H1 FY 2024 Operating Update

Petra Diamonds Limited
16 January 2024
 

 

 

16 January 2024

 LSE: PDL

 

 

Petra Diamonds Limited

 

H1 FY 2024 Operating Update

 

Petra reports its operating results for the first half of FY 2024

 

Richard Duffy, Chief Executive Officer of Petra, commented:

 

"Production increased 2% in this period as operations continued to stabilise at Finsch and Cullinan Mines and Williamson continued its ramp-up to full production. We remain on track to meet our FY 2024 production guidance of 2.9 - 3.2 Mct although, as announced on 01 November 2023, we expect it will be towards the lower end of guidance. We continue to make good progress on the CC1E development project at Cullinan Mine and the 78-Level Phase II development project at Finsch, and the resumption of the deferred capital programmes remains on target for July 2024. The replanning and value-engineering work associated with the deferred capital projects continues and, once completed, the Company will inform the market of the expected impact on forward looking guidance.

 

While we are seeing encouraging indications of price recovery and some stabilisation in the rough diamond market, following actions taken by both producers and the mid-stream, we continue to adopt a cautious approach to the market in the near-term. Once completed, the additional headroom afforded by our increased Revolving Credit Facility will enable us to continue our flexible sales approach and position ourselves to take advantage of any market improvements."

 

 

Highlights vs H1 FY 2023

 

·    LTIFR and LTIs decreased to 0.15 and 5 respectively

·    Ore processed increased 8% to 5.8Mt largely due to the successful ramp-up of production at Williamson

·    Total diamond production increased 2% to 1.43 million carats mainly due to resuming operations at Williamson and increased ROM contribution at Finsch, partially offset by slightly lower grades at the Cullinan Mine

·    Support from a weaker South African Rand continued throughout the period, with the Rand averaging ZAR18.69 : US$1 (H1 FY 2023: ZAR17.32 : US$1)

·    Revenue amounted to US$187.8 million (H1 FY 2023: US$208.5 million)

As announced on 14 December 2023, like-for-like prices were down 13.3% compared to H1 FY 2023 sales, with the balance of price movements attributable to product mix

No profit share uplifts were effected during the period; H1 FY 2023 revenue includes US$1.4 million from profit share arrangements

·    Consolidated net debt increased to US$212.3 million as at 31 December 2023 (30 June 2023: US$176.8 million) due to the timing of closing the Company's sales tenders, the continued lower diamond pricing environment, working capital funding for the resumption of mining at Williamson and the increasing capex spend profile, as previously announced, to extend the life of our operations at Cullinan Mine and Finsch

 

 

 

Operating Summary

Safety, sales and production

 

Unit

H1 FY 2024

H1 FY 2023

(restated to exclude Koffiefontein)

Q2

Q1

Total

Q2

Q1

Total

Safety


 


 

 

 


LTIFR

-

0.18

0.12

0.15

0.22

0.16

0.19

LTIs

Number

3

2

5

4

3

7





 



 

Sales




 



 

Diamonds sold

Carats

727,189

932,431

1,659,620

788,661

516,308

1,304,969

Revenue1

US$m

90.2

97.6

187.8

105.7

101.4

207.1

Contribution from Exceptional Stones2

US$m

0.0

0.0

0.0

0.0

0.0

0.0





 



 

Production




 



 

ROM tonnes

Tonnes

2,875,410

2,717,486

5,592,896

2,162,877

2,993,247

5,156,124

Tailings and other tonnes

Tonnes

96,235

91,008

187,243

92,375

94,877

187,252

Total tonnes treated

Tonnes

2,971,645

2,808,494

5,780,139

2,255,252

3,088,124

5,343,376





 



 

ROM diamonds

Carats

694,884

652,021

1,346,905

602,055

729,761

1,331,816

Tailings and other diamonds

Carats

36,018

44,618

80,636

31,612

29,951

61,563

Total diamonds

Carats

730,902

696,639

1,427,541

633,667

759,712

1,393,379

1 Revenue reflects proceeds from the sale of rough diamonds and excludes revenue from profit share arrangements (as noted in the text above)

2 Petra classifies "Exceptional Stones" as rough diamonds which sell for US$15 million or more each

 

 

INVESTOR WEBCASTS

Webcast presentation for institutional investors and analysts

09:30am GMT today

 

Petra's CEO, Richard Duffy, and CFO, Jacques Breytenbach, will host a webcast for institutional investors and analysts to discuss this operating update.

