Petra is to offer a 32.32-carat pink diamond at its first tender of goods from the Williamson mine, in Tanzania following a Covid-enforced closure.
The stone is among 26,000 carats that will be offered in Antwerp from 19 to 26 November. The London-based miner classified Williamson as “an asset held for sale for financial reporting purposes” after a a debt-for-equity restructuring. The open-pit mine was mothballed in April 2020 to “preserve its liquidity, at a time when diamond pricing was impacted by the COVID-19 pandemic”. Operations resumed in Q1 FY 2022.
South Africa’s Petra Diamonds is considering selling its Williamson mine in Tanzania, even as it continues to work on bringing the operation back online in the second half of 2021.
Delivering its year-end results, Petra said that Williamson had been classified as a discontinued operation, which will mean an accounting loss of $52.1 million for the company. The mine was mothballed in April last year after diamond prices dropped following the global covid-19 outbreak.
BMO analyst Raj Ray said that while a sale could be viewed positively by the market, he sees potential risks in terms of realizing the value of $84 million (net book value of about $26 million at F2021 year-end) the bank ascribes to the asset, given the recent challenges.
“Recent efforts to procure a $25 million working capital facility with a local bank for the restart have so far been unsuccessful,” Raj wrote in a note to investors.
Petra has faced allegations of human rights abuses at the mine, resulting from the actions of its security guards.
The miner formed in February an internal committee to oversee the investigation, which concluded that “regrettable” incidents did take place at the mine in the past. Shortly after, it reached a £4.3 million (about $6m) settlement with claimants, even though it did not admit liability.
The company is currently engaged in talks with the Tanzanian government over a revised regulatory framework, which would lead to Williamson’s re-opening.
A key issue in those discussions concerns a parcel of 71,654 carats of diamonds effectively placed in limbo after deceased President John Magufuli blocked their export in 2017.
Turnaround Despite covid-19 and issues at Williamson, Petra has staged a sharp turnaround in fortunes over the past financial year. It cut net debt by two-thirds in the year ended June 30 after a capital restructuring completed in March and rising sales drove strong growth in free cash flow.
Petra ended fiscal 2021 with net debt of $228 million, down from just under $693 million last year. Net profit reached $196.6 million, reflecting a $213.3 million gain after the successful debt restructuring.
Revenue rose 65% to $402.3 million on the back of higher sales of exceptional stones.
As for fiscal 2022, Petra reaffirmed production guidance of 3.3 million-3.6 million carats, with capital expenditure of $78 million- $92 million.
342.92 carat Type IIa white diamond: Petra Diamonds
Petra Diamonds Limited has sold a 342.92 carat Type IIa white diamond and an 18.30 carat Type IIb blue diamond, both recovered at the Cullinan Diamond Mine in South Africa.
The stones have been sold into a partnership with Stargems (Pty) Ltd. Petra will receive an upfront payment of US$10.0 million for the 342.92 carat stone and US$3.5 million for the 18.30 carat stone, as well as retaining a 50% interest in the profit uplift of the polished proceeds of both diamonds, after costs.
Stargems is a Johannesburg-based subsidiary of Stargems Group, an international and vertically integrated diamond company, and is a diamond beneficiation licencee, allowing for the two diamonds to be cut and polished in South Africa.
Petra’s Chief Executive Officer Richard Duffy commented: “These two diamonds are wonderful examples of the very high quality and rare white and blue diamonds that are so well known from the Cullinan Diamond Mine. We are delighted that both stones will be manufactured in South Africa and it is fitting that we will be working with Stargems, who specialise in the sourcing and supply of the finest diamonds to customers across the world.”
Meanwhile, Shailesh Javeri, Chairman of Stargems Group, commented: “The stones will be beneficiated in South Africa at our Stargems cutting factory in Johannesburg and we look forward to working closely with Petra during the manufacturing process to reveal the eventual polished gems.”
