Petra Diamonds on track, sees signs of price stabilisation

(Sharecast News) - South Africa and Tanzania-focused diamond miner Petra said it remains on track to hit its full-year production guidance and reported "encouraging" signs of a recovery in prices after a tough year for the industry. As announced in November, full-year output will be at the lower end of the 2.9-3.2m carat guidance.

Total diamond production rose by 2% to 1.43m carats in the first half ended 31 December as operations continued to stabilise at Finsch and Cullinan Mines and Williamson continued its ramp-up to full production.

Revenues totalled $187.8m in the six-month period, down from $208.5m the year before, as like-for-like prices dropped 13.3%.

"While we are seeing encouraging indications of price recovery and some stabilisation in the rough diamond market, following actions taken by both producers and the mid-stream, we continue to adopt a cautious approach to the market in the near-term," said chief executive Richard Duffy.

The company in December increased its revolving credit facility from ZAR1bn ($53m) to ZAR1.75bn ($93mm), which is partially undrawn and available.

"Once completed, the additional headroom afforded by our increased revolving credit facility will enable us to continue our flexible sales approach and position ourselves to take advantage of any market improvements," Duffy said.