Petra Diamonds records 16% revenue growth in Q3

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Petra Diamonds, owner of Cullinan Mine outside Pretoria, has recorded a 16 percent jump in revenue to $106 million (R1.5 billion) during its third quarter ended March 2021 as prices recovered to pre Covid-19 levels and boosted by the sale of a 299.3 carat exceptional diamond in February for $12.2m.

Petra, whose Williamson Mine in Tanzania faces allegations of human rights abuses, said yesterday revenue during the March quarter was boosted by improved pricing and the carry over of 382 000 carats, of mostly lower value stock from the first half of the 2021 financial year, sold during January.

On a like for like basis, realised diamond prices increased 12 percent from those achieved in the first half of the 2021 financial year, the group said.

At the end of March, Petra also sold a 11.82 carat blue stone, recovered during the period from the Cullinan mine for $9.5m and recovered a 39.34 carat blue stone, also from the Cullinan mine, which is scheduled to be sold via a special tender.

Revenue for the nine months ended March was $284.2 million in line with $285.2 million recorded a year earlier.

London-listed Petra said, following its capital restructuring, consolidated net debt had been reduced to $290.7m at 31 March 2021 from $700.4m at the end of December 2020.

Chief executive Richard Duffy said the group was seeing encouraging signs of a recovery in the diamond market, supporting better pricing, reflected in the third quarter revenue numbers.

“Post completion of the capital restructuring, Petra is in a far stronger position, with a solid platform for future growth and development,” said Duffy.

However, production levels had taken a 24 percent knock during the three months ended March to 704 498 carats, from 932 456 carats in 2019, and by 19 percent to 2.4 million carats during the nine months ended March from 3 million carats a year earlier.

Cullinan posted a 9 percent output increase to 436 703 carats while the Finsch in the Northern Cape posted a 43 percent fall in production to 253 607 carats and Koffiefontein in the Free State recorded an 18 percent decline in output to 14 188 carats.

Petra said Finsch’s production had been impacted by measures to address water ingress, while production at both Finsch and Koffiefontein were affected by high levels of rainfall during the third quarter.

The group said Williamson mine remained in care and maintenance since mid-April.

“We expect to see improved performance from Finsch as underground water ingress reduces and the remediation steps are implemented,” Duffy said.

Petra said talks with the Tanzanian government – relating to various issues at the Williamson mine, including the overdue VAT receivables and the blocked diamond parcel – were ongoing and were expected to conclude during the fourth quarter of 2021.

Petra said it planned to provide its feedback on the company’s conclusions and next steps following the investigation into allegations of human rights abuses at the Williamson mine around the end of the month.

“The investigation is being undertaken by an external independent advisor, in conjunction with the company’s legal advisers,” Petra said.

Last year, UK-based law firm Leigh Day filed claims in the High Court of England against Petra on behalf of 32 individuals who allegedly suffered human rights abuses, injuries and death at the hands of security guards around the mine. Williamson is 75 percent owned by Petra and 25 percent owned by the Tanzanian government.

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