Petra Diamonds delivers record quarterly production

Independent mining group Petra Diamonds posted a record quarterly production in its third quarter but saw revenues held back by its inability to sell the blocked Williamson parcel of roughly 71,000 carats.

Petra's third-quarter production moved ahead 20% to 1.19m carats and run-of-mine production, which contributed approximately 82% of the group's total carats recovered during the period, increased 29% to 981,201 carats, in line with the company's focus on "value rather than volume production".

Production for the nine months to 31 March was up 13% to 3,403,003 carats and revenue was up 44% year-on-year to $397.3m over the same time frame; however, Petra halted operations at its Williamson mine back in September after the Tanzanian government seized a parcel of diamonds set for export to its marketing office, on suspicion they were undervalued.

Petra claimed the parcel of 71,654 carats of diamonds had still not been released by Tanzanian authorities, which alleged the diamonds are worth more than declared, charging two officials involved in the valuation process with "economic sabotage".

Net debt as of 31 March was 6.39% higher $685.9m.

Johan Dippenaar, Petra's chief Executive, highlighted the group's strong results in both production and sales, as well as a 25% improvement in its safety performance, which came to a lost time injury frequency rate of 0.18 for the year-to-date.

"It is also important to note that the make-up of our production is transforming, with higher value ROM production representing circa 82% of our carat volume. The future focus of the Company will move away from volume targets to value optimisation," he said.

"While we are very encouraged by the operational delivery against our long-term expansion plans, risks to performance continue to relate to increased volatility in the ZAR/US$ exchange rate, grade and pricing variability at Cullinan, as well as the outlook for Williamson and the blocked diamond parcel," Dipenaar added.

As of 1030 BST, shares had collected 6.80% to 69.26p.