REG - Petra Diamonds Ltd - H1 FY 2024 Operating Update

Petra DiamondsAnnouncement

16/01/2024 07:00

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RNS Number : 7641Z  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)

o  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

o  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                     H1 FY 2024                       H1 FY 2023

                                          Unit                                     (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
 Revenue(1)                               US$m    90.2       97.6       187.8      105.7          101.4          207.1
 Contribution from Exceptional Stones(2)  US$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/
(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
(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
(mailto:investorrelations@petradiamonds.com)

Julia Stone

Kelsey Traynor

 

Financial PR (Camarco)

Gordon
Poole
            Telephone: +44 20 3757 4980

Owen
Roberts
            petradiamonds@camarco.co.uk
(mailto: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

 

                                                  Unit     As at 31 December 2023  As at 31 December  As at 30 June

                                                                                   2022               2023
 Cash at bank - (including restricted amounts)¹   US$m     75.4                    146.6              61.8
 Diamond debtors                                  US$m     8.1                     4.9                8.9
 Diamond inventories(2,3)                         US$m     53.5                    59.9               65.9

                                                  Carats   483,142                 540,153            715,222
 2026 US$336.7m loan notes(4)                     US$m     249.2                   241.7              247.5
 Bank loans and borrowings(5)                     US$m     46.6                    -                  -
 Consolidated Net Debt(6)                         US$m     212.3                   90.2               176.8
 Bank facilities undrawn(5)                       US$m     49.2                    58.8               53.1

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

                                  H1 FY 2024                       H1 FY 2023

                          Unit
                          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
 Grade(1)                 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
 Grade(1)                 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

                                  H1 FY 2024                   H1 FY 2023

                          Unit
                          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
 Grade(1)                 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
 Grade(1)                 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

                                  H1 FY 2024                       H1 FY 2023

                          Unit
                          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
 Grade(1)                 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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