REG-Petra Diamonds Ltd: Q4 and FY 2024 Operating Update

Petra DiamondsAnnouncement

16/07/2024 07:15

 

 

 16 July 2024  LSE: PDL  

 

 

Petra Diamonds Limited

(Petra or the Company)

 

Q4 and FY 2024 Operating Update

 

Richard Duffy, Chief Executive Officer of Petra, commented:

 

“At our recent investor day, we unveiled our plans to demonstrate Petra
Diamonds’ enhanced resilience and compelling value proposition. We are
focussed on delivering our target of US$30 million in sustainable annual cost
savings together with a smoothed capital profile, to generate net free cash
from the current financial year onwards. This will allow us to continue to
deleverage and provide flexibility with regards to refinancing our 2026 2L
Notes.

 

During FY 2024, carats sold increased by 36% compared to FY 2023, with revenue
rising by 13%. This increase was driven by Williamson ramping up to
steady-state operations and the planned benefit of the delayed sale of the
final tender in FY 2023. Annual production was slightly below our revised
guidance at 2.73 million carats.

 

Our net debt decreased by US$11 million to US$201 million at 30 June 2024,
compared to US$212 million at 31 December 2023, reflecting our agility in
exceeding the cost reduction, capital savings and deferral targets announced
in November 2023.

 

Current diamond market weakness is expected to continue through to the end of
the calendar year with some price volatility. We expect diamond prices to show
modest recovery in the new year with market fundamentals providing pricing
support in the medium and longer-term. We are looking forward to addressing
the challenges ahead of us from a position of strength, with world class
assets that have long term-potential, strong sustainability credentials and an
ability to withstand market and capital cycles.”

 

Highlights vs Q3 FY 2024

 
* LTIFR and LTIs improved to 0.13 and 2 respectively (Q3 FY 2024: 0.20 and 3
respectively)
* Ore processed increased marginally to 3.0Mt from 2.9Mt with the ramp-up at
Williamson increasing production by 0.1Mt and a steady quarter at the Cullinan
and Finsch Mines	* Improvements in grade recovery continued at Finsch given
increasing contribution from 78-Level Phase II. Work to resolve the winder
issues and the transition from continuous operations to a two-shift, five-day
configuration has reduced carats recovered from Q3 FY 2024
	
* Revenue, including revenue from profit share arrangements, amounted to
US$113 million (Q3 FY 2024: US$66 million), with the increase due to the
timing of receipts from Tender 5 carried over from the previous quarter
* Support from South African Rand weakness continued throughout the period,
with the Rand averaging ZAR18.71:US$1 (Q3 FY 2024: ZAR18.95:US$1)
* Operational capital expenditure for Q4 FY 2024 totalled US$18 million,
in-line with updated guidance announced following the decision to defer
certain capital project expenditure
* Amounts drawn under the ZAR1.75 billion (US$96 million) Revolving Credit
Facility with Absa Bank remains unchanged, leaving an outstanding balance of
ZAR450 million (US$25 million) at 30 June 2024, down from ZAR850 million
(US$47 million) at 31 December 2023
* Consolidated net debt decreased to US$201 million as at 30 June 2024 (31
March 2024: US$232 million) with US$5 million of 2026 2L Notes bought through
an Open Market Repurchase programme
 

Operating Summary

 

                                                 Three months                                         Twelve months                         
                                                 Q4 FY 2024  Q3 FY 2024  Var.   Q4 FY 2023 Restated3  FY 2024     FY 2023 Restated3  Var.   
 Safety                                                                                                                                     
 LTIFR                                   Rate    0.13        0.20        -35%   0.12                  0.16        0.24               -33%   
 LTIs                                    Number  2           3           -33%   2                     10          17                 -41%   
                                                                                                                                            
 Sales                                                                                                                                      
 Diamonds sold                           Carats  1,022,430   476,730     +114%  561,624               3,158,780   2,329,817          +36%   
 Revenue 1                               US$m    112         66          +71%   50                    366         324                +13%   
 Contribution from Exceptional Stones 2  US$m    -           -           -      -                     -           -                  -      
                                                                                                                                            
