Petra Diamonds PDL Interim Management Statement

  Petra Diamonds (PDL) - Interim Management Statement

RNS Number : 9400Q
Petra Diamonds Limited
13 November 2012




                                      

                       

13 November 2012 LSE: PDL





                            Petra Diamonds Limited

                  ("Petra" or the "Company" or the "Group")

                                      

   Interim Management Statement and Q1 FY 2013 Production and Sales Report

                                      



Petra Diamonds Limited announces its Interim Management Statement ("IMS")  for 
the period  from 1  July 2012  to 12  November 2012  ("the Period"),  covering 
production and sales from 1 July 2012 to 30 September 2012 ("Q1 FY 2013").





HIGHLIGHTS

· Production for Q1 FY 2013 up 70% to 654,690 carats (Q1 FY 2012:  384,543 
carats).

· Revenue for Q1 FY 2013 up  188% to US$51.1 million (318,700 carats)  (Q1 
FY 2012: US$17.7 million; 109,798 carats); only one tender was held during  Q1 
FY2013 due to timing of industry holidays.

· The second tender of FY 2013  closed in early October 2012 and  achieved 
sales of US$45.8 million  (326,261 carats); overall prices  per carat year  to 
date ("YTD") continue to be in line with Petra's FY 2013guidance.

· Petra has entered into agreements with a syndicate of banks with regards
to  new  Group  debt  facilities  of  ca.  US$244  million;  an  increase  and 
reorganisation  of  Petra's  existing   debt  structures,  providing   greater 
assurance and flexibility with regards to the Group's project expansion plans.





                        Production and Sales - Summary



                               Unit     Q1      Q1    Variance   FY 2012

                                      FY 2013 FY 2012          (full year)
Production
ROM diamonds                   Carats 530,376 359,775      47%   1,872,120
Tailings and alluvial diamonds Carats 124,314  24,768     402%     336,742
Total diamonds                 Carats 654,690 384,543      70%   2,208,862
Sales
Diamonds sold                  Carats 318,700 109,798     190%   2,084,429
Gross revenue                  US$M      51.1    17.7     188%       316.9

Note: For mine by mine production and sales data, please refer to the appendix
to this announcement.





Johan Dippenaar, Chief Executive Officer, commented:

"This is  a further  solid  set of  results,  demonstrating that  the  Company 
continues to deliver on  its growth ambitions.  Following the announcement  of 
our successful  debt financing  today,  Petra is  positioned to  maintain  its 
successful track record and continue on its path to 5 million carats per annum
by 2019."







CONFERENCE CALL

Petra's CEO, Johan Dippenaar, and Finance  Director, David Abery, will host  a 
conference call  at 9:30am  GMT today  to discuss  the IMS  and the  new  debt 
facilities with  investors and  analysts. Participants  may join  the call  by 
dialling one of the following three numbers shortly before the call:



From the UK (toll free): 0800 368 1895
From South Africa (toll free): 0800 983 097
From the rest of the world: +44 20 3140 0693
Participant passcode: 970015#



A replay of  the conference call  will be available  on the following  numbers 
from 12:00pm GMT today:



From UK (toll free): 0800 368 1890
From South Africa and the rest of the world: +44 20 3140 0698
Playback passcode: 387648#





COMMENTARY



Production

· Q1 production  up 70% to  654,690 carats (Q1  FY 2012: 384,543  carats), 
primarily due to the inclusion  of the Finsch mine  for the full quarter  (the 
Finsch acquisition closed halfway through Q1 FY 2012 on 14 September 2011).

· As  has been  widely reported,  the South  African mining  industry  has 
recently experienced  a challenging  labour relations  environment and  during 
October 2012  there were  brief work  stoppages at  certain of  Petra's  South 
African operations.  These  stoppages,  combined  with  the  difficult  labour 
relations environment experienced  beforehand during  Q1 FY 2013,  have had  a 
production impact but  it is expected  that the lost  production will to  some 
extent be  made up  during  the coming  months. At  this  point, there  is  no 
material change to Petra's FY 2013 production guidance of 2.85 million carats.

