Petra achieves 1.1Mct output in Q1

JOHANNESBURG (miningweekly.com) – LSE-listed Petra Diamonds has reported a strong start to the 2017 financial year, achieving a double-digit surge in diamond output and higher revenue for the three months to September 30.

Petra on Monday reported a 30% jump in diamond production during the first quarter of the year to nearly 1.1-million carats, compared with the 842 796 ct delivered in the first quarter of the prior financial year.

CEO Johan Dippenaar attributed the positive increase to initial production from undiluted areas improving run-of-mine (RoM) grades at both Cullinan and Finsch and increased tailings production from Kimberley Ekapa Mining.

“The newly established caves at both Finsch and Cullinan, accessing higher-grade undiluted areas, are starting to meaningfully contribute to RoM production, which is continuing to ramp up in line with expectations,” he explained.

RoM carat production at Finsch increased 9% to 458 396 ct amid improved RoM grades of 52.4 carats per hundred tonnes (cpht), while Cullinan produced 44% more carats at 208 974 ct, with RoM grades, benefiting from initial production from the newly established C-Cut Phase 1 production area and pillar and reclamation mining, of 33.2 cpht.

Cullinan's planned 2017 financial year production is weighted towards the second half of the year as the commissioning of the new plant starts in the third quarter.

Meanwhile, Kimberley Ekapa Mining's attributable production increased from 49 107 ct in the corresponding period last year to 237 906 ct in the first quarter of 2017, following the acquisition of Kimberley Mines in January this year and the subsequent formation of the Kimberley Ekapa Mining joint venture in July.

Both the Koffiefontein mine, in South Africa, and the Williamson mine, in Tanzania, reported double-digit increases in output to 15 481 ct  and 53 034 ct respectively.

Petra’s full-year output guidance of 4.4-million to 4.6-million carats is being maintained.

First-quarter sales of 745 447 ct generated revenue of $94.7-million by September 30, with a 138.57 ct white stone from Cullinan sold for $6.5-million and a 10.64 ct pink stone from Williamson sold for $5.2-million.

No revenue was generated in the prior corresponding quarter, as no first-quarter tender was held.

A second tender closed post-quarter, generating $66.4-million from the sale of some 574 000 ct, with a third and final tender for the first half of the 2017 financial year scheduled for early December.

“Petra remains on track to become free cash flow positive from the second half of 2017 onwards, as capital expenditure requirements will reduce from the third quarter, owing to the advanced nature of the expansion projects,” Dippenaar noted.

As at September 30, Petra’s diamond inventory was 902 211 ct.