Petra Diamonds received a welcome respite from their recent struggles with debt and low prices for small diamonds across the global market. It arrived in the form of a 100.83 carat D-Colour Type II gem quality diamond, which followed another recent recovery of a 6.12 carat Type II blue stone at its Cullinan Diamond Mine in South Africa. The mid-tier miner's flagship mine - which earned its place in history with the discovery of the Cullinan diamond in 1905, the largest rough gem diamond ever found at 3,106 carats - is renowned as a source of large, high-quality gem diamonds and is the most important source of very rare blue diamonds. These new recoveries demonstrate the capacity of this mine to still produce large Type IIa stones as well as the ability of the mine’s plant to recover the full spectrum of diamonds. Both stones will be included in the Company’s upcoming March 2019 tender.
Petra can only hope this is a harbinger of things to come, as prices achieved from the miner's Cullinan goods in 2018 slumped to just $96 per carat compared to a nine-year average of $140 per carat from 2009 through 2018. Last month, Petra told Reuters its debts from the Cullinan mine stood at around 65 percent of its overall $650 million in borrowing, which would represent about $420 million. Cullinan’s general manager Juan Kemp added that it could take “between five and 10 years” from the opening of the new section to clear the debts related to the mine. This makes it imperative that Petra recovers more large stones, which they have not had many of recently. “Everyone is very much hoping, for the sake of the equity holders and debt holders, it will deliver more higher-quality stones,” Kemp told Reuters. Today's announcement hopefully signals a change of fortune.