· At Finsch, the ROM grade of 32.0 cpht was in line with Company guidance;
the reduction in grade vs. Q4 FY 2012 was due to the expected dilution of  the 
Block 4  production areas  as  previously advised.  The build-up  of  tailings 
tonnes processed was marginally  behind due to  adverse weather conditions  in 
August and a delayed start-up of contracted tramming.

· A characteristic of Finsch production is the good quality of the smaller
stones and the bottom-cut is systematically  being reduced to 1 mm (from  1.47 
mm) to capture this size fraction.

· At Cullinan, as  previously announced, Petra is  managing the lower  ROM 
grade (32.9  cpht) in  the current  working areas  by higher  ROM  throughput. 
Tailings production was also in  line with expectations, with the  significant 
ramp-up of tailings throughput  for FY 2013 back-ended  to the second half  of 
the financial year, in accordance with Petra's business plan. The  improvement 
in tailings grade  is expected to  continue once the  recrush system has  been 
incorporated into  the  new  dense media  separation  ("DMS")  tailings  plant 
(expected by the end of FY 2013).

· At Koffiefontein, ROM production tonnes were in line with  expectations. 
The ROM grade improved to 6.9 cpht and is expected to continue to improve once
more tonnes  are  accessed from  the  higher  grade 52  Recovery  Level.  ROM 
tonnages continue  to be  supplemented by  increased production  from  surface 
resources (the satellite Ebenhaezer open pit and tailings). The combined grade
of the surface tonnages is expected to  rise later in the financial year,  due 
to an increased contribution from Ebenhaezer.

· At  Kimberley  Underground,  commissioning of  the  Wesselton  plant  is 
progressing satisfactorily, with throughput ahead of plan. Wesselton grade  is 
expected to improve  as further refinements  to the plant  are made  following 
commissioning. 

· Williamson ROM tonnages and grade exceeded expectations due to a  smooth 
transition to production post commissioning.

· Limited  production and  sales activities  at the  Fissure mines  are  a 
result of the ongoing disposal process of these mines.





Expansion projects

· The Group's  expansion projects at  Finsch, Cullinan, Koffiefontein  and 
Kimberley Underground are progressing well.

· At Finsch and Cullinan, development  of the declines and access  tunnels 
(as well as the shaft at Cullinan) is progressing in line with expectations.

· The  commissioning of  the new  modular tailings  plant at  Cullinan  is 
running marginally behind schedule,  mainly as a result  of delays due to  the 
lengthy strike action in the South African transport industry.  Commissioning, 
originally planned for September, commenced during October 2012.





Diamond market and sales

· The rough diamond  market was essentially  flat in Q1  FY 2013, in  line 
with Petra's expectations.

· Supply  to  the  market  remains  constrained,  with  several  producers 
revising production targets downwards.

· Revenue for  Q1 FY  2013 was  up 188% to  US$51.1 million  (Q1 FY  2012: 
US$17.7 million).

· Carats sold were up 190% to 318,700 carats (Q1 FY 2012: 109,798).

· Carat sales  were significantly lower  than carats produced  due to  the 
seasonal timing of Petra's tenders; only one tender was held in Q1 FY 2013 due
to the timing of industry holidays. As usual, Petra will hold three tenders in
H1 (equating to five  months production) and five  tenders in H2 (equating  to 
seven months  production).  As  previously stated,  Petra  does  not  withhold 
production and, with the very occasional exceptions of certain 'specials', all
production is offered for sale at its regular tenders.

· In October  2012, Petra  closed tenders for  both its  South African  and 
Tanzanian production,  recording  combined  revenue  of  US$45.8  million  for 
326,261 carats sold; average prices YTD remained in line with Petra's previous
FY 2013 guidance.  Petra will publish  overall tender results  for Q2 FY  2013 
within its half yearly trading update in January 2013.

