Petra Announces $300 Million Notes Issue for Cullinan Construction

(IDEX Online News) – Petra Diamonds Limited has announced the launch of a $300 million notes issue as well as increases to its senior lender debt facilities as part of its plans to construct a modern processing plant at the Cullinan mine in South Africa.

Petra’s lender group has agreed, in principle, subject to the closing of the Notes, to increase the group’s debt facilities from $81.6 million to $302.4 million. The miner said it will use proceeds from the notes to settle, but not cancel, certain existing debt.

The planned processing plant at Cullinan will R1,650 million ($142.8 million). The new plant is expected to improve the recovery of the full spectrum of diamonds (thereby increasing the volume of stones recovered, as well as better protecting large stones from breakage); and improve the efficiency of the material flow, which will significantly lowering operating costs.

“Petra will be using a portion of the notes financing to construct a modern processing plant at Cullinan, which we believe will significantly improve returns at the mine by delivering enhanced diamond recoveries, especially of the large, high-value diamonds for which the mine is known, as well as substantial savings to operating costs,” said CEO Johan Dippenaar.

“In addition to the notes’ proceeds, Petra’s lender group has agreed in principle to extend and increase the group’s working capital and debt facilities to approximately $300 million, which will remain largely undrawn at the time of closing the notes issue. We believe that this new, more diversified, funding package better serves our needs as a business as we continue to grow and evolve and provides additional financial flexibility as we pursue our stated growth strategy,” he added.