PETRA'S WILLIAMSON MINE RESTARTS OPERATIONS - FINANCIAL-24
Petra Diamonds has resumed operations at its Williamson mine after a four-day stoppage, it said yesterday, adding that its full-year production target remains unchanged.
The London-listed miner halted operations at the mine last week after the Tanzania government seized a consignment of diamonds and questioned Petra personnel as part of a crackdown on the mining sector.
Petra is keeping a close eye on developments at Williamson, CEO Johan Dippenaar said on Monday after the company posted a 4 percent drop in core profit, sending its shares down 7 percent to 78 pence by 1050 GMT.
However, the company said its forecast includes the Tanzanian mine in normal operation. “We are watching things on a week to week basis,” Dippenaar said on a conference call. “But we won’t allow the mine to endanger the rest of the group.”
Petra also said it was expecting delays in receiving VAT re funds from the totalling $15.8 million because of the current operating environment. Changes made in July to Tanzania’s law on VAT rebates could result in costs at Williamson rising 10 per cent above guidance, Petra warned.
In the meantime, the mining firm has reported production increase amid revenue decreased in this year. The largest diamond miner in the country said yesterday in a statement that production went up due to run of mine (ROM) grades as a result of improved liberation associated with the new milling section of the plant.
On the revenue, Petra attributed to falling revenue contribution from exceptional diamond that fell five times in 2016/17. The miner year ends in June. The statement said production increased by 6.0 per cent to 225,202 carats from 212,869 carats reported last year.
The production upsurge was “mainly due to a 16 per cent increase in ROM grades, partially offset by throughput constraints experienced during commissioning of the new mill ing section.” The new milling section was commissioned during the first half of this year or on Petra’s second half of financial year.
On other hand, the revenue went down 26 per cent to 58.4 million US dollars against 78.9 million in last year due to the contribution of revenue from exceptional diamonds that dropped to 5.2 million US dollars from 25.1 million US dollars last year.
On development plan Williamson is expected to see production rise from ca. 225,000 carats in this year to ca. 337,500 ctpa by 2019. “The current mine plan has a life extending to 2033, but given that the Mwadui kimberlite hosts a major resource of 39.0 Mcts, there is potential to extend the LOM (Life of Mine) considerably,” the statement said.
On the ongoing seize diamonds at Julius Nyerere International Airport, operations at Williamson resumed after a four day stoppage, but the company’s parcel of diamonds (71,654 carats) has not been released for export.
“…Discussions with the government are ongoing. The company’s forecasts and expectations as disclosed in this announcement include Williamson in normal operation,” the release said.
But Petra Diamonds share ever since had slumped 7.0 per cent to 77.50 pence at London’s FTSE 250. The firm warned that failure to resolve a dispute with the government over diamond exports may result in it breaching two of its covenant measures.
Daily News
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