The strategy to focus on and expand its pipeline of diamond mining operations that have been yielding high tonnages is starting to show positive results‚ Petra Diamonds CEO Johan Dippenaar said on Tuesday.
The miner‚ which is listed in London but predominantly operates out of SA‚ doubled output and surpassed its annual production target of 2 million carats‚ largely due to the strong operational performance by the Finsch mine‚ which Petra acquired from De Beers in 2011.
In a trading update‚ Petra reported that production for the twelve months ending in June increased by 98% to 2.2 million carats‚ and that revenues were up by 44% to US$616.9m.
Fourth-quarter production was up 143% to 632‚800 carats‚ primarily due to Finsch contributing 1.105 million carats for the year and 347‚004 carats.
The company added that cash operating costs remained well controlled.
Capital spending had risen to $134m from last year’s $110.6m‚ in line with the roll-out of its planned expansion programmes.
Although prices fell as a result of the economic slowdown in Europe‚ Dippenaar was confident that this would unlikely affect the company’s capital expenditure project‚ that is aimed at raising production to 5 million carats per annum by 2019.
“The group’s various expansion projects have also progressed according to plan during the year and this‚ together with the production growth recorded‚ puts the group in a strong position to deliver on its longer-term objectives‚” Dippenaar said.
Petra and its empowerment partners Sedibeng Mining have agreed to put the fissure diamond mining operations‚ comprising the Sedibeng‚ Helam and Star mines‚ up for sale‚ as part of its growth strategy.
According to the company’s website‚ the operations hold around 5 million carats resources and have a 15 year life of mine.
The average value per carat of the fissure mines is high for kimberlite operations‚ and range from US$150 to US$500 per carat‚ and have a full year average of US$255 per carat‚ compared with the global average of US$90 per carat.
Dippenaar said the potential transactions arising from the sale process will be subject to detailed scrutiny and‚ apart from financial objectives‚ Petra would consider prospective purchasers’ approach to employment‚ health and safety‚ environmental management and other issues fundamental to the long-term success of the fissure mines for all stakeholders.
“The fissure mines were Petra’s first producing mines we acquired further to the Crown Diamonds merger in 2005‚ but given Petra’s development and growth over recent years‚ the fissure mines are no longer core to the group‚” Dippenaar said.
The sale process is expected to start soon. - I-Net Bridge