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Steve E60,
I hope you are well and bullish,decent update which should be reflected in the S/P in due course.
I am bullish here and even though I may have been 18mths too early (covid largely) my best guess is that the bottom is in.
Best of luck
All positive here now... and well summarised below.
We are still sat way below fair value, and will likely see a rapid rerate over a couple of days.
When is the big question, but my gut says soon.
Agree - it looks like stars are aligning at last for a decent recovery. They're obviously mining Cullinan for all its worth (and why not especially with prices on the up), so restoration of normal activity at Finsch + Koffefontain will be additionally very beneficial, and perhaps resolution in Tanzania which although small in the context of the other mines will be extremely helpful at the margin cashflow-wise.
Yes, it's good news too.
Though Q3 production is down about 20% on a group level, Q3 revenue is still up 16% due to much better prices.
So, when they get the waste cleared in Finsch etc. and production increases again, together with the VAT and the diamond parcel in Tanzania getting cleared, I would expect to see further momentum on the positive numbers just reported here.
Consequently, the current consolidated net debt (of 290M$) does not look like much of a problem for the balance sheet anymore. I also note, that the CEO used a stronger language about the financially "solid platform" for growth this time, "Post completion of the capital restructuring, Petra is in a far stronger position, with a solid platform for future growth and development. Production during the period reflected continued out-performance from Cullinan, with remedial action to address waste ingress at Finsch delayed as a result of excessive rainfall levels, which also negatively impacted Koffiefontein, whilst the Williamson mine remains on care and maintenance. We expect to see improved performance from Finsch as underground water ingress reduces and the remediation steps are implemented".
Bottom line: PDL looks increasingly likely to fulfil the projection of a FY results 2023 being net cash positive. However, I would like to see the other mines back in full production mode soon...
Hi SR123!
Thanks for mentioning PDL on the THS board. I'm still researching, but I bought a small "starter" stake this morning.
If PDL is in a race with its debts, at first sight it looks like it is winning it at the moment.
"Highlights
Q3 revenue up 16% to US$106.0m (Q3 FY 2020: US$91.3m), as prices recovered to pre-COVID-19 levels 9M revenue of US$284.2m, in-line with prior year (9M FY 2020: US$285.2m) Operations: Q3 production of 704,498 carats (Q3 2020: 932,456 carats) and 9M production of 2,445,360 carats (9M FY 2020: 3,002,697 carats) Post period end an exceptional 11.82 carat blue stone was sold for US$9.5m and an exceptional 39.34 carat blue stone was recovered, to be sold via special tender…
Diamond Sales
Q3 revenue increased 16% to US$106.0m (Q3 FY 2020: US$91.3m). This increase was driven by improved pricing, the sale of a 299.3 carat exceptional diamond in February for US$12.2m and the carryover of 382 Kcts, of mostly lower value stock from H1 FY 2021, sold during January 2021. On a like for like basis, realised diamond prices increased ca.12% from those achieved in H1 FY 2021.
Post the period end, an exceptional 11.82 carat blue stone, recovered during the period from the Cullinan mine, was sold for US$9.5m. The Company also announced the recovery of an exceptional 39.34 carat blue stone, also from the Cullinan mine, which will be sold via a special tender….
Corporate and Financial
The recapitalisation of the Group was completed during the period, significantly strengthening the balance sheet, with consolidated net debt reducing to US$290.7m, from US$700.4m at the end of December 2020.
Petra Diamonds had unrestricted cash of US$139.8m, available undrawn banking facilities of US$10.8m and diamond inventory valued at US$75.5m as at 31 March 2021. At 31 December 2020, unrestricted cash was US$92.4m, the Company had fully drawn bank facilities and the diamond inventory was valued at US$105.0m. "