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RAPAPORT... Petra Diamonds Ltd. announced a $300 million notes issue and an increase to its senior lender debt facilities to prepare for the construction of a modern processing plant at its Cullinan mine in South Africa. Petra's lender group has agreed, in principle, to increase the miner's debt facilities - subject to the closing of the issue- from $81.6 million to $302.4 million, along with certain amended availability and repayment terms.
Petra stated that it will use the proceeds to settle (not cancel) certain existing debt and, together with future drawdowns from the expanded facilities, fund the construction at Cullinan. The new fit-for-purpose processing plant at Cullinan carries a capital cost of $142.8 million and is expected to improve the recovery of a full spectrum of diamond sizes, protect large stones from breakage and improve efficiency in order to lower operating costs. Johan Dippenaar, the CEO of Petra, said, "Petra will be using a portion of the notes financing to construct a modern processing plant at Cullinan, which we believe will
significantly improve returns at the mine by delivering enhanced diamond recoveries, especially of the large, high-value diamonds for which the mine is known, as well as substantial savings to operating costs.
"We believe that this new, more diversified, funding package better serves our needs as a business as we continue to grow and evolve and provides additional financial flexibility as we pursue our stated growth strategy." The new plant at Cullinan will incorporate autogenous (AG) milling, described as a gentler recovery process that breaks down ore via attrition rather than crushing; high pressure grinding rolls (HPGR) technology, a gentler liberation technique incorporating interparticle crushing and enhanced utilization of XRF X-ray technology to replace conventional dense media separation (DMS) plants to treat coarser 12-millimeter-plus material.
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