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Petra Extends Life of Cullinan, Finsch Mines

Feb 22, 2022 6:04 AM   By Rapaport News
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Petra Diamonds will invest $389 million to expand its two main mines in South Africa, each of which is expected to yield an additional 30% in revenue.

The project at the company’s Cullinan mine will cost approximately $173 million and will extend the life of the mine until 2031, while its outlay of $216 million to upgrade the Finsch site will see it through to 2030, it said Tuesday. Both locations have additional resources that could potentially take them “well beyond” those dates, Petra added. Meanwhile, the miner’s other South African asset, Koffiefontein, will deplete all available reserves by fiscal 2025.

Revenue for the six months ending December 31 jumped 49% to $264.7 million as strong demand bolstered prices. A 16% increase in prices on a like-for-like basis outweighed a 7% drop in sales volume to 1.6 million carats, the company explained.

Petra also profited from the sale of “exceptional stones,” including special-size rough over 10.8 carats and colored diamonds, which accounted for $77.9 million in revenue, compared to $40.4 million during the same period the year before.

“[The company] has delivered strong results...as well as reducing net debt significantly,” said Petra CEO Richard Duffy. “We have benefited from the recovery in rough-diamond prices, record proceeds from the sale of exceptional stones, and the improvements we have made in our operations…. Our strengthened operating platform and balance sheet, coupled with the robust rough-diamond market, sets us well for the second half of the year.”

However, profit slid 26% to $49.1 million during the period, stemming from the loss of $63.4 million in currency-exchange rates, it noted.

Production increased 2% for the six months as the Williamson mine in Tanzania came back online in September after an extended period on care and maintenance, and the company made operational improvements at the Finsch and Cullinan mines in South Africa.

The miner managed to reduce its debt to $152.3 million, versus $228.2 million as at June 30, it added.

Image: The Finsch mine. (Petra Diamonds)
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Tags: Cullinan, Cullinan Mine, diamonds, Finsch, Koffiefontein, petra, Petra Diamonds, Rapaport News, Richard Duffy, South Africa, tanzania, Williamson Mine
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