Fissures Review

RNS Number : 8548I

Petra Diamonds Limited

31 July 2012

 



31 July 2012

LSE: PDL

Petra Diamonds Limited

("Petra" or "the Company" or "the Group")

Proposed Sale of Fissure Mines

Petra Diamonds Limited announces that it has, in conjunction with its BEE partners, decided to undertake a sale process in respect of its fissure mine operations, comprising the Helam, Sedibeng and Star mines in South Africa (the "Fissure Mines").

Background

Following the merger of Petra with Crown Diamonds NL (which previously operated the Fissure Mines) in 2005, the Group embarked on a strategy of growing its production through the acquisition of several high-tonnage, long-life kimberlite pipe operations (namely Cullinan, Finsch, Koffiefontein, Williamson and Kimberley Underground). This strategy has been highly successful, significantly increasing the Group's resource base, production and revenues, and has put the Group in the enviable position of targeting (without further acquisitions) an increase in production from 2.2 million carats in FY 2012 to over 5 million carats for FY 2019.

Through Petra's focus on the development of its major assets, the Group has evolved into a successful producer from underground and surface (Williamson), high-tonnage kimberlite pipe mines. The Fissure Mines have therefore become non-core to the Group, both in terms of their revenues and resource base, and Petra is of the view that the Fissure Mines have the potential to deliver strong returns under the ownership of an operator to whom they would be core assets.

Potential transactions arising from the sale process will be subject to detailed scrutiny and, apart from financial objectives, Petra will consider prospective purchasers' approach to employment, health and safety, environmental management and other issues fundamental to the long term success of the Fissure Mines for all stakeholders.

Petra Diamonds' CEO, Johan Dippenaar, commented:

"The Fissure Mines were Petra's first producing mines when acquired further to the Crown Diamonds merger in 2005, but given Petra's development and growth over recent years, the Fissure Mines are no longer core to the Group. Petra's management teams are focusing their attention on the Group's major assets, as it is from these that production growth to over 5 million carats per annum by FY 2019 will be delivered.

"The Fissure Mines produce high value stones and under the right ownership they have the potential to deliver strong returns for many years to come, whilst at the same time providing employment to the communities in the surrounding areas."

Conference Call

Petra's CEO, Johan Dippenaar, and Finance Director, David Abery, will host a conference call at 9:30am BST today to discuss the sale of the Fissures Mines and the Company's FY 2012 Trading Update (also released today) with investors and analysts. Participants may join the call by dialling one of the following three numbers shortly before the call:

From the UK (toll free): 0800 368 1895
From South Africa (toll free): 0800 983 092
From the rest of the world: [phone]
Participant passcode: 837341#

A replay of the conference call will be available on the following numbers from 12:00pm BST on Tuesday 31 July 2012:

From the UK (toll free): 0800 376 5689
From South Africa and the rest of the world: [phone]
Playback passcode: 386010#

About the Fissure Mines

Helam, Sedibeng and Star are all well-established fissure mines which have been in operation for more than 50 years. Full shrinkage overhand stoping is employed at Helam and Sedibeng, while underhand open stoping is employed at Star.

The average value per carat of the Fissure Mines is high for kimberlite operations, ranging across each of the fissures from US$150 to US$500 per carat (FY 2012), with an FY 2012 average for the Fissures Mines combined of US$255 per carat, in comparison to a global average of US$90 per carat (according to the latest Kimberley Process statistics which relate to 2010). The quality of the Fissure Mines' production is well known to diamantaires.

Petra holds a 74% interest in Helam (BEE partner 26%); a 74.5% interest in Sedibeng (BEE partners 25.5%); and a 74% interest in Star (BEE partner 26%).

The sale process will commence shortly. Any parties who may have an interest in acquiring the Fissure Mines should send their details to Cathy Malins at [e-mail] or to Craig Kraus at [e-mail]

~Ends ~

For further information, please contact:

Petra Diamonds, London	Telephone: [phone]
Cathy Malins	[e-mail]

Buchanan (PR Adviser)	Telephone: [phone]
Bobby Morse Cornelia Browne	[e-mail] [e-mail]

RBC Capital Markets (Joint Broker)	Telephone: [phone]
Martin Eales	[e-mail]
Pierre Schreuder	[e-mail]

Canaccord Genuity Limited (Joint Broker)	Telephone: [phone]
Rob Collins Andrew Chubb	[e-mail] [e-mail]

About Petra Diamonds Limited

Petra Diamonds is a leading independent diamond mining group and an increasingly important supplier of rough diamonds to the international market. The Company has interests in eight producing mines: seven in South Africa (Finsch, Cullinan, Koffiefontein, Kimberley Underground, Helam, Sedibeng and Star) and one in Tanzania (Williamson). It also maintains a highly focused exploration programme in Botswana.

Petra offers an exceptional growth profile, with a core objective to steadily increase annual production to 5 million carats by FY 2019. The Group has a major resource base in excess of 300 million carats.

Petra conducts all its operations according to the highest ethical standards and will only operate in countries which are members of the Kimberley Process. Petra is quoted with a premium listing on the Main Market of the London Stock Exchange under the ticker 'PDL' and is a member of the FTSE 250.

For more information, visit the Company's website at www.petradiamonds.com 

 

END

 

 

MSCEAKXEDLXAEFF