Petra Shares Fall as Company Announces Lower Expected Revenue

(IDEX Online News) – Shares in London-listed Petra Diamonds Limited fell by as much as 11 percent on Friday following the company’s announcement that it expected its revenue for the year to fall to $430 million.

The revenue drop is the result of changes in its product mix, with a lower incidence of high-quality stones and a higher volume of smaller stones.

Nevertheless, Petra said it is still on track to meet its production target of approximately 3.2 million carats.

The change in product mix is due to the underground production at Finsch and Cullinan being sourced from mature and diluted mining areas, which is causing variability in both the achieved run of mine grade as well as in product mix due to the finer nature of the ore at this late stage in the life cycles of the old block caves.

The company said its reliance on production from heavily diluted ore will become less of an issue during the course of FY 2016 as it will see increased production from less diluted areas and from new mining areas providing access to undiluted ore and a reduction in waste development tons.

Petra said its expansion programmes remain on time at both Finsch and Cullinan and that it remains on track to reach its longer-term target of approximately 5 million carats by FY 2019.

The company will announce its FY 2015 Trading Update (Production and Sales Report) and annual guidance announcement on July 27.