Petra Diamonds Posts Sharp Rises in Output, Revenue

(IDEX Online News) – Petra Diamonds Ltd reports a 25-percent rise on the year in production to 816,735 carats for its fiscal first quarter of 2014, and continues to see output for fiscal 2014, up to June 30, of three million carats.

Revenue for the quarter was up 27 percent to $65.1 million on the sale of 589,233 carats.

The firm’s second tender of fiscal 2014 closed in the second quarter and recorded revenue of $55.7 million on the sale of 442,566 carats. Cumulative revenues for fiscal 2014 to date now stand at $120.8 million, the miner reported.

“The diamond market exhibited weaker price performance in the post summer period, but Petra now expects a firmer market through to calendar year end and in the second half of fiscal 2014. Further to the increased recovery of higher value stones in the second quarter, combined with improved market conditions, Petra maintains its overall guidance for average prices for full year 2014.

“The diamond market exhibited weaker price performance in the post summer period, with average prices achieved at Petra's Q1 tender around 7 percent below those achieved in Petra's H2 FY 2013 (January to June 2013).

“In addition to seasonal weakness, the market was further impacted by liquidity constraints in the Indian market, which is the world's most significant diamond cutting and polishing centre and which has been affected by a sustained period of weakness in the rupee. However prices for Petra's product offering, which is underpinned by significant volumes of commercial, mass market goods, showed a degree of resilience.”

Johan Dippenaar, Chief Executive Officer, commented: "These results demonstrate the continued delivery of growth in accordance with our stated expansion plans. Our mines produce a significant and growing volume of the commercial, mass market goods which form the mainstay of the diamond market, but they also regularly produce high quality, and at times world-class, diamonds.”

He added that the firm expects two large and high-quality white diamonds from the Cullinan mine “to generate substantial interest at our next sales tender in late November."

The diamonds, weighing 126.4 carats and 91.5 carats, are Type IIa stones for which the Cullinan mine is known and are considered to be of top color and quality, Petra reported. “The company has also recovered a number of other high quality stones in Q2 FY 2014, and these 'specials' will enhance the average prices achieved at the company's late November tender.