Petra Diamonds has seen its production climb 17% to 3.1 million carats (Mcts) from 2.6 Mcts last year, exceeding market guidance of 3 Mcts. The company has also seen its revenue increase 17% to US$472.6 million from US$402.7 million in 2013.
“FY 2014 has seen a further year of solid production and revenue growth, with the group on track to reach annual production of circa 5 million carats by FY 2019,” said Petra Diamonds CEO Johan Dippenaar.
“We have also recorded further progress with our expansion programmes, which remain on schedule and on budget. Petra has experienced a firmer diamond market during the second half of FY 2014 and the outlook remains positive due to constrained supply and a firm US market, as well as continued growth in emerging markets.”
Trading Update for the Year ended 30 June 2014
In its trading update (unaudited) for the year ended 30 June 2014, Petra confirmed that costs remained well controlled despite the ongoing inflationary pressures experienced in the mining industry, specifically labour and electricity.
Capital expenditure for the year amounted to $210 million, up from $191.2 million in the prior year, in accordance with the roll-out of the Group’s expansion programmes. The company had $33.3 million in cash, while net debt stood at $125.6 million as at June 30. Petra’s net debt at 30 June 2014 stood at US$125.6 million, in line with management’s expectations.
Production rose 17 % to 3.11 million carats for FY 2014 due to increases at Finsch, Williamson, Koffiefontein and Kimberley Underground, partially offset by reductions at Cullinan and Helam. Petra is currently operating in diluted ‘mature’ production areas at both Cullinan and Finsch, which will result in ROM grade volatility until the expansion programmes open up access to undiluted ore from the new C-Cut block cave at Cullinan and the new sub-level caves at Finsch.
Diamond market and sales
“A firmer diamond market was experienced in H2 FY 2014, with rough diamond prices achieved by Petra for FY 2014 either in line with or above guidance,” the company said in a statement. Gross mine revenue increased 17% to US$ 472.6 million, due to increased volumes and the sale of two ‘exceptional’ (+US$5 million) Cullinan stones for US$34.1 million: the 126.4 carat white diamond that sold for US$8.5 million in December 2013 and the 29.6 carat blue diamond that sold for US$25.6 million in February 2014.
The Group’s expansion projects at Finsch, Cullinan and Koffiefontein continue to progress well. The development of the declines at Finsch and the shaft deepening and underground development at Cullinan are key deliverables at these major projects and continue to progress in line with expectations.