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itsa: actually, I do not think 113 is a significant barrier. We might move past it already next week. However, I think that you will be surprised at how high the SP will go before end of september...

So far, so good. But if we now follow the same pattern like the run from December to April six months ago, I expect the SP to hit 190 in October, before we go back a few steps to test the low... But the september earnings call will be a significant event, which might "disturb" the geometric pattern of my technical analysis. Hold and see ;-)

Here we go ! ,-)

So, where are we on the PDL share price? In spite of my expectations, we actually got to test the 85 level... However, we did not break the support line at 80, so I did not go all in with a new mortgage etc ,-) But maybe I should have anyway... at least I will hold a significant position. Here is why:

From a technical perspective?: We have thoroughly tested the channel low at 85, we are currently flagging in a rising channel, and if (when,-) we break the 105 level in the next couple of weeks, we should be free to go to new all time high – so my goal is still intact at +150p before 2023…
Revenue and earnings?: I assume PDL is net cash by now, with two months of income since status of net debt at USD40M in June. Free cashflow for the year should also be high following the record revenue in FY22, and my guess is about USD 200M, to be confirmed when we get the results for FY22 next month.

Future development?:
1) as always diamond price levels could fall (they already are). However, in light of the Alrosa situation, global supply reductions and the rising demand, I assume they will stay at relatively high level, but find it prudent to allow for a -10% from the current record levels. This would impact revenue 1:1… so, from a FY22 baseline of USD580m that would reduce cashflow from 200 to 140.
2) Also, the increased capex from 80 in FY22 to 160 FY23 will reduce the free cashflow. Not so much a risk, since it has already been decided and announced, but a factor for evaluating the total future cashflow situation nonetheless. From 140 to 60.
3) Reduced value from exceptional finds ( >USD 5 M). Average is around USD45M, so it would be unreasonable to expect a repeat of the past record year (FY22) of USD89M this year (FY23). A fair guess would be a 50% reduction to around average of USD45M. Naturally, this will also reduce cashflow. From 60 to 15...
With such a drastically reduced future free cashflow, what about the debt?! Well, I hope the BOD will decide to repay all of the current debt in March 2023 from the current cash pile, when there is no longer any restrictions in terms of 3-4% extra fee on early repayments. This would bring the cashflow back online by removing the annual interest payments of about USD 50M. If only repaid partially, then refinance the rest from a position of strength, and start a significant share buy-back program or pay some dividends…
Altogether, I would not be surprised if free cashflow is reduced from the current level of around USD200M to just about USD 20M during the coming financial year (FY23). But since the capex investments have a positive business case, and PDL is a net cash company able to finance its own capex projects, the sp should be ok.
So, a hopeful (biased) prognosis for the coming 12 months: we go from the current level to +150 in the coming 2-5 months, then in 2H a small correction to account for the reduced cashflow and backtest the channel low at say 140… and then repeat the cycle ,-)

Itsa: yep, there is a descending triangle pushing towards 85. I still do not think we will get that far. However, if we actually go all the way down to 80p, I will be ready to buy a serious extra amount ,-)

Hi Itsa, good luck ;-) If we get to revisit that level, I will even mortgage my house and invest for borrowed funds... But in three weeks - after the FY22 sales report - we might also be much higher than now.

06/01/2022 | 07:28am EDT: (MT Newswires) -- Bank of America on Wednesday upgraded Petra Diamonds (PDL.L) to buy from neutral and raised its price target to 1.70 pounds sterling ($2.14) from 1.10 pounds.

After a spike, there will be time for cooling off - not to be mixed up with "falling off a cliff" - before the next spike...

It looks like the old bond holders are not done selling out yet, so there might be bumps on the road - but the overall direction is clear to me: Diamond prices are still going strong. See: https://www.bloomberg.com/news/articles/2022-05-11/diamond-prices-surged-since-russian-sanctions-de-beers-can-t-help?
And if I am not mistaken, Petra still has about 20% of this years production to sell on top of the USD491m sold YTD, before the annual results are due. With such a record sales year almost in the bag, prudent management and proven cost control, and strong outlook for the diamond market, this is a hold (or buy if you have cash to spare ,-)

My guess is that we will be "flagging" for the rest of May at the current level within the boundaries of 110-130ish. Somehow the resistance we hit at around 137 demands a more solid basis, than I assumed at first, in order to break through... Given the transformational dynamics in the PDL balance sheet journey going from heavily indebted to debt free to cash cow within a year or two, and a solid 65% growth YTD (from 70 on 1st Jan to 115 today), I am not concerned about the current sp level.

