Its getting there......

StockMarketWire.com
Petra Diamonds has announced the launch of a $600m notes issue and restructuring of its debt facilities.

It intended to offer $600m in aggregate principal amount of senior secured second lien notes due 2022. The notes would be issued by Petra Diamonds US$ Treasury, a subsidiary of Petra Diamonds Ltd.

Proceeds would be used to refinance the company's existing $300m 8.25% senior secured second lien notes due 2020, to repay all drawn bank facilities, and for general corporate purposes.

At the same time, Petra said it intended to enter into new bank facilities to provide additional liquidity to the company. It said these facilities would remain undrawn upon closing of the offering of the 2022 notes.

"The new capital structure will provide the group with additional financial flexibility as a result of an extended debt maturity profile and increased liquidity position," it said in a statement.

Petra added that the terms of the 2022 notes would be determined at the time of pricing of the offering, subject to market conditions.

CEO Johan Dippenaar said the group's new capital structure provided Petra with financial flexibility, with no drawn debt maturities until 2022.

"This represents a further step forward in the next phase of the company's development as the eight-year capital expenditure programme at the group's flagship Finsch and Cullinan mines nears completion."

StockMarketWire.com
Petra Diamonds said its Q3 production was steady at 999,768 carats, from 995,905 carats a year earlier, taking production for nine months to March 31 up 15% to 3.014m carats, from 2.625 carats.

The group maintained its full year production guidance of about 4.4 Mcts.

It said revenue was down 1% to $119.1m, with no revenue from exceptional diamonds. A year earlier, revenue was $120.5m, including $15.0m from exceptional diamonds. Excluding exceptional diamonds, revenue rose 13%.

Revenue for nine months was up 27% to $347.6m, including $10.9m from exceptional diamonds. A year earlier, revenue was $274.4m, including $25.0m from exceptional diamonds. Excluding exceptional diamonds, revenue rose 35%.

CEO Johan Dippenaar commented that further progress was made with Petra's expansion programmes during the three-month period, as evidenced by the higher ROM grades achieved as a consequence of the increased contribution from undiluted ore.

ROM production for Q3 increased 18% to 760,916 carats, from 646,850 carats a year earlier, further to ROM grade improvements as a result of the ongoing ramp-up of underground expansion projects.

"The significant strengthening of the company's balance sheet following the recent debt restructuring, as well as the positive signs we are seeing in the diamond market, position us well as we continue to ramp up production from our capital programmes," said Dippenaar.

Market Update
Petra Diamonds Limited announces the following market update with respect to progress with its capital programmes, production profile and its upcoming results for the year ended 30 June 2017 ("FY 2017" or "the Year").

The Company is on track to achieve record revenue and production figures in FY 2017. However, due to the slower than anticipated build-up of its expansion programmes across its operations, production is now estimated to be ca. 8-9% lower than guidance of ca. 4.4 million carats. As a result, revenue is expected to be ca. 8-9% below market consensus and financial results for the Year are therefore also forecast to be below market expectations.

The Company has now reached an operational run rate across the Group which supports FY 2018 production guidance of ca. 5 million carats (which, as stated before, is being reached a year earlier than originally anticipated). While the ramp-up of production from the sub level cave at Finsch took longer than expected, it is now operating at the required levels. At the new Cullinan plant, both mills and crushing circuits have now been commissioned, with the first mill and crushing circuit having been run very successfully for over a month. As previously announced, all untreated ROM stockpile material at Cullinan (which will total ca. 400-450 Kt at Year end) will be processed in H1 FY 2018. Petra has also built up a ROM stockpile at Kimberley Ekapa Mining of ca. 100 Kt.

With respect to the covenants relating to its banking facilities, the Company has had initial constructive discussions with its lender group and is confident that the likely shortfall in the upcoming ratio measurement, arising from the lower production levels, will not present an issue.

Petra will release its FY 2017 Trading and FY 2018 Guidance Update on 24 July 2017.

finnCap today reaffirms its buy investment rating on Petra Diamonds Ltd (LON:PDL) and cut its price target to 120p (from 151p).

Petra Diamonds market value falls after Tanzania seizes $15m shipment

Petra Diamonds’ stock market value fell after the Tanzanian government seized a parcel of gems valued at nearly $15m (£11.4m) as part of a parliamentary investigation into alleged wrongdoing in the diamond sector.

The London-listed company also had to shut down its Williamson mine, the source of the stones, as “certain key personnel” were questioned by the Tanzanian authorities looking into how diamonds are being valued.

Shares in the company, which said it had not been made “formally aware” of the reason for the investigation, fell nearly 25% when the market opened, before recovering to settle at about 6% lower, down 6.2p at 83.75p.

The diamonds were confiscated at Dar es Salaam airport on 31 August as they were being readied for export to Antwerp, with Tanzanian officials claiming they had been undervalued.

“While Williamson Diamonds declared in its documentation that the value of the diamonds was $14.798m, a fresh valuation done by the government established that the actual value of the diamonds is $29.5m,” the finance ministry said in a statement.

“Among the legal action to be taken include the nationalisation of all the diamonds seized after it was established that there was cheating involved in declaring the actual value of the minerals.”

Tanzania has locked horns with several foreign mining companies since the 2015 election of John Magufuli, who as president has sought to extract higher value for the country’s raw materials.

His government last week cited “irregularities” in the process by which its stake in the Williamson mine was reduced from 50% to 25%, while Magufuli has also ordered an investigation into alleged under-declaration of diamond exports.

Petra said it had not been made formally aware of the reason for the investigation, although it produced several documents relating to the valuation process and royalty payments to the Tanzanian government.

The company said the 71,645-carat consignment had been given a provisional value of nearly $14.8m by Tanzania’s diamonds and gemstones valuation agency before being prepared for export.

