PETRA DIAMONDS
w Employees underground at the Wesselton Shaft, Kimberley Underground
PETRA DIAMONDS
Petra Holds All the Jewels PRODUCTION: Timothy Reeder
Petra boasts a diversified portfolio of world-class mines which have produced some of the world’s most important and valuable diamonds to date. The recent announcement of leadership changes, along with enviable interim results, gives much cause for excitement for the future of the independent diamond mining group. www.enterprise-africa.net / 3
INDUSTRY FOCUS: DIAMOND MINING
// PETRA HAS DELIVERED SOLID PRODUCTION IN THE FIRST HALF OF FY 2019 UNDERPINNED BY A CONTINUED IMPROVEMENT IN SAFETY PERFORMANCE //
Drilling Specialist and Long Hole Charging Assistant observing the Simba M4C operating in automation, underground at Finsch
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Having blossomed from a junior diamond explorer with a market capitalisation of less than £10 million in 1997, to a leading independent diamond mining group today, Petra’s portfolio comprises four producing operations, and of these, three can be found in South Africa. The fourth is Williamson, Tanzania’s only significant diamond producer based upon the 146-hectare Mwadui kimberlite pipe. Finsch is South Africa’s second largest diamond operation by production, after De Beers’ Venetia mine, and in 2017 passed 50 years of operations, at which time it had produced nearly 50 million carats. “For a mine to reach this milestone is significant,” COO Luctor Roode told us. “We’re still going strong and hoping to see many more years added to the life of the mine.” Cullinan is, again, among the world’s most celebrated diamond mines, not least for having been the source of the two largest stones in the British Crown Jewels. It has gained renown for being a source of large, high-quality gem diamonds, as well as being the world’s most important source of very rare blue diamonds. Petra was celebrating a profitable decade at Koffiefontein last time we covered the third of its South African diamond mines. Mining first started at Koffiefontein over 140 years ago, and this remarkable longevity is testament to its quality. Petra’s success has always been down to its focus on value rather than volume production, optimising recoveries from a high-quality asset base in order to maximise their efficiency and profitability. The approach has seen it amass one of the world’s largest diamond resources of nearly 300 million carats. CHANGE AT THE TOP The group announced in February that, as of April this year, Richard
PETRA DIAMONDS
Duffy had been elected as the man to foster further growth as Petra’s new CEO, bringing with him 27 years’ experience in mining in both open pit and underground mining having led multiple large-scale mining operations across Africa. “I am delighted to have been appointed CEO of Petra Diamonds,” Duffy commented. “I look forward to working with a very capable team
that has grown the business and laid the foundations for delivering on the recent capital investment programme.” Petra’s Chairman, Adonis Pouroulis, added: “We are extremely pleased that Richard will be joining Petra Diamonds. He brings with him an impressive depth of global mining experience which we believe will be critical to drive Petra’s
transition from a phase of intensive capital expenditure and expansion to a focus on steady-state, cashgenerative operations. “We are deeply grateful to Johan Dippenaar for all of the work he has done over the past 14 years to lead Petra through a long period of significant growth and establishing the company as a leading independent diamond producer.”
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INDUSTRY FOCUS: DIAMOND MINING
The Bulk Sample Plant – Crushing Plant at the Finsch mine
PLEASING PERFORMANCE Production figures for Petra for the six months ended 31 December 2018 made for pleasant reading, up
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The new Cullinan plant, fines plant feed belt
10% to 2,019,147 carats and with full year production guidance of ca. 3.8 - 4.0 Mcts maintained. Revenue was also on the up, by 8% to
US$207.1 million, and the number of diamonds sold increased 15% to 1,736,357 carats. While Koffiefontein’s run-of-mine
PETRA DIAMONDS
Drilling Specialist operating the Simba M4C, underground at Finsch
// OUR FOCUS REMAINS TO CONTINUE TO DELIVER OPERATIONAL - AND CAPEX EFFICIENCIES AT ALL OF OUR OPERATIONS // (ROM) production remained flat at 25,275 carats, this was negatively impacted during the period by the community unrest concerning municipal service delivery, operational challenges relating to plant availability and a lower than planned grade recovered. However, since the start of January 2019 additional crushing capacity has been introduced to the plant, employee attendance has normalised and monthly production is expected to ramp up over January to the levels observed in Q1 FY 2019. Results were also somewhat marred by volatility in Cullinan’s product mix, a feature associated with complex orebodies such as Cullinan’s, which yielded prices at the lower end of historical ranges - a 4%
downward movement and around US$10 million shortfall in revenues. There was continued strong operational performance at Williamson with two good quality pink stones recovered post Period end which are expected to be sold in February 2019. “Petra has delivered solid production in the first half of FY 2019 underpinned by a continued improvement in safety performance,” summed up outgoing CEO Johan Dippenaar. “We are seeing production reaching consistent levels while our focus remains on the delivery of operational and capex efficiencies in order to generate positive free cashflow and subsequent debt reduction. “Whilst we delivered solid
production and continued to improve our safety performance in the first half, we recognise the impact the lower value of the product mix at Cullinan had on our financial results for the period,” Dippenaar concluded. “During the second half, we will accelerate the installation of drawpoints to improve access across the full footprint of the C-Cut Phase 1 block cave. Our focus remains to continue to deliver operational- and capex efficiencies at all of our operations.”
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