@Wigwammer: ;-)

Carats: I disagree about your explanation.
I do not think the selling these days is due to a well known gross debt, which has been consistently reduced during the year, and should be considered in a balance sheet perspective where the net debt is so small it is almost insignificant.
Instead, and in addition to my previous posts, I just noticed that we have also hit a top line barrier stemming from 2018 and 2019, which intersects with the one I mentioned from april 2021. We have plenty of experience of large players playing the big games, selling out in spite of the day-to-day improvements... We wil just have to weather it to move on.

I do not have enough insight to forecast exact amounts. But my expectations was actually around that number based on a few simple assumptions. Let me explain:
Prior to the Q3 FY 2022 sales report in April, I noticed that the results of the 4th tender 7th March 2022 showed that like-for-like prices rose 38% versus the previous tender, which ended December 15, and jumped 47% compared with the six months ending December 2021.
Given that 1) full year revenue 2021 was $402m, a price increase of at least 47% would land the full year revenue FY22 around $600m. Furthermore, I assumed that the cost would be at the lower end of the budget given consistent messages from Duffy. I know it is more complicated than that, but if increasing prices could level out the increased capex, we land at a quarterly net debt reduction of about $50m during FY22. So, $45m pretty much hit my mark...

Carats: actually, I said the opposite. Please have another look, and you can see my statement is that we might have to revisit 115 again. But yes, I also state that, personally, I do not think it is a fair price...

Completely agree pv.
Like I said, although currently the scenario needs to be taken into account, I do not find it likely that sp will actually revisit 115 this time.
The future perspective on potentials should be stronger than the historic boundaries, when the market considers the right level for pdl.

why we might actually have to revisit 115…
Since December2021 the sp built a strong upwards channel, which led me to believe that the sp would rise from the bottom to the top within that channel in the coming weeks.
However, we have just hit another resistance level coming from april 2021. Hitting this Line the sp has previously recoiled downwards before it reduced its rising trend.
So, since there are no real material changes to the company itself, and the 22q3 sales report was only as good as could be expected, it remains to be seen whether the short term upwards trend or the older resistance level wins this month… right now, it looks like the old resistance level takes the price.
However, personally, I would put my money on the new trend to break through since it builds on the current drivers. Not least because of the fact that the Big sell-out from the Old bondholders that held back any major rise from becoming sustainable, seem to have run its course. But others might think differently…
In sum, based on this weeks sp development, we might see more turbulence in the coming weeks than I previously expected. This, of course, does not alter my solid buy recommendation for PDL in the longer term (6-12 months)…

carats: I am not exactly sure about the reference for your $45m, but, this year, PDL has paid interest and other debts than the 2L notes that replaced the former bondholders debt. In their recent presentation from Feb there is a slide on the anticipated development of their capital structure, with gross debt going from $426m in december 21 to $357m to March 22 (i.e. during Q3 in Petra time). Of course net debt is another matter, since it can be reduced much more without actually paying anything...

No worries, we are still moving steadily up within the channel boundaries. So, just keeping status quo and we will break the 140 resistance this month, and then as a minimum pass 150 in May...

Well, if the pattern holds, you should have bought some today as we hit the 115 mark. Maybe I am wrong, but I would not wait too long.

But we might have to revisit 115 in the next couple of weeks, before we can reverse again and go higher than the 140 mark next month...

Of course, it is easy to get excited about PDL rising så fast (that even Mr C recognises the positive notes ,-)
In the current environment it only takes about a month for the latest high to become the new low, and the rising channel is steep. So, there will also be some consolidation to avoid the RSI overheating in the red +70... But if todays buyers just wait minimum four weeks, they should be good to go... Or stay to experience the coming highs... My guess is that we are on course to 150 before summer, and then 500 within 2022.