 Production                                                                                                                                 
 ROM tonnes                              Mt      2,880,975   2,851,469   +1%    1,826,843             11,325,340  8,637,232          +31%   
 Tailings and other tonnes               Mt      107,203     75,100      +43%   102,193               369,546     399,877            -8%    
 Total tonnes treated                    Mt      2,988,178   2,926,569   +2%    1,929,036             11,694,886  9,037,109          +29%   
                                                                                                                                            
 ROM diamonds                            Carats  603,217     643,350     -6%    592,374               2,593,471   2,517,309          +3%    
 Tailings and other diamonds             Carats  33,526      22,227      +51%   27,644                136,389     149,216            -9%    
 Total diamonds                          Carats  636,743     665,577     -4%    620,018               2,729,861   2,666,525          +2%    

1 Revenue reflects proceeds from the sale of rough diamonds and excludes
revenue from profit share arrangements

2 Petra classifies “Exceptional Stones” as rough diamonds which sell for
US$15 million or more each

3 Restated to exclude Koffiefontein which is classified as a discontinued
operation

 

Group guidance for FY 2025 to 2029

 

                             Unit  FY25     FY26     FY27     FY28     FY29     
 Total carats recovered      Mcts  2.8-3.1  2.9-3.3  3.1-3.5  3.4-3.7  3.4-3.7  
 Cash on-mine costs and G&A  US$m  241-257  241-257  227-242  239-255  251-266  
 Extension capex             US$m  62-67    86-93    78-84    81-88    41-44    
 Sustaining capex            US$m  26-30    25-28    21-23    22-25    23-25    

Notes: Guidance for FY 2026 to 2029 is subject to the Board’s approval of
future budgets

Real amounts stated in FY 2025 money terms using 6% SA CPI & 2.5% US CPI. US$
equivalent for SA operations converted at an exchange rate of USD1:ZAR18.36

Detailed mine-by-mine guidance for FY 2025 to 2029 can be found in the
guidance section of our website:
https://www.petradiamonds.com/investors/shareholder-centre/analysts/

 

 

INVESTOR WEBCASTS

Webcast presentation for institutional investors and analysts at 09:30am BST
today

Petra’s CEO, Richard Duffy, and CFO designate, Johan Snyman, will host a
live virtual presentation including Q&A for institutional investors and
analysts at 09:30 BST today to discuss this operating update.

Link for live presentation via Teams:
https://events.teams.microsoft.com/event/c44e6be5-431f-4e65-8ee3-37c3811ddf84@3c08cd12-de9b-4814-9ea3-392066758217

Link for recording (available later in the day): 

https://www.petradiamonds.com/investors/results-reports/

 

Investor Meet Company webcast at 14.30pm BST today

 

Petra’s CEO, Richard Duffy, and CFO designate, Johan Snyman, will also
present these results live on the Investor Meet Company platform,
predominantly aimed at retail investors. To join:
https://www.investormeetcompany.com/petra-diamonds-limited/register-investor

 

 

FURTHER INFORMATION

 

Please contact

 

Investor Relations, London

Patrick Pittaway      Telephone: +44 (0)784 192 0021

Kelsey Traynor     investorrelations@petradiamonds.com

 

 

 

 

Notes:

The following definitions have been used in this announcement:
1. cpht: carats per hundred tonnes
2. LTIs: lost time injuries
3. LTIFR: lost time injury frequency rate, calculated as the number of LTIs
multiplied by 200,000 and divided by the number of hours worked
4. FY: financial year ending 30 June
5. CY: calendar year ending 31 December
6. Q: quarter of the financial year
7. ROM: run-of-mine (i.e. production from the primary orebody)
8. m: million
9. Mt: million tonnes
10. Mcts: million carats
11. period: the fourth quarter of FY 2024
 

ABOUT PETRA DIAMONDS

 

Petra Diamonds is a leading independent diamond mining group and a supplier of
gem quality rough diamonds to the international market. The Company’s
portfolio incorporates interests in three underground mines in South Africa
(Cullinan Mine, Finsch and Koffiefontein) and one open pit mine in Tanzania
(Williamson). The Koffiefontein mine is currently on care and maintenance in
preparation for a possible sale following the execution of a definitive sales
agreement as announced on 8 April 2024.

 

Petra's strategy is to focus on value rather than volume production by
optimising recoveries from its high-quality asset base in order to maximise
their efficiency and profitability. The Group has a significant resource base
which supports the potential for long-life operations.