South Africa’s Petra Diamonds has recovered a 342.92-carat Type IIa white rough at its iconic Cullinan mine.
The company said the diamond is “exceptional” quality, in terms of both its colour and clarity, and that it will likely be sold at the September tender.
Petra fetched in March $12.2 million for a 299.3-carat Type IIA white diamond. That meant it obtained $40,701 per carat, which exceeds the $34,386/ct received for the 424.89-carat “Legacy of the Cullinan Diamond Mine” in May 2019.
Type II diamonds are found less frequently and are more valuable than Type I diamonds, as they have no measurable nitrogen impurities. This gives them exceptional transparency and brilliance.
Cullinan is known as the birthplace of the famed 3,106-carat Cullinan diamond, which was cut to form the 530-carat Great Star of Africa.
The operation also yielded the 317-carat Second Star of Africa.
They are the two largest diamonds in the British Crown Jewels.
Cullinan is known as the world’s most important source of blue diamonds, such as the 39.34-carat stone Petra found in April and which sold for $40.2 million earlier this month. It was the company’s highest price ever for a single stone.
Petra Diamonds Ltd. sold a 39.3-carat blue gem for more than $40 million, making it one of the most expensive rough diamonds ever.
The small miner sold the exceptional Type IIb blue diamond to a joint venture between top producer De Beers and Diacore, a trading company owned by the billionaire Steinmetz family, it said Monday. The stone fetched just over $1 million per carat and is the most expensive gem Petra has ever sold.
Petra found the diamond at the Cullinan mine in South Africa in April. The mine, once owned by De Beers, is famous for both large and blue stones and was where world’s biggest diamond was found in 1905. Blue stones are among the most rare and valuable.
The sale is good news for Petra, which was forced to restructure its debt last year, when the Covid-19 crisis brought the industry to a standstill at a time when the company was already facing a mountain of debt and falling diamond prices. The shares, which were once worth more than $1.5 billion, closed up 1.1% on Monday.
39.34 carat blue diamond recovered by Petra South Africa
South Africa’s Petra Diamonds has put a 39.34 carat Type IIb gem recovered at its iconic Cullinan mine in April up for sale, with viewings beginning June 15.
The company said the diamond of “exceptional quality” in terms of both its colour and clarity, will be showcased in Antwerp, Dubai, Hong Kong and New York.
Petra, which anticipates that the diamond will be sold via a special tender, said that biddings via its online platform will close on July 12.
While it didn’t set a price range for the stone, the miner said high-quality blue diamonds like the one for sale usually fetch the highest values.
Petra’s Blue Moon of Josephine diamond, cut from a 29 carat rough blue diamond, sold for $48.5 million in 2015.
The figure corresponds to a price of $4 million per carat, which remains the world record price per carat ever paid for a diamond.
Cullinan is known as the world’s most important source of blue diamonds, as well as being the birthplace of the 3,106-carat Cullinan diamond, which was cut to form the 530-carat Great Star of Africa. The operation also yielded the 317-carat Second Star of Africa. They are the two largest diamonds in the British Crown Jewels.
South Africa’s Petra Diamonds has found yet another big rock at its iconic Cullinan mine, a 39.34 carat Type IIb gem said to be of “exceptional quality” due to both its colour and clarity.
The miner didn’t indicate the diamond’s potential value but said it would sell it in a special tender.
Cullinan is known as the world’s most important source of blue diamonds, as well as being the birthplace of the 3,106-carat Cullinan diamond, which was cut to form the 530-carat Great Star of Africa.
The operation also yielded the 317-carat Second Star of Africa. They are the two largest diamonds in the British Crown Jewels.
Petra Diamonds has sold a 299.3 carat diamond recovered in January at its iconic Cullinan mine, in South Africa, to Belgium-based Stargems DMCC for $12.18 million.
The exceptional Type 11a white gem-quality rock achieved a price of $40,701 per carat, which exceeds the $34,386/ct received for the 424.89 carat “Legacy of the Cullinan Diamond Mine” in May 2019.