Please register at: https://brrmedia.news/PDL_H1FY24OU

Dial in details:

 

UK-wide                                  +44 (0) 33 0551 0200

UK toll free                              0808 109 0700

South Africa toll free               0800 980 512

United States (Local)              +1 786 697 3501

 

09:30am password (if prompted): Petra Diamonds

 

Link for recording (available later in the day): 

https://www.petradiamonds.com/investors/results-reports/

 

Investor Meet Company webcast at 14.30pm GMT today

 

Petra's CEO, Richard Duffy, and CFO, Jacques Breytenbach, will also present these results live on the Investor Meet Company platform, predominantly aimed at retail investors. To join: https://www.investormeetcompany.com/petra-diamonds-limited/register-investor

 

 

FURTHER INFORMATION

 

Please contact

 

Petra Diamonds, London                                                    Telephone: +44 207494 8203

Patrick Pittaway                                                                      investorrelations@petradiamonds.com

Julia Stone

Kelsey Traynor

 

Financial PR (Camarco)

Gordon Poole                                                                          Telephone: +44 20 3757 4980

Owen Roberts                                                                         petradiamonds@camarco.co.uk

Elfie Kent

 

 

ABOUT PETRA DIAMONDS

 

Petra Diamonds is a leading independent diamond mining group and a supplier of gem quality rough diamonds to the international market. The Company's portfolio incorporates interests in three underground mines in South Africa (Cullinan Mine, Finsch and Koffiefontein) and one open pit mine in Tanzania (Williamson). The Koffiefontein mine is currently on care and maintenance in preparation for sale or closure.

 

Petra's strategy is to focus on value rather than volume production by optimising recoveries from its high-quality asset base in order to maximise their efficiency and profitability. The Group has a significant resource base which supports the potential for long-life operations.

 

Petra strives to conduct all operations according to the highest ethical standards and only operates in countries which are members of the Kimberley Process. The Company aims to generate tangible value for each of its stakeholders, thereby contributing to the socio-economic development of its host countries and supporting long-term sustainable operations to the benefit of its employees, partners and communities.

 

Petra is quoted with a premium listing on the Main Market of the London Stock Exchange under the ticker 'PDL'. The Company's loan notes due in 2026 are listed on the Irish Stock Exchange and admitted to trading on the Global Exchange Market. For more information, visit www.petradiamonds.com.

 

 

 

 

 

 



 

Corporate and financial summary 31 December 2023

 

Note:  The following exchange rates have been used for this announcement: average for H1 FY 2024 US$1: ZAR18.69 (H1 FY 2023: US$1: ZAR17.32; FY 2023: US$1: ZAR17.77); closing rate as at 31 December 2023 US$1: ZAR18.28 (31 December 2022: US$1: ZAR17.00, 30 June 2023: US$1: ZAR18.83).

 

Notes:

1.     The Group's cash balances comprise unrestricted balances of US$56.5 million, and restricted balances of US$18.9 million.

2.     Recorded at the lower of cost and net realisable value.

3.     Diamond inventories for periods prior to 30 June 2023 include the Williamson 71,654.45 carat parcel of diamonds blocked for export during August 2017, with a carrying value of US$12.5 million. Under the Framework Agreement entered into with the Government of Tanzania (GoT) in December 2021, it is stated that the proceeds from the sale of this parcel are to be applied to the Williamson mine to assist with the restart of operations and that in the event such proceeds are not received by Williamson, Williamson is not required to pay a US$20 million liability relating to the settlement of past tax disputes. During discussions, the GoT confirmed that the blocked parcel was partially sold during the period and so this parcel has been excluded from diamond inventories as at 30 June 2023. During these discussions, the parties also confirmed their intent to resolve how to treat the blocked parcel sale proceeds and the related US$20 million settlement liability.

4.     The 2026 US$336.7 million loan notes, originally issued following the capital restructuring (the "Restructuring") completed during March 2021, have a carrying value of US$249.2 million which represents the outstanding principal amount of US$209.7 million (after the early participation phase of the debt tender offers as announced in September and October 2022) plus US$48.2 million of accrued interest and net of unamortised transaction costs capitalised of US$8.7 million.

5.     Bank loans and borrowings represent the Group's revolving credit facility, which was increased from ZAR1 billion in December 2023 to ZAR1.75 billion, and is partially undrawn and available. The upsized portion will be imminently available upon conclusion of the required amendments.

