Petra Diamonds Ltd - Q3 FY 2024 Operating Update and Final Sales Results for Tender 5 FY 2024
16 April 2024 LSE: PDL
( Petra or the Company )
Q3 FY 2024 Operating Update and Final Sales Results for Tender 5 FY 2024
“Production for the quarter is consistent with the preceding quarter and in-line with expectations. At Finsch, the first of the 78-Level Phase II production tunnels was successfully commissioned in
Our fifth tender cycle yielded
We continue to update our life of mine plans to support our transition to a smoother capex profile. This includes a replanned ramp-up of the deferred capital projects from Q1 FY 2025.
On
During the quarter we repaid
[1] 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
Highlights vs Q2 FY 2024
-- LTIFR and LTIs are 0.20 and 3 respectively (Q2 FY 2024: 0.18 and 3 respectively) -- Ore processed reduced marginally to 2.9Mt from 3.0Mt with the continued ramp-up of production at Williamson and a steady quarter atCullinan Mine offset by lower volumes at Finsch due to the previously announced winder issues, which have since been resolved o The 18% improvement in grades at Finsch is largely ascribed to first production tonnes from 78-Level Phase II o Lower diamond production atCullinan Mine is due to reduced tailings volume and grade variations, in-line with expectations -- Revenue amounted toUS$66 million (Q2 FY 2024:US$90 million ) with the decrease due to the lower production and the timing of receipts from Tender 5 -- Support from South African Rand weakness continued throughout the period, with the Rand averagingZAR18 .95:US$1 (Q2 FY 2024:ZAR18 .99:US$1 ) -- Capital expenditure for Q3 FY 2024 totalledUS$15 million , in-line with updated guidance announced earlier following the decision to defer certain capital project expenditure -- Partial settlement of the withdrawn amounts under theZAR1.75 billion (US$93 million ) Revolving Credit Facility with Absa Bank, leaving an outstanding balance ofZAR450 million (US$24 million ) at31 March 2024 , down fromZAR850 million (US$47 million ) at31 December 2023 -- Consolidated net debt increased toUS$232 million as at31 March 2024 (31 December 2023 :US$212 million ) due to the timing of closing Tender 5, noting the balance of sales receipts yieldedUS$32 million shortly after period-end which exceeded the increase in net debt
Final sales results for Tender 5 FY 2024
The sales of the fifth tender cycle of FY 2024 closed this week with 362kcts sold yielding
These results include a 14.76ct exceptional colour and clarity blue gemstone recovered from the
Rough diamond sales results for the respective periods are set out below:
_________________________________________________________________________ | |Tender 5|Tender 4| |Tender 5|YTD |YTD | | | | | | | | | | |FY 2024 |FY 2024 |Variance|FY 2023 |FY 2024 |FY 2023 | | | | | | | | | | |Apr-24 |Feb-24 | |May-24 |Tenders 1–5|Tenders 1-5| |_____________|________|________|________|________|___________|___________| |Diamonds sold|362,132 |428,860 |-16% |468,817 |2,450,613 |2,237,010 | |(carats) | | | | | | | |_____________|________|________|________|________|___________|___________| |Sales (US$ |49 |48 |3% |42 |285 |316 | |million) | | | | | | | |_____________|________|________|________|________|___________|___________| |Average price|136 |112 |22% |90 |116 |141 | |(US$/ct) | | | | | | | |_____________|________|________|________|________|___________|___________| |Revenue from | | | | | | | | | | | | | | | |Exceptional |0 |0 |0% |0 |0 |0 | |Stones1 | | | | | | | | | | | | | | | |(US$ million)| | | | | | | |_____________|________|________|________|________|___________|___________|
Note 1: Exceptional Stones are defined as rough diamonds for
Sales
Total revenue YTD FY 2024 from rough diamond sales is
Mine by mine average prices for the respective periods are set out in the table below:
_______________________________________________________________ | |Tender 5|Tender 4| | | | | | | |YTD FY 2024|YTD FY 2023| | |US$/carat |FY 2024 |FY 2024 | | |FY 2023| | | | |Tenders 1-5|Tenders 1-5| | | |Apr-24 |Feb-24 | | | | |_____________|________|________|___________|___________|_______| |Cullinan Mine|157 |98 |115 |143 |139 | |_____________|________|________|___________|___________|_______| |Finsch |95 |101 |99 |110 |110 | |_____________|________|________|___________|___________|_______| |Williamson |177 |220 |200 |280 |280 | |_____________|________|________|___________|___________|_______|
Like-for-like prices
Like-for-like rough diamond prices decreased marginally by 0.8% on Tender 4 FY 2024. Prices for plus 2ct goods remained solid, while prices for smaller goods showed some seasonal weakness contributing to the overall decline. Average like-for-like prices for the first five tenders of FY 2024 were down 8.5% year-to-date compared to the equivalent five tenders of FY 2023. Pricing assumptions for the remainder of the year remain unchanged.
