Mining
Thursday, June 30th, 2022 5:51 am EDT
“The Tender 6 results conclude a strong year for Petra’s diamond sales both in terms of pricing and the demand we have seen,” chief executive officer Richard Duffy said. “The significant interest shown at Tender 6 bears testament to the ongoing strength of the rough diamond market.”
The executive said in the past 12 months the company has seen pricing support across its product mix, with particular strength in the prices of both white and coloured gem-quality stones.
While no exceptional stones were offer in the last tender, Petra’s revenue from these kind of diamonds totalled $89 million, with $75.2 million coming from its iconic Cullinan mine in South Africa and $13.8 million from the Williamson mine in Tanzania.
The figures compared to the $62 million in revenue from exceptional stones Petra obtained in fiscal 2021, all found at Cullinan mine.
Petra defines “exceptional stones” as rough diamonds that sell for $5 million or more each.
Turned the corner
Burdened by debt and falling revenue, Petra Diamonds put itself up for sale in 2020, but reversed the decision later, opting instead for a debt-for-equity restructuring.
The move allowed Petra to cut net debt by two-thirds in the fiscal year ended June 30, 2021 to $228 million, down from just under $693 million the previous year.
The diamond producer also resorted to shrink its share in the Williamson mine in Tanzania from 75% to 63% as part of a framework agreement with the country’s government.
Duffy said earlier this year the company had turned the corner following a revival in rough diamond prices, as well as self-help efforts aimed at reducing net debt. Petra is currently exploring options for its loss making Koffiefontein mine.
The company’s preference is to sell it and if it fails to do so, it said it will close Koffiefontein when it reaches the end of its life, in 2025.
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