· During  Q1 FY  2013, a  68.6 carat  white stone  from Cullinan  sold  for 
US$3.45 million.

· The tender result for Q1 FY 2013 shown below is as previously  disclosed 
in Petra's Preliminary Results announcement on 24 September 2012.





                      Average        Average        Average      Management
                      US$/carat      US$/carat      US$/carat      guidance
         
                                                                Average
       Mine
                      Q1 FY 2013     Q1 FY 2012      FY 2012        US$/ct

                                                                FY 2013
Finsch                   133            n/a            138           129
Cullinan                151^2           131            128           129
Koffiefontein            566            468            487           475
Kimberley                236            259            320           300
Underground
Fissures                 325            297            255           n/a
Williamson              243^3           n/a            236           220



Notes:

1. All sales (both  ROM and tailings/alluvials/Ebenhaezer) including  specials 
(stones above US$1 million in value) were used to calculate the above  average 
values.

2. US$149 per carat was disclosed in Petra's Preliminary Results announcement;
the amendment to US$151 is due to a stone sold post the date of Petra's result
announcement.

3. Excluding alluvial sales results.







Exploration (Botswana)

· Positive drilling  and microdiamond  results from  kimberlite KX36  were 
announced on  14  March 2012.  A  preliminary  large diameter  (24  inch)  and 
delineation drillingprogramme has been completed delivering approximately 700
to 800 tonnes.  These samples  are being processed  through Petra's  dedicated 
sampling plant. Phase 1  results from the treatment  of the sampling  material 
are expected in December/January 2013.

· As previously announced, due tothe  potential that KX36 might be one  of 
several kimberlites  within a  new  kimberlite field,  the following  work  is 
underway:

o a high resolution regional soil sampling programme covering kimberlite KX36
and its immediate surrounds is being undertaken; and

o an airborne electro-magnetic survey will be executed in the coming months.





Corporate and Governance

· As  previously  announced,  Petra and  its  black  economic  empowerment 
partners have commenced  a sales  process with  regards to  the Fissure  Mines 
(Helam, Sedibeng and Star), which are no longer core to the Group's portfolio.
The disposal  process  is  progressing  well  and  has  attracted  significant 
interest.

· On 12 September 2012, following a search assisted by external specialist
consultants, Mr Tony Lowrie was appointed as Senior Independent  Non-Executive 
Director.

· On 24  October 2012,  IFC exercised  warrants over  2.1 million  shares, 
increasing their shareholding in the Company to 7,067,192 shares (representing
1.4% of the  Company's issued  share capital.).  IFC holds  an additional  4.2 
million warrants in the Company.





Financial:

· As at 30 September 2012, Petra  had cash at bank of US$15.4 million  (30 
June 2012: US$47.3  million) and  diamond inventories of  ca. US$61.5  million 
(558,128 carats) (30  June 2012:  US$24.5 million  (372,556 carats)).  Diamond 
inventory carrying values are stated at the lower of cost of production on the
weighted average basis or estimated net realisable value.

· Loans and  borrowings as  at 30  September 2012  were US$100.2  million, 
being seasonal  utilisation  of  the Group's  working  capital  facilities  of 
US$19.2 million and the  amount drawn-down of US$81.0  million on the  current 
debt IFC/RMB facilities.

· On 12 November  2012, agreements were entered  into with regards to  new 
debt facilities  of ca.  US$244 million  with FirstRand  Bank Limited  (acting 
through Rand Merchant Bank and First National Bank divisions), Absa  Corporate 
and Investment Banking and IFC. The new facilities represent a  reorganisation 
and optimisation  of  Petra's  previous  debt  structures,  providing  greater 
assurance, alignment and  flexibility with  regards to  the Group's  expansion 
plans. Further detail  on the new  debt facilities is  provided in a  separate 
announcement made today.





Health and safety:

· Group lost time injury frequency rate  ("LTIFR") for Q1 FY 2013 of  1.11 
(Q1 FY 2012: 1.00).

