Publication of Prospectus

RNS Number : 0927U

Petra Diamonds Ld

15 December 2011

 



 

15 December 2011

AIM: PDL

Petra Diamonds Limited

("Petra" or "the Company")

 

Publication of Prospectus and Notice of Cancellation of Trading on AIM

Admission to Premium Segment of the Official List and to trading on the London Stock Exchange's Main Market for Listed Securities

Update on Current Trading and Future Prospects

Updated Group Resource Statement and Significant Increase in Gross Reserves

Petra Diamonds Limited announces that it has published its prospectus (the "Prospectus") in connection with the admission, with a premium listing, of its entire issued share capital to the Official List of the United Kingdom Listing Authority ("UKLA") and to trading on the London Stock Exchange's Main Market ("Admission").

It is expected that Admission will become effective and that dealings in Petra's ordinary shares on the London Stock Exchange's Main Market will commence at 8.00 a.m. GMT on 21 December 2011. Pursuant to Rule 41 of the AIM Rules, the Company hereby gives notice that trading in the Company's ordinary shares on AIM will be cancelled on the same day with effect from 8.00 a.m. GMT.

The Company is not raising any funds or issuing any new ordinary shares in connection with Admission. The Company's TIDM code on the London Stock Exchange will remain 'PDL' and, on Admission, there will be 501,351,601 ordinary shares in issue.

Copies of the Prospectus are available from the office of Memery Crystal LLP, 44 Southampton Buildings, London WC2A 1AP during normal business hours and will shortly be available on the Company's website www.petradiamonds.com.

The Prospectus has been submitted to the UKLA and to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do.

Current Trading and Future Prospects

Included in the Prospectus (as covered below) is an update on Petra's trading position since the Company's FY 2011 preliminary results announcement (unaudited) of 19 September 2011 ("FY 2011 Results").

Diamond prices

Petra's FY 2011 Results included a full commentary on trading for FY 2011. As stated within the FY 2011 Results, the US Dollar prices achieved by Petra from its rough diamond sales rose steadily from October 2010 to 30 June 2011.

However, since July 2011, Petra (and the industry) has seen rough diamond prices adjust downwards from the June 2011 highs. The fall in rough diamond prices from July 2011 to 13 December (being the latest practicable date prior to the publication of the Prospectus) has resulted in Petra's gross revenues, over the same period, to be approximately US$23.0 million lower than the Group's expectations (as based on the Directors' assumptions for rough diamond prices for the 2012 financial year, which were set out within the FY 2011 Results and are repeated below):

Mine	Weighted Average (US$)	ROM (US$)	Tailings / Other (US$)
Cullinan	163	170	100
Finsch	155	180	95
Williamson (main pit excluding alluvials)	230	230	n/a
Koffiefontein	549	600	480 - Ebenhaezer satellite pipe 200 - Tailings
Kimberley Underground	325	325	150
Fissures	271	180 - 450	n/a

In the short term, global economic uncertainty may continue to cause some volatility in rough diamond pricing, but it should be noted that demand from Asia and other emerging markets is continuing to grow strongly and is lessening the reliance on the major US market. The long term fundamentals of the industry remain intact; whilst supply is forecast to remain flat or may decline, demand for diamonds is expected to continue to rise in both established and new markets as wealth and consumer spending increase.

The Company remains confident that, in the medium term, rough diamond prices will stabilise and return to the approximate price levels disclosed in the table above (although the Company does not, as previously stated, expect to see the price highs of June 2011 for some time).

The revenue amounts referred to above for the period from July 2011 to 13 December 2011 are the estimates of the Directors and are unaudited.  In line with past practice, the Company will publish a trading statement for the full period of 1 July to 31 December 2011 in early 2012.

Exchange rates

Since July 2011, the Rand has weakened significantly against the US Dollar. The bulk of the Group's operations are based in South Africa, with the Rand being the transactional currency whilst the Group's reporting currency is the US Dollar. For the period from 1 July to 13 December 2011 (being the latest practicable date prior to the publication of the Prospectus) the Rand averaged R7.51 against the US Dollar, compared to management's business plan of R6.75.

The weakening of the Rand against the US Dollar during the period from July will reduce the Group's reported US Dollar operating costs and capital expenditure. It is not possible to accurately quantify an approximate US Dollar operating cost or capital expenditure effect at this time, but Petra notes that the exchange rate movement as set out above will have a significant positive effect.

Updated Group Resource Statement and Significant Increase in Gross Reserves

Also included in the Prospectus is an updated Resource statement as at 30 June 2011 (including the Finsch mine, as if the acquisition had completed by this date, as Petra had done for its previous 30 June 2011 resource statement) (the "Resource Statement"). Whilst Petra had previously reported Resources exclusive of Reserves, the Company now reports Resources inclusive of Reserves, in line with best practice for a company of Petra's size and complexity. Carats in the Probable and Proved Reserve categories are therefore now also reported in the Measured and Indicated Resource categories without the application of modifying factors, which has resulted in an apparent increase in Petra's total carat base from 302.7 million carats to 305.7 million carats (as at 30 June 2011). Both reporting formats are compliant with the guidelines of the SAMREC Code. The full Resource Statement can also be accessed on the Company's website www.petradiamonds.com.

