Petra could "comfortably" top 1m carat target
Posted: Tue, 23 Sep 2008
[miningmx.com] -- PETRA Diamonds has grown its resource base exponentially in the past year in which it posted a swing to profit. The company reckons it will comfortably exceed its million-carat target for financial 2009.Petra has grown its reserve and resource base to an attributable 121 million carats from an attributable 9.3 million as at October 2007. The growth has come primarily from acquisitions of mines from De Beers, the most significant being the Cullinan mine with its resource of 208 million carats, making it the second-largest such resource in the world. Petra has an initial 37% stake in Cullinan and has the option to increase this to 60%. Cullinan is a company maker, said Adonis Pouroulis. The mine is expected to produce up to 750,000 carats in 2009 and then ramp up to one million carats from 2010. “We now expect to meet, and probably comfortably exceed, our target of one million carats production in the year to June 2009,” said Pouroulis. Petra produced 200,287 carats in 2008, pushing up group revenue by 352% to $77m. Net group profit came in at $1.9m from a loss in the previous year of $21m. The Cullinan transaction was completed in July this year, while the Kimberley Underground transaction should be wrapped up in December and the purchase of the Williamson mine in Tanzania is expected to be completed in October. Kimberley will add more than 100,000 carats a year from the three mines. Williamson, with a resource topping 40 million carats, has production of 150,000 carats, but there are plans to lift that to 500,000 carats in about two years’ time. The Koffiefontein mine, also a purchase from De Beers, has been within Petra for a year and produced 89,622 carats at an average value of $484/carat. Cash costs were R90/tonne, which is expected to be maintained. Koffiefontein's cash cost per tonne of R90 is spectacular, said BMO Capital Markets' Jamie Strauss. Petra CEO Johan Dippenaar said Cullinan had a high cost of around R200/tonne and the aim was to bring this down to between R130-R150/tonne. Petra is installing generating capacity at the mine to protect it from power shortages in South Africa. The three fissure mines in South Africa turned in lower production at 110,655 carats because of reduced tonnages from Helam, the smallest mine in the group. Cash costs were R530/tonne for the three mines.