· The health and safety  of all employees is  of the utmost importance  to 
the Company and Petra is highly focused on this area; the Company continues to
strive for zero harm across all its operations.





Note

Exchange rates  of US$1:R8.70  as at  12  November 2012,  US$1:8.30 as  at  30 
September 2012 and US$:8.16 as at 30 June 2012 have been used for the purposes
of this announcement.







For further information, please contact:



Petra Diamonds, London Telephone: +44 20 7318 0452
Cathy Malins           cathym@petradiamonds.com



Buchanan        Telephone: +44 20 7466 5000

(PR Adviser)
Bobby Morse     bobbym@buchanan.uk.com

Louise Mason    louisem@buchanan.uk.com

Cornelia Browne corneliab@buchanan.uk.com



RBC Capital Markets Telephone: +44 20 7653 4000

(Joint Broker)
Martin Eales        martin.eales@rbccm.com
Pierre Schreuder    pierre.schreuder@rbccm.com



Canaccord Genuity Limited Telephone: +44 20 7523 8000

(Joint Broker)
Rob Collins               rcollins@canaccordgenuity.com

Andrew Chubb              achubb@canaccordgenuity.com





                                   ~ Ends ~



About Petra Diamonds Limited

Petra  Diamonds  is  a  leading  independent  diamond  mining  group  and   an 
increasingly important supplier of rough diamonds to the international market.
The Company has  interests in  eight producing  mines: seven  in South  Africa 
(Finsch, Cullinan, Koffiefontein, Kimberley  Underground, Helam, Sedibeng  and 
Star) and  one in  Tanzania  (Williamson). It  also maintains  an  exploration 
programme in Botswana.



The Company has recently commenced a disposal process in respect of the Helam,
Sedibeng and Star mines (the Fissure Mines),  which are no longer core to  the 
Group's portfolio.



Petra offers an exceptional growth profile, with a core objective to  steadily 
increase annual production to  5 million carats  by FY 2019.  The Group has  a 
major resource base in excess of 300 million carats.



Petra conducts all operations according  to the highest ethical standards  and 
will only operate  in countries which  are members of  the Kimberley  Process. 
Petra is quoted with a premium listing on the Main Market of the London  Stock 
Exchange under the ticker 'PDL' and is a member of the FTSE 250.



For more information, visit the Company's website at www.petradiamonds.com

APPENDIX - MINE BY MINE PRODUCTION TABLES





Finsch - South Africa



                        Unit   Q1 FY 2013 Q1 FY 2012^1 Variance   FY 2012
ROM Production
Tonnes treated          Tonnes    686,680      248,960     176% 2,260,842
Diamonds produced       Carats    220,008       97,617     125%   832,396
Grade                   cpht         32.0         39.2     -18%      36.8
Tailings Production
Tonnes treated          Tonnes    566,902       53,508     960% 1600,170
Diamonds produced       Carats    100,606        9,096   1,006%   272,222
Grade                   cpht         17.7         17.0       4%      17.0
Total Production
Tonnes treated          Tonnes  1,253,582      302,468     315% 3,861,012
Diamonds produced       Carats    320,614      106,713     200% 1,104,618
Sales
Diamonds sold           Carats    155,934            -      n/a   989,101
Average price per carat US$           133            -      n/a       138
Revenue                 US$M         20.7            -      n/a     136.9



Note:

The acquisition of Finsch completed on 14 September 2011





Cullinan - South Africa



                        Unit   Q1 FY 2013 Q1 FY 2012 Variance   FY 2012
ROM Production
Tonnes treated          Tonnes    682,557    629,747       8% 2,504,137
Diamonds produced       Carats    224,861    217,188       4%   833,285
Grade                   cpht         32.9       34.5      -5%      33.3
Tailings Production
Tonnes treated          Tonnes    230,400    196,277      17%   668,534
Diamonds produced       Carats     14,255      9,776      46%    34,495
Grade                   cpht          6.2        5.0      24%       5.2
Total Production
Tonnes treated          Tonnes    912,957    826,024      11% 3,172,671
Diamonds produced       Carats    239,116    226,964       5%   867,780
Sales
Diamonds sold           Carats    114,133     91,791      24%   876,384
Average price per carat US$           151        131      15%       128
Revenue                 US$M         17.2       12.0      43%     112.0