_______________________ |US$ per carat|FY 2024 | |_____________|_________| |Cullinan Mine|105 – 125| |_____________|_________| |Finsch |95 – 110 | |_____________|_________| |Williamson |200 – 225| |_____________|_________|
Future diamond prices are influenced by a range of factors outside of Petra’s control and so these assumptions are internal estimates only and no reliance should be placed on them. The Company’s pricing assumptions will be considered on an ongoing basis and may be updated as appropriate.
Product Mix
The balance of price movements is attributable to product mix, with
Operating Summary
_______________________________________________________________________________ | | |Three months |Nine months YTD | |____________|______|__________________________________|________________________| | | |Q3 |Q2 | |Q3 | | | | | | | | |Var.| |FY 2024 |FY 2023 |Var.| | | |FY 2024 |FY 2024 | |FY 2023 | |Restated3| | | | | | | |Restated3| | | | |____________|______|_________|_________|____|_________|_________|_________|____| |Safety | | | | | | | | | |____________|______|_________|_________|____|_________|_________|_________|____| |LTIFR |- |0.20 |0.18 |+11%|0.47 |0.16 |0.26 |-39%| |____________|______|_________|_________|____|_________|_________|_________|____| |LTIs |Number|3 |3 |- |8 |8 |14 |-43%| |____________|______|_________|_________|____|_________|_________|_________|____| |Sales | | | | | | | | | |____________|______|_________|_________|____|_________|_________|_________|____| |Diamonds |Carats|476,730 |727,189 |-34%|463,224 |2,136,350|1,768,179|+21%| |sold | | | | | | | | | |____________|______|_________|_________|____|_________|_________|_________|____| |Revenue1 |US$m |66 |90 |-27%|67 |253 |274 |-8% | |____________|______|_________|_________|____|_________|_________|_________|____| |Contribution| | | | | | | | | |from |US$m |- |- |- |- |- |- |- | |Exceptional | | | | | | | | | |Stones2 | | | | | | | | | |____________|______|_________|_________|____|_________|_________|_________|____| |Production | | | | | | | | | |____________|______|_________|_________|____|_________|_________|_________|____| |ROM tonnes |Mt |2,851,469|2,875,410|-1% |1,654,267|8,444,365|6,810,390|+24%| |____________|______|_________|_________|____|_________|_________|_________|____| |Tailings and|Mt |75,100 |96,235 |-22%|110,431 |262,343 |297,684 |-12%| |other tonnes| | | | | | | | | |____________|______|_________|_________|____|_________|_________|_________|____| |Total tonnes|Mt |2,926,569|2,971,645|-2% |1,764,698|8,706,708|7,108,074|+22%| |treated | | | | | | | | | |____________|______|_________|_________|____|_________|_________|_________|____| |ROM diamonds|Carats|643,350 |694,884 |-7% |593,120 |1,990,255|1,924,936|+3% | |____________|______|_________|_________|____|_________|_________|_________|____| |Tailings and| | | | | | | | | |other |Carats|22,227 |36,018 |-38%|60,009 |102,863 |121,572 |-15%| |diamonds | | | | | | | | | |____________|______|_________|_________|____|_________|_________|_________|____| |Total |Carats|665,577 |730,902 |-9% |653,128 |2,093,118|2,046,508|+2% | |diamonds | | | | | | | | | |____________|______|_________|_________|____|_________|_________|_________|____|
1 Revenue reflects proceeds from the sale of rough diamonds and excludes revenue from profit share arrangements
2
Petra classifies “Exceptional Stones” as rough diamonds which sell for
3 Re-presented to exclude Koffiefontein which is classified as a discontinued operation
INVESTOR WEBCASTS
Webcast presentation for institutional investors and analysts at
Petra’s CEO,
Link for recording (available later in the day):
https://www.petradiamonds.com/investors/results-reports/
Petra’s CEO,
FURTHER INFORMATION
Please contact