Whilst the abovementioned change in Reserves and Resources reporting style has not caused a material change to the Group's Resources figures, Petra's updated Resource Statement does include a material increase in Group Reserves. This is due to the inclusion of 14.8 million carats in the Probable Reserve category at the Cullinan mine, as a result of Petra's phase one development plan to establish a new block cave in the mine's C-Cut area.

Whilst a like-for-like comparison is not possible due to the change in resources reporting style, the inclusion of the C-Cut phase one at Cullinan in the Probable Reserves category (27.0 million tonnes containing 14.8 million carats) has meant that Petra's Group Reserves now stand at 49.2 million carats (gross) and 36.4 million carats (attributable). 

Below is a summary of the updated Group's Resource Statement as at 30 June 2011 (including the Finsch mine, as if the acquisition had completed by this date); the individual mine by mine resource tables can be accessed on Petra's website at www.petradiamonds.com.

RESOURCE STATEMENT - TOTAL COMBINED OPERATIONS
Category	Gross			Net attributable
	Tonnes (millions)	Grade        (cpht)	Contained Diamonds (Mcts)	Tonnes (millions)	Grade        (cpht)	Contained Diamonds (Mcts)
Reserves
Proved	16.623	7.03	1.169	12.304	7.04	0.866
Probable	111.789	42.99	48.062	82.726	42.99	35.566
Sub-total	128.412	38.34	49.231	95.030	38.34	36.432
Resources
Measured	15.726	8.29	1.304	11.638	8.30	0.966
Indicated	463.302	48.35	223.999	343.830	48.22	165.809
Inferred	1,248.126	6.44	80.397	932.496	6.42	59.847
Total Resources inclusive of Reserves	1,727.154	17.70	305.701	1,287.965	17.60	226.622

General notes on reporting criteria

1. Resources are reported inclusive of Reserves.

2. Tonnes are reported as millions; contained diamonds are reported as million carats.

3. Tonnes are metric tonnes, and are rounded to the nearest 1,000 tonnes; carats are rounded to the nearest 1,000 carats; rounding off of numbers may result in minor computational discrepancies.

4. Resource tonnages and grades are reported exclusive of internal waste, unless where otherwise stated.

5. Reserve tonnages and grades are reported inclusive of external waste, mining and geological losses and plant modifying factors; reserve carats will generally be less than resource carats on conversion and this has been taken into account in the applicable statements.

6. The Resources Statement shown above is extracted without amendment from the Company's Annual Report and Accounts for the financial year ended 30 June 2011 and includes information for Finsch, which was acquired on 14 September 2011.

7. All Reserves and Resources have been independently verified by Dr Patrick Bartlett, Pr. Sci. Nat. (reg. No. 400060/87) as a competent person, in his report dated 23 November 2011. Dr Bartlett is a competent person with over 30 years' relevant experience in the diamond mining industry, who was appointed as an independent consultant by the Company for this purpose. A Competent Person's Report was not produced in arriving at the Reserves and Resources independent verification. Dr Bartlett was subsequently appointed as an independent Non-Executive Director of the Company on 28 November 2011; the Company is of the clear opinion that prior to Dr Bartlett's appointment to the Board, he was an independent consultant to the Company and there were no conflicts of interest or other matters arising that would affect his independence as an expert consultant.

~ Ends ~

For further information, please contact:

Petra Diamonds, London	Telephone: [phone]
Cathy Malins	[e-mail]

Buchanan (PR Adviser)	Telephone: [phone]
Bobby Morse James Strong	[e-mail] [e-mail]

RBC Europe Limited (Financial Adviser and Joint Broker)	Telephone: [phone]
Joshua Critchley	[e-mail]
Martin Eales	[e-mail]

Canaccord Genuity Limited (NOMAD and Joint Broker)	Telephone: [phone]
Rob Collins	[e-mail]
Andrew Chubb	[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 a well-diversified portfolio, with interests in eight producing mines: seven in South Africa (Finsch, Cullinan, Koffiefontein, Kimberley Underground, Helam, Sedibeng and Star) and one in Tanzania (Williamson).

Petra offers an exceptional growth profile, with a core objective to steadily increase annual production to over 5 million carats by FY 2019. The Group has a major reserves and resources base in excess of 300 million carats.

Petra conducts all its operations according to the highest ethical standards and will only operate in countries which are members of the Kimberley Process.

For more information, visit www.petradiamonds.com.

 

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