TIDMPDL
RNS Number : 4562V
Petra Diamonds Limited
23 July 2018
The following replaces the announcement issued by Petra Diamonds
Limited at 7am BST this morning, further to the changes below:
FY 2019 Guidance Highlights - Outlook for FY 2019 Absolute
Costs:
-- Total FY 2019 absolute on-mine cash costs are expected to
remain largely flat compared to FY 2018 expected costs in ZAR local
currency, "notwithstanding an increase in overall tonnages and
inflationary increases." (previously said "with the decrease in
overall tonnage throughput offset by inflationary increases.")
Cullinan - FY 2018 Results:
-- Production increased 74% to 1,368,720 carats (FY 2017:
786,509 carats) mainly due to a 97% increase in ROM carat
production as the new C-Cut Phase 1 block cave continued to ramp up
and the new plant operated at planned throughput rates. Production
from the undiluted C-Cut mining areas (including CC1E) increased to
"ca. 2.46 Mt in FY 2018" (previously said "ca. 2 Mt in FY
2018").
23 July 2018 LSE: PDL
Petra Diamonds Limited
("Petra" or the "Company" or the "Group")
FY 2018 Trading Update and FY 2019 Guidance Update
Petra Diamonds Limited announces its Trading Update (unaudited)
for the year ended 30 June 2018 (the "Year" or "FY 2018"), ahead of
its preliminary results for the Year ("Prelim Results"), which will
be released on 17 September 2018.
The Company also announces updated analyst guidance for the year
to 30 June 2019 ("FY 2019").
Further to the announcement on 5 July 2018 that the Company and
its black economic empowerment ("BEE") partners have entered into
binding Heads of Agreement to dispose of their interest in the
Kimberley Ekapa Mining Joint Venture ("KEM JV"), results and
guidance have been disclosed both with and without the inclusion of
this business unit; the divestment is expected to complete before
the end of September 2018.
FY 2018 HIGHLIGHTS
-- Safety:
o Lost Time Injury Frequency Rate ("LTIFR") improved to 0.23 (FY
2017: 0.27).
-- Production:
o Production up 15% to 4.6 Mcts (FY 2017: 4.0 Mcts), in line
with guidance of 4.6 to 4.7 Mcts.
o Adjusted for the sale of KEM JV: production up 19% to 3.8 Mcts
(FY 2017: 3.2 Mcts).
-- Revenue:
o Revenue up 21% to US$576.4 million (FY 2017: US$477.0
million).
o Adjusted for the sale of KEM JV: revenue up 25% to US$494.6
million (FY 2017: US$394.8 million).
-- The diamond market remained stable throughout FY 2018, with
rough diamond prices on a like for like basis up ca. 2% for the
Year, compared to FY 2017.
-- Total FY 2018 Group absolute operating costs remained in-line
with expectations despite inflationary pressures and additional
costs incurred at KEM JV in relation to security and other measures
associated with illegal mining activities (as noted in Petra's FY
2018 Interim Results). However, the strengthening of the Rand
during the Year had a negative impact on US Dollar reported
operating costs.
-- FY 2018 unit cost per tonne has been adversely affected by
below planned throughput with a high percentage of fixed costs,
especially at Koffiefontein and KEM JV. Further detail on the
breakdown of costs will be given in the Prelim Results
announcement.
-- Operational Capex:
o Operational Capex (excluding capitalised borrowing costs)
reduced to US$142.7 million (FY 2017: US$255.1 million), within
budget and in line with the Company's reducing capital profile.
o Adjusted for the sale of KEM JV: operational Capex of US$128.9
million (FY 2017: US$226.7 million).
-- Net debt as at 30 June 2018 reduced to US$436.1 million
(US$518.8 million net of diamond debtors of US$82.7 million) (30
June 2017: US$513.9 million (US$555.3 million net of diamond
debtors of US$41.5 million)) further to the completion of the 5 for
8 Rights Issue and the receipt of the net proceeds of ca. US$170
million.
Post Year End
-- Binding Heads of Agreement reached with regards to the
disposal of the Company's interest in the KEM JV to Petra's joint
venture partner Ekapa Mining (Pty) Ltd for ca. ZAR300 million.
-- The KEM JV asset will be accounted for as an asset held for
sale as at 30 June 2018 in the Company's Prelim Results and it is
expected that a non-cash impairment charge will be recorded in the
region of US$35 - 45 million.
FY 2019 GUIDANCE HIGHLIGHTS
As outlined in the recent Rights Issue Prospectus (published 24
May 2018), FY 2019 and FY 2020 production guidance was stated to be
at the lower end of the guidance issued in July 2017. This will be
accompanied by an ongoing focus on delivering the most effective
capital and operational cost profiles for its portfolio in order to
protect overall profit margins.
This is in line with the Board's strategic focus on driving
operational efficiency with emphasis on value-over-volumes, as well
as a close focus on operational costs, productivity and ongoing
optimisation of the portfolio (as demonstrated by the proposed
disposal of the Company's interest in KEM JV).
-- FY 2019 production is expected to be 4.6 to 4.8 Mcts.
-- Excluding KEM JV, FY 2019 production is expected to be 3.8 to 4.0 Mcts.
-- Total FY 2019 absolute on-mine cash costs are expected to
remain largely flat compared to FY 2018 expected costs in ZAR local
currency, notwithstanding an increase in overall tonnages and
inflationary increases. As the Company transitions from its
capital-intensive phase to steady state operations, it will have a
core focus on further streamlining operations and re-setting the
cost base across its portfolio.
-- FY 2019 Capex (excluding capitalised borrowing costs) is
guided at ca. US$100 million (excluding KEM JV: ca. US$93 million),
continuing the declining trend since peak Capex was reached in FY
2016. All future Capex figures guided in this announcement are in
FY 2019 money terms, converted at an exchange rate of
ZAR12.75:US$1.
