REG-Petra Diamonds Ltd: Q1 FY 2025 operating update and final sales results for Tenders 1 and 2 FY 2025
22/10/2024 07:15
22 October 2024 LSE: PDL
Petra Diamonds Limited
(Petra or the Company)
Q1 FY 2025 operating update and final sales results for Tenders 1 and 2 FY
2025
Richard Duffy, Chief Executive Officer of Petra, commented:
“Following changes to the mine plans announced at our Investor Day, diamond
production increased 7% from the previous quarter on the back of solid
performances from Cullinan Mine and Williamson, with Finsch transitioning from
continuous to a two-shift operation. We recorded 4 LTIs, resulting in our
LTIFR rate increasing to 0.28 from 0.13 in the previous quarter. This is of
concern to us given our focus on delivering zero-harm workplaces, and we have
implemented a number of behaviour-based interventions aimed at improving our
health and safety performance.
Reflecting our agility to respond to weaker market conditions, we announced
the decision to defer the sale of the majority of our South African goods from
Tender 1 in August/September to support steps taken by major producers to
manage supply. Our combined first and second tenders indicate continued
weakness in the rough diamond market, more than offset by Petra’s product
mix. Overall average prices increased 13% compared to the previous tender,
with product mix contributing 22%, partially offset by a 9% decrease in
like-for-like 1 (#_ftn1) prices. Product mix showed improvement across the
operations, with Cullinan Mine, in particular, benefitting from an 18.85ct
blue diamond, of exceptional quality in terms of colour and clarity, that was
sold in Q1 FY2025 for US$8.5 million into a partnership agreement and a top
light brown 405ct diamond, of exceptional clarity, from Cullinan Mine that was
sold for US$4.7 million. Product mix also benefitted from withdrawal of ca.
88kcts (ca. US$3 million) of brown goods as a result of poor demand for that
particular category.
Revenue recorded in Q1 FY 2025 only reflects the proceeds of US$8.5 million
for the 18.85ct blue diamond at Cullinan Mine and US$14 million for
Williamson. We drew down US$48 million from our Revolving Credit Facility
(RCF), which will reduce once the proceeds from the recently closed combined
Tenders 1 and 2 are received. We have continued with the open market
repurchase (OMR) of our 2026 2L Notes, cancelling US$8 million during the
quarter. This brings the total of 2L Notes cancelled as at 30 September 2024
to US$13 million. We will continue to look at opportunities to further reduce
our 2L debt through the OMR programme as we consider our options to refinance
the 2L Notes ahead of their maturity in March 2026.
I am pleased to confirm completion of the sale of Koffiefontein to Stargems
Group, which will enable economic activity to continue under new ownership. As
a result, Petra will avoid incurring closure-related costs of US$15-18
million. I would like to extend my thanks and appreciation to all our
employees, community members and regulatory bodies for their support in
concluding this transaction and wish the new owners every success going
forward.
A further review of cash generation opportunities is currently underway to
mitigate the impact of ongoing weakness in the diamond market and a stronger
Rand, and we remain committed to our target of net cash generation for the
full year in FY 2025. We continue to expect prices to show some improvement in
CY 2025, with market fundamentals being supportive in the medium-to-longer
term.”
Highlights vs Q4 FY 2024
* LTIFR and LTIs increased to 0.28 and 4, respectively, (Q4 FY 2024: 0.13 and
2, respectively) resulting in Petra implementing a number of behaviour-based
interventions aimed at improving health and safety performance
* Ore processed increased by 7% to 3.2Mt from 3.0Mt largely due to improved
performance at Finsch and Williamson
* The phased ramp-up of the 78-Level phase II has now been completed at
Finsch, with tonnes treated increasing 7%, but with run-of-mine grades down
14% due to mining the last remaining level of the sub-level cave. We expect
grades to improve as a result of enhanced grade control measures and a higher
proportion of less-diluted ore from 78-Level phase II
* Diamonds produced increased to 679,625 carats (Q4 FY 2024: 636,743 carats)
largely due to higher grades at Cullinan Mine and higher tonnes mined and
grade improvements at Williamson
* Revenue, including profit share arrangements, amounted to US$23 million (Q4
FY 2024: US$113 million), impacted by the deferral of the majority of our
South African goods from Tender 1
* A stronger South African Rand has impacted US$-denominated costs, with the
Rand averaging ZAR17.96:US$1 (Q4 FY 2024: ZAR18.71:US$1). The impact for the
quarter was mostly mitigated through our currency hedging programme
* Capital expenditure for Q1 FY 2025 totalled US$16 million which is in-line
with guidance
* A US$48 million drawdown was made under the ZAR1.75 billion (US$101 million)
Revolving Credit Facility with Absa Bank, leaving an outstanding balance of
ZAR1.30 billion (US$76 million) at 30 September 2024
* Consolidated net debt increased to US$285 million as at 30 September 2024
(30 June 2024: US$201 million) due to the deferral of the majority of our
South African goods from Tender 1
Final sales results for Tenders 1 and 2 FY 2025
Sales for the first and second tender cycles of FY 2025 closed this week,
yielding US$76 million from 600 kcts sold. Average prices increased 13% over
Tender 7 FY 2024, with product mix contributing 22%, partially offset by a 9%
decrease in like-for-like prices with weakness evident in the smaller size
fractions.
