TIDMPDL
RNS Number : 4969W
Petra Diamonds Limited
18 April 2023
18 April 2023 LSE: PDL
Petra Diamonds Limited
("Petra" or "the Company")
Q3 FY 2023 Operating Update
Petra reports improved diamond production in the third quarter
of FY 2023
Richard Duffy, Chief Executive Officer of Petra, commented:
"We are pleased to report higher diamond production following
improved ROM grades and tailings production at Cullinan Mine and
increased throughput at Finsch. We expect to deliver on our revised
guidance of 2.75-2.85 Mcts for FY 2023. With Williamson targeted to
resume production in Q1 FY 2024, we are well positioned to increase
production by c.1Mct to 3.6-3.9 Mcts in FY 2025.
The key mitigating actions initiated over the last 6 months have
been successful and occurred against a backdrop of recently
improved diamond pricing which we largely attribute to a post-COVID
19 recovery in demand from China. We continue to expect a
supportive diamond market in the medium to longer-term as a result
of the structural supply deficit, while noting potential volatility
in the near-term owing to recent geopolitical and macroeconomic
uncertainty."
Highlights vs Q2 FY 2023
-- LTIs and LTIFR increased to 8 and 0.47, respectively, due
largely to a single incident at the Cullinan Mine in which 4
employees were injured. Petra has renewed its safety focus directed
at addressing the quarter-on-quarter regression
-- Total diamond production increased 3% to 653,700 carats as
production improved 14% at Finsch following the introduction of new
equipment, despite some ground handling challenges. Production at
the Cullinan Mine increased by 7%, supported by higher tailings and
ROM grades. Together, this more than offset the temporary
suspension of production at Williamson and the placing of
Koffiefontein on care and maintenance
-- Ore processed decreased 25% to 1.65Mt, largely due to the
temporary suspension of production at Williamson, which is targeted
to restart in Q1 FY 2024
-- At Koffiefontein the Section 189(3) labour reduction process
was completed during the quarter, resulting in the retrenchment of
382 employees at a cost of around ZAR99 million with around 80-90
employees being retained for care and maintenance activities in the
run-up to a responsible closure
-- Support from a weaker Rand and more stable diamond pricing continued throughout the quarter
-- Revenue amounted to US$67.8 million (Q2 FY 2023: US$107.8
million) as higher pricing at the Cullinan Mine and Finsch in the
quarter was more than offset by tender cycle timings (one tender in
Q3 FY 2023 vs two in Q2 FY 2023); the resultant inventory build is
expected to be released in Q4 FY 2023
-- Gross debt increased to US$248.5 million (31 December 2022:
US$241.7 million), reflecting the accrued interest charges for the
three months to 31 March 2023. Consolidated net debt of US$124.7
million (31 December 2022: US$90.8 million) increased due to the
timing of the Company's diamond sales tenders, coupled with the
previously announced capital expenditure programmes for the
expansion projects at the Cullinan Mine and Finsch
Three months Nine months YTD
Q3 Q2 Q3
FY 2023 FY 2023 Var. FY 2022 FY 2023 FY 2022 Var.
