REG - Petra Diamonds Ltd - Sales results for Tender 2 FY 2024

Petra DiamondsAnnouncement

17/10/2023 07:00

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RNS Number : 2970Q  Petra Diamonds Limited  17 October 2023

 17 October 2023  LSE: PDL

 

Petra Diamonds Limited

("Petra" or "the Company")

 

Sales results for Tender 2 FY 2024

 

Following the initial results for the first c.75% of total tender volume for
this cycle announced on 6 October 2023, Petra announces the full results of
Tender 2 of FY 2024, at which 444,029 carats were sold for a total of US$40.5
million. This includes 37,856 carats of Williamson goods which were sold for
US$7.7 million.

 

Richard Duffy, Chief Executive Officer of Petra, said:

 

"Petra has now concluded its second tender for FY 2024, which included
Williamson's first sale after restarting operations, marking the start of the
steady ramping up of carats available for tender from this mine.

 

Like-for-like 1  (#_ftn1) prices for goods sold were down 16.9% compared to
Tender 1 held in August 2023 and in line with the 16% - 18% range indicated in
our initial results announcement, reflecting prevailing market weakness. We
believe actions taken by major producers to curb supply and the two-month
Indian moratorium will assist in bringing stability and support to the market
and prices as inventory levels reduce. While we anticipate that prices will
remain volatile throughout CY 2023 and possibly into CY 2024, we continue to
expect prices to benefit in the medium to longer term as a result of the
structural supply deficit."

 

 

Rough diamond sales results for the respective periods are set out below(1):

 

                                                   Tender 2     Tender 1   Variance  Tender 2   YTD               YTD

                                                   FY 2024      FY 2024              FY 2023    FY 2024           FY 2023

                                                   Sep/Oct 23   Aug 2023             Nov 2022   Tenders 1 and 2   Tenders 1 and 2
 Diamonds sold (carats)                            444,029      696,194    -36%      445,113    1,140,223         961,411
 Sales (US$ million)                               40.5         79.3       -49%      59.9       119.8             161.3
 Average price (US$/ct)                            91           114        -20%      135        105               168
 Revenue from Exceptional Stones(2) (US$ million)  0.0          0.0        n.a.      0.0        0.0               0.0

Note 1: Excludes all Koffiefontein sales results since it has been classified
as a discontinued operation in the Group's FY 2023 accounts.

Note 2: Exceptional Stones are defined as rough diamonds for US$15 million or
more each.

 

 

Sales

A total of 406.2kcts of goods from Cullinan Mine and Finsch were sold,
yielding US$32.9 million, and 37.9kcts from Williamson were sold, yielding
US$7.7 million. Parcels containing 527 carats, valued by Petra at US$1.6
million and largely earmarked for South African customers, are planned to be
sold in the coming weeks and will be included in the third tender cycle.

 

The results of Tender 2 bring FY 2024 YTD revenue from rough diamond sales to
US$119.8 million, compared to US$161.3 million in the first two tenders of FY
2023, excluding Koffiefontein. Year-on-year volume variances were affected by
the deferral of certain FY 2023 sales to Tender 1 of FY 2024 which was
partially offset by the decision to bring forward the second tender due to the
Indian import moratorium that commenced on 15 October 2023 and is expected to
last for 2 months.

 

Mine by mine average prices for the respective periods are set out in the
table below:

 

 US$/carat      Tender 2       Tender 1   YTD FY 2024   YTD FY 2023   FY 2023

                FY 2024        FY 2024    Tenders 1-2   Tenders 1-2

                Sep/Oct 2023   Aug 2023
 Cullinan Mine  78             113        101           165           139
 Finsch         83             116        103           126           110
 Williamson     203            n/a        203           286           280

 

Like-for-like prices

Like-for-like rough diamond prices for goods sold declined by 16.9% on Tender
1 FY 2024, driven by double-digit decreases in prices across all size
categories. Year to date like-for-like prices were down 14.2% compared to the
equivalent two tenders of FY 2023.

 

 

Product mix

The balance of price movements is attributable to product mix, which is partly
affected by the exclusion of 527 carats of higher-value goods carried forward
to the third tender cycle, and partly due to lower overall quality
contributions from both Cullinan Mine and Finsch, although both remained
within the expected range of product variability from tender to tender. This
was the first sale of goods from Williamson following the restart of
operations in July 2023.

 

 

Group pricing assumptions FY 2024

Given the current market dynamics, which we expect to be temporary in nature,
we have revised our FY 2024 pricing assumptions downward as reflected in the
table below. 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.

 

                 Previous   Current

 US$ per carat   Sep 2023   Oct 2023
 Cullinan Mine   125 - 140  110 - 130
 Finsch          105 - 120  100 - 115
 Williamson      240 - 270  225 - 250

 

 

 

For further information, please contact:

 

Investor Relations, London                  Telephone: +44 20
7494
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 Limited

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
(Finsch and Cullinan 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.

(#_ftnref1) 1 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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