Petra Diamonds output increases

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Johannesburg - London-listed Petra Diamonds has reported a 31% rise in prodution for the six months ended December 2012 to 1.247 million carats‚ primarily due to Finsch being part of the portfolio for the full six months.

Finsch was acquired from De Beers in 2011.

However‚ despite the rise. Petra expects its previous FY 2013 production guidance of 2.85 million carats to be lower by around 200‚000 carats - or by approximately 7%.

“However‚ the medium term outlook of achieving continued production growth until the development plans deliver production from the new mining areas remains firmly intact‚” it said.

Petra’s South African operations were affected by brief work stoppages during October 2012‚ although the disruptions were not as significant as those experienced in the platinum and other sectors. The stoppages experienced by Petra‚ combined with the adverse effect on productivity during the periods before and after the labour disruptions‚ resulted in production losses during H1 FY 2013.

Production levels have now normalised and labour relations are stable‚ the company said.

As previously reported‚ the management of run-of-mine grades‚ specifically at Finsch and Cullinan‚ remains a challenge due to the mature nature and dilution of the current mining areas. As a result‚ volatility in recovered ROM grades at these two operations can be expected until such time as new mining areas have been accessed and deliver undiluted ore to the production profile from FY 2015 onwards.

The company reported revenue for the six months to end December was up 54% to US$156.3 million.

It noted that its expansion programmes were progressing well with capital expenditure of US$92.1 million within management expectations and in accordance with the roll out of the group's plans.

“These results mark a further step change in production and revenues for the Group. Though we consider it prudent to revise full year production expectations‚ it is important to note that we still expect to report substantial production growth for FY 2013. Our production growth plans remain in place‚ with targeted output growing to 5 million carats by FY 2019‚” said CEO Johan Dippenaar. - I-Net Bridge

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