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(Alliance News) - Petra Diamonds Ltd on Thursday said the Covid-19 outbreak has hurt its business as it announced efforts to maintain liquidity through the period of disruption.
The miner said diamond prices at its fifth sales cycle were down by around 27% on a like-for-like basis compared to prices in its sales cycle in February. As a result, it decided to only sell 75% of its South African goods, with the remaining exported to Antwerp. Of those exported, around 75% were later sold at its Antwerp marketing office.
Petra said that a total of 24,254 carats - comprising higher value single stones of 10.8 carats and more as well as parcels across the size and quality ranges - were withdrawn, adding that they will be sold privately or at a subsequent sales cycle, when market conditions improve. It said its sales scheduled for May and June remain under review.
The company said its operations in South Africa have been scaled down significantly amid the Covid-19 lockdown there, and the outlook as to when operation will normalise remains uncertain.
In Tanzania, the Williamson mine will be placed under care and maintenance from the middle of April, with only essential services to be carried out. Petra said that talks with the Tanzanian government regarding overdue VAT receivables and the blocked diamond parcel have been interrupted due to the Covid-19 outbreak.
In order to preserve liquidity, Petra has fully drawn down its ZAR500 million loan facility - around GBP22.4 million - and is in discussions with its South African lender group to access its ZAR1 billion revolving credit facility.
"Given the unprecedented trading conditions, we are taking all steps necessary to preserve the company's liquidity position in order to withstand this very difficult period until market conditions improve. We remain committed to protecting the ongoing viability of our operations, to the benefit of all our stakeholders," said Chief Executive Richard Duffy.
The stock was 11% lower at 2.50 pence each at the close in London on Thursday.
By Ife Taiwo; ifetaiwo@alliancenews.com
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