------ -------- -------- ------ -------- --------- --------- ------
Safety
------ -------- -------- ------ -------- --------- --------- ------
LTIFR - 0.47 0.22 +114% 0.18 0.28 0.18 +56%
------ -------- -------- ------ -------- --------- --------- ------
LTIs Number 8 4 +100% 3 15 9 +67%
------ -------- -------- ------ -------- --------- --------- ------
Sales
------ -------- -------- ------ -------- --------- --------- ------
Diamonds sold Carats 465,138 792,889 -41% 735,225 1,778,051 2,331,076 -24%
------ -------- -------- ------ -------- --------- --------- ------
Revenue(1) US$m 67.8 107.8 -37% 140.6 278.5 405.4 -31%
------ -------- -------- ------ -------- --------- --------- ------
Contribution
from Exceptional
Stones(2) US$m 7.0 0.0 - 5.5 7.0 83.3 -92%
------ -------- -------- ------ -------- --------- --------- ------
Production
------ -------- -------- ------ -------- --------- --------- ------
ROM tonnes Mt 1.65 2.20 -25% 2.8 6.9 8.2 -16%
------ -------- -------- ------ -------- --------- --------- ------
Tailings and
other tonnes Mt 0.11 0.09 +20% 0.1 0.3 0.4 -12%
------ -------- -------- ------ -------- --------- --------- ------
Total tonnes
treated Mt 1.76 2.29 -23% 2.9 7.2 8.6 -16%
------ -------- -------- ------ -------- --------- --------- ------
ROM diamonds Carats 593,691 604,917 -2% 780,896 1,931,622 2,430,885 -21%
------ -------- -------- ------ -------- --------- --------- ------
Tailings and
other diamonds Carats 60,009 31,612 +90% 49,560 121,827 176,995 -31%
------ -------- -------- ------ -------- --------- --------- ------
Total diamonds Carats 653,700 636,529 +3% 830,456 2,053,449 2,607,880 -21%
------ -------- -------- ------ -------- --------- --------- ------
(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$5 million or more each
Outlook
Ongoing actions taken to strengthen the business and improve
cash flow generation, together with capital discipline, enable
Petra to take advantage of the current supportive diamond market
fundamentals. Petra's projects remain on track to deliver a c.1Mct
annual increase in FY 2025, with work commencing on the C-Cut
extension to unlock a further 2.3Mct from FY 2025 through to FY
2033, as the Company develops the long-term potential of its
resource base.
Petra continues to strive to create a zero harm environment. The
Company is increasing its focus on identifying and mitigating
safety risks with behaviour-focused intervention programmes.
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 webcast for institutional investors and analysts today
at 09:30 BST to discuss this operating update.
Webcast link for live presentation:
https://brrmedia.news/PDL_OU
Dial in details:
United Kingdom 033 0551 0200
South Africa 0800 980 512
United States (Local) +1 786 697 3501
Password (if prompted): Quote "Petra Diamonds Operating
Update"
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 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
Petra Diamonds, London
Patrick Pittaway Telephone: +44 207494 8203
Julia Stone investorrelations@petradiamonds.com
Camarco (Financial PR)
Gordon Poole Telephone: +44 20 3757 4980
Owen Roberts petradiamonds@camarco.co.uk
Elfie Kent
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. Q: quarter of the financial year
g. ROM: run-of-mine (i.e. production from the primary orebody)
h. m: million
i. Mt: million tonnes
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 of 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 March 2023
Unit As at 31 As at 31 As at 30 As at 30
March December September June
2023 2022 2022 2022
--------- ---------- ---------- -----------
Cash at bank
- (including
restricted amounts)(1) US$m 96.8 146.6 154.0 288.2
--------------------------- --------- ---------- ---------- ----------- ---------
Diamond debtors US$m 27.0 4.3 4.2 37.4
--------------------------- --------- ---------- ---------- ----------- ---------
Diamond inventories(2,3) US$m 73.9 59.9 76.3 52.7
Carats 728,765 540,153 692,219 453,380
------------------------------------- ---------- ---------- ----------- ---------
2026 US$336.7m
loan notes (4) US$m 248.5 241.7 235.8 366.2
--------------------------- --------- ---------- ---------- ----------- ---------
Bank loans and US$m - - - -
borrowings(5)
--------------------------- --------- ---------- ---------- ----------- ---------
Consolidated
Net Debt(6) US$m 124.7 90.8 77.6 40.6
--------------------------- --------- ---------- ---------- ----------- ---------
Bank facilities
undrawn and available(5) US$m 56.2 58.8 55.1 61.5
--------------------------- --------- ---------- ---------- ----------- ---------
Note: The following exchange rates have been used for this
announcement: average for 9M FY 2023 US$1: ZAR17.46 (9M FY 2022:
US$1: ZAR15.10, FY 2022: US$1:ZAR15.22); closing rate as at 31
March 2023 US$1: ZAR17.78 (31 March 2022: US$1:ZAR14.60), 31
December 2022: US$1: ZAR17.00, 30 September 2022: ZAR18.15 and 30
June 2022: ZAR16.27.
Notes:
1. The Group's cash balances comprise unrestricted balances of
US$80.9 million, and restricted balances of US$15.9 million.
2. Recorded at the lower of cost and net realisable value.
3. Diamond inventories includes 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
reached with the Government of Tanzania, as announced on 13
December 2021, the proceeds from the sale of this parcel are
required to be allocated to Williamson.