Rough diamond sales results for the respective periods are shown below.
Tenders 1-2 FY 2025 Oct 24 Tender 7 FY 2024 Jun 24 Variance YTD FY 2025 Tenders 1-2 YTD FY 2024 1 Tenders 1-2 FY 2024
Diamonds sold (carats) 600,161 337,064 78% 600,161 1,191,493 3,158,780
Sales (US$ million) 76 38 100% 76 131 366
Average price (US$/ct) 126 111 13% 126 110 116
1Revenue and volume variances were impacted by the deferral of the final
tender of FY 2023 into FY 2024, leading to higher sales in the comparative YTD
FY 2024 period.
Price comparison by operation
Mine by mine average prices for the respective periods are set out in the
table below:
US$/carat Tenders 1-2 FY 2025 Oct 24 Tender 7 FY 2024 Jun 24 YTD FY 2025 Tenders 1-2 YTD FY 2024 Tenders 1-2 FY 2024
Cullinan Mine 146 2 111 146 101 116
Finsch 84 93 84 103 98
Williamson 164 158 164 203 191
2Including the 88kcts of brown goods withdrawn at a revenue of US$3 million,
average prices of US$123/ct would have been achieved.
Pricing assumptions for the remainder of the year remain unchanged:
US$ per carat FY 2025
Cullinan Mine 125 – 135
Finsch 98 – 105
Williamson 200 – 225
Future diamond prices are influenced by a range of factors outside of
Petra’s control and so these assumptions are internal estimates only and no
reliance should be placed on them. The Company’s pricing assumptions will be
considered on an ongoing basis and may be updated as appropriate.
Operating Summary
Unit FY 2025 FY 2024
Q1 Q4 Var. Q1 Var. 12 months
Safety
LTIFR Rate 0.28 0.13 115% 0.12 133% 0.16
LTIs Number 4 2 100% 2 100% 10
Sales
Diamonds sold Carats 85,449 1,022,430 -92% 932,431 -91% 3,158,780
Revenue 1 US$m 23 112 -80% 98 -77% 366
Production
ROM tonnes Mt 3,112,645 2,880,975 8% 2,717,486 15% 11,325,340
Tailings and other tonnes Mt 98,002 107,203 -9% 91,008 8% 369,546
Total tonnes treated Mt 3,210,647 2,988,178 7% 2,808,494 14% 11,694,886
ROM diamonds Carats 630,768 603,217 5% 652,021 -3% 2,593,471
Tailings and other diamonds Carats 48,857 33,526 46% 44,618 10% 136,389
Total diamonds Carats 679,625 636,743 7% 696,639 -2% 2,729,861
1 Revenue reflects proceeds from the sale of rough diamonds and excludes
revenue from profit share arrangements
INVESTOR WEBCASTS
Webcast presentation for institutional investors and analysts at 09:30am BST
today
Petra’s CEO, Richard Duffy, and CFO, Johan Snyman, will host a live virtual
presentation including Q&A for institutional investors and analysts at 09:30
BST today to discuss this announcement.
Lines will be open from 09:15 BST and participants are encouraged to register
early to avoid queues around the start time of 09:30 BST.
To join:
https://events.teams.microsoft.com/event/02953759-3006-42ef-9bbc-969ebc36ef08@3c08cd12-de9b-4814-9ea3-392066758217
Link for recording (available later in the day):
https://www.petradiamonds.com/investors/results-reports/
Investor Meet Company webcast at 14.30pm BST today
Petra’s CEO, Richard Duffy, and CFO, Johan Snyman, 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
FURTHER INFORMATION
Please contact
Investor Relations, London
Patrick Pittaway Telephone: +44 (0)784 192 0021
Kelsey Traynor investorrelations@petradiamonds.com
Notes:
The following definitions have been used in this announcement:
1. cpht: carats per hundred tonnes
2. LTIs: lost time injuries
3. LTIFR: lost time injury frequency rate, calculated as the number of LTIs
multiplied by 200,000 and divided by the number of hours worked
4. FY: financial year ending 30 June
5. CY: calendar year ending 31 December
6. Q: quarter of the financial year
7. ROM: run-of-mine (i.e. production from the primary orebody)
8. m: million
9. Mt: million tonnes
10. period: the first quarter of FY 2025
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 two underground mines in South Africa
(Cullinan and Finsch Mine) and one open pit mine in Tanzania (Williamson).