-- Total Capex for FY 2020 is expected to be ca. US$72 million
(excluding KEM JV), mostly relating to Cullinan and Finsch.
Sustaining Capex post FY 2020 is expected to be ca. US$30 million
per annum; planning on Expansion Capex post FY 2020 is ongoing.
FY 2018 Production, Sales and Capex - Summary(1)
Unit FY 2018 FY 2017 Variance
Sales
-------- ---------- ---------- ---------
Diamonds sold Carats 4,550,292 4,006,856 +14%
-------- ---------- ---------- ---------
Revenue US$M 576.4 477.0 +21%
-------- ---------- ---------- ---------
Production
-------- ---------- ---------- ---------
ROM diamonds Carats 3,731,951 2,849,247 +31%
-------- ---------- ---------- ---------
Tailings & other(2)
diamonds Carats 879,531 1,163,966 -24%
-------- ---------- ---------- ---------
Total diamonds Carats 4,611,482 4,013,213 +15%
-------- ---------- ---------- ---------
Tonnages
-------- ---------- ---------- ---------
ROM tonnes Mt 12.9 10.1 +29%
-------- ---------- ---------- ---------
Tailings & other(2)
tonnes Mt 7.7 8.7 -12%
-------- ---------- ---------- ---------
Total tonnes Mt 20.6 18.8 +10%
-------- ---------- ---------- ---------
Capex
-------- ---------- ---------- ---------
Expansion US$M 120.1 230.8 -48%
-------- ---------- ---------- ---------
Sustaining US$M 22.6 24.3 -7%
-------- ---------- ---------- ---------
Borrowing Costs Capitalised US$M 35.8 45.5 -21%
-------- ---------- ---------- ---------
Total US$M 178.5 300.6 -41%
-------- ---------- ---------- ---------
Notes:
1. Production, sales and Capex stated on an attributable basis, including 75.9% of KEM JV.
2. 'Other' represents alluvial diamond mining at Williamson.
FY 2018 Production, Sales and Capex - Summary (Excluding KEM
JV)
Unit FY 2018 FY 2017 Variance
Sales
-------- ---------- ---------- ---------
Diamonds sold Carats 3,793,799 3,184,893 +19%
-------- ---------- ---------- ---------
Revenue US$M 494.6 394.8 +25%
-------- ---------- ---------- ---------
Production
-------- ---------- ---------- ---------
ROM diamonds Carats 3,649,337 2,761,464 +32%
-------- ---------- ---------- ---------
Tailings & other(1)
diamonds Carats 186,130 451,315 -59%
-------- ---------- ---------- ---------
Total diamonds Carats 3,835,467 3,212,779 +19%
-------- ---------- ---------- ---------
Tonnages
-------- ---------- ---------- ---------
ROM tonnes Mt 12.1 9.4 +29%
-------- ---------- ---------- ---------
Tailings & other(1)
tonnes Mt 1.6 2.6 -39%
-------- ---------- ---------- ---------
Total tonnes Mt 13.7 12.0 +14%
-------- ---------- ---------- ---------
Capex
-------- ---------- ---------- ---------
Expansion US$M 110.0 206.9 -47%
-------- ---------- ---------- ---------
Sustaining US$M 18.9 19.8 -5%
-------- ---------- ---------- ---------
Borrowing Costs Capitalised US$M 35.8 45.5 -21%
-------- ---------- ---------- ---------
Total US$M 164.7 272.2 -40%
-------- ---------- ---------- ---------
Notes:
1. 'Other' represents alluvial diamond mining at Williamson.
Johan Dippenaar, Chief Executive of Petra Diamonds,
commented:
"FY 2018 represents a solid progression for the Group after the
challenges of FY 2017 and H1 FY 2018, and places our production on
a firm footing, backed up by a strong safety performance.
"The future focus of the Group will be on the continued
optimisation of production volumes and cost structures across our
portfolio in order to maximise cash generation."
CONFERENCE CALLS
Petra will hold two conference calls today hosted by Chief
Executive Johan Dippenaar, Finance Director Jacques Breytenbach and
Chief Operating Officer Luctor Roode to discuss the FY 2018 Trading
Update and FY 2019 Guidance with investors and analysts.
Detailed guidance documents can be downloaded from the 'Analyst
Guidance' page of Petra's website at:
www.petradiamonds.com/investors/analysts/analyst-guidance.
Participants on the calls are recommended to have these documents
to hand.
First Call - 9:30am BST
UK Toll-Free Number: 0808 237 0040
From South Africa (toll free): 0800 222 290
From the rest of the world: +44 20 3428 1542
Participant passcode: 64276584#
A replay of the conference call will be available on the
following numbers:
From UK (toll free): 0808 237 0026
From South Africa (toll free): 0800 002 877
From the rest of the world: +44 20 3426 2807
Playback passcode: 698101#
Second call - 4:00pm BST
Petra will host a second call to cater for international
investors.
From the United States (toll free): 1866 928 7517
From the rest of the world: 020 3428 1542
From the UK (toll free): 0808 237 0040
From South Africa (toll free): 0800 222 290
Participant passcode: 64276584#
HEALTH AND SAFETY
-- The Group's LTIFR improved to 0.23 (FY 2017: 0.27). Although
the Company is very encouraged by this improving trend, it will
continue to strive to reach its goal of a zero-harm workplace.
OPERATIONS
-- Production rose 15% to 4.6 Mcts for FY 2018 (FY 2017: 4.0
Mcts), due to the underground expansion programmes continuing to
ramp up and the resultant higher contribution of undiluted ore from
the new mining areas together with the ongoing ramp-up of the new
Cullinan Plant.
