As Petra Diamonds approaches the close of financial year 2017 (ending 30 June 2017), it has released a market update revising its production and revenue guidance down by 8-9%, despite the fact that the miner is on track to achieve record revenue and production figures in FY 2017. "However, due to the slower than anticipated build-up of its expansion programmes across its operations, production is now estimated to be ca. 8-9% lower than guidance of ca. 4.4 million carats. As a result, revenue is expected to be ca. 8-9% below market consensus and financial results for the Year are therefore also forecast to be below market expectations," their statement reads.
They add that, "The Company has now reached an operational run rate across the Group which supports FY 2018 production guidance of ca. 5 million carats (which, as stated before, is being reached a year earlier than originally anticipated). While the ramp-up of production from the sub level cave at Finsch took longer than expected, it is now operating at the required levels. At the new Cullinan plant, both mills and crushing circuits have now been commissioned, with the first mill and crushing circuit having been run very successfully for over a month. As previously announced, all untreated ROM stockpile material at Cullinan (which will total ca. 400-450 Kt at Year end) will be processed in H1 FY 2018. Petra has also built up a ROM stockpile at Kimberley Ekapa Mining of ca. 100 Kt." Concerning banking facilities with its lender group, Petra is "confident" that the guidance revision "will not present an issue."
Petra Diamonds' stock price fell to its lowest in a year after the diamond miner shares in the company fell as much as 10.1% on Wednesday, but later pared losses to trade down to 4.9% at 108.09 pence on the London Stock Exchange. Investors look to diamonds, which tend to hold value when basic commodities fall in price, to shield their portfolio from volatile markets. The UK-based miner has five mines in South Africa and one in Tanzania and estimated diamond resources of 312 million carats. It has a core objective to steadily increase annual production to ca. 5.3 million carats by FY 2019.