Petra sells 121.26 carat diamond for $6m

Petra Diamonds has sold the 121.26 carat white diamond recovered at the Cullinan mine in South Africa for $6m as part of its June sales process in Johannesburg.

It said the stone had been bought by a joint venture comprising diamond manufacturers Nemesis International and Golden Yellow Diamonds.

RBC Capital Markets said the proceeds are relatively small to Petra, which it expects to report revenue of $413m and EBITDA of $155m for full-year 2016.

“Our model builds in +$20m for specials so this sale should not have any material impact on our forecasts, and will not impact our price target or recommendation,” said analyst Des Kilalea.

“The positive message from this stone, we think, is that it could indicate the start of improved quality production from Cullinan as an increasing proportion of Cullinan ore is sourced from the new block cave. The sale is also positive in that it boosts cash ahead of the last phase of high capex to develop new production levels at Cullinan and Finsch.”

At 1024 BST, Petra shares were down 1.9% to 113.75p.