ROM carats produced increased 31% to 3,731,951 carats (FY 2017:
2,849,247 carats), contributing ca. 81% of the Group's production
profile (FY 2017: ca. 71%), in comparison to lower value carats
from surface tailings operations.
Finsch
FY 2018 Results:
-- ROM production increased 6% to 1,926,467 carats (FY 2017:
1,818,454 carats) driven by a higher average ROM grade of 62.5 cpht
(FY 2017: 56.6 cpht), positively impacted by the treatment of
higher-grade surface ROM material, coupled with the increase in
undiluted tonnes from the new Block 5 Sub Level Cave ("SLC").
-- This partially offset the underperformance of ROM tonnage
throughput due to lower tonnes from the South West Precursor
ancillary orebody ("SW Precursor"), where production was curtailed
further to intermittent caving leading to safety concerns around
the stability of the ground conditions in the vicinity of the
mining area. This is necessitating continual reassessment of the
manner in which the SW Precursor orebody can be accessed, as
described further below.
-- Overall production decreased 4% to 2,073,477 carats (FY 2017:
2,149,896 carats), with the increase in ROM production offset by
the planned reduction in tailings production, which decreased to
147,010 carats (FY 2017: 331,442 carats).
-- Block 5 SLC ramped up further and delivered ca. 1.65 Mt in FY
2018 compared to 0.75 Mt in FY 2017.
-- FY 2018 Expansion Capex of US$42.3 million was mainly spent
on underground development and infrastructure relating to the Block
5 SLC.
Guidance:
-- ROM throughput of 3.1 Mt in FY 2018 will rise to 3.2 Mt in FY
2019, as disclosed in Petra's recent Rights Issue prospectus
(published 24 May 2018). This is lower than previous guidance of
3.5 Mtpa due to the exclusion of the SW Precursor from the mine
plan.
-- The SW Precursor is a smaller ancillary orebody (ca. 1.2 ha
in size, compared to the main orebody of ca. 4.7 ha), which
contains ca. 3 Mt of ore above 63 Level and another ca. 3 Mt
between 63 Level and 73 Level. The relatively small size and its
proximity to the main pipe affects the ability to induce continuous
caving and the stability of the rim tunnel. Refer to the schematic
'Finsch Plan View' at:
https://www.petradiamonds.com/investors/analysts/analyst-guidance/.
-- The Company will continue to assess plans to achieve its
longer term throughput target of 3.5 Mtpa at Finsch by
investigating options to safely reintroduce the SW Precursor from
73 Level or increasing throughput rates from the Block 5 SLC.
-- FY 2019 planned tonnage from the SLC is ca. 2.7 Mt, with the
remaining tonnes to be sourced from the ROM overburden dumps.
-- Finsch's ROM grade of 62.5 cpht was higher than guidance
primarily due to the contribution of high grade surface overburden
dumps. The ROM grade is expected to reduce to within the guidance
range of 56 - 59 cpht for FY 2019, mainly due to the depletion of
these high grade overburden dumps from FY 2019, although partially
offset by the increased ramp up of the Block 5 SLC.
-- Limited tailings production of ca. 200,000 tonnes is planned
for FY 2019, which includes mostly remnants from the higher grade
pre-79 tailings. While tailings production post FY 2019 does not
form part of the current mine plan, lower grade post-79 tailings
material remains available to supplement the underground operations
in the future.
-- Total absolute on mine cash cost is guided at ca. ZAR1,270
million. Unit costs are expected to increase due to the mining of
predominantly ROM tonnes, an increase in drilling and blasting
activities associated with SLC mining, a reduction in the
previously guided Block 5 SLC ROM throughput and the effect of a
relatively high fixed cost base associated with mining operations.
As the mine transitions from a capital-intensive expansion phase
into a steady state production phase, the right sizing and
streamlining of the cost structure at Finsch will be a priority
focus in FY 2019.
-- Expansion Capex for FY 2019 is guided at ca. US$16 million,
primarily relating to the completion of the blue (kimberlite)
tunnel development in the Block 5 SLC.
Cullinan
FY 2018 Results:
-- Production increased 74% to 1,368,720 carats (FY 2017:
786,509 carats) mainly due to a 97% increase in ROM carat
production as the new C-Cut Phase 1 block cave continued to ramp up
and the new plant operated at planned throughput rates. Production
from the undiluted C-Cut mining areas (including CC1E) increased to
ca. 2.46 Mt in FY 2018 (FY 2017: ca. 1.2 Mt).
-- Plant optimisation is ongoing, with the recovered ROM grade
improving from ca. 33 cpht achieved in H1 FY 2018 to 37.8 cpht for
H2 FY 2018, with Q4 FY 2018 yielding a grade of 39.3 cpht, in line
with revised guidance of 37 - 42 cpht for 2H"HH2.
-- A total of 0.4 Mt of tailings were treated with an average grade of 6.5 cpht.
-- FY 2018 Expansion Capex of US$55.5 million was mainly spent
on the C-Cut Phase 1, CC1E and finalisation of the new plant.
Guidance:
-- 1.0 Mt ROM was hoisted and treated in Q4 FY 2018, which
demonstrates the strong progress and capability of the Cullinan
operations. However, the Company is guiding for a range of 3.7 -
4.0 Mt to be treated during FY 2019, due to the continued ramp-up
of C-Cut Phase 1, the depletion of the old B Block mining areas and
the switch-over period required for the implementation of the new
shaft / plant interface, which is scheduled to be completed by Q3
FY 2019. This will aid in alleviating constraints with the link
between the underground hoisting system and the plant.
-- The C-Cut Phase 1 project is planned to contribute ca. 3 Mt
for the year. A further 0.7 - 1.0 Mt will be sourced predominantly
from the CC1E mining area, as well as from other B Block
tonnes.