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$248.5 million which
represents the outstanding principal amount of US$210.2 million
(after the early participation phase of the debt tender offers as
announced in September and October 2022) plus US$49.5 million of
accrued interest and net of unamortised transaction costs
capitalised of US$11.2 million.
5. Bank loans and borrowings represent the Group's ZAR1 billion
revolving credit facility which remains undrawn and available.
6. Consolidated Net Debt is bank loans and borrowings plus loan
notes, less cash and diamond debtors.
Mine-by-mine tables:
Cullinan Mine - South Africa
Three months Nine months YTD
Q3 Q2 Q3
Unit FY 2023 FY 2023 Var. FY 2022 FY 2023 FY 2022 Var.
--------- --------- ------ --------- --------- --------- ------
Sales
------- --------- --------- ------ --------- --------- --------- ------
Revenue US$m 47.9 45.8 5% 73.7 150.6 241.4 -38%
------- --------- --------- ------ --------- --------- --------- ------
Diamonds sold Carats 310,300 400,999 -23% 409,030 979,027 1,281,334 -24%
------- --------- --------- ------ --------- --------- --------- ------
Average price
per carat US$ 154 114 35% 180 154 188 -18%
------- --------- --------- ------ --------- --------- --------- ------
ROM Production
------- --------- --------- ------ --------- --------- --------- ------
Tonnes treated Tonnes 1,025,056 1,120,282 -9% 1,053,631 3,256,249 3,360,618 -3%
------- --------- --------- ------ --------- --------- --------- ------
Diamonds produced Carats 322,724 328,137 -2% 404,473 1,019,657 1,247,675 -18%
------- --------- --------- ------ --------- --------- --------- ------
Grade(1) Cpht 31.5 29.3 7% 38.4 31.3 37.1 -16%
------- --------- --------- ------ --------- --------- --------- ------
Tailings Production
------- --------- --------- ------ --------- --------- --------- ------
Tonnes treated Tonnes 110,431 62,178 78% 112,414 250,182 350,706 -29%
------- --------- --------- ------ --------- --------- --------- ------
Diamonds produced Carats 60,009 28,211 113% 49,560 115,010 176,995 -35%
------- --------- --------- ------ --------- --------- --------- ------
Grade(1) Cpht 54.3 45.4 20% 44.1 46.0 50.5 -9%
------- --------- --------- ------ --------- --------- --------- ------
Total Production
------- --------- --------- ------ --------- --------- --------- ------
Tonnes treated Tonnes 1,135,487 1,182,460 -4% 1,166,045 3,506,431 3,711,324 -6%
------- --------- --------- ------ --------- --------- --------- ------
Diamonds produced Carats 382,732 356,348 7% 454,033 1,134,667 1,424,670 -20%
------- --------- --------- ------ --------- --------- --------- ------
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
Three months Nine months YTD
Q3 Q2 Q3
Unit FY 2023 FY 2023 Var. FY 2022 FY 2023 FY 2022 Var.
-------- -------- ------ -------- --------- --------- ------
Sales
------- -------- -------- ------ -------- --------- --------- ------
Revenue US$m 19.0 32.0 -40% 39.2 74 .4 104.9 -29%
------- -------- -------- ------ -------- --------- --------- ------
Diamonds sold Carats 152,924 283,833 -46% 259,164 614,041 935,459 -34%
------- -------- -------- ------ -------- --------- --------- ------
Average price
per carat US$ 124 113 10% 151 121 112 8%
------- -------- -------- ------ -------- --------- --------- ------
ROM Production
------- -------- -------- ------ -------- --------- --------- ------
Tonnes treated Tonnes 629,211 522,578 20% 656,408 1,724,765 2,079,527 -17%
------- -------- -------- ------ -------- --------- --------- ------
Diamonds produced Carats 270,396 234,150 15% 303,591 764,763 1,005,134 -24%
------- -------- -------- ------ -------- --------- --------- ------
Grade(1) Cpht 43.0 44.8 -4% 46.3 44.3 48.3 -8%
------- -------- -------- ------ -------- --------- --------- ------
Tailings Production
------- -------- -------- ------ -------- --------- --------- ------
Tonnes treated Tonnes - 30,197 - - 47,502 - -
------- -------- -------- ------ -------- --------- --------- ------
Diamonds produced Carats - 3,402 - - 6,562 - -
------- -------- -------- ------ -------- --------- --------- ------
Grade(1) Cpht - 11.3 - - 13.8 - -
------- -------- -------- ------ -------- --------- --------- ------
Total Production
------- -------- -------- ------ -------- --------- --------- ------
Tonnes treated Tonnes 629 211 552,775 14% 656,408 1,772,267 2,079,527 -15%
------- -------- -------- ------ -------- --------- --------- ------
Diamonds produced Carats 270 396 237,552 14% 303,591 771,325 1,005,134 -23%
------- -------- -------- ------ -------- --------- --------- ------
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
Three months Nine months YTD
Q3 Q2 Q3
Unit FY 2023 FY 2023 Var. FY 2022 FY 2023 FY 2022 Var.
