Petra Diamonds | Independent diamond producer
is a leading independent diamond producer with an exceptional growth profile, an industry-leading team and one of the world’s largest diamond resources
RAPAPORT… Petra Diamonds Ltd. reiterated its production target of 3.2 million carats for the fiscal year that ends on June 30 and it remains on target to achieve 5 million carats by 2019, according to a market update that was filed on the London Stock Exchange. However, due to the lower incidence of high-quality rough diamond production and with a higher volume of smaller diamonds being recovered, Petra anticipates reporting revenue of approximately $430 million for the fiscal year, which is down from $472 million one year earlier.
The mining company defined the year as “a transitional period” due to late stage underground production at Finsch and Cullinan tapping mature and diluted resources. Petra did state, however, that reliance on production from heavily diluted ore will become less of an issue during the course of the current fiscal year as it increases production from less diluted areas and due to new mining areas providing access to undiluted ore and reduced waste development.
The company expects to announce fiscal year 2015 results along with annual guidance on July 27.
Petra Diamonds forecasts full-year revenue below market estimates
Petra Diamonds forecast full-year revenue below market expectations as the smaller diamonds mined from late stage ores at its Finsch and Cullinan mines in South Africa have been fetching lower prices.
The miner’s third warning this year sent its shares down as much as 12.4 percent, making it the second largest percentage loser on the FTSE-250 Midcap Index on Friday.
Petra said it expected revenue of about $430 million for the year ended June 30, almost 9 percent lower than a year earlier and below an average market estimate of $442 million, according to three analysts.
The company had warned twice earlier this year that its results would be below consensus due to variability in grade and production mix and softness in the diamond market earlier in the year.
Petra has been mining at mature caves at Finsch and Cullinan and has therefore seen a lower incidence of the high quality stones that have traditionally boosted the company’s results.
Cullinan, located in the foothills of the Magaliesberg mountain range northeast of Pretoria, has in particular been the source of many large diamonds.
Petra in 2014 unearthed three large stones at the mine, which is the source of the largest rough diamond ever recovered – the 3,106-carat Cullinan Diamond found in 1905. Petra has not revealed any major discovery at Cullinan in 2015.
Mining at Cullinan’s mature underground area has also meant that the ore mined has been more diluted, costing the company more to move additional waste material.
Petra, however, kept its full-year production target of about 3.2 million carats and said its reliance on heavily diluted ore would be reduced in fiscal year 2016 as it ramps up production from new areas.
Shares in the company were down 9.9 percent at 154 pence at 0916 GMT on the London Stock Exchange. As of Thursday’s close, the stock had fallen 10 pct since the beginning of 2015, compared with a 3.7 pct decline in the FTSE-350 Mining index.