PETRA Diamonds remained “on track” to meet its production guidance of 2.9 million carats to 3.2m carats for the year to end-June 2024, but CEO Richard Duffy provided no update on the group’s longer term output following the capex cutbacks announced in November.
He said 2024 production would still be “towards the lower end” of the guidance range which was the position he indicated in early November when Petra announced the deferral of $65m in capital expenditure programmes at the Cullinan and Finsch mines because of plunging diamond sales.
Duffy commented at the time Petra was “taking immediate and prudent steps to provide further financial flexibility and preserve the company’s short-to-medium term liquidity as well as increase its headroom and flexibility until such time as the market has sufficiently stabilised”.
Duffy said today that the “resumption of the deferred capital programmes remains on track for July 2024. The re-planning and value-engineering work associated with the deferred capital projects continues and, once completed, the company will inform the market of the expected impact on forward looking guidance.”
In November, Duffy said Petra expected to provide this updated production guidance with the release of its interim results in February.
Turning to the diamond markets Duffy commented Petra was seeing “encouraging indications of price recovery and some stabilisation in the rough diamond market following actions taken by both producers and the mid-stream.”
But he added “we continue to adopt a cautious approach to the market in the near-term. Once completed, the additional headroom afforded by our increased revolving credit facility will enable us to continue our flexible sales approach and position ourselves to take advantage of any market improvements”.
Duffy’s comments follow a report from Morgan Stanley that indicated India’s rough diamond imports “bounced back” in December with indications that restocking of diamonds was taking place at mid-stream.
India is a key hub in the diamond value chain with the country’s manufacturers cutting and polishing nine out of every ten stones.