Petra
Diamonds Limited
(Petra
or
the
Company)
Q3
FY 2024 Operating Update and Final Sales Results for Tender 5 FY
2024
Richard Duffy, Chief Executive Officer of Petra,
commented:
“Production for the
quarter is consistent with the preceding quarter and in-line with
expectations. At Finsch, the first of the 78-Level Phase II
production tunnels was successfully commissioned in March 2024, with commissioning of the remaining
six tunnels expected to be completed by June
2024. We confirm our FY 2024 production guidance of 2.75 –
2.85 Mcts.
Our fifth tender cycle
yielded US$49 million from the sale
of 362kcts. Average prices per carat received were 22% higher than
Tender 4, supported by the sale of a 14.76ct exceptional colour and
clarity blue diamond for US$8.2
million. Like-for-like1
prices
were relatively flat through this seasonally weaker period, being
0.8% lower than Tender 4.
We continue to update
our life of mine plans to support our transition to a smoother
capex profile. This includes a replanned ramp-up of the deferred
capital projects from Q1 FY 2025.
On 8 April 2024, we announced the signing of a
definitive transaction agreement for the sale of Koffiefontein
which is expected to result in Petra avoiding closure-related costs
of US$15-18 million included in the
Company’s 31
December 2023 balance
sheet provisions. We also announced an
increased cost savings target of more than US$30 million per annum that will sustainably
lower our cost base. Around half of these savings are expected to
come through a rebasing of fixed and variable costs in-line with
reduced throughput at Finsch, with the remaining half as savings
across operating costs and overheads at the Group level and
Cullinan Mine.
During the quarter we
repaid US$23m of our RCF to reduce
interest costs and had available liquidity of US$104 million at the end of Q3 FY 2024. While
net debt had increased at the end of Q3 FY 2024, proceeds from the
recently-closed Tender 5 have more than offset this increase.
Together with the actions taken to sustainably reduce costs, this
further enhances our business resilience.”
[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
Highlights
vs Q2 FY 2024
-
LTIFR and LTIs are 0.20
and 3 respectively (Q2 FY 2024: 0.18 and 3
respectively)
-
Ore processed reduced
marginally to 2.9Mt from 3.0Mt with the continued ramp-up of
production at Williamson and a steady quarter at Cullinan Mine
offset by lower volumes at Finsch due to the previously announced
winder issues, which have since been resolved
-
The 18% improvement in
grades at Finsch is largely ascribed to first production tonnes
from 78-Level Phase II
-
Lower diamond production
at Cullinan Mine is due to reduced tailings volume and grade
variations, in-line with expectations
-
Revenue amounted to
US$66 million (Q2 FY 2024:
US$90 million) with the decrease due
to the lower production and the timing of receipts from Tender
5
-
Support from South African
Rand weakness continued throughout the period, with the Rand
averaging ZAR18.95:US$1 (Q2 FY 2024: ZAR18.99:US$1)
-
Capital expenditure for Q3
FY 2024 totalled US$15 million,
in-line with updated guidance announced earlier following the
decision to defer certain capital project
expenditure
-
Partial settlement of the
withdrawn amounts under the ZAR1.75
billion (US$93 million)
Revolving Credit Facility with Absa
Bank, leaving an outstanding balance of ZAR450 million (US$24
million) at 31 March 2024,
down from ZAR850 million
(US$47 million) at 31 December 2023
-
Consolidated net debt
increased to US$232 million as at
31 March 2024 (31 December 2023: US$212
million) due to the timing of closing Tender 5, noting the
balance of sales receipts yielded US$32
million shortly after period-end which exceeded the increase
in net debt
Final
sales results for Tender 5 FY 2024
The sales
of the fifth tender cycle of FY 2024 closed this week with 362kcts
sold yielding US$49 million, with
average prices increasing 22% over Tender 4, noting a marginal 0.8%
decrease in like-for-like prices. Around 48kcts of Tender 5 goods
were sold in Q3 FY 2024 yielding some US$17
million.
These
results include a 14.76ct exceptional colour and clarity blue
gemstone recovered from the Cullinan Mine which the Company sold
into a partnership agreement with sale proceeds of US$8.2 million.