Investor Relations,
Notes:
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. Q: quarter of the financial year g. ROM: run-of-mine (i.e. production from the primary orebody) h. m: million i. Mt: million tonnes j. period: the third quarter of FY 2024
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
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
Corporate and financial summary as at
______________________________________________________________________________ | | |As at 31 March|As at 31 December|As at 30 |As at 30| | |Unit | | |September|June | | | |2024 |2023 | | | | | | | |2023 |2023 | |___________________|______|______________|_________________|_________|________| |Cash at bank – | | | | | | |(including |US$m |37 |75 |74 |62 | |restricted | | | | | | |amounts)¹ |US$m |42 |85 |73 |61 | | | | | | | | | -- Petra Group|US$m |(5) |(10) |1 |1 | | (excl. | | | | | | | Williamson)| | | | | | |____--__Williamson_|______|______________|_________________|_________|________| |Diamond debtors |US$m |11 |8 |33 |9 | |___________________|______|______________|_________________|_________|________| |Diamond |US$m |71 |54 |52 |66 | |inventories2,3 | | | | |715,222 | | |Carats|671,989 |483,142 |479,430 | | |___________________|______|______________|_________________|_________|________| |2026 Loan Notes4 |US$m |256 |249 |255 |248 | |___________________|______|______________|_________________|_________|________| |Bank loans and |US$m |24 |47 |45 |- | |borrowings5 | | | | | | |___________________|______|______________|_________________|_________|________| |Consolidated Net |US$m |232 |212 |192 |177 | |Debt6 | | | | | | |___________________|______|______________|_________________|_________|________| |Bank facilities | | | | | | |undrawn and |US$m |69 |8 |8 |53 | |available5 | | | | | | |___________________|______|______________|_________________|_________|________|
Note:
The following exchange rates have been used for this announcement: average for 9M FY 2024 US$1:
Notes:
1. The Group’s cash balances excluding Williamson comprise unrestricted balances ofUS$24 million (31 December 2023 :US$67 million ), and restricted balances ofUS$18 million (31 December 2023 :US$19 million ). 2. Recorded at the lower of cost and net realisable value. 3. Post period-end, the Company completed the balance of Tender 5 with the sale of 314,439 carats fromCullinan Mine and Finsch, yieldingUS$32 million which will be recorded in Q4 FY 2024. 4. The 2026 Loan Notes, originally issued following the capital restructuring (the “Restructuring”) completed duringMarch 2021 , have a carrying value ofUS$256 million which represents the outstanding principal amount ofUS$210 million (after the debt tender offers as announced in September andOctober 2022 ) plusUS$54 million of accrued interest and is stated net of unamortised transaction costs capitalised ofUS$8 million . 5. Bank loans and borrowings represent the Group’s upsizedZAR1.75 billion (US$93 million ) revolving credit facility. InDecember 2023 , the Group announced that Absa Bank had approved an increase in the commitments under the Group’s revolving credit facility byZAR750 million , bringing the total commitments under the facility toZAR1.75 billion (US$93 million ). This increase in the facility is now fully available following execution and completion of the associated amendment agreement on15 February 2024 . The amended facility’s existing covenants, margin, fees, and maturity date remain unchanged. A total ofZAR450 million (US$24 million ) is currently drawn leaving a further balance ofZAR1.3 billion (US$69 million ) available for drawdown under the upsized facility. 6. Consolidated Net Debt is bank loans and borrowings plus loan notes, less cash and diamond debtors.
