Only weeks after recovering a 425-carat diamond, Petra Diamond's famed Cullinan mine has produced another big stone, this time a 209.9 carat D-Colour Type II diamond. The big diamond is the third +100ct Type II D color gem-quality diamond Petra has recovered since March 2019 and the fourth in this financial year. The find will take some of the sting out of the 7% production decline in the third fiscal quarter due to a slowdown at its Finsch mine in South Africa.
Petra's Q3 production of 924,228 carats fell 7% from the 992,315 carats recovered in Q3 FY 2018, reflecting increased production at Cullinan, Koffiefontein mines in South Africa and the Williamson mine in Tanzania, offset by lower production at Finsch. For the first nine months of the fiscal year to 31 March 2019, however, production for is up 4% to 2,943,374 carats from the 2,836,272 carats produced in the same period a year ago. The miner maintained its production guidance of 3.8 - 4.0 million carats for FY 2019.
The miner's Q3 revenue decreased 7% to US$135.2 million due to a 6% reduction in sales volumes to 1,061,343 carats sold, as compared to US$145.7 million from 1,131,262 carats sold in Q3 FY 2018. Petra's revenue for the nine months to 31 March 2019 has risen by 1% to $342.4 million from 2,797,700 carats sold, compared with $337.4 million from 2,641,720 carats sold through the first three quarters of 2018. They note that rough diamond prices achieved during the two tenders in Q3 up ca. 1% on a like-for-like basis compared to prices achieved in H1 FY 2019. They expect to sell during Q4 FY 2019 the 425.1 carat D colour Type II gem quality diamond recovered at Cullinan on 29 March 2019. The major issue hanging over Petra - its sizeable debt - fell slightly to $553.1 million from $559.3 million at the end of the prior quarter. Petra will hold two more tenders in Antwerp during the fiscal year, which ends June 30.
“I have visited all of Petra’s operations and am impressed by the very capable teams and quality asset base, strongly reinforcing my initial views of the business," said new CEO Richard Duffy. "Our capital investment phase is largely over and we are well positioned to benefit from this as we move towards steady state operational performance. I am pleased with the incremental improvement in operational performance at Cullinan, Koffiefontein and Williamson and despite a challenging January, Finsch’s performance through February and March is as expected. Our focus remains on the delivery of free cash flow to reduce our net debt and generate future options for the Company.”