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Petra Diamonds' 1Q Revenue +55%

Oct 27, 2014 4:47 AM   By Deena Taylor
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RAPAPORT... Petra Diamonds reported that revenue grew 55 percent year on year to $100.8 million during the first fiscal quarter that ended on September 30. Revenue growth was due to increased production and the sale of an 85 percent interest in a 122-carat blue diamond that was recovered from the Cullinan mine and sold for $23.5 million. The company sold 532,250 carats during the period, 10 percent less than one year ago.

Group production rose 2 percent to 833,744 carats, marking the highest quarterly production figure to date. The increase was due to a continued ramp-up of production at the Williamson, Koffiefontein and Kimberley underground mines. The company recorded a slight reduction at Cullinan and lower production at Helam due to the operation moving toward care and maintenance. The company sold the Sedibeng and Star mines in April 2014.

Petra noted that the rough diamond market is currently exhibiting post-summer softness. The company expects the market to improve beginning in late November as Christmas and the wedding season in India usually result in improved trading conditions, increased investment in rough diamond inventory and improved liquidity. Petra explained that consumer demand in the U.S., China and India, remains firm. The company maintained a favorable longer term outlook for the diamond market, underpinned by constrained supply from mining production.

Production at the Finsch mine was flat at 517,998 carats, which was in line with the mine's business plan for fiscal year 2015. Sales from Finsch totaled $26.7 million for 295,488 carats, with an average price of $90 per carat. Production at the Cullinan mine fell 4 percent to 209,632 carats due to lower-grade ore mined during the period, while sales jumped 154 percent to $43.2 million, for an average price of $134 per carat.

Petra's Koffiefontein mine produced 10,618 carats, 37 percent higher than one year ago as a result of a ramp up of underground operations. Sales grew 48 percent to $3.7 million. The company's Kimberley underground operation recorded a 31 percent production increase to 36,036 carats and sales of $7.8 million. Production at the company's Williamson mine in Tanzania rose 54 percent to 53,880 carats and generated $18.8 million in sales.

The company reported that its expansion plans at Finsch and Cullinan are progressing as planned and it maintained production guidance of 3.2 million carats for fiscal 2015. Petra expects to mine 5 million carats by fiscal 2019.
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Tags: Cullinan, Deena Taylor, diamond, diamonds, Finsch, Koffiefontein, Petra Diamonds, Williamson
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