FY 2015 - Market Update

RNS Number : 9812P

Petra Diamonds Limited

12 June 2015

 

12 June 2015

LSE: PDL

Petra Diamonds Limited

("Petra" or the "Company")

FY 2015 - Market Update

Petra Diamonds Limited announces the following update with regards to the expected results for the year to 30 June 2015 ("FY 2015" or "the Year").

As previously reported, the Company is in a transitional period at present, mainly due to (i) the underground production at Finsch and Cullinan being sourced from mature and diluted mining areas, causing variability in both the achieved ROM grade as well as in product mix due to the finer nature of the ore at this late stage in the life cycles of the old block caves and (ii) specifically at Cullinan, the treatment of high levels of C-Cut project development waste material through the main plant (as there are no separate waste handling facilities at the mine).

Whilst Petra's production target of ca. 3.2 million carats for the Year remains unchanged, due to this variability in product mix (the lower incidence of high quality stones and higher volumes of smaller diamonds reduces the average prices achieved on sale), the Company advises that it expects revenue for the Year to be approximately US$430 million.

The Company's reliance on production from heavily diluted ore will become less of an issue during the course of FY 2016 as the Company will see (i) increasing production from less diluted areas and from new mining areas providing access to undiluted ore and (ii) a reduction in waste development tonnes.

The Company's expansion programmes remain on time at both flagship operations and Petra remains on track to reach its longer-term target of ca. 5 million carats by FY 2019.

The Company will be announcing its FY 2015 Trading Update (Production and Sales Report) and annual guidance announcement on 27 July 2015.

Note:

1.     The following definitions have been used in this announcement:

a.     diluted mining areas: at Finsch and Cullinan, Petra is currently operating in block caves which are reaching the end of their life cycles. Once the majority of the ore in a block cave has been removed, waste from the side walls of host rock is able to fall into the cave and subsequently report to the drawpoints, thereby diluting the material being extracted. This means that the overall diamond content per tonne mined is much lower than that of the pure kimberlite ore mined in the earlier stages of a block cave life cycle.

b.     grade: the volume of carats recovered, measured in 'carats per hundred tonnes'.

c.     ROM: run-of-mine (i.e. production from the primary orebody).

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For further information, please contact:

Petra Diamonds, London                                         Telephone: [phone]

Cathy Malins                                                               [e-mail]

Cornelia Grant                                                             [e-mail]

Buchanan                                                                  Telephone: [phone]

(PR Adviser)

Bobby Morse                                                               [e-mail]

Anna Michniewicz                                                       [e-mail]

RBC Capital Markets                                               Telephone: [phone]

(Joint Broker)

Matthew Coakes                                                         [e-mail]

Jonathan Hardy                                                           [e-mail]

Barclays                                                                     Telephone: [phone]

(Joint Broker)

Bertie Whitehead                                                        [e-mail]

Marcus Jackson                                                          [e-mail]

About Petra Diamonds Limited

Petra Diamonds is a leading independent diamond mining group and an increasingly important supplier of rough diamonds to the international market. The Company has interests in five producing mines: four in South Africa (Finsch, Cullinan, Koffiefontein and Kimberley Underground) and one in Tanzania (Williamson). It also maintains an exploration programme in Botswana.

Petra has a core objective to steadily increase annual production to 5 million carats by FY 2019. The Group has a significant resource base in excess of 300 million carats.

Petra conducts all operations according to the highest ethical standards and will only operate in countries which are members of the Kimberley Process. Petra is quoted with a premium listing on the Main Market of the London Stock Exchange under the ticker 'PDL' and is a member of the FTSE 250. For more information, visit the Company's website at www.petradiamonds.com.  

 

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