6.     Consolidated Net Debt is bank loans and borrowings plus loan notes, less cash and diamond debtors.

 



 

Mine-by-mine tables:

 

 

Cullinan Mine - South Africa


 

Unit

H1 FY 2024

H1 FY 2023

Q2

Q1

Total

Q2

Q1

Total

Sales








Revenue

US$m

45.5

51.0

96.5

45.8

56.9

102.7

Diamonds sold

Carats

345,867

519,362

865,229

400,999

267,728

668,727

Average price per carat

US$

131

98

112

114

212

154





 



 

ROM Production




 



 

Tonnes treated

Tonnes

1,078,409

1,137,435

2,215,844

1,120,282

1,110,912

2,231,194

Diamonds produced

Carats

331,349

318,261

649,610

328,137

368,796

696,933

Grade1

Cpht

30.7

28.0

29.3

29.3

33.2

31.2





 



 

Tailings Production




 



 

Tonnes treated

Tonnes

96,235

91,008

187,243

62,178

77,572

139,750

Diamonds produced

Carats

36,018

44,618

80,636

28,211

26,790

55,001

Grade1

Cpht

37.4

49.0

43.1

45.4

34.5

39.4

 




 



 

Total Production




 



 

Tonnes treated

Tonnes

1,174,644

1,228,443

2,403,087

1,182,460

1,188,484

2,370,944

Diamonds produced

Carats

367,367

362,879

730,246

356,348

395,586

751,934

 

Note: 1. Petra is not able to precisely measure the ROM / tailings grade split because ore from both sources is processed through the same plant; the Company therefore back-calculates the grade with reference to resource grades.

 

 

Finsch - South Africa


 

Unit

H1 FY 2024

H1 FY 2023

Q2

Q1

Total

Q2

Q1

Total

Sales








Revenue

US$m

28.1

38.9

67.0

32.0

23.4

55.4

Diamonds sold

Carats

298,889

375,214

674,103

283,833

177,285

461,118

Average price per carat

US$

94

104

99

113

132

120





 



 

ROM Production




 



 

Tonnes treated

Tonnes

635,872

544,140

1,180,012

522,578

572,976

1,095,554

Diamonds produced

Carats

276,842

259,864

536,706

234,150

260,217

494,367

Grade1

Cpht

43.5

47.8

45.5

44.8

45.4

45.1





 



 

Tailings Production




 



 

Tonnes treated

Tonnes

-

-

-

30,197

17,305

47,502

Diamonds produced

Carats

-

-

-

3,402

3,160

6,562

Grade1

Cpht

-

-

-

11.3

18.3

13.8

 




 



 

Total Production




 



 

Tonnes treated

Tonnes

635,872

544,140

1,180,012

552,775

590,281

1,143,056

Diamonds produced

Carats

276,842

259,864

536,706

237,552

263,377

500,929

Note: 1. Petra is not able to precisely measure the ROM / tailings grade split because ore from both sources is processed through the same plant; the Company therefore back-calculates the grade with reference to resource grades.



 

 

Williamson - Tanzania


 

Unit

H1 FY 2024

H1 FY 2023

Q2

Q1

Total

Q2

Q1

Total

Sales








Revenue

US$m

16.6

7.7

24.3

27.9

21.2

49.1

Diamonds sold

Carats

82,432

37,856

120,288

103,829

71,295

175,124

Average price per carat

US$

201

203

202

269

297

280





 



 

ROM Production




 



 

Tonnes treated

Tonnes

1,161,129

1,035,911

2,197,040

520,017

1,309,359

1,829,376

Diamonds produced

Carats

86,693

73,896

160,589

39,766

100,750

140,516

Grade1

Cpht

7.5

7.1

7.3

7.6

7.7

7.7

 




 



 

Total Production




 



 

Tonnes treated

Tonnes

1,161,129

1,035,911

2,197,040

520,017

1,309,359

1,829,376

Diamonds produced

Carats

86,693

73,896

160,589

39,766

100,750

140,516

 

 

 

Notes:

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

a.     cpht: carats per hundred tonnes

b.     LTIs: lost time injuries

c.     LTIFR: lost time injury frequency rate, calculated as the number of LTIs multiplied by 200,000 and divided by the number of hours worked

d.     FY: financial year ending 30 June

e.     CY: calendar year ending 31 December

f.      H: half of the financial year

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

h.     m: million

i.      Mt: million tonnes

j.      Mct: million carats

k.     Like-for-like: refers to the change in realised prices between tenders and excludes revenue from all single stones and Exceptional Stones, while normalising for the product mix impact

 

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