-- Steady state production of 4.0 Mtpa will be delivered from
C-Cut Phase 1 and CC1E. The Company will on an ongoing basis
investigate the optimal plan to utilise the full extent of the
large Cullinan orebody (ca. 16 ha at current production
depths).
-- ROM grade is expected to remain in the 38 - 42 cpht range from FY 2019 onwards.
-- Tailings production is planned at ca. 1.5 - 1.7 Mt yielding 6
- 7 cpht, whilst the plant optimisation (total throughput in
relation to mill settings and recirculating load) is ongoing.
Longer term steady state tailings production is expected to be ca.
2 Mtpa yielding 6 - 7 cpht.
-- Total absolute on mine cash cost is guided at ca. ZAR1,135 million.
-- FY 2019 expansion Capex for Cullinan is guided at ca. US$45
million, primarily relating to the installations of the final C-Cut
Phase 1 drawpoint and the shaft / plant interface.
Koffiefontein
FY 2018 Results:
-- ROM production increased 3% to 52,537 carats (FY 2017: 51,173
carats) further to the commissioning of the new ground handling
system during Q3, which enabled the subsequent ramp up of tonnages
in Q4 and allowed the mine to reach its revised guidance of ca.
0.65 - 0.7 Mt for FY 2018.
-- During May and June 2018, ca. 187,000 tonnes were hoisted, in
line with the mine's FY 2019 annualised targeted throughput of 1.0
Mtpa.
Guidance:
-- The SLC is expected to maintain the throughput rates achieved
in May and June 2018 and deliver ROM throughput of ca. 1.0 Mtpa at
an average grade of 7.5 - 8.0 cpht for FY 2019.
-- Total absolute on mine cash cost is guided at ca. ZAR420 million.
-- FY 2019 expansion Capex is guided at ca. US$5 million,
primarily relating to blue (kimberlite) tunnel development in the
SLC.
Williamson
FY 2018 Results:
-- The mine performed well operationally with production up 51%
to 341,102 carats (FY 2017: 225,202 carats), being the highest
level of production achieved by the mine in over 40 years. This is
despite operations being impacted by liquidity constraints due to
the parcel of ca. 72,000 carats that remains blocked for export and
the overdue VAT receivables of ca. US$15 million.
-- FY 2018 Capex of US$4.6 million mainly related to waste
stripping and slimes dam construction.
Guidance:
-- ROM throughput is planned at ca. 4.7 Mt at a grade of ca.
6.75 - 7 cpht for FY 2019, supplemented by alluvial production of
ca. 0.4 Mt at a grade of ca. 2.5 cpht.
-- Total on mine absolute cost is guided at ca. US$59 million.
-- Total Capex is guided at US$5 million for FY 2019, primarily
related to waste stripping. This level of Capex is funded from the
mine's own cash flow and could be adjusted when issues relating to
the blocked parcel and VAT are resolved.
Kimberley Ekapa Mining Joint Venture
FY 2018 Results (stated in 75.9% attributable terms):
-- Petra's attributable production decreased 3% to 775,645
carats for the Year (FY 2017: 800,434 carats), with ROM production
decreasing 6% to 82,246 carats (FY 2017: 87,783 carats). This was
below guidance due to a combination of factors including the labour
disruption experienced in Q1 FY 2018, project delays and the
mudrush incident at Bultfontein which has led to the early closure
of this underground mining area. Tailings production decreased 3%
to 693,399 carats (FY 2017: 712,651 carats) further to the severe
rain storms during Q3 restricting access to higher grade dumps.
-- Binding Heads of Agreement reached post Year end with regards
to the disposal of the Company's interest in the KEM JV to the
Company's joint venture partner Ekapa Mining (Pty) Ltd for ca.
ZAR300 million.
REVENUE AND DIAMOND MARKET
Diamond Market
-- The diamond market was stable throughout FY 2018, though
subject to normal seasonal fluctuations in pricing. As at the date
of this announcement, it is considered to remain healthy, as
evidenced by strong demand at Petra's tenders and further
substantiated by inventory within the pipeline assessed to be at
relatively normal levels and positive demand from the retail
market, particularly in the US and China.
-- The Company expects the diamond market to remain stable in FY 2019.
Petra Sales and Prices
-- FY 2018 revenue increased 21% to US$576.4 million (FY 2017:
US$477.0 million) due to the number of carats sold for the Year
increasing 14% to 4,550,292 carats (FY 2017: 4,006,856 carats) and
an improving average product mix due to the higher proportion of
ROM versus tailings carats.
-- The diamond market saw seasonal weakness in July to October
2017, with Petra prices on a like-for-like basis down approximately
5% before recovering approximately 1.5% in December 2017, and since
increasing by approximately 5% in H2 FY 2018. Such fluctuations in
part reflect the seasonal nature of the rough market, due to the
fact that retailers are ready to restock after the festive selling
season, which includes Thanksgiving in the U.S., Christmas, Chinese
New Year and Valentine's Day, thereby serving to introduce fresh
liquidity into the diamond pipeline and draw down inventory levels
of polished diamonds.
-- Overall rough diamond prices on a like for like basis were up
ca. 2% for the Year, compared to FY 2017.
-- Following an assessment of the level of guidance provided by
the Company, future price guidance has been removed, and Petra will
now instead report historical and actual prices achieved and
provide additional commentary as required to highlight any
anomalies.
