Petra lifts FY production guidance, seeks to establish JV for Kimberley assets

JOHANNESBURG (miningweekly.com) – LSE-listed Petra Diamonds has lifted its full-year production guidance to between 3.6-million and 3.65-million carats, compared with the previous guidance of 3.3-million to 3.4-million carats, owing to the initial integration of the Kimberley Mines assets.

De Beers Consolidated Mines in December last year sold its Northern Cape assets, including tailings dumps and a processing plant, to a consortium comprising Ekapa Mining and Petra Diamonds for R102-million.

Petra and Ekapa have since started negotiations to combine the respective operations owned and operated by them in the Kimberley area. This included Petra’s Kimberley Underground operations, Ekapa’s tailings operations and the newly acquired Kimberley Mines' tailings resources and associated assets, including the Central Treatment Plant.

Petra on Tuesday said negotiations were at an advanced stage and the joint venture (JV) was likely to become effective in the quarter to end September 30.

“The proposed JV is expected to bring significant synergies to the operations at Kimberley, with the opportunity to increase throughput and reduce operating costs, thereby extending mine life to the benefit of all parties,” Petra stated.

Meanwhile, the diamond miner’s production for the third quarter of the current financial year, ended March 31, increased 26% year-on-year to 995 905 ct, with production having been positively impacted from the Kimberley tailings operations.

Production for the nine months to March 31 was up 10% year-on-year to 2.63-million carats, compared with the 2.39-million carats produced in the first nine months of the prior financial year.

Diamonds sold increased 13% year-on-year to 937 526 ct in the third quarter, while revenue for the quarter rose 25% to $120.5-million.

“Petra has delivered another firm production quarter and we are pleased to announce an increase in our full-year production target, further to the integration of the Kimberley Mines assets. We are excited about our partnership in Kimberley, given the potential for long-term sustainable operations to the benefit of employees and the local communities there,” CEO Johan Dippenaar commented.