Petra Diamonds Share News (PDL)

(Alliance News) - Petra Diamonds Ltd on Tuesday said its first half production was down sharply, mainly as a result of the Williamson mine in Tanzania remaining on care and maintenance.

The South African and Tanzanian focused diamond miner saw total diamond production in the six months to December 31 fell 16% year on year to 1.7 million carats from 2.1 million.

Run-of-mine production slipped 40% to 4.2 million from 7.0 million.

Diamonds sold fell 2% to 1.7 million carats, leading to revenue in the half falling 8% to USD178.1 million.

Chief Executive Richard Duffy said: "We are living through a time of great uncertainty as a result of Covid-19, which has put considerable pressure on the business and all of our employees."

"I am delighted that we have now secured the support of our noteholders, lenders and shareholders for the proposed restructuring of the group's balance sheet, which will formally complete in the coming weeks following the receipt of the requisite regulatory approval. This marks a significant milestone in putting the company on a sustainable footing going forward. The improvement in the market, with prices from our January sale now back at pre-Covid levels, is very encouraging and will provide some support as we look to optimise the value of our asset base," Duffy continued.

Duffy said the firm's operations in South Africa, and Cullinan in particular, continue to "perform well", despite the emerging operational challenges at Finsch - which can be attributed to waste ingress, that has negatively impacted on its carat production.

"Mitigation plans have been developed and are currently being implemented to address this. Williamson remains under care and maintenance and we are considering various options to resume mining operations," Duffy added.

Petra noted Cullinan is on track to deliver on its throughput stretch target for 2021, having met the first half recovered carats stretch target of 1 million carats. However, the higher than expected levels of waste ingress at Finsch is having a "detrimental impact on throughput benefits due to both lower grade and volume".

Petra confirmed production guidance for 2021 remains suspended.

The firm also noted it is aware of media reports suggesting that the parcel of 71,654 carats of diamonds from the Williamson mine in Tanzania, which was blocked for export in September 2017, has been nationalised.

"To date the company has not received any communication from the government of Tanzania about this matter and Williamson Diamonds Ltd, the owner and operator of the Williamson mine, has written to the Minister of Minerals requesting an update on the status of the parcel," Petra added.

Shares in Petra Diamonds closed 2.9% higher in London on Tuesday at 1.75 pence each.

By Paul McGowan; paulmcgowan@alliancenews.com

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