Mine Actual Guidance Actual
US$/ct US$/ct US$/ct
FY 2018 FY 2018 FY 2017
Finsch 108(1) 101 - 106 101
-------- --------- --------
Cullinan 125(2) 140 - 160 120
-------- --------- --------
Koffiefontein 525(1) 525 - 550 506
-------- --------- --------
KEM JV 108(1) 105 - 115 100
-------- --------- --------
Williamson 270(3) 214 - 224 258
-------- --------- --------
Notes:
1. In line with expectations.
2. Below historical averages due to lower incidence of higher value stones.
3. Higher average value achieved due to higher incidence of high value stones.
Due to the variability in Cullinan's achieved prices, the
following historical price information is provided, which is based
on the sale of 7,883,301 carats over the nine year period FY 2010
to FY 2018 for an average of US$144 per carat:
-- on an annual basis, a high of US$185 per carat and a low of
US$120 per carat was achieved (FY 2018: US$125 per carat);
-- on a half yearly basis, a high of US$247 per carat and a low
of US$87 per carat was achieved (FY 2018: high of US$140 and low of
US$118); and
-- on a quarterly basis, a high of US$293 per carat and a low of
US$63 per carat was achieved (FY 2018: high of US$157 and low of
US$97).
CORPORATE AND FINANCIAL
Rights Issue
-- On 24 May 2018, the Company announced a 5 for 8 Rights Issue
to raise net proceeds of ca. US$170 million via the issuance of
332,821,725 Rights Issue Shares at an Issue Price of 40 pence per
share. The main driver for the fundraise was to accelerate a
reduction in leverage to a more sustainable level, with the Board
setting a target of Consolidated Net Debt to Consolidated EBITDA of
2x or less by FY 2020, and to enable management to focus on ongoing
operational delivery and optimisation, as well as to assist in
mitigating short-term issues relating to currency volatility and
other ongoing business challenges.
On 13 June 2018, shareholders approved the Rights Issue, with
over 99% of votes cast in favour of the transaction and on 29 June
2018, the Company announced that it had received valid acceptances
representing ca. 95% of the total number of Rights Issue Shares
offered to shareholders. The remaining ca. 5% of Rights Issue
Shares were subsequently placed with institutions on the same day
at a price of 52.25 pence per share. Petra's number of shares in
issue is now 865,336,485.
Further to the receipt of the funds from the Rights Issue, the
Company utilised ca. US$107 million to fully pay down outstanding
drawn indebtedness with its South African Lending Group, (thereby
realising cash interest savings of ca. US$10 - 12 million per
annum), whilst retaining both of these facilities.
Balance Sheet
-- A summary of the Group's current cash, diamond inventories,
debtors, borrowings and net debt is set out below.
Unit 30 June 2018 30 June 2017
Exchange rate used for R13.73:US$1 R13.05:US$1
conversion
--------- ------------- -------------
Cash at bank US$m 237.9 203.7
--------- ------------- -------------
Diamond inventories US$m 64.6 50.2
Carats 624,951 570,264
--------------------------------------------- ------------- -------------
Diamond inventories US$m 55.1 42.3
(excluding KEM JV) Carats 529,054 493,296
--------- ------------- -------------
Diamond debtors US$m 82.7 41.5
--------- ------------- -------------
US$650 million loan notes
(issued April 2017) US$m 650.0 650.0
--------- ------------- -------------
Bank loans and borrowings US$m 106.7 109.0
--------- ------------- -------------
Net debt US$m 518.8 555.3
--------- ------------- -------------
Consolidated net debt for
covenant measurement purposes(1) US$m 521.7 616.8
--------- ------------- -------------
Note:
1. Consolidated Net Debt is bank loans and borrowings plus loan
notes, less cash, less diamond debtors and includes the BEE
guarantees of ca. US$85.6 million (ZAR1,175 million) issued by
Petra to the lenders as part of the BEE financing concluded in
December 2014.
Bank Facility Covenants
-- The Company's South African bank debt was settled shortly
after Year end, as per one of the core objectives of the Rights
Issue.
-- No covenant measurement will be taken for June 2018, further
to the South African lender group agreeing to waive this covenant
measurement period subject to the completion of the Rights
Issue.
-- Following the completed Rights Issue, the Company aims to
engage with the South African lender group in order to simplify the
financing agreements with regards to covenants and BEE partner
debt.
Board and Management Structures
-- As noted in the Company's Rights Issue announcement on 24 May
2018, the Company is continuing to review its Board, board
committee and senior management structures in line with its
development from a phase of intensive capital expenditure and
expansion to a focus on steady state operations, as well as to
address improving diversity at the higher levels of the
business.
-- To this end, the Company's Nomination Committee, which is
currently in year two of its three year succession plan, is making
good progress with plans to make additional changes in FY 2019 in
order to ensure the Company has the right mix of expertise and
skills. New developments will be announced in this regard before
the end of H1 FY 2019.
South African Mining Charter
-- On 15 June 2018, the South African Department of Mineral
Resources gazetted a revised draft Mining Charter which was open
for comments from stakeholders for 30 days prior to a mining summit
held on 7 - 8 July 2018. The Minister of Mineral Resources has
since announced that the period for comment has been extended until
31 August 2018. The Minerals Council South Africa, which represents
the South African mining industry and of which Petra is a member,
will be providing submissions in relation to the draft Charter.
Update on Tanzania
-- No further update to be reported on the blocked Williamson
parcel or outstanding VAT receivables.
Notes
1. The following exchange rates have been used for this
announcement: average for the Year US$1:ZAR12.86 (FY 2017:
US$1:ZAR13.59); closing rate as at 30 June 2018 US$1:ZAR13.73 (30
June 2017: US$1:ZAR13.05).