Receipts for the royalty payments showed it paid nearly $888,000, as well as an “inspection and clearing” fee of nearly $150,000.

It said the final sum to be paid to the government was dependent on what it received from the sale of the gems in Antwerp, rather than the provisional valuation.

“The competitive open-tender process utilised by Petra is also used by several other diamond mining companies and has a proven track record of transparent price discovery,” the company said.

“Petra is committed to engagement with the government in order to resolve this matter and ensure that the correct information is available to all parties.

“The company will be in a position to address any other concerns raised by the findings of the parliamentary investigation once it has received a copy of the report.”

The company said mining operations “are conducted in a transparent manner and in full compliance with legislation in Tanzania and the Kimberley Process”.

“The government has complete oversight of the diamonds produced at the mine, which are physically controlled by a number of different government representatives in conjunction with Petra from the point of recovery until the point of sale.”

first ACA and now this ...... tanzania is obviously intent on grabbing all for itself - sorry; its governing families

small short at 83.35

StockMarketWire.com
Petra Diamonds (PDL) was the biggest FTSE 350 faller after cancelling its full year dividend. The miner also warned it would breach banking debt covenants if it didn't start sales from its Williamson diamond mine in Tanzania by the end of 2017. A consignment of diamonds from the mine were blocked from export by the Tanzanian authorities earlier this month.

i banked my modest profit this morning as i'm too busy running hither and thither, but may be tempted to short once more ..... ditto PURP

When you think it couldn't get worse.........

Labour Disruptions in South Africa
Further to the release of the Company's preliminary results yesterday in which it noted that labour relations volatility could be experienced prior to the finalisation of its new wage agreement for its operations in South Africa, Petra confirms that since last night it is experiencing labour disruption at its Finsch mine and there is also disruption underway at its Kimberley Ekapa Mining JV operations.

The Company is currently assessing the impact on both operations. Although underground and surface mining have been affected, plant treatment is continuing at near normal capacity at both operations treating surface material and available stockpiles.

Normal operations are continuing at Cullinan and Koffiefontein.

The Company is in ongoing discussions with the National Union of Mineworkers in order to resolve the situation and is closely managing the situation to ensure the least possible impact on Group production. Petra will update the market as the situation unfolds.

PDL
Petra Diamonds shares fell 4 percent on Tuesday after the miner said it had experienced labour disruption overnight at its Finsch mine and Kimberley Ekapa Mining JV operations in South Africa.

Members of South Africa's National Union of Mineworkers (NUM) are on strike over pay, regional secretary Cornelius Manhe said, after more than 600 members downed tools on Monday.

The London-listed miner had warned on Monday that there could be labour unrest as it finalises a new wage agreement for its operations in South Africa, sending its shares down 7 percent on the day.

It also said on Monday that it had resumed operations at its Williamson mine in Tanzania after a four-day stoppage, adding that its full-year production target remains unchanged.

Petra Diamonds had halted operations at the mine last week after the Tanzanian government seized a consignment of diamonds and questioned Petra personnel as part of a crackdown on the mining sector.

StockMarketWire.com
Petra Diamonds downgraded full-year production guidance and said its earnings would fall short of market expectations.

Output for the year was now expected at 4.6m-to-4.7m carrots, down from previous guidance of 4.8m-to-5.0m, mostly due to lowered grade guidance at the Cullinan mine in South African and industrial action.

Petra diamond said Ebita for the full year was expected to around 10-15% below consensus, primarily due to the recent strengthening of the Rand.

'Petra's stated strategy is to focus on value as opposed to volume production, which is particularly pertinent to diamond operations, as not all carats are of equal value,' chief executive Johan Dippenaar said.

'Our assessment of optimal recoveries at Cullinan has therefore led us to opt for lower carat volumes, due to the positive impact that not recovering the small diamonds has on the average value per carat.'

'This has led to lowered production guidance for FY 2018, but does not materially impact our expected revenue, further to the positive uplift in Cullinan's average value per carat.'

StockMarketWire.com
Petra Diamonds swung to a first-half loss after it was dogged by industrial action and wrote down the value of its assets in South Africa.

The company booked a net loss of $117.7m, compared to a profit of $35.2m in the first half of its fiscal 2017 year.

Revenue fell slightly to $225.2m, from $228.5m.

The company booked non-cash impairment charges recognised on the carrying value of Koffiefontein and Kimberley Ekapa Mining of $118.0m, due to the effect of the strong Rand on the cost base of the assets, compounded by 'continuing operational underperformance'.

Annual revenue expectations remained in line with current consensus forecasts, the company said.

StockMarketWire.com
Petra Diamonds boosted third-quarter revenue by 44% after it produced and sold more gems.

Revenue rose to $172.0m from 1,373,771 carats sold, up from 1,069,886 carats the previous year.

Production jumped 20% to a record quarterly volume of 1,194,947 carats.

'Petra has recorded strong results in both production and sales, as well as a continued improvement in our safety performance,' chief executive Johan Dippenaar said.

'It is also important to note that the make-up of our production is transforming, with higher-value run-of-mine production representing around 82% of our carat volume. The future focus of the company will move away from volume targets to value optimisation.'

'While we are very encouraged by the operational delivery against our long-term expansion plans, risks to performance continue to relate to increased volatility in the ZAR/US$ exchange rate, grade and pricing variability at Cullinan, as well as the outlook for Williamson and the blocked diamond parcel.'

Barclays Capital today reaffirms its overweight investment rating on Petra Diamonds Ltd (LON:PDL) and cut its price target to 70p (from 85p)

Barclays Capital today reaffirms its overweight investment rating on Petra Diamonds Ltd (LON:PDL) and cut its price target to 65p (from 70p).