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 email@example.com Buchanan Telephone: +44 20 7466 5000 (PR Adviser) Bobby Morse firstname.lastname@example.org Louise Mason email@example.com Cornelia Browne firstname.lastname@example.org RBC Capital Markets Telephone: +44 20 7653 4000 (Joint Broker) Martin Eales email@example.com Pierre Schreuder firstname.lastname@example.org Canaccord Genuity Limited Telephone: +44 20 7523 8000 (Joint Broker) Rob Collins email@example.com Andrew Chubb firstname.lastname@example.org ~ 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 IMSBKBDKFBDDBDD -0- Nov/13/2012 07:00 GMT
Petra Diamonds PDL Interim Management Statement
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