Rough
diamond sales results for the respective periods are set out
below:
|
|
Tender
5
FY
2024
Apr-24
|
Tender
4
FY
2024
Feb-24
|
Variance
|
Tender
5
FY
2023
May-24
|
YTD
FY
2024
Tenders
1–5
|
YTD
FY
2023
Tenders
1-5
|
|
Diamonds
sold (carats)
|
362,132
|
428,860
|
-16%
|
468,817
|
2,450,613
|
2,237,010
|
|
Sales (US$
million)
|
49
|
48
|
3%
|
42
|
285
|
316
|
|
Average
price (US$/ct)
|
136
|
112
|
22%
|
90
|
116
|
141
|
|
Revenue
from
Exceptional
Stones1
(US$
million)
|
0
|
0
|
0%
|
0
|
0
|
0
|
Note 1:
Exceptional Stones are defined as rough diamonds for US$15 million or more each.
Sales
Total
revenue YTD FY 2024 from rough diamond sales is US$285 million, compared to US$316 million in the first five tenders of FY
2023, excluding Koffiefontein. Year-on-year volume variances were
affected by the deferral of certain FY 2023 sale parcels sold as
part of Tender 1 of FY 2024.
Mine by
mine average prices for the respective periods are set out in the
table below:
|
US$/carat
|
Tender
5
FY
2024
Apr-24
|
Tender
4
FY
2024
Feb-24
|
YTD
FY 2024
Tenders
1-5
|
YTD
FY 2023
Tenders
1-5
|
FY
2023
|
|
Cullinan
Mine
|
157
|
98
|
115
|
143
|
139
|
|
Finsch
|
95
|
101
|
99
|
110
|
110
|
|
Williamson
|
177
|
220
|
200
|
280
|
280
|
Like-for-like
prices
Like-for-like
rough diamond prices decreased marginally by 0.8% on Tender 4 FY
2024. Prices for plus 2ct goods remained solid, while prices for
smaller goods showed some seasonal weakness contributing to the
overall decline. Average like-for-like prices for the first five
tenders of FY 2024 were down 8.5% year-to-date compared to the
equivalent five tenders of FY 2023. Pricing assumptions for the
remainder of the year remain unchanged.
|
US$
per carat
|
FY
2024
|
|
Cullinan
Mine
|
105 –
125
|
|
Finsch
|
95 –
110
|
|
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.
Product
Mix
The
balance of price movements is attributable to product mix, with
Cullinan Mine benefiting from the 14.76ct blue stone which sold for
US$8.2 million in this cycle.
Williamson’s average price was impacted by reduced prevalence of
higher-valued single stones, ascribed to the mining areas currently
accessed and expected to be temporary in nature.
Operating
Summary
|
|
|
Three
months
|
Nine
months YTD
|
|
|
|
Q3
FY
2024
|
Q2
FY
2024
|
Var.
|
Q3
FY
2023 Restated3
|
FY
2024
|
FY
2023 Restated3
|
Var.
