Production results for the year released by Petra Diamonds (PDL LN) today show total carats produced up 8% YoY to 4mcts and revenue up 11% to US$477m. Diamond prices in the rough market were largely stable with a change upward of just 2% YoY. Cash at bank rose over 3x to US$205m as capital is allowed to accrue against the increased debt level which now stands at US$554m. Capital expenditure will now be declining from here.
The production pipeline is looking good with guidance supporting a forecast of 23% more carats produced to circa 5mcts for 2018. Tailings derived stones will be diminishing from here on out which should improve the product mix on sales. Net debt should stay relatively level in H1 this coming year and fall thereafter PDL predicts. Preliminary financial results will be released on 19 September.
If we can see an increase in stone size distribution from mined ore in the product sales over the coming 12 months as well as an increase in the number of carats as tailings production falls away, this should give the company an added revenue boost above just more carats produced alone.
In a media briefing on Saturday, Randgold (RRS LN) disclosed a significant discovery of gold in Cote d’Ivoire at Boundiali but also complained of the encroachment of large numbers of illegal miners to the site as a result. CEO Mark Bristow typified unhindered illegal mining as the single biggest challenge to the industry now.
Mark reported that Tongon ramp up is proceeding to plan with a 2017 target of 285kozs but admitted that the investment of US$28m into the government grid infrastructure has not yet been agreed with the local tax office as to when and how it should be repaid in the accounts, despite the government having already earned US$100m in revenue on the power distribution to RRS and regional users.