TIDMPDL
RNS Number : 0202R
Petra Diamonds Limited
24 October 2023
24 October 2023 LSE: PDL
Petra Diamonds Limited
("Petra" or "the Company")
Q1 FY 2024 Operating Update
Petra reports improved diamond production in the first quarter
of FY 2024
Richard Duffy, Chief Executive Officer of Petra, commented:
"With stabilising operations at Cullinan Mine and Finsch, and
Williamson resuming production ahead of schedule, production
increased 12% from the previous quarter. This was accompanied by a
continuation of our strong safety performance from Q4 FY 2023
following our renewed safety focus.
We believe the actions taken by the major producers to curb
supply and the two-month Indian diamond import moratorium will
assist in stabilising the market and supporting prices as inventory
levels reduce. Whilst we continue to see support for the market in
the medium to longer term as a result of the structural supply
deficit, we are taking prudent steps to enhance our business
resilience in light of these market challenges and uncertainties
that are expected to continue over the coming months. By bringing
forward our second tender of FY 2024 we were able to sell 75% of
our goods ahead of the moratorium, with the balance sold shortly
after. We are in discussions with our first lien lender to upsize
our existing Revolving Credit Facility and are evaluating options
to provide further financial flexibility, such as optimising our
operational expenditure and deferring capital spend.
We are confident these actions will enable us to navigate this
period of market weakness whilst limiting the impact on our
value-led growth strategy."
Highlights vs Q4 FY 2023
-- We maintained our improved safety performance with LTIs and
LTIFR remaining at 2 and 0.12, respectively.
-- Total diamond production increased 12% to 696,639 carats
mainly due to Williamson successfully resuming operations ahead of
schedule. Production at Cullinan Mine was largely in line with
expectations, with a small increase in tonnes treated offset by
grade trending towards the lower end of expectations. At Finsch,
tonnes treated decreased 23% from the preceding quarter, largely
offset by a 26% increase in ROM grade, reflecting increased
quarter-on-quarter volatility associated with the sub-level cave
maturity. Production guidance for FY 2024 remains unchanged.
-- Revenue totalled US$97.6 million, which included Tender 1
sales of US$79.3 million and a portion of Tender 2 sales concluded
prior to 30 September, with the balance of Tender 2 adding a
further US$22.2 million post period end.
-- Unrestricted cash balances amounted to US$56.5 million (30
June 2023: US$44.1 million), with a further US$33.0 million (30
June 2023: US$8.9 million) cash received from diamond debtors
shortly after period end. Cash balances include a ZAR850 million
(US$45.0 million) drawdown from the Company's ZAR1 billion (US$53.0
million) Revolving Credit Facility.
-- Consolidated net debt increased to US$192.4 million (30 June
2023: US$176.8 million) due to the timing of closing the Company's
sales tenders, the continued lower diamond pricing environment,
working capital funding for the resumption of mining at Williamson
and the increasing capex spend profile, as previously announced, to
extend the life of our operations at Cullinan Mine and Finsch.
Operating Summary
Unit FY 2024 FY 2023
Q1 Q4 Var. Q1 Var. 12 months
Safety
LTIFR Rate 0.12 0.12 - 0.16 -25% 0.24
LTIs Number 2 2 - 3 -33% 17
Sales
Diamonds sold Carats 932,431 561,624 +66% 516,308 +81% 2,329,799
Revenue(1) US$m 97.6 49.9 +96% 101.4 -4% 323.9
Contribution
from Exceptional
Stones(2) US$m 0.0 0.0 - 0.0 - 0.0
Production
ROM tonnes Mt 2.7 1.8 +49% 3.0 -9% 8.6
Tailings and
other tonnes Mt 0.1 0.1 - 0.1 - 0.4
Total tonnes
treated Mt 2.8 1.9 +46% 3.1 -9% 9.0
ROM diamonds Carats 652,021 592,374 +10% 729,761 -11% 2,517,309
Tailings and
other diamonds Carats 44,618 27,644 +61% 29,951 +49% 149,216
Total diamonds Carats 696,639 620,018 +12% 759,712 -8% 2,666,525
(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
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 including Q&A for institutional investors
and analysts today at 09:30 BST to discuss this operating
update.
Webcast link for live presentation:
https://brrmedia.news/PDL_Q1FY24
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 Q1 Operations
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'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
Financial PR (Camarco)
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
j. period: the first 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 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 30 September 2023
Unit As at 30 As at 30 As at 31 As at 30
September June December September
2023 2023 2022 2022
Cash at bank -
(including restricted
amounts)(1) US$m 74.3 61.8 146.6 154.0
Diamond debtors US$m 33.0 8.9 4.3 4.2
Diamond inventories(2,3,4) US$m 51.8 65.9 59.9 76.3
Carats 479,430 715,222 540,153 692,219
2026 US$336.7m
loan notes (4) US$m 254.6 247.5 241.7 235.8
Bank loans and
borrowings(5) US$m 45.0 - - -
Consolidated Net
Debt(6) US$m 192.4 176.8 90.8 77.6
Bank facilities
undrawn and available(5) US$m 7.9 53.1 58.8 55.1
Note: The following exchange rates have been used for this
announcement: average for 3M FY 2024 US$1: ZAR18.65 (FY 2023: US$1:
ZAR17.77); closing rate as at 30 September 2023 US$1: ZAR18.92 (30
June 2023: ZAR18.83, 31 December 2022: US$1: ZAR17.00, and
September 2022: ZAR18.15).
