Petra hails ‘step change’ in fortunes

[] — AIM-listed diamond producer Petra Diamonds said Tuesday that gross production was up 6% to 1,164,856 carats for the year ended June 2010 from 2009’s 1,099,367 carats.

Gross mine revenue was up 88% to $177.7m owing to the continuation of the recovery in rough diamond prices, sale of notable ‘specials’ and increased group production.

Gross carats sold was up 11% to 1,125,098, while group consolidated mine revenue was up 136% to US$163.3 million, with growth accentuated due to the 100% consolidation of Cullinan from November 2009.

The company said in a trading update that it has been a highly progressive year for the company, during which it increased its ownership of the Cullinan mine to 74%, thereby doubling Cullinan’s attributable production and increasing Petra’s attributable resource base from all operations to 195 million carats.

It also completed the acquisition of a further important producing diamond mine – Kimberley Underground, sold the remarkable 507 carat Cullinan Heritage diamond for $35.3m, raised $120m in an equity financing and agreed terms for debt facilities totalling $78m with the IFC and Rand Merchant Bank.

“Petra is now fully financed to roll out its planned capital expansions to treble annual output to over three million carats, by increasing production from its world-class resource base,” it said.

“These results signify a further step change for Petra, with substantially higher revenues reflecting our continued production growth and a strong recovery in rough diamond prices,” said CEO Johan Dippenaar.

“We have recently taken steps to significantly strengthen our balance sheet and are now fully financed to ensure the capital roll-out which will deliver further growth and returns to our shareholders,” he added.