South Africa’s Petra Diamonds (LSE: PDL) said Thursday it fetched US$93 million in its last sale of fiscal year 2022, as prices for its diamonds climbed 7.7% from the previous one.
The results of the tender, the sixth one since July 2021, brought total sales for 2022 to US$584.5 million across Petra’s mining operations.
“The Tender 6 results conclude a strong year for Petra’s diamond sales both in terms of pricing and the demand we have seen,” chief executive officer Richard Duffy said. “The significant interest shown at Tender 6 bears testament to the ongoing strength of the rough diamond market.”
The executive said in the past 12 months the company has seen pricing support across its product mix, with particular strength in the prices of both white and coloured gem-quality stones.
While no exceptional stones were offer in the last tender, Petra’s revenue from these kind of diamonds totalled US$89 million, with US$75.2 million coming from its iconic Cullinan mine in South Africa and $13.8 million from the Williamson mine in Tanzania.
An exceptional 32.32 carat pink diamond recovered at Petra Diamonds’ Williamson mine in Tanzania in November 2021. Credit: Petra Diamonds
The figures compared to the US$62-million revenue from exceptional stones Petra obtained in fiscal 2021, all found at Cullinan mine).
Petra defines as “exceptional stones” rough diamonds that sell for $US5 million or more each.
Turned the corner
Burdened by debt and falling revenue, Petra Diamond put itself up for sale in 2020, but reversed the decision later, opting instead for a debt-for-equity restructuring.
The move allowed Petra to cut net debt by two-thirds in the fiscal year ended June 30, 2021 to $228 million, down from just under $693 million the previous year.
The diamond producer also resorted to shrink its share in the Williamson mine in Tanzania from 75% to 63% as part of a framework agreement with the country’s government.
Duffy said earlier this year the company had turned the corner following a revival in rough diamond prices, as well as self-help efforts aimed at reducing net debt. Petra is currently exploring options for its loss making Koffiefontein mine. The company’s preference is to sell it and if it fails to do so, it will close it when it reaches the end of its life, in 2025.
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