|
|
Safety
|
|
|
|
|
|
|
|
|
|
LTIFR
|
-
|
0.20
|
0.18
|
+11%
|
0.47
|
0.16
|
0.26
|
-39%
|
|
LTIs
|
Number
|
3
|
3
|
-
|
8
|
8
|
14
|
-43%
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
Diamonds
sold
|
Carats
|
476,730
|
727,189
|
-34%
|
463,224
|
2,136,350
|
1,768,179
|
+21%
|
|
Revenue1
|
US$m
|
66
|
90
|
-27%
|
67
|
253
|
274
|
-8%
|
|
Contribution
from Exceptional Stones2
|
US$m
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
|
|
|
|
|
|
|
ROM
tonnes
|
Mt
|
2,851,469
|
2,875,410
|
-1%
|
1,654,267
|
8,444,365
|
6,810,390
|
+24%
|
|
Tailings
and other tonnes
|
Mt
|
75,100
|
96,235
|
-22%
|
110,431
|
262,343
|
297,684
|
-12%
|
|
Total
tonnes treated
|
Mt
|
2,926,569
|
2,971,645
|
-2%
|
1,764,698
|
8,706,708
|
7,108,074
|
+22%
|
|
|
|
|
|
|
|
|
|
|
|
ROM
diamonds
|
Carats
|
643,350
|
694,884
|
-7%
|
593,120
|
1,990,255
|
1,924,936
|
+3%
|
|
Tailings
and other diamonds
|
Carats
|
22,227
|
36,018
|
-38%
|
60,009
|
102,863
|
121,572
|
-15%
|
|
Total
diamonds
|
Carats
|
665,577
|
730,902
|
-9%
|
653,128
|
2,093,118
|
2,046,508
|
+2%
|
1 Revenue reflects
proceeds from the sale of rough diamonds and excludes revenue from
profit share arrangements
2 Petra
classifies “Exceptional Stones” as rough diamonds which sell for
US$15 million or more
each
3 Re-presented
to exclude Koffiefontein which is classified as a discontinued
operation
INVESTOR
WEBCASTS
Webcast
presentation for institutional investors and analysts
at
09:30am BST
today
Petra’s CEO, Richard Duffy, and CFO,
Jacques Breytenbach, will host a
live virtual presentation including Q&A for institutional
investors and analysts at 09:30 BST
today to discuss this operating update.
To join:
https://events.teams.microsoft.com/event/cfe4e98b-bdfa-4060-847a-2549a20f9fbe@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,
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
FURTHER
INFORMATION
Please
contact
Investor
Relations, London
Patrick Pittaway
Telephone:
+44 20 7494 8203
Julia Stone investorrelations@petradiamonds.com
Kelsey Traynor
Notes:
The
following definitions have been used in this
announcement:
-
cpht: carats per hundred
tonnes
-
LTIs: lost time
injuries
-
LTIFR: lost time injury
frequency rate, calculated as the number of LTIs multiplied by
200,000 and divided by the number of hours
worked
-
FY: financial year ending
30 June
-
CY: calendar year ending
31 December
-
Q: quarter of the
financial year
-
ROM: run-of-mine (i.e.
production from the primary orebody)
-
m:
million
-
Mt: million
tonnes
-
period: the third quarter
of FY 2024
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 a possible
sale following the execution of a definitive sales agreement as
announced on 8 April
2024.
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 31 March
2024
|
|
Unit
|
As
at 31 March
2024
|
As
at 31 December
2023
|
As
at 30 September
2023
|
As
at 30
June
2023
|
|
Cash at
bank – (including restricted amounts)¹
-
Petra Group (excl.
Williamson)
-
Williamson
|
US$m
US$m
US$m
|
37
42
(5)
|
75
85
(10)
|
74
73
1
|
62
61
1
|
|
Diamond
debtors
|
US$m
|
11
|
8
|
33
|
9
|
|
Diamond
inventories2,3
|
US$m
Carats
|
71
671,989
|
54
483,142
|
52
479,430
|
66
715,222
|
|
2026 Loan
Notes4
|
US$m
|
256
|
249
|
255
|
248
|
|
Bank loans
and borrowings5
|
US$m
|
24
|
47
|
45
|
-
|
|
Consolidated
Net Debt6
|
US$m
|
232
|
212
|
192
|
177
|
|
Bank
facilities undrawn and available5
|
US$m
|
69
|
8
|
8
|
53
|
Note: The following exchange rates have been used for
this announcement: average for 9M FY
2024 US$1: ZAR18.75 (H1 FY2024: US$1: ZAR18.69; FY
2023: US$1: ZAR17.77; 3M FY
2024: US$1: ZAR18.65); closing rate as at 31 March 2024 US$1:
ZAR18.92 (31
December 2023: US$1:
ZAR18.28; 30
June 2023: US$1: ZAR18.83 and 30 September
2023: US$1: ZAR18.92).
Notes:
-
The Group’s cash balances
excluding Williamson comprise unrestricted balances of US$24 million (31 December
2023: US$67 million), and
restricted balances of US$18 million
(31 December 2023: US$19 million).
-
Recorded at the lower of
cost and net realisable value.