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 as at 30 September 2024
Unit As at 30 September 2024 As at 30 June 2024 As at 31 March 2024 As at 31 December 2023 As at 30 September 2023
Cash at bank – (including restricted amounts)¹ * Petra Group (excl. Williamson) US$m US$m US$m 36 47 (11) 40 47 (7) 37 42 (5) 75 85 (10) 74 73 1
* Williamson
Diamond debtors US$m — 31 11 8 33
Diamond inventories 2 US$m Carats 92 880,479 32 286,303 71 671,989 54 483,142 52 479,430
2026 Loan Notes 3 US$m 245 246 256 249 255
Bank loans and borrowings 4 US$m 76 25 24 47 45
Consolidated Net Debt 5 US$m 285 201 232 212 192
Bank facilities undrawn and available 4 US$m 26 72 69 8 8
Note: The following exchange rates have been used for this announcement:
average for 3M FY 2025 US$1: ZAR17.96 (FY 2024: US$1: ZAR18.71); closing rate
as at 30 September 2024 US$1: ZAR17.26 (30 June 2024: ZAR18.19; 31 March 2024
US$1: ZAR18.92; 31 December 2023: US$1: ZAR18.28; and 30 September 2023:
ZAR18.92).
Notes:
1. The Group’s cash balances excluding Williamson comprise unrestricted
balances of US$27 million, and restricted balances of US$20 million.
2. Recorded at the lower of cost and net realisable value.
3. The 2026 Loan Notes, originally issued following the capital restructuring
(the “Restructuring”) completed during March 2021, have a carrying value
of US$245 million which represents the outstanding principal amount of US$199
million (after the repurchases concluded during Q1 FY2025) plus US$52 million
of accrued interest and is stated net of unamortised transaction costs
capitalised of US$6 million. During quarter 1 of FY 2025 Petra purchased and
cancelled 2026 Loan Notes with a nominal value of US$8 million through an open
market repurchase programme.
4. Bank loans and borrowings represent the Group’s ZAR1.75 billion (US$101
million) revolving credit facility (RCF). In August and September 2024, the
Group drew down ZAR855 million (c. US$48 million) from the RCF as a result of
the deferral of South African goods from Tender 1 FY 2025. As at 30 September
2024, a total of ZAR1 305 million (US$76 million) was drawn leaving a further
balance of ZAR445 million (US$26 million) available for drawdown.
5. Consolidated Net Debt is bank loans and borrowings plus loan notes, less
cash and diamond debtors.
Mine-by-mine tables:
Cullinan Mine – South Africa
Unit FY 2025 FY 2024
Q1 Q4 Var. Q1 Var. 12 months
Sales
Revenue US$m 9 61 -86% 51 -83% 189
Diamonds sold Carats 19 534,767 -100% 519,362 -100% 1,633,456
Average price per carat US$ 450,928 113 +100% 98 +100% 116
ROM Production
Tonnes treated Tonnes 1,089,570 1,117,591 -3% 1,137,436 -4% 4,497,444
Diamonds produced Carats 314,126 299,301 5% 318,261 -1% 1,268,402
Grade 1 Cpht 28.8 26.8 8% 28.0 3% 28.2
Tailings Production
Tonnes treated Tonnes 98,002 107,203 -9% 91,008 8% 369,546
Diamonds produced Carats 48,847 33,526 46% 44,618 10% 136,389
Grade 1 Cpht 49.9 31.3 59% 49.0 2% 36.9
Total Production
Tonnes treated Tonnes 1,187,572 1,224,795 -3% 1,228,443 -3% 4,866,990
Diamonds produced Carats 362,983 332,828 9% 362,879 0% 1,404,791
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
Unit FY 2025 FY 2024
Q1 Q4 Var. Q1 Var. 12 months
Sales
Revenue US$m - 37 -100% 39 -100% 120
Diamonds sold Carats - 400,322 -100% 375,214 -100% 1,227,409
Average price per carat US$ - 93 -100% 104 -100% 98
ROM Production
Tonnes treated Tonnes 477,267 446,012 7% 544,140 -12% 2,096,730
Diamonds produced Carats 204,238 222,387 -8% 259,864 -21% 1,001,636
Grade 1 Cpht 42.8 49.9 -14% 47.8 -10% 47.8
Williamson – Tanzania
Unit FY 2025 FY 2024
Q1 Q4 Var. Q1 Var. 12 months
Sales
Revenue US$m 14 15 -4% 8 82% 59
Diamonds sold Carats 85,430 87,341 -2% 37,856 126% 297,915
Average price per carat US$ 164 168 -2% 203 -19% 191
ROM Production
Tonnes treated Tonnes 1,545,808 1,317,372 17% 1,035,911 49% 4,731,166
Diamonds produced Carats 112,404 81,529 38% 73,896 52% 323,434
Grade 1 Cpht 7.3 6.2 17% 7.1 2% 6.8
Capital expenditure breakdown
US$m Q1 FY 2025 FY 2024
Extension Stay-in-Business Total Total
Cullinan Mine 8 0 8 48
Finsch 5 1 6 25
Williamson - 2 2 10
Total 13 3 16 83
1 (#_ftnref1) 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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