JOHANNESBURG (miningweekly.com) – London-listed South Africa-focused diamond-mining company Petra Diamonds, which on Monday declared its first dividend, has pushed up production guidance to 3.3-million carats for the year to June 30.

Petra, which operates the Finsch, Cullinan, Koffiefontein and Kimberley Underground diamond mines in South Africa and the Williamson diamond mine in Tanzania, declared a 2p a share dividend for the full 2015 financial year.

The independent diamond-mining company said it intended paying a progressive dividend as it moved through its current phase of significant capital expenditure (capex) and increasing free cash flow.

Capex of $125.2-million was well up on the $85.3-million in the corresponding previous half-year (H1) and net debt well down at $45.8-million.

The company has cash in hand of $129.6-million and undrawn available debt facilities of $66.9-million.

The power issues of South Africa’s State electricity utility Eskom did not represent a material risk at this point in time, owing to Eskom's approach of consulting prior to load shedding, which allowed Petra to use curtailed tailings production to minimise higher-value underground production.

“This strategy has ensured that there has been no material impact,” CEO Johan Dippenaar commented.

Petra produced 1 601 069 ct in the six months to December 31, 2% fewer than in the corresponding previous H1.

However, revenue was up 16% to $214.8-million, boosted by the weaker rand and the sale of two exceptional diamonds for $38.7-million, which cushioned a weaker-than-usual rough diamond market.

The company achieved an average H1 value of $154/ct compared with $130/ct in the previous corresponding H1 period.

Dippenaar said that although there was short-term “indigestion” in the diamond pipeline, caused by liquidity, polished inventory and strong US dollar-denominated diamond prices, the Chinese New Year on February 19 would likely help to firm up pricing towards June.

Expansion projects at Finsch, Cullinan and Koffiefontein were continuing to progress in line with expectations.

Increased run of mine (RoM) production from Finsch, Koffiefontein, Kimberley Underground and Williamson was offset by lower RoM from Cullinan and lower tailings production from Finsch and Koffiefontein.

H1 production at Finsch rose 4% to 1 013 117 carats, driven by increased throughput and grades and the higher recovery of smaller diamonds, allowing H2 guidance to be lifted by 200 000 ct.

H1 production at Cullinan fell 15% to 391 398 carats and grades below guidance to 25.8 carats per hundred tons as a result of the absence of separate waste-handling facilities.

RoM production at Koffiefontein increased 6% to 9 709 ct, but overall production fell by 30% largely on tailings depletion.

Kimberley Underground's diamond production increased 14% to 72 012 ct and Williamson's rose 15% to 98 949 ct.