Notes:
1. The Group's cash balances comprise unrestricted balances of
US$56.5 million (30 June 2023: US$44.1 million), and restricted
balances of US$17.8 million (30 June 2023: US$17.0 million).
2. Recorded at the lower of cost and net realisable value.
3. Diamond inventories for periods prior to 30 June 2023 include
the 71,654.45 carat Williamson 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 earlier
discussions, the GoT confirmed that the blocked parcel was
partially sold during FY 2023 and so this parcel was excluded from
diamond inventories in the Group's FY 2023 accounts and expensed to
other direct mining expense with the calculated fair value proceeds
of US$12.4 million for the blocked parcel recognised as other
direct mining income and trade and other receivables as at 30 June
2023. During these discussions, the parties also confirmed their
intent to resolve the treatment of the blocked parcel sale proceeds
and the related US$20 million settlement liability.
4. Post period-end, the Company completed Tender 2 with the sale
of 207,792 carats from Cullinan Mine and Finsch, yielding US$22.2
million.
5. 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$254.6 million which
represents the outstanding principal amount of US$209.7 million
(after the debt tender offers as announced in September and October
2022) plus US$54.4 million of accrued interest and is stated net of
unamortised transaction costs capitalised of US$9.5 million.
6. Bank loans and borrowings represent the Group's ZAR1 billion
revolving credit facility (RCF). During Q1 FY 2024, as a result of
the deferment of the June 2023 diamond tender, the Group drew down
ZAR850 million (US$44.9 million) on the RCF.
7. Consolidated Net Debt is bank loans and borrowings plus loan
notes, less cash and diamond debtors.
Mine-by-mine tables:
Cullinan Mine - South Africa
FY 2024 FY 2023
Unit Q1 Q4 Var. Q1 Var. 12 months
Sales
Revenue US$m 51.1 30.9 +65% 56.9 -10% 181,5
Diamonds sold Carats 519,362 327,429 +59% 267,728 +94% 1,306,457
Average price
per carat US$ 98 94 +4% 212 -54% 139
ROM Production
Tonnes treated Tonnes 1,137,436 1,120,346 +2% 1,110,912 +2% 4,376,595
Diamonds produced Carats 318,261 323,535 -2% 368,796 -14% 1,343,191
Grade(1) Cpht 28.0 28.9 -3% 33.2 -16% 30.7
Tailings Production
Tonnes treated Tonnes 91,008 102,193 -11% 77,572 +17% 352,375
Diamonds produced Carats 44,618 27,644 +61% 26,790 +67% 142,654
Grade(1) Cpht 49.0 27.1 +81% 34.5 +42% 40.5
Total Production
Tonnes treated Tonnes 1,228,443 1,222,539 +0 1,188,484 +3% 4,728,970
Diamonds produced Carats 362,879 351,179 +3% 395,586 -8% 1,485,846
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
FY 2024 FY 2023
Unit Q1 Q4 Var. Q1 Var. 12 months
Sales
Revenue US$m 38.9 19.0 +105% 23.4 +66% 93.4
Diamonds sold Carats 375,214 234,195 +60% 177,285 +112% 848,236
Average price
per carat US$ 104 81 +28% 132 -22% 110
ROM Production
Tonnes treated Tonnes 544,140 706,497 -23% 572,976 -5% 2,431,261
Diamonds produced Carats 259,864 268,839 -3% 260,217 -0% 1,033,602
Grade(1) Cpht 47.8 38.1 +26% 45.4 +5% 42.5
Tailings Production
Tonnes treated Tonnes - - - 17,305 -100% 47,502
Diamonds produced Carats - - - 3,160 -100% 6,562
Grade(1) Cpht - - - 18.3 -100% 13.8
Total Production
Tonnes treated Tonnes 544,140 706,497 -23% 590,281 -8% 2,478,764
Diamonds produced Carats 259,864 268,839 -3% 263,377 -1% 1,040,164
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
FY 2024 FY 2023
Unit Q1 Q4 Var. Q1 Var. 12 months
Sales
Revenue US$m 7.7 - +100% 21.1 -64% 49.1
Diamonds sold Carats 37,856 - +100% 71,295 -47% 175,124
Average price
per carat US$ 203 - +100% 297 -32% 280
ROM Production
Tonnes treated Tonnes 1,035,911 - +100% 1,309,359 -21% 1,829,376
Diamonds produced Carats 73,896 - +100% 100,750 -27% 140,516
Grade(1) Cpht 7.1 - +100% 7.7 -7% 7.7
Total Production
Tonnes treated Tonnes 1,035,911 - +100% 1,309,359 -21% 1,829,376
Diamonds produced Carats 73,896 - +100% 100,750 -27% 140,516
Capital expenditure breakdown
US$m Q1 FY 2024 FY 2023
Extension Stay-in-Business Total Total
Cullinan Mine 13.1 2.4 15.5 52.8
Finsch 7.1 2.7 9.8 43.2
Williamson - 4.7 4.7 19.3
Total 20.2 9.8 30.0 115.3
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