Koffiefontein - South Africa



                               Unit   Q1 FY 2013 Q1 FY 2012 Variance   FY 2012
ROM Production
Tonnes treated                 Tonnes     53,950    142,275     -62%   498,412
Diamonds produced              Carats      3,723      6,785     -45%    24,569
Grade                          cpht          6.9        4.8      45%       4.9
Tailings/Ebenhaezer Production
Tonnes treated                 Tonnes    359,570    202,175      78%   967,538
Diamonds produced              Carats      6,421      3,309      94%    15,548
Grade                          cpht          1.8        1.6       9%       1.6
Total Production
Tonnes treated                 Tonnes    413,520    344,450      20% 1,465,950
Diamonds produced              Carats     10,144     10,094       1%    40,117
Sales
Diamonds sold                  Carats      5,730      3,852      49%    38,798
Average price per carat        US$           566        468      21%       487
Revenue                        US$M          3.2        1.8      80%      18.9





Kimberley Underground - South Africa



                        Unit   Q1 FY 2013 Q1 FY 2012 Variance FY 2012
ROM Production¹
Tonnes treated          Tonnes    217,021    133,603      62% 587,065
Diamonds produced       Carats     26,150     16,464      59%  68,422
Grade                   cpht         12.0       12.3      -2%    11.7
Sales
Diamonds sold           Carats     15,681      7,695     104%  61,895
Average price per carat US$           236        259      -9%     320
Revenue                 US$M          3.7        2.0      86%    19.8



Note:

Petra only produces from ROM (underground) operations at Kimberley Underground





Fissure mines - South Africa



                        Unit   Q1 FY 2013 Q1 FY 2012 Variance FY 2012
ROM Production
Tonnes treated          Tonnes     50,972     49,983       2% 167,794
Diamonds produced       Carats     19,886     21,721      -8%  70,593
Grade                   cpht         39.0       43.5     -10%    42.1
Tailings Production
Tonnes treated          Tonnes          -          -      n/a   8,203
Diamonds produced       Carats          -          -      n/a     281
Grade                   cpht            -          -      n/a     3.4
Total Production
Tonnes treated          Tonnes     50,972     49,983       2% 175,997
Diamonds produced       Carats     19,886     21,721      -8%  70,874
Sales
Diamonds sold           Carats        104      6,460     -98%  69,097
Average price per carat US$           325        297       9%     255
Revenue                 US$M         0.03        1.9     -98%    17.7





Williamson - Tanzania



                           Unit   Q1 FY 2013 Q1 FY 2012 Variance   FY 2012
ROM Production
Tonnes treated             Tonnes    632,877          -      n/a   826,699
Diamonds produced          Carats     35,748          -      n/a    42,855
Grade                      cpht          5.6          -      n/a       5.2
Alluvial Production
Tonnes treated             Tonnes     86,530     59,774      45%   278,328
Diamonds produced          Carats      3,032      2,587      17%    14,195
Grade                      cpht          3.5        4.3     -19%       5.1
Total Production
Tonnes treated             Tonnes    719,407     59,774   1,104% 1,105,027
Diamonds produced          Carats     38,780      2,587   1,400%    57,050
Sales
Diamonds sold              Carats     27,119          -      n/a    49,153
Average price per carat                                              

- ROM                  US$           243          -      n/a       240

- Alluvials / tailings US$           165          -      n/a       232
Revenue                    US$M          6.2          -      n/a      11.6



Note:

During Q1 FY  2012 there was  no production  from the main  pit at  Williamson 
while the development programme  was underway; therefore  the results for  the 
comparative periods only represent alluvial and limited tailings production.



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


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