Petra H2 Revenues Rise 52%, Production 422%, Drops Angolan Project

Petra Diamonds said revenues from rough diamond sales in the second half of the year increased 52 percent to $48.1 million. Decided to withdraw from the Alto Cuilo project in Angola and hand it over to Endiama.

The diamond miner saw gross revenue growth mainly due to the Cullinan mine in South Africa, offset by weaker diamond prices in the latter half of the period and reduced sales at Koffiefontein due to the release of diamond inventory in the comparable period.

Gross production is estimated to total 528,636 carats, a 422 percent year-over-year increase.

Following a strategic review of its exploration activities, Petra decided to withdraw from the Alto Cuilo project, citing exploration results and weakness in the financial markets.

In Botswana, Petra decided to substantially reduce the level of exploration activities but does not plan to relinquish any of the licenses. It intends to do the same in Sierra Leone where it has the Kono Project joint venture with Stellar Diamonds.

Reducing these exploration activities will slash its annual exploration budget from approximately $25 million to about $5 million. A further reduction is possible pending the results of the Luangue and Kono reviews.

On a more upbeat note, Petra mined a second blue diamond, weighing 26.58 carats, at Cullinan. Early indications are that it is an extremely rare stone, of even better color and clarity than the 39.19 carat blue diamond recovered at Cullinan. The first diamond sold for $8.8 million.

“The global financial environment requires a change in commercial approach,” CEO Johan Dippenaar said. “Our focus now is to continue to build cash positive production, whilst maintaining rigorous cost control.”