Petra sells two diamonds for initial $13.5m

(Sharecast News) - Petra Diamonds said on Wednesday that it has sold two diamonds recovered from the Cullinan mine in South Africa into a partnership with Johannesburg-based diamond cutter and polisher Stargems, for an initial $13.5m.

The company sold a 342.92 carat Type IIa white diamond and an 18.30 carat Type IIb blue diamond. Petra will receive an upfront payment of $10m for the former and $3.5m for the latter. It will also retain a 50% interest in the profit uplift of the polished proceeds of both diamonds, after costs.

Chief executive Richard Duffy said: "These two diamonds are wonderful examples of the very high quality and rare white and blue diamonds that are so well known from the Cullinan Diamond Mine.

"We are delighted that both stones will be manufactured in South Africa and it is fitting that we will be working with Stargems, who specialise in the sourcing and supply of the finest diamonds to customers across the world."

Broker Peel Hunt said: "Given that Petra is now in position to wait for the stones to be cut and sold, we think it makes sense to partner.

"The Cullinan Dream (cut from the 2014 blue) sold for 6.3x per carat more than the rough, so while Petra are not maximising the short term cash generation, the team is maximising its long term cash generation from these specials. At a total of $13.5m raised this is slightly more than the $12m we had expected the 342ct white to sell for."