Petra Diamonds, the parent company of Kalahari Diamonds, saw its carat production swelling five-fold to over 1 million carats, the company said in its full year published this week.
The company gross production stood at 1.1 million, representing 453.6 percent largely boosted by its mines in South Africa and the recently acquired Williamson mine in Tanzania.
Gross revenue shot-up 22 percent to US $ 94.4 million.
Petra Diamonds is currently operating Cullinan, Koffientein, Sedibeng, Star, Helam and Williamson mines’ 75 percent stake — that were originally owned by De Beers. The company is also negotiating with De Beers to buy Kimberly Underground mines. While in Botswana it is prospecting what it termed potentially economic resources in the Kalahari area under the flagship Kalahari Diamonds.
“The net increase in production and sales is largely due to the Cullinan mine coming on stream in July 2008 as well as the Williamson in November 2008,” it said, but stated that was offset by the fall in rough diamond prices across all operations in line with market conditions.
“This has been a year in which Petra has established itself as a significant diamond producer. We have grown our production substantially, continue to find world class stones, effectively managed our cost base and expanded our geographic footprint,” Petra Diamonds’ Chief Executive Officer, Johan Dippenaar said.
“Trading conditions remain challenging and our cash flow remains tight with the recent strengthening of the rand absorbing much of the benefits of increased rough diamond prices. Management will remain vigilant to guide the company through these difficult times,” he added.
The mid tier miner has been hit by the global recession which saw diamond prices falling as much as 65 percent between September last and the lows reached in early 2009. However, he said, Petra has since experienced a general price recovery in the region of 25 percent in line with the improvement noted by commentators in the industry.
“Whilst these remain challenging trading conditions, there are positive signs that demand for rough, and more specially liquidity, is improving,” Dippenaar said.
“Cautious optimism is at the forefront of Petra’s thinking and, while we remain aware that a softening in prices is possible, we expect prices to continue to slowly and gradually strengthen,” he added.
Cullinan mine alone produced 898,043 carats, including two blue diamonds, one weighing 39.19 carats, which sold for US $ 8.8 million, while the other one weighed 7.03 carats and sold as polished achieved a price of US $ 9.4 million. The type II white diamonds also recovered from Cullinan mine were sold as rough and achieved between US $ 1 million and US $ 1.6 million.
This was against the average stones from the mine that are selling at US $ 66 per carat.