Petra reports record results as Williamson mine in Tanzania recommits its operations

Diamond producer Petra Diamonds has reported record results in terms of three metrics for the financial year ended June 30, which CEO Richard Duffy said would allow the company to maximise the benefit gained from a higher diamond price environment.

For the year, Petra reported a 103% year-on-year increase in adjusted earnings before interest, taxes, depreciation and amortisation to $265-million, a 91% increase in operational free cash flow to $230-million, and a 219% in adjusted basic earnings a share to $0.43.

“This affirms the quality of the diamonds in our resource, where we also saw a contribution of $89.1-million from exceptional diamond sales,” he said. Exceptional diamonds are those that are capable of fetching more than $5-million each.

“This all culminated in stronger cash generation, which has generated $265-million of net free cash flow from our Project 2022, which was launched towards the end of 2019, targeting the delivery of $150-million to $200-million of net free cash flow from the business over a three-year period. We have generated well in excess of that $265-million net free cash over a three-year period,” Duffy said.

The focus of Project 2022 centred primarily on improving throughput at the company’s operations.

Over the year, Petra reported a 44% increase in revenue for the year to $585-million and a net profit after tax of $88.1-million.

“The significant increase in our whole process is really as a result of Williamson mine [in Tanzania] recommitting its operations on the back of it being in care and maintenance,” Duffy explained.

The mine was placed on care and maintenance in April 2020 to preserve its liquidity. Operations restarted during the first quarter of the 2022 financial year.

“Our overall performance caps the turnaround begun three years ago. In addition to Project 2022, the key drivers were our record recovery of exceptional stones, the resumption of operations at the Williamson mine, and a 41.5% increase in like-for-like diamond prices.

“The diamond market remains broadly supportive as a result of the prevailing structural supply deficit, although ongoing macro-economic uncertainties may lead to some volatility in the short term,” Duffy summarised. 

SOURCE: MINING WEEKLY