TIDMPDL
RNS Number : 4115K
Petra Diamonds Limited
25 August 2023
FOR IMMEDIATE RELEASE
25 August 2023 LSE: PDL
Sales results for Tender 1 FY 2024
First tender of FY 2024 yields US$79.3 million in sales
Richard Duffy, Chief Executive Officer of Petra Diamonds
(Petra), said:
"Petra's first tender of FY 2024 yielded US$79.3 million from
696.2kcts sold. We saw very strong attendance at the Tender
although demand was more muted than we had expected in exiting the
summer holiday period. Average prices for both Cullinan Mine and
Finsch benefited from an improved product mix, while like-for-like
[1] prices declined by 4.3% compared to our most recent tender,
Tender 5 of FY 2023, which closed in May 2023.
The expected seasonal improvement in demand was evident for
higher quality +10.8ct stones with solid prices realised, including
US$82,630 per carat for a 20.9 ct yellow diamond from Cullinan Mine
that sold for US$1.7m. This was offset by slower demand for 2-10
carat size ranges with like-for-like prices down by c. 14% compared
to Tender 5. Demand in smaller categories remains resilient, with
like-for-like prices increasing between 1-2%.
Macro-economic uncertainties around prevailing high interest and
inflation rates have resulted in a more cautious approach from the
mid-stream towards holding inventory. Indications are that these
rates have now peaked and will start to decline, providing support
to our view of improved demand in the medium-term as a result of
the structural supply deficit. Although demand for lab grown goods
increased, this was coupled with further price depreciation that
continues to substantially differentiate this market segment from
our unique and rare natural diamonds that provide enduring benefit
in celebrating life's most significant moments.
As we enter a seasonally stronger period which includes Diwali,
Thanksgiving, Christmas and the Chinese New Year, we remain
optimistic that jewellery demand will improve and provide some
support to prices over the balance of the calendar year."
Sales
Overall, 696,194 carats were sold for a total of US$79.3 million
from Petra's South African operations during Tender 1 of FY 2024.
No Exceptional Stones(2) were sold as part of Tender 1. This cycle
included goods deferred for sale following an earlier decision to
defer the majority of Tender 6 in June 2023, as well as the
75.9kcts of goods withdrawn from our May tender (Tender 5), with
prices for these goods remaining largely flat compared to the bids
received in May 2023.
No sales for either Koffiefontein or Williamson were recorded in
this cycle. Following the restart of operations at Williamson in
July 2023, Petra is planning a first sale of Williamson goods
during September 2023.
Rough diamond sales results for the respective periods are set
out below:
Tender Tender Variance Tender FY 2023
1 FY24 5 FY23 1 FY23
Aug-23 May-23 T1 FY24 Sep-22 12 months
to
vs 30 June
2023
T5 FY23
Diamonds sold (carats) 696,194 468,817 49% 520 011 2,339,675
Sales (US$ million) 79.3 42.1 88% 102.9 328.4
Average price (US$/ct) 114 90(1) 27% 198 140
Revenue from Exceptional Stones (US$ million) 0.0 5.6 -100% 0.0 12.6
---------------------------------------------- ------- ------- --------- ------- ----------
Note 1: As announced in May 2023, Petra estimated the overall
realised price for Tender 5 FY 2023 to be between US$105 and US$115
per carat including withdrawn parcels, based on bids received and
reserve prices for the withheld parcels.
Mine by mine average prices for the respective periods are set
out in the table below:
US$/carat Tender 1 Tender 5 Tender 1 FY 2023
FY23(1)
FY24 May-23 FY23 12 months
to
Aug-23 Sep-22 30 June 2023
Cullinan Mine(1) 113 99 212 139
Finsch 116 81 132 110
Williamson(1) n/a n/a 383 452
Koffiefontein n/a n/a 297 280
------------------ ---------- ---------- ---------- --------------
Note 1: Where applicable, prices for both Cullinan Mine and
Williamson include proceeds from the sale of Exceptional
Stones.
Note 2: As announced in May 2023, Petra estimated the overall
realised price for Tender 5 FY2023, including withdrawn parcels, to
be between US$110 and US$115 per carat for Cullinan Mine, and
between US$105 and US$110 per carat for Finsch .
Like-for-like prices
Like-for-like rough diamond prices declined by 4.3% on Tender 5
FY 2023, resulting from a 14% decrease in prices of 2 to 10.8 carat
diamonds and a 1-2% increase in diamonds smaller than 2ct.
Product mix
The balance of price movements is attributable to product mix,
with both Cullinan Mine and Finsch benefiting from improved overall
quality compared to Tender 5 FY2023, after normalising for the
withdrawn parcels, partly offset by the lack of Exceptional Stones
in this period compared to US$5.6 million sold as part of Tender 5
FY 2023. Tender 1 FY 2023, which closed in September 2022, included
an unusually high contribution of high-value stones at Cullinan
Mine, resulting in the average price of US$212 per carat for that
tender, with the overall average price of US$139 per carat for FY
2023.
For further information, please contact:
Petra Diamonds, London Telephone: +44 20 7494 8203
Patrick Pittaway investorrelations@petradiamonds.com
Julia Stone
Camarco (Financial PR)
Gordon Poole Telephone: +44 20 3757 4980
Owen Roberts petradiamonds@camarco.co.uk
Elfie Kent
About Petra Diamonds Limited
Petra Diamonds is a leading independent diamond mining group and
a supplier of gem quality rough diamonds to the international
market. The Company's portfolio incorporates interests in three
underground mines in South Africa (Finsch, Cullinan Mine and
Koffiefontein) and one open pit mine in Tanzania (Williamson).
Petra's strategy is to focus on value rather than volume
production by optimising recoveries from its high-quality asset
base in order to maximise their efficiency and profitability. The
Group has a significant resource base which supports the potential
for long-life operations.
Petra strives to conduct all operations according to the highest
ethical standards and only operates in countries which are members
of the Kimberley Process. The Company aims to generate tangible
value for each of its stakeholders, thereby contributing to the
socio-economic development of its host countries and supporting
long-term sustainable operations to the benefit of its employees,
partners and communities.
Petra is quoted with a premium listing on the Main Market of the
London Stock Exchange under the ticker 'PDL'. The Company's loan
notes due in 2026 are listed on the Irish Stock Exchange and
admitted to trading on the Global Exchange Market. For more
information, visit www.petradiamonds.com.
[1] Like-for-like refers to the change in realised prices
between tenders and excludes revenue from all single stones and
Exceptional Stones, while normalising for the product mix
impact
(2) Petra classifies "Exceptional Stones" as rough diamonds
which sell for US$5 million or more each
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END
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