 

Petra strives to conduct all operations according to the highest ethical
standards and only operates in countries which are members of the Kimberley
Process. The Company aims to generate tangible value for each of its
stakeholders, thereby contributing to the socio-economic development of its
host countries and supporting long-term sustainable operations to the benefit
of its employees, partners and communities.

 

Petra is quoted with a premium listing on the Main Market of the London Stock
Exchange under the ticker 'PDL'. The Company’s loan notes due in 2026 are
listed on the Irish Stock Exchange and admitted to trading on the Global
Exchange Market. For more information, visit www.petradiamonds.com.

 

 

Corporate and financial summary as at 30 June 2024

 

                                                                                      Unit             As at 30 June 2024  As at 31 March 2024  As at 31 December 2023  As at 30 September 2023  As at 30     
                                                                                                                                                                                                  June 2023   
 Cash at bank – (including restricted amounts)¹ * Petra Group (excl. Williamson)      US$m  US$m US$m  40  47 (7)          37  42 (5)           75  85 (10)             74  73 1                 62  61 1     
 * Williamson                                                                                                                                                                                                 
 Diamond debtors                                                                      US$m             31                  11                   8                       33                       9            
 Diamond inventories 2                                                                US$m Carats      32 286,303          71 671,989           54 483,142              52 479,430               66           
                                                                                                                                                                                                  715,222     
 2026 Loan Notes 3                                                                    US$m             246                 256                  249                     255                      248          
 Bank loans and borrowings 4                                                          US$m             25                  24                   47                      45                       -            
 Consolidated Net Debt 5                                                              US$m             201                 232                  212                     192                      177          
 Bank facilities undrawn and available 4                                              US$m             72                  69                   8                       8                        53           

 

Note:  The following exchange rates have been used for this announcement:
average for FY 2024 US$1: ZAR18.71 (FY 2023: US$1: ZAR17.77); closing rate as
at 30 June 2024 US$1: ZAR18.19 (31 March 2024: US$1: ZAR18.92; 31 December
2023: US$1: ZAR18.28 and 30 June 2023: US$1: ZAR18.83).

 

Notes:
1. The Group’s cash balances excluding Williamson comprise unrestricted
balances of US$27 million, and restricted balances of US$20 million.
2. Recorded at the lower of cost and net realisable value.
3. The 2026 Loan Notes, originally issued following the capital restructuring
(the “Restructuring”) completed during March 2021, have a carrying value
of US$246 million which represents the outstanding principal amount of US$206
million (after the debt tender offers as announced in September and October
2022) plus US$47 million of accrued interest and is stated net of unamortised
transaction costs capitalised of US$7 million. During quarter 4 of FY 2024
Petra purchased 2026 Loan Notes with a nominal value of US$5 million through
an open market repurchase programme. The repurchased notes were cancelled.
4. Bank loans and borrowings represent the Group’s ZAR1.75 billion (US$96
million) revolving credit facility. As at 30 June 2024, a total of ZAR450
million (US$25 million) was drawn leaving a further balance of ZAR1.3 billion
(US$72 million) available for drawdown. 
5. Consolidated Net Debt is bank loans and borrowings plus loan notes, less
cash and diamond debtors.
 


Mine-by-mine tables:

 

 

Cullinan Mine – South Africa

 

                          Unit        Three months                              Twelve months                
                          Q4 FY 2024             Q3 FY 2024  Var.   Q4 FY 2023  FY 2024    FY 2023    Var.   
 Sales                                                                                                       
 Revenue                  US$m        61         32          +90%   31          189        182        +4%    
 Diamonds sold            Carats      534,767    233,460     +129%  327,429     1,633,456  1,306,457  +25%   
 Average price per carat  US$         113        137         -17%   94          116        139        -17%   
                                                                                                             
 ROM Production                                                                                              
 Tonnes treated           Tonnes      1,117,591  1,164,009   -4%    1,120,346   4,497,444  4,376,595  +3%    
 Diamonds produced        Carats      299,301    319,490     -6%    323,535     1,268,402  1,343,191  -6%    
 Grade 1                  Cpht        26.8       27.4        -2%    28.90       28.2       30.7       -8%    
                                                                                                             
