Petra Diamonds’ rough prices fell on a like-for-like basis at its most recent tender amid ongoing softness in the market.
The sale, which combined the miner’s delayed September tender with its October one, realized $76 million for 600,161 carats, Petra reported Tuesday.
Although the average price rose 13% to $126 per carat, the increase was not a reflection of rebounding prices, according to the company, but of a better product mix. Like-for-like prices were down 