HomeDiamonds & GemstonesPetra reports first profits

Petra reports first profits

Aerial view of the plant
at Petra’s Alto Cuilo
project in Angola
London, England — MININGREVIEW.COM — 19 February, 2008 – Petra Diamonds Limited – a diamond mining group focused on the exploration, mining and beneficiation of diamonds in Africa – has shown substantial revenue growth with a corresponding turnaround in profits and cash flows. The Company has reported its first profits, following its successful development from an exploration base into a leading diamond producer and exploration group.

In a statement here today releasing its interim results for the six months ended 31 December 2007, the company confirmed that over the past 14 months it has successfully grown its base of production assets through the separate acquisitions of the Cullinan, Koffiefontein and Kimberley underground mines in South Africa, complementing Petra’s world class exploration base in Angola (Alto Cuilo, Luangue), Botswana (Kalahari Diamonds) and operations in Sierra Leone (Kono).

Group revenue in the period under review reached US$32.1 (R240 million) – a four-fold increase from the US$8.2 million (R61 million) recorded in the six months to 31 December 2006. Gross profit leapt to US$16.1 R120 million) from a loss of US$1.6 (R12 million) in the same period of 2006, and net profit showed a dramatic swing from a loss of US$9.5 million (more than R70 million) in the second half of 2006 to a profit of US$8.2 million (more than R60 million) last July to December.

Exploration expenses in the same period more than doubled from US$400 000 (R3 million) to US$1 million (R7.5 million).

Major group developments during the second half of 2007 included acquisition of the Cullinan mine, which is expected to add gross production of over 1 million carats p.a. to the group. Petra is also acquiring the Kimberley Underground mines, which are expected to add over 100 000 carats p.a. in gross production for the group.

Production in the period under review amounted to 101 213 carats – a 17% increase on the 86 396 carats in the six months to 31 December 2006.

Sales for the same period were 115 918 carats – a 79% increase on the previous year.

The production build-up of calibrated diamonds production continues and the aim is to cut and polish 2 500 carats of rough diamonds by mid 2008.

Petra chairman Adonis Pouroulis commented: “Petra is well positioned to become a top tier global diamond producer. With group production expected to rise to well over one million carats pa by 2010, against a previous management target of 500 000 carats, we have rapidly established strong revenue growth that will in turn enhance shareholder value,” he added.