-
Post period-end, the
Company completed the balance of Tender 5 with the sale of 314,439
carats from Cullinan Mine and Finsch, yielding US$32 million which will be recorded in Q4 FY
2024.
-
The 2026 Loan Notes,
originally issued following the capital restructuring (the
“Restructuring”) completed during March
2021, have a carrying value of US$256
million which represents the outstanding principal amount of
US$210 million (after the debt tender
offers as announced in September and October
2022) plus US$54 million of
accrued interest and is stated net of unamortised transaction costs
capitalised of US$8
million.
-
Bank loans and borrowings
represent the Group’s upsized ZAR1.75
billion (US$93 million)
revolving credit facility. In December
2023, the Group announced that Absa
Bank had approved an increase in the commitments under the
Group’s revolving credit facility by ZAR750
million, bringing the total commitments under the facility
to ZAR1.75 billion (US$93 million). This increase in the facility is
now fully available following execution and completion of the
associated amendment agreement on 15
February 2024. The amended facility’s existing covenants,
margin, fees, and maturity date remain unchanged. A total of
ZAR450 million (US$24 million) is currently drawn leaving a
further balance of ZAR1.3 billion
(US$69 million) available for
drawdown under the upsized facility.
-
Consolidated Net Debt is
bank loans and borrowings plus loan notes, less cash and diamond
debtors.
Mine-by-mine
tables:
Cullinan
Mine – South
Africa
|
|
Unit
|
Three
months
|
Nine
months YTD
|
|
Q3
FY
2024
|
Q2
FY
2024
|
Var.
|
Q3
FY
2023
|
FY
2024
|
FY
2023
|
Var.
|
|
Sales
|
|
|
|
|
|
|
|
|
|
Revenue
|
US$m
|
32
|
46
|
-30%
|
48
|
129
|
151
|
-15%
|
|
Diamonds
sold
|
Carats
|
233,460
|
345,867
|
-33%
|
310,300
|
1,098,689
|
979,027
|
+12%
|
|
Average
price per carat
|
US$
|
137
|
131
|
+4%
|
154
|
117
|
154
|
-24%
|
|
|
|
|
|
|
|
|
|
|
|
ROM
Production
|
|
|
|
|
|
|
|
|
|
Tonnes
treated
|
Tonnes
|
1,164,009
|
1,078,409
|
+8%
|
1,025,056
|
3,379,853
|
3,256,249
|
+4%
|
|
Diamonds
produced
|
Carats
|
319,490
|
331,349
|
-4%
|
322,724
|
969,100
|
1,019,657
|
-5%
|
|
Grade1
|
Cpht
|
27.4
|
30.7
|
-11%
|
31.5
|
28.7
|
31.3
|
-8%
|
|
|
|
|
|
|
|
|
|
|
|
Tailings
Production
|
|
|
|
|
|
|
|
|
|
Tonnes
treated
|
Tonnes
|
75,100
|
96,235
|
-22%
|
110,431
|
262,343
|
250,182
|
+5%
|
|
Diamonds
produced
|
Carats
|
22,227
|
36,018
|
-38%
|
60,009
|
102,863
|
115,010
|
-11%
|
|
Grade1
|
Cpht
|
29.6
|
37.4
|
-21%
|
54.3
|
39.2
|
46.0
|
-15%
|
|
|
|
|
|
|
|
|
|
|
|
Total
Production
|
|
|
|
|
|
|
|
|
|
Tonnes
treated
|
Tonnes
|
1,239,109
|
1,174,644
|
+5%
|
1,134,487
|
3,642,196
|
3,506,431
|
+4%
|
|
Diamonds
produced
|
Carats
|
341,717
|
367,367
|
-7%
|
382,732
|
1,071,963
|
1,134,667
|
-6%
|
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
|
Three
months
|
Nine
months YTD
|
|
Q3
FY
2024
|
Q2
FY
2024
|
Var.
|
Q3
FY
2023
|
FY
2024
|
FY
2023
|
Var.
