77); closing rate as at 31 December 2023 US$1: ZAR18.28 (31
December 2022: US$1: ZAR17.00, 30 June 2023: US$1: ZAR18.83).
Notes:
1. The Group's cash balances comprise unrestricted balances of US$56.5
million, and restricted balances of US$18.9 million.
2. Recorded at the lower of cost and net realisable value.
3. Diamond inventories for periods prior to 30 June 2023 include the
Williamson 71,654.45 carat parcel of diamonds blocked for export during August
2017, with a carrying value of US$12.5 million. Under the Framework Agreement
entered into with the Government of Tanzania (GoT) in December 2021, it is
stated that the proceeds from the sale of this parcel are to be applied to the
Williamson mine to assist with the restart of operations and that in the event
such proceeds are not received by Williamson, Williamson is not required to
pay a US$20 million liability relating to the settlement of past tax disputes.
During discussions, the GoT confirmed that the blocked parcel was partially
sold during the period and so this parcel has been excluded from diamond
inventories as at 30 June 2023. During these discussions, the parties also
confirmed their intent to resolve how to treat the blocked parcel sale
proceeds and the related US$20 million settlement liability.
4. The 2026 US$336.7 million loan notes, originally issued following
the capital restructuring (the "Restructuring") completed during March 2021,
have a carrying value of US$249.2 million which represents the outstanding
principal amount of US$209.7 million (after the early participation phase of
the debt tender offers as announced in September and October 2022) plus
US$48.2 million of accrued interest and net of unamortised transaction costs
capitalised of US$8.7 million.
5. Bank loans and borrowings represent the Group's revolving credit
facility, which was increased from ZAR1 billion in December 2023 to ZAR1.75
billion, and is partially undrawn and available. The upsized portion will be
imminently available upon conclusion of the required amendments.
6. Consolidated Net Debt is bank loans and borrowings plus loan notes,
less cash and diamond debtors.
Mine-by-mine tables:
Cullinan Mine - South Africa
H1 FY 2024 H1 FY 2023
Unit
Q2 Q1 Total Q2 Q1 Total
Sales
Revenue US$m 45.5 51.0 96.5 45.8 56.9 102.7
Diamonds sold Carats 345,867 519,362 865,229 400,999 267,728 668,727
Average price per carat US$ 131 98 112 114 212 154
ROM Production
Tonnes treated Tonnes 1,078,409 1,137,435 2,215,844 1,120,282 1,110,912 2,231,194
Diamonds produced Carats 331,349 318,261 649,610 328,137 368,796 696,933
Grade(1) Cpht 30.7 28.0 29.3 29.3 33.2 31.2
Tailings Production
Tonnes treated Tonnes 96,235 91,008 187,243 62,178 77,572 139,750
Diamonds produced Carats 36,018 44,618 80,636 28,211 26,790 55,001
Grade(1) Cpht 37.4 49.0 43.1 45.4 34.5 39.4
Total Production
Tonnes treated Tonnes 1,174,644 1,228,443 2,403,087 1,182,460 1,188,484 2,370,944
Diamonds produced Carats 367,367 362,879 730,246 356,348 395,586 751,934
Note: 1. Petra is not able to precisely measure the ROM / tailings grade split
because ore from both sources is processed through the same plant; the Company
therefore back-calculates the grade with reference to resource grades.
Finsch - South Africa
H1 FY 2024 H1 FY 2023
Unit
Q2 Q1 Total Q2 Q1 Total
Sales
Revenue US$m 28.1 38.9 67.0 32.0 23.4 55.4
Diamonds sold Carats 298,889 375,214 674,103 283,833 177,285 461,118
Average price per carat US$ 94 104 99 113 132 120
ROM Production
Tonnes treated Tonnes 635,872 544,140 1,180,012 522,578 572,976 1,095,554
Diamonds produced Carats 276,842 259,864 536,706 234,150 260,217 494,367
Grade(1) Cpht 43.5 47.8 45.5 44.8 45.4 45.1
Tailings Production
Tonnes treated Tonnes - - - 30,197 17,305 47,502
Diamonds produced Carats - - - 3,402 3,160 6,562
Grade(1) Cpht - - - 11.3 18.3 13.8
Total Production
Tonnes treated Tonnes 635,872 544,140 1,180,012 552,775 590,281 1,143,056
Diamonds produced Carats 276,842 259,864 536,706 237,552 263,377 500,929
Note: 1. Petra is not able to precisely measure the ROM / tailings grade split
because ore from both sources is processed through the same plant; the Company
therefore back-calculates the grade with reference to resource grades.
Williamson - Tanzania
H1 FY 2024 H1 FY 2023
Unit
Q2 Q1 Total Q2 Q1 Total
Sales
Revenue US$m 16.6 7.7 24.3 27.9 21.2 49.1
Diamonds sold Carats 82,432 37,856 120,288 103,829 71,295 175,124
Average price per carat US$ 201 203 202 269 297 280
ROM Production
Tonnes treated Tonnes 1,161,129 1,035,911 2,197,040 520,017 1,309,359 1,829,376
Diamonds produced Carats 86,693 73,896 160,589 39,766 100,750 140,516
Grade(1) Cpht 7.5 7.1 7.3 7.6 7.7 7.7
Total Production
Tonnes treated Tonnes 1,161,129 1,035,911 2,197,040 520,017 1,309,359 1,829,376
Diamonds produced Carats 86,693 73,896 160,589 39,766 100,750 140,516
Notes:
1. The following definitions have been used in this announcement:
a. cpht: carats per hundred tonnes
b. LTIs: lost time injuries
c. LTIFR: lost time injury frequency rate, calculated as the number of
LTIs multiplied by 200,000 and divided by the number of hours worked
d. FY: financial year ending 30 June
e. CY: calendar year ending 31 December
f. H: half of the financial year
g. ROM: run-of-mine (i.e. production from the primary orebody)
h. m: million
i. Mt: million tonnes
j. Mct: million carats
k. Like-for-like: refers to the change in realised prices between
tenders and excludes revenue from all single stones and Exceptional Stones,
while normalising for the product mix impact
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