The freshly sold find adds to other most famous diamonds unearthed at Cullinan, such as “The Blue Moon of Josephine”. This 29.6 carat blue diamond sold for $48.5 million in 2015, a world record price per carat for any diamond sold at an auction at the time.
The company’s board approved such reorganization in January, and Petra expects to finish the process around the end of March.
Petra’s shares slumped by more than 80% last year as the covid-19 pandemic battered the global diamond sector, with mines forced to shut down while consumer demand continued to fall.
Struggling Petra Diamonds (LON: PDL) said on Wednesday its investors have approved plans to restructure the business, a move that aims to provide the miner with a more stable, deleveraged capital structure to ensure its short and long-term viability.
Over 95% of shareholders voted in favour of a resolution that includes reducing authorized share capital of the company by cutting the nominal value of all ordinary shares from 10p to 0.001p.
SIGN UP FOR THE PRECIOUS METALS DIGEST It also involves an increase to Petra’s authorized share capital through the creation of 8.5-million ordinary shares and the authorization for directors to allot ordinary shares up to £88,447 ( just over 8.8-million ordinary shares).
Hefty debt Petra Diamonds’ weak financial position, a product of stagnant demand and heavy borrowing to expand its mines, particularly the iconic Cullinan, pushed it to put itself up for sale in June. Petra reversed the decision in October, opting instead for the debt-for-equity restructuring approved Wednesday.
The company noted it expected to complete the reorganization in the first quarter of 2021.
Petra’s shares slumped by more than 80% last year as the covid-19 pandemic battered the global diamond sector, with mines forced to shut down while consumer demand continued to fall.
The diamond miner, which has three operations in South Africa and one in Tanzania, is also dealing with allegations of human rights abuses at its Williamson mine in Tanzania, resulting from the actions of its security guards.
Botswana Diamonds (LON:BOD) said on Monday it had completed the acquisition of Sekaka, the exploration vehicle that belonged to embattled rival Petra Diamonds (LON:PDL) and which held three prospecting licenses in the country’s Central Kalahari Game Reserve.
In one of its licenses, Sekaka had singled out the KX36 kimberlite pipe, which is situated about 70 km from Gem Diamonds’ Ghaghoo mine, and 260 km north-west of Botswana’s capital Gaborone.
SIGN UP FOR THE PRECIOUS METALS DIGEST Sekaka also had a recently built, fit-for-purpose bulk sampling plant on-site that includes crushing, scrubbing, dense media separation circuits and X-ray recovery modules within a secured area.
The acquisition includes an extensive database, built up over 15 years of exploration.
Botswana Diamonds believes the information contained in the database will provide substantial support to its future kimberlite exploration activities in the mining-dependent country, the world’s second-largest diamond producer.
“We are delighted that this acquisition has now closed. This paves the way to explore commercial development options for KX36 and begin to evaluate the extensive database in conjunction with ours to discover more kimberlites in prime diamond real estate,” chairperson John Teeling said in a media statement.
Diamond exports from the southern African nation dropped 42% to $1.49 billion in the first nine months of this year as production fell 29% to 12.3 million carats due to covid-related restrictions.
Botswana’s mining sector provides a fifth of the country’s GDP and 80% of its foreign exchange earnings.
Mounting woes Petra Diamonds, the former owner of Sekaka, has been struggling for over two years. Its weak financial position pushed it to shed non-core assets and put itself up for sale in June.
The company reversed the decision in October, opting instead for a debt-for-equity restructuring. The deal would leave existing shareholders with just 9% of the company.
Petra is also dealing with allegations of human rights abuses at its Williamson mine in Tanzania, resulting from the actions of its security guards.
It recently reported a 36% fall in revenue and a net loss of $223 million (168.7 million pounds) for the year ended June 30, as the coronavirus pandemic deepened the company’s financial woes.