|
|
Sales
|
|
|
|
|
|
|
|
|
|
Revenue
|
US$m
|
16
|
28
|
-44%
|
19
|
83
|
74
|
+11%
|
|
Diamonds
sold
|
Carats
|
152,984
|
298,889
|
-49%
|
152,924
|
827,088
|
614,041
|
+35%
|
|
Average
price per carat
|
US$
|
104
|
94
|
+10%
|
124
|
100
|
121
|
-17%
|
|
|
|
|
|
|
|
|
|
|
|
ROM
Production
|
|
|
|
|
|
|
|
|
|
Tonnes
treated
|
Tonnes
|
470,706
|
635,872
|
-26%
|
629,211
|
1,650,718
|
1,724,765
|
-4%
|
|
Diamonds
produced
|
Carats
|
242,543
|
276,842
|
-12%
|
270,396
|
779,249
|
764,763
|
+2%
|
|
Grade1
|
Cpht
|
51.5
|
43.5
|
+18%
|
43.0
|
47.2
|
44.3
|
+6%
|
|
|
|
|
|
|
|
|
|
|
|
Tailings
Production
|
|
|
|
|
|
|
|
|
|
Tonnes
treated
|
Tonnes
|
-
|
-
|
-
|
-
|
-
|
47,502
|
-
|
|
Diamonds
produced
|
Carats
|
-
|
-
|
-
|
-
|
-
|
9,562
|
-
|
|
Grade1
|
Cpht
|
-
|
-
|
-
|
-
|
-
|
13.8
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total
Production
|
|
|
|
|
|
|
|
|
|
Tonnes
treated
|
Tonnes
|
470,706
|
635,872
|
-26%
|
629,211
|
1,650,718
|
1,772,267
|
-7%
|
|
Diamonds
produced
|
Carats
|
242,543
|
276,842
|
-12%
|
270,396
|
779,249
|
771,325
|
+1%
|
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
|
|
Unit
|
Three
months
|
Nine
months YTD
|
|
Q3
FY
2024
|
Q2
FY
2024
|
Var.
|
Q3
FY
2023
|
FY
2024
|
FY
2023
|
Var.
|
|
Sales
|
|
|
|
|
|
|
|
|
|
Revenue
|
US$m
|
18
|
17
|
+8%
|
-
|
42
|
49
|
-14%
|
|
Diamonds
sold
|
Carats
|
90,285
|
82,432
|
+10%
|
-
|
210,574
|
175,124
|
+20%
|
|
Average
price per carat
|
US$
|
198
|
201
|
-1%
|
|
200
|
280
|
-29%
|
|
|
|
|
|
|
|
|
|
|
|
ROM
Production
|
|
|
|
|
|
|
|
|
|
Tonnes
treated
|
Tonnes
|
1,216,754
|
1,161,129
|
+5%
|
-
|
3,413,794
|
1,829,376
|
+87%
|
|
Diamonds
produced
|
Carats
|
81,317
|
86,693
|
-6%
|
-
|
2241,905
|
140,516
|
+72%
|
|
Grade1
|
Cpht
|
6.7
|
7.5
|
-10%
|
-
|
7.1
|
7.7
|
-8%
|
|
|
|
|
|
|
|
|
|
|
|
Total
Production
|
|
|
|
|
|
|
|
|
|
Tonnes
treated
|
Tonnes
|
1,216,754
|
1,161,129
|
+5%
|
-
|
3,413,794
|
1,829,376
|
+87%
|
|
Diamonds
produced
|
Carats
|
81,317
|
86,693
|
-6%
|
-
|
241,905
|
140,516
|
+72%
|
FY
2024 Capital expenditure breakdown
|
US$m
|
Q3
FY 2024
|
YTD
Q3 FY 2024
|
FY
2023
|
|
|
Extension
|
Stay-in-Business
|
Total
|
Extension
|
Stay-in-Business
|
Total
|
Total
|
|
Cullinan
Mine
|
6
|
3
|
9
|
28
|
8
|
36
|
53
|
|
Finsch
|
3
|
1
|
4
|
14
|
5
|
19
|
43
|
|
Williamson
|
—
|
2
|
2
|
—
|
9
|
9
|
19
|
|
Total
|
9
|
6
|
15
|
42
|
22
|
64
|
115
|