JOHANNESBURG (miningweekly.com) – London-listed Petra Diamonds on Monday boasted double-digit revenue and production growth for the year ended June 30, as the diamond producer’s expansion plan gained traction.

The company achieved basic earnings a share of 6.3c  for the year ended June, compared with the loss a share of 0.48c recorded in the prior year.

Profit for the 2013 financial year reached $27.9-million, a turnaround from the $2.1-million loss recorded in 2012.

Revenue was up 27% from $316.9-million in 2012, to $402.7-million in 2013, with 2.5-million carats – a 22% rise on the prior year – sold during the period under review.

Petra’s diamond production increased by 21% to 2.67-million carats in 2013, mostly owing to the first full-year contribution from the Finsch mine, as well as the planned levels of production achieved after the commissioning of the Williamson operation’s rebuilt plant at the end of 2012.

"The 2013 financial year marked a further year of solid growth in terms of production, revenue and the underlying profitability of the group, as well as the acceleration of our major expansion programmes at Finsch and Cullinan, in line with expectations,” said Petra CEO Johan Dippenaar.

Petra reported that the company remained on track for a full-year production increase to three-million carats in 2014, rising to five-million carats by 2019.

“Petra's expansion programmes will continue to accelerate in the 2014 financial year, with access being established to the Finsch Block 5 sublevel cave during 2014 and initial production tonnages from 2015. Access to the Cullinan C-Cut Phase 1 is on schedule for 2015, with initial production tonnages from 2016,” he noted.

Petra had invested about $138.8-million of its total $198.3-million capital expenditure for the year, on the roll-out of the company’s expansion plans.

The Cullinan mine’s expansion programme would take yearly production to 2.2-million carats by the 2019 financial year, while the company’s expansion plan at Finsch would increase production from the current 1.4-million carats a year, to 1.8-million carats by 2016, before increasing output to two-million carats a year by 2019.

At both Finsch and Cullinan, the development plan enabled the tonnage profile to gradually switch from diluted to undiluted ore.

The group’s Koffiefontein operation was expected to increase production from 34 800 ct/y to 105 000 ct/y by 2017. The Kimberley underground mine was set to increase yearly production to 130 000 ct by 2016.

Overall company output beyond five-million carats a year would be contingent on the security of sufficient electricity and water supplies, the company noted.

Petra said the higher grade for the Finsch operation’s life-of-mine had boosted gross resources by 2.5% to 309.6-million carats, while new areas brought into production and detailed mine planning at Cullinan resulted in gross reserves increasing by 14.3% to 54.4-million carats.

THE DIAMOND MARKET
Petra reported a stable rough diamond market during 2013, with less volatility than has been experienced in recent years. This was expected to continue into 2014, but with a potential for pricing upside on the back of constrained supply and a firmer US market, as well as continued growth in China.

“The supply side of the rough market remains tight, with only around 30 kimberlite diamond mines of significance in the world today, many of which are now past their peak production,” Petra commented.

Demand side growth continued to be driven by urbanisation and the growing middle-classes in emerging markets. In particular, Asian consumers had revealed a “natural affinity” to diamonds and there was potential as new markets, such as China and India, continued to develop.