-------- -------- ------ --------- --------- --------- ------
Sales
------- -------- -------- ------ --------- --------- --------- ------
Revenue US$m - 27.9 - 22.4 49 .1 42.6 15%
------- -------- -------- ------ --------- --------- --------- ------
Diamonds sold Carats - 103,829 - 60,759 175,124 87,370 100%
------- -------- -------- ------ --------- --------- --------- ------
Average price
per carat US$ - 269 - 369 280 488 -43%
------- -------- -------- ------ --------- --------- --------- ------
ROM Production
------- -------- -------- ------ --------- --------- --------- ------
Tonnes treated Tonnes - 520,017 - 1,005,901 1,829,376 2,360,017 -22%
------- -------- -------- ------ --------- --------- --------- ------
Diamonds produced Carats - 39,766 - 65,003 140,516 147,876 -5%
------- -------- -------- ------ --------- --------- --------- ------
Grade(1) Cpht - 7.6 - 6.5 7.7 6.3 23%
------- -------- -------- ------ --------- --------- --------- ------
Total Production
------- -------- -------- ------ --------- --------- --------- ------
Tonnes treated Tonnes - 520,017 - 1,005,901 1,829,376 2,360,017 -22%
------- -------- -------- ------ --------- --------- --------- ------
Diamonds produced Carats - 39,766 - 65,003 140,516 147,876 -5%
------- -------- -------- ------ --------- --------- --------- ------
Koffiefontein - South Africa
Three months Nine months YTD
Q3 Q2 Q3
Unit FY 2023 FY 2023 Var. FY 2022 FY 2023 FY 2022 Var.
-------- -------- ------ -------- --------- --------- ------
Sales
------- -------- -------- ------ -------- --------- --------- ------
Revenue US$m 0.8 2.2 -64% 5.4 4.5 16.5 -73%
------- -------- -------- ------ -------- --------- --------- ------
Diamonds sold Carats 1,927 4,228 -54% 6,269 9,859 26,907 -63%
------- -------- -------- ------ -------- --------- --------- ------
Average price
per carat US$ 461 508 -9% 856 452 612 -26%
------- -------- -------- ------ -------- --------- --------- ------
ROM Production
------- -------- -------- ------ -------- --------- --------- ------
Tonnes treated Tonnes - 36,099 - 76,453 84,869 393,763 -78%
------- -------- -------- ------ -------- --------- --------- ------
Diamonds produced Carats - 2,862 - 7,829 6,687 30,200 -78%
------- -------- -------- ------ -------- --------- --------- ------
Grade(1) Cpht - 7.9 - 10.2 7.9 7.7 3%
------- -------- -------- ------ -------- --------- --------- ------
Tailings Production
------- -------- -------- ------ -------- --------- --------- ------
Tonnes treated Tonnes - - - - -
------- -------- -------- ------ -------- --------- --------- ------
Diamonds produced Carats - - - - -
------- -------- -------- ------ -------- --------- --------- ------
Grade(1) Cpht - - - - -
------- -------- -------- ------ -------- --------- --------- ------
Total Production
------- -------- -------- ------ -------- --------- --------- ------
Tonnes treated Tonnes - 36,099 - 76,453 84,869 393,763 -78%
------- -------- -------- ------ -------- --------- --------- ------
Diamonds produced Carats - 2,862 - 7,829 6,687 30,200 -78%
------- -------- -------- ------ -------- --------- --------- ------
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.
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