Mine-by-mine tables:
_____________________________________________________________________________ | | |Three months |Nine months YTD | | | |__________________________________|________________________| | |Unit |Q3 |Q2 | |Q3 | | | | | | | | |Var.| |FY 2024 |FY 2023 |Var.| | | |FY 2024 |FY 2024 | |FY 2023 | | | | |__________|______|_________|_________|____|_________|_________|_________|____| |Sales | | | | | | | | | |__________|______|_________|_________|____|_________|_________|_________|____| |Revenue |US$m |32 |46 |-30%|48 |129 |151 |-15%| |__________|______|_________|_________|____|_________|_________|_________|____| |Diamonds |Carats|233,460 |345,867 |-33%|310,300 |1,098,689|979,027 |+12%| |sold | | | | | | | | | |__________|______|_________|_________|____|_________|_________|_________|____| |Average | | | | | | | | | |price per |US$ |137 |131 |+4% |154 |117 |154 |-24%| |carat | | | | | | | | | |__________|______|_________|_________|____|_________|_________|_________|____| |ROM | | | | | | | | | |Production| | | | | | | | | |__________|______|_________|_________|____|_________|_________|_________|____| |Tonnes |Tonnes|1,164,009|1,078,409|+8% |1,025,056|3,379,853|3,256,249|+4% | |treated | | | | | | | | | |__________|______|_________|_________|____|_________|_________|_________|____| |Diamonds |Carats|319,490 |331,349 |-4% |322,724 |969,100 |1,019,657|-5% | |produced | | | | | | | | | |__________|______|_________|_________|____|_________|_________|_________|____| |Grade1 |Cpht |27.4 |30.7 |-11%|31.5 |28.7 |31.3 |-8% | |__________|______|_________|_________|____|_________|_________|_________|____| |Tailings | | | | | | | | | |Production| | | | | | | | | |__________|______|_________|_________|____|_________|_________|_________|____| |Tonnes |Tonnes|75,100 |96,235 |-22%|110,431 |262,343 |250,182 |+5% | |treated | | | | | | | | | |__________|______|_________|_________|____|_________|_________|_________|____| |Diamonds |Carats|22,227 |36,018 |-38%|60,009 |102,863 |115,010 |-11%| |produced | | | | | | | | | |__________|______|_________|_________|____|_________|_________|_________|____| |Grade1 |Cpht |29.6 |37.4 |-21%|54.3 |39.2 |46.0 |-15%| |__________|______|_________|_________|____|_________|_________|_________|____| |Total | | | | | | | | | |Production| | | | | | | | | |__________|______|_________|_________|____|_________|_________|_________|____| |Tonnes |Tonnes|1,239,109|1,174,644|+5% |1,134,487|3,642,196|3,506,431|+4% | |treated | | | | | | | | | |__________|______|_________|_________|____|_________|_________|_________|____| |Diamonds |Carats|341,717 |367,367 |-7% |382,732 |1,071,963|1,134,667|-6% | |produced | | | | | | | | | |__________|______|_________|_________|____|_________|_________|_________|____|
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 –
______________________________________________________________________________ | | |Three months |Nine months YTD | | | |____________________________|________________________| | |Unit |Q3 |Q2 | |Q3 | | | | | | | | |Var.| |FY 2024 |FY 2023 |Var.| | | |FY 2024|FY 2024| |FY 2023| | | | |_________________|______|_______|_______|____|_______|_________|_________|____| |Sales | | | | | | | | | |_________________|______|_______|_______|____|_______|_________|_________|____| |Revenue |US$m |16 |28 |-44%|19 |83 |74 |+11%| |_________________|______|_______|_______|____|_______|_________|_________|____| |Diamonds sold |Carats|152,984|298,889|-49%|152,924|827,088 |614,041 |+35%| |_________________|______|_______|_______|____|_______|_________|_________|____| |Average price per|US$ |104 |94 |+10%|124 |100 |121 |-17%| |carat | | | | | | | | | |_________________|______|_______|_______|____|_______|_________|_________|____| |ROM Production | | | | | | | | | |_________________|______|_______|_______|____|_______|_________|_________|____| |Tonnes treated |Tonnes|470,706|635,872|-26%|629,211|1,650,718|1,724,765|-4% | |_________________|______|_______|_______|____|_______|_________|_________|____| |Diamonds produced|Carats|242,543|276,842|-12%|270,396|779,249 |764,763 |+2% | |_________________|______|_______|_______|____|_______|_________|_________|____| |Grade1 |Cpht |51.5 |43.5 |+18%|43.0 |47.2 |44.3 |+6% | |_________________|______|_______|_______|____|_______|_________|_________|____| |Tailings | | | | | | | | | |Production | | | | | | | | | |_________________|______|_______|_______|____|_______|_________|_________|____| |Tonnes treated |Tonnes|- |- |- |- |- |47,502 |- | |_________________|______|_______|_______|____|_______|_________|_________|____| |Diamonds produced|Carats|- |- |- |- |- |9,562 |- | |_________________|______|_______|_______|____|_______|_________|_________|____| |Grade1 |Cpht |- |- |- |- |- |13.8 |- | |_________________|______|_______|_______|____|_______|_________|_________|____| |Total Production | | | | | | | | | |_________________|______|_______|_______|____|_______|_________|_________|____| |Tonnes treated |Tonnes|470,706|635,872|-26%|629,211|1,650,718|1,772,267|-7% | |_________________|______|_______|_______|____|_______|_________|_________|____| |Diamonds produced|Carats|242,543|276,842|-12%|270,396|779,249 |771,325 |+1% | |_________________|______|_______|_______|____|_______|_________|_________|____|
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 –
______________________________________________________________________________ | | |Three months |Nine months YTD | | | |________________________________|________________________| | |Unit |Q3 |Q2 | |Q3 | | | | | | | | |Var.| |FY 2024 |FY 2023 |Var.| | | |FY 2024 |FY 2024 | |FY 2023| | | | |_____________|______|_________|_________|____|_______|_________|_________|____| |Sales | | | | | | | | | |_____________|______|_________|_________|____|_______|_________|_________|____| |Revenue |US$m |18 |17 |+8% |- |42 |49 |-14%| |_____________|______|_________|_________|____|_______|_________|_________|____| |Diamonds sold|Carats|90,285 |82,432 |+10%|- |210,574 |175,124 |+20%| |_____________|______|_________|_________|____|_______|_________|_________|____| |Average price|US$ |198 |201 |-1% | |200 |280 |-29%| |per carat | | | | | | | | | |_____________|______|_________|_________|____|_______|_________|_________|____| |ROM | | | | | | | | | |Production | | | | | | | | | |_____________|______|_________|_________|____|_______|_________|_________|____| |Tonnes |Tonnes|1,216,754|1,161,129|+5% |- |3,413,794|1,829,376|+87%| |treated | | | | | | | | | |_____________|______|_________|_________|____|_______|_________|_________|____| |Diamonds |Carats|81,317 |86,693 |-6% |- |2241,905 |140,516 |+72%| |produced | | | | | | | | | |_____________|______|_________|_________|____|_______|_________|_________|____| |Grade1 |Cpht |6.7 |7.5 |-10%|- |7.1 |7.7 |-8% | |_____________|______|_________|_________|____|_______|_________|_________|____| |Total | | | | | | | | | |Production | | | | | | | | | |_____________|______|_________|_________|____|_______|_________|_________|____| |Tonnes |Tonnes|1,216,754|1,161,129|+5% |- |3,413,794|1,829,376|+87%| |treated | | | | | | | | | |_____________|______|_________|_________|____|_______|_________|_________|____| |Diamonds |Carats|81,317 |86,693 |-6% |- |241,905 |140,516 |+72%| |produced | | | | | | | | | |_____________|______|_________|_________|____|_______|_________|_________|____|
FY 2024 Capital expenditure breakdown
__________________________________________________________________________________ |US$m |Q3 FY 2024 |YTD Q3 FY 2024 |FY | | | | |2023 | |__________|________________________________|________________________________|_____| | |Extension|Stay-in-Business|Total|Extension|Stay-in-Business|Total|Total| |__________|_________|________________|_____|_________|________________|_____|_____| |Cullinan |6 |3 |9 |28 |8 |36 |53 | |Mine | | | | | | | | |__________|_________|________________|_____|_________|________________|_____|_____| |Finsch |3 |1 |4 |14 |5 |19 |43 | |__________|_________|________________|_____|_________|________________|_____|_____| |Williamson|— |2 |2 | — |9 |9 |19 | |__________|_________|________________|_____|_________|________________|_____|_____| |Total |9 |6 |15 |42 |22 |64 |115 | |__________|_________|________________|_____|_________|________________|_____|_____|
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