 Tailings Production                                                                                         
 Tonnes treated           Tonnes      107,203    75,100      +43%   102,193     369,546    352,375    +5%    
 Diamonds produced        Carats      33,526     22,227      +51%   27,644      136,389    142,654    -4%    
 Grade 1                  Cpht        31.3       29.6        +6%    27.10       36.9       40.5       -9%    
                                                                                                             
 Total Production                                                                                            
 Tonnes treated           Tonnes      1,224,795  1,239,109   -1%    1,222,539   4,866,990  4,728,970  +3%    
 Diamonds produced        Carats      332,828    341,717     -3%    351,179     1,404,791  1,485,846  -5%    

 

Note 1: Petra is not able to precisely measure the ROM / tailings grade split
because ore from both sources is processed through the same plant; the Company
therefore back-calculates the grade with reference to resource grades.

 

 

Finsch – South Africa

 

                          Unit        Three months                            Twelve months                
                          Q4 FY 2024           Q3 FY 2024  Var.   Q4 FY 2023  FY 2024    FY 2023    Var.   
 Sales                                                                                                     
 Revenue                  US$m        37       16          +134%  19          120        93         +28%   
 Diamonds sold            Carats      400,322  152,984     +162%  234,195     1,227,409  848,236    +45%   
 Average price per carat  US$         93       104         -11%   81          98         110        -11%   
                                                                                                           
 ROM Production                                                                                            
 Tonnes treated           Tonnes      446,012  470,706     -5%    706,497     2,096,730  2,431,262  -14%   
 Diamonds produced        Carats      222,387  242,543     -8%    268,839     1,001,636  1,033,602  -3%    
 Grade 1                  Cpht        49.9     51.5        -3%    38.1        47.8       42.5       +12%   
                                                                                                           
 Tailings Production                                                                                       
 Tonnes treated           Tonnes      -        -           -      -           -          47,502     -      
 Diamonds produced        Carats      -        -           -      -           -          6,562      -      
 Grade 1                  Cpht        -        -           -      -           -          13.8       -      
                                                                                                           
 Total Production                                                                                          
 Tonnes treated           Tonnes      446,012  470,706     -5%    706,497     2,096,730  2,478,764  -15%   
 Diamonds produced        Carats      222,387  242,543     -8%    268,839     1,001,636  1,040,164  -4%    

 

Note 1: Petra is not able to precisely measure the ROM / tailings grade split
because ore from both sources is processed through the same plant; the Company
therefore back-calculates the grade with reference to resource grades.

 


 

Williamson – Tanzania

 

                          Unit        Three months                             Twelve months                
                          Q4 FY 2024             Q3 FY 2024  Var.  Q4 FY 2023  FY 2024    FY 2023    Var.   
 Sales                                                                                                      
 Revenue                  US$m        15         18          -18%  -           59         49         +16%   
 Diamonds sold            Carats      87,341     90,285      -3%   -           297,915    175,124    +70%   
 Average price per carat  US$         168        198         -15%  -           191        280        -32%   
                                                                                                            
 ROM Production                                                                                             
 Tonnes treated           Tonnes      1,317,372  1,216,754   +8%   -           4,731,166  1,829,376  +159%  
 Diamonds produced        Carats      81,529     81,317      +0%   -           323,434    140,516    +130%  
 Grade 1                  Cpht        6.2        6.7         -7%   -           6.8        7.7        -11%   
                                                                                                            
 Total Production                                                                                           
 Tonnes treated           Tonnes      1,317,372  1,216,754   +8%   -           4,731,166  1,829,376  +159%  
 Diamonds produced        Carats      81,529     81,317      +0%   -           323,434    140,516    +130%  

 

FY 2024 Capital expenditure breakdown

 US$m           Q4 FY 2024                          FY 2024                             FY 2023  
                Extension  Stay-in-Business  Total  Extension  Stay-in-Business  Total  Total    
 Cullinan Mine  7          4                 11     36         12                48     53       
 Finsch         4          1                 5      19         6                 25     43       
 Williamson     —          2                 2      —          10                10     19       
 Total          11         7                 18     55         28                83     115      

 

 

 4015292_0.jpeg (https://news.cision.com/petra-diamonds-ltd/i/4015292-0-jpeg,c3320054)  



Copyright (c) 2024 PR Newswire Association,LLC. All Rights Reserved