2. The following definitions have been used in this announcement:
a. ct: carat
b. cpht: carats per hundred tonnes
c. Mctpa: million carats per annum
d. Mcts: million carats
e. Mt: million tonnes
f. Mtpa: million tonnes per annum
g. ROM: run-of-mine, i.e. relating to production from the primary orebody
h. SLC: sub-level cave, a variation of block caving
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Ends
For further information, please contact:
Petra Diamonds, London Telephone: +44 20 7494 8203
Cathy Malins investorrelations@petradiamonds.com
Cornelia Grant
Marianna Bowes
Buchanan Telephone: +44 20 7466 5000
(PR Adviser) pdl@buchanan.uk.com
Bobby Morse
About Petra Diamonds Limited
Petra Diamonds is a leading independent diamond mining group and
a consistent supplier of gem quality rough diamonds to the
international market. The Company has a diversified portfolio
incorporating interests in three underground producing mines in
South Africa (Finsch, Cullinan and Koffiefontein) and one open pit
producing mine in Tanzania (Williamson). It announced in July 2018
an agreement to dispose of its interest in the Kimberley Ekapa
Mining JV in South Africa. It also maintains an exploration
programme in Botswana and South Africa.
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 the efficiency and profitability of its
operations. The Group has a significant resource base in excess of
300 million carats, which supports the potential for long-life
operations.
Petra conducts all operations according to the highest ethical
standards and will only operate 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' and is a constituent
of the FTSE4Good Index. For more information, visit
www.petradiamonds.com.
APPIX
FY 2018 MINE BY MINE PRODUCTION TABLES
Finsch - South Africa
H2 H1
Unit FY 2018 FY 2018 FY 2018 FY 2017 Variance
Sales
-------- ---------- ---------- ---------- ---------- -----------
Revenue US$M 131.1 100.8 231.9 216.7 +7%
-------- ---------- ---------- ---------- ---------- -----------
Diamonds sold Carats 1,182,240 970,446 2,152,786 2,141,885 +1%
-------- ---------- ---------- ---------- ---------- -----------
Average price per
carat US$ 111 104 108 101 +6%
-------- ---------- ---------- ---------- ---------- -----------
ROM Production
-------- ---------- ---------- ---------- ---------- -----------
Tonnes treated Tonnes 1,525,115 1,559,280 3,084,395 3,212,169 -4%
-------- ---------- ---------- ---------- ---------- -----------
Diamonds produced Carats 994,608 931,859 1,926,467 1,818,454 +6%
-------- ---------- ---------- ---------- ---------- -----------
Grade(1) Cpht 65.2 59.8 62.5 56.6 +10%
-------- ---------- ---------- ---------- ---------- -----------
Tailings Production
-------- ---------- ---------- ---------- ---------- -----------
Tonnes treated Tonnes 279,749 515,224 794,973 1,651,089 -52%
-------- ---------- ---------- ---------- ---------- -----------
Diamonds produced Carats 42,273 104,737 147,010 331,442 -56%
-------- ---------- ---------- ---------- ---------- -----------
Grade(1) Cpht 15.1 20.3 18.5 20.1 -8%
-------- ---------- ---------- ---------- ---------- -----------
Total Production
-------- ---------- ---------- ---------- ---------- -----------
Tonnes treated Tonnes 1,804,864 2,074,503 3,879,368 4,863,258 -20%
-------- ---------- ---------- ---------- ---------- -----------
Diamonds produced Carats 1,036,881 1,036,596 2,073,477 2,149,896 -4%
-------- ---------- ---------- ---------- ---------- -----------
Capex
-------- ---------- ---------- ---------- ---------- -----------
Expansion Capex US$M 18.3 24.0 42.3 58.4 -28%
-------- ---------- ---------- ---------- ---------- -----------
Sustaining Capex US$M 4.3 3.4 7.7 9.1 -15%
-------- ---------- ---------- ---------- ---------- -----------
Borrowing Costs
Capitalised US$M 8.4 7.1 15.5 18.9 -18%
-------- ---------- ---------- ---------- ---------- -----------
Total Capex US$M 31.0 34.5 65.5 86.4 -24%
-------- ---------- ---------- ---------- ---------- -----------
Note:
1. The Company 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.
Cullinan - South Africa
H2 H1
Unit FY 2018 FY 2018 FY 2018 FY 2017 Variance
Sales
-------- ---------- ---------- ---------- ---------- -----------
Revenue US$M 105.6 61.4 167.0 91.3 +83%
-------- ---------- ---------- ---------- ---------- -----------
Diamonds sold Carats 896,657 439,012 1,335,669 760,957 +76%
-------- ---------- ---------- ---------- ---------- -----------
Average price per
carat US$ 118 140 125 120 +4%
-------- ---------- ---------- ---------- ---------- -----------
ROM Production
-------- ---------- ---------- ---------- ---------- -----------
Tonnes treated Tonnes 1,957,857 1,783,229 3,741,086 1,882,911 +99%
-------- ---------- ---------- ---------- ---------- -----------
Diamonds produced Carats 739,426 602,594 1,342,020 679,622 +97%
-------- ---------- ---------- ---------- ---------- -----------
Grade(1) Cpht 37.8 33.8 35.9 36.1 -1%
-------- ---------- ---------- ---------- ---------- -----------
Tailings Production
-------- ---------- ---------- ---------- ---------- -----------
Tonnes treated Tonnes 375,726 37,023 412,749 506,176 -18%
-------- ---------- ---------- ---------- ---------- -----------
Diamonds produced Carats 22,060 4,640 26,700 106,887 -75%
-------- ---------- ---------- ---------- ---------- -----------
Grade(1) Cpht 5.9 12.5 6.5 21.1 -69%
-------- ---------- ---------- ---------- ---------- -----------
Total Production
-------- ---------- ---------- ---------- ---------- -----------
Tonnes treated Tonnes 2,333,583 1,820,252 4,153,835 2,389,087 +74%
-------- ---------- ---------- ---------- ---------- -----------
Diamonds produced Carats 761,486 607,234 1,368,720 786,509 +74%
-------- ---------- ---------- ---------- ---------- -----------
Capex
-------- ---------- ---------- ---------- ---------- -----------
Expansion Capex US$M 25.5 30.0 55.5 120.9 -54%
-------- ---------- ---------- ---------- ---------- -----------
Sustaining Capex US$M 5.1 1.4 6.5 4.3 +51%
-------- ---------- ---------- ---------- ---------- -----------
Borrowing Costs
Capitalised US$M 11.2 9.1 20.3 26.6 -24%
-------- ---------- ---------- ---------- ---------- -----------
Total Capex US$M 41.8 40.5 82.3 151.8 -46%
-------- ---------- ---------- ---------- ---------- -----------
Notes:
1. The Company 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.
Koffiefontein - South Africa
H2 H1
Unit FY 2018 FY 2018 FY 2018 FY 2017 Variance
Sales
-------- --------- --------- ---------- ---------- -----------
Revenue US$M 16.2 11.0 27.2 28.4 -4%
-------- --------- --------- ---------- ---------- -----------
Diamonds sold Carats 30,381 21,555 51,936 56,068 -7%
-------- --------- --------- ---------- ---------- -----------
Average price per
carat US$ 534 511 525 506 +4%
-------- --------- --------- ---------- ---------- -----------
ROM Production
-------- --------- --------- ---------- ---------- -----------
Tonnes treated Tonnes 359,781 289,478 649,259 667,821 -3%
-------- --------- --------- ---------- ---------- -----------
Diamonds produced Carats 27,245 25,292 52,537 51,173 +3%
-------- --------- --------- ---------- ---------- -----------
Grade Cpht 7.6 8.7 8.1 7.7 +6%
-------- --------- --------- ---------- ---------- -----------
Total Production
-------- --------- --------- ---------- ---------- -----------
Tonnes treated Tonnes 359,781 289,478 649,259 667,821 -3%
-------- --------- --------- ---------- ---------- -----------
Diamonds produced Carats 27,245 25,292 52,537 51,173 +3%
-------- --------- --------- ---------- ---------- -----------
Capex
-------- --------- --------- ---------- ---------- -----------
Expansion Capex US$M 4.1 5.5 9.6 13.8 -30%
-------- --------- --------- ---------- ---------- -----------
Sustaining Capex US$M 0.4 2.3 2.7 5.5 -51%
-------- --------- --------- ---------- ---------- -----------
Total Capex US$M 4.5 7.8 12.3 19.3 -36%
-------- --------- --------- ---------- ---------- -----------
Kimberley Ekapa Mining JV - South Africa
H2 H1
Unit FY 2018(1) FY 2018(1) FY 2018(1) FY 2017(1) Variance
Sales
-------- ------------ ------------ ------------- ------------- -----------
Revenue US$M 48.1 33.5 81.6 82.3 -1%
-------- ------------ ------------ ------------- ------------- -----------
Diamonds sold Carats 455,700 300,793 756,493 821,963 -8%
-------- ------------ ------------ ------------- ------------- -----------
Average price per
carat US$ 106 111 108 100 +8%
-------- ------------ ------------ ------------- ------------- -----------
ROM Production
-------- ------------ ------------ ------------- ------------- -----------
Tonnes treated Tonnes 338,588 430,188 768,776 597,025 +29%
-------- ------------ ------------ ------------- ------------- -----------
Diamonds produced Carats 32,727 49,519 82,246 87,783 -6%
-------- ------------ ------------ ------------- ------------- -----------
Grade Cpht 9.7 11.5 10.7 14.7 -27%
-------- ------------ ------------ ------------- ------------- -----------
Tailings Production
-------- ------------ ------------ ------------- ------------- -----------
Tonnes treated Tonnes 3,248,206 2,802,785 6,050,991 6,153,657 -2%
-------- ------------ ------------ ------------- ------------- -----------
Diamonds produced Carats 378,819 314,581 693,399 712,651 -3%
-------- ------------ ------------ ------------- ------------- -----------
Grade Cpht 11.7 11.2 11.5 11.6 -1%
-------- ------------ ------------ ------------- ------------- -----------
Total Production
-------- ------------ ------------ ------------- ------------- -----------
Tonnes treated Tonnes 3,586,794 3,232,973 6,819,767 6,750,682 +1%
-------- ------------ ------------ ------------- ------------- -----------
Diamonds produced Carats 411,546 364,099 755,645 800,434 -3%
-------- ------------ ------------ ------------- ------------- -----------
Capex
-------- ------------ ------------ ------------- ------------- -----------
Expansion Capex US$M 3.8 6.3 10.1 23.9 -58%
-------- ------------ ------------ ------------- ------------- -----------
Sustaining Capex US$M 1.9 1.8 3.7 4.5 -18%
-------- ------------ ------------ ------------- ------------- -----------
Total Capex US$M 5.7 8.1 13.8 28.4 -51%
-------- ------------ ------------ ------------- ------------- -----------
Note:
1. Data represent Petra's 75.9% attributable share in the KEM JV.
Williamson - Tanzania
H2 H1
Unit FY 2018 FY 2018 FY 2018 FY 2017 Variance
Sales
-------- ---------- ---------- ----------- ---------- -----------
Revenue US$M 50.0 18.5 68.5 58.4 +17%
-------- ---------- ---------- ----------- ---------- -----------
Diamonds sold Carats 174,079 79,445(1) 253,524(1) 226,110 +12%
-------- ---------- ---------- ----------- ---------- -----------
Average price per
carat US$ 287 233 270 258 +5%
-------- ---------- ---------- ----------- ---------- -----------
ROM Production
-------- ---------- ---------- ----------- ---------- -----------
Tonnes treated Tonnes 2,256,170 2,403,393 4,659,563 3,667,781 +27%
-------- ---------- ---------- ----------- ---------- -----------
Diamonds produced Carats 159,800 168,881 328,681 212,215 +55%
-------- ---------- ---------- ----------- ---------- -----------
Grade Cpht 7.1 7.0 7.0 5.8 +22%
-------- ---------- ---------- ----------- ---------- -----------
Alluvial Production
-------- ---------- ---------- ----------- ---------- -----------
Tonnes treated Tonnes 192,549 193,172 385,721 403,811 -4%
-------- ---------- ---------- ----------- ---------- -----------
Diamonds produced Carats 6,468 5,953 12,421 12,987 -4%
-------- ---------- ---------- ----------- ---------- -----------
Grade Cpht 3.4 3.1 3.2 3.2 -
-------- ---------- ---------- ----------- ---------- -----------
Total Production
-------- ---------- ---------- ----------- ---------- -----------
Tonnes treated Tonnes 2,448,719 2,596,565 5,045,284 4,071,592 +24%
-------- ---------- ---------- ----------- ---------- -----------
Diamonds produced Carats 166,268 174,834 341,102 225,202 +51%
-------- ---------- ---------- ----------- ---------- -----------
Capex
-------- ---------- ---------- ----------- ---------- -----------
Expansion Capex US$M 1.9 0.7 2.6 14.1 -82%
-------- ---------- ---------- ----------- ---------- -----------
Sustaining Capex US$M 0.5 1.5 2.0 0.9 +122%
-------- ---------- ---------- ----------- ---------- -----------
Total Capex US$M 2.4 2.2 4.6 15.0 -69%
-------- ---------- ---------- ----------- ---------- -----------
Note:
1. Negatively impacted by the 71,654 carat parcel blocked for export.
KEY FY 2019 OPERATING AND CAPEX ASSUMPTIONS
The table below sets out management's guidance in respect of the
key operating parameters for FY 2019.
Unit Finsch Cullinan Koffiefontein KEM JV Williamson
ROM tonnes
------ ---------- ----------- -------------- -------- -----------
Tonnes treated Mt 3.2 3.7 - 4.0 1.0 0.6 4.7
------ ---------- ----------- -------------- -------- -----------
Grade Cpht 56 - 59 38 - 42 7.5 - 8.0 13 - 14 6.5 - 7
------ ---------- ----------- -------------- -------- -----------
Tailings/other
tonnes
------ ---------- ----------- -------------- -------- -----------
Tonnes treated Mt 0.2 1.5 - 1.7 0.0 5.7 0.4
------ ---------- ----------- -------------- -------- -----------
Grade Cpht 18 - 20 6 - 7 n/a 11 - 12 2.5
------ ---------- ----------- -------------- -------- -----------
Total production
------ ---------- ----------- -------------- -------- -----------
Tonnes treated Mt 3.4 5.2 - 5.7 1.0 6.3 5.1
------ ---------- ----------- -------------- -------- -----------
On mine cash ZARm ZAR1,270m ZAR1,135m ZAR420m ZAR840m US$59m
cost
------ ---------- ----------- -------------- -------- -----------
Capex
------ ---------- ----------- -------------- -------- -----------
Expansion
Capex ZARm 200 570 65 55 US$0m
------ ---------- ----------- -------------- -------- -----------
Sustaining
Capex ZARm 125 130 30 40 US$5m
------ ---------- ----------- -------------- -------- -----------
Total Capex ZARm 325 700 95 95 US$5m
------ ---------- ----------- -------------- -------- -----------
Notes:
1. For detail on the figures above, please download the document
'Analyst Guidance - Detailed' available from the Company's website
at:
http://www.petradiamonds.com/investors/analysts/analyst-guidance.
2. Grades stated are recovered grades with appropriate dilution
and plant modification factors already applied.
3. All Capex numbers in this announcement exclude capitalised
borrowing costs, in line with previous guidance.
4. An inflation increase of 8% in ZAR terms has been applied to
update all Capex from FY 2018 money terms to FY 2019 money terms.
All Capex changes are therefore given in inflation adjusted
comparable FY 2018 money terms. FY 2018 Capex guidance figures for
the South African operations are converted at an exchange rate of
ZAR12.25/US$1.
CAPEX RECONCILIATION
Capex Unit FY 2018 FY 2017
Finsch US$M 65.5 86.4
------ -------- --------
Cullinan US$M 82.3 151.8
------ -------- --------
Koffiefontein US$M 12.3 19.3
------ -------- --------
KEM JV US$M 13.8 28.4
------ -------- --------
Williamson US$M 4.6 15.0
------ -------- --------
Helam US$M 0.0 0.0
------ -------- --------
Subtotal - Capex incurred by
operations US$M 178.5 300.9
------ -------- --------
Petra internal projects division
- Capex under construction
/ invoiced to operations US$M (1.7) (0.3)
------ -------- --------
Corporate / exploration US$M 2.3 1.4
------ -------- --------
Total Group Capex US$M 179.1 302.0
------ -------- --------
Notes:
1. Petra operates an internal projects / construction division
and, although this division's spend is reported in the Group's
total Capex, it is policy not to account for it on a specific
mine's Capex until the work completed is invoiced to the relevant
operation.
2. Capex for the Year includes US$35.8 million (FY 2017: US$45.5
million) of capitalised borrowing costs, which is also included in
the applicable mine-by-mine tables above.
3. Petra's annual Capex guidance is cash-based and excludes
capitalised borrowing costs. Given that the majority of Petra's
debt funding is in relation to its expansion and development
programmes, Petra's guidance is to assume that the majority of
interest and financing fees will be capitalised for the duration of
the project phases and not expensed through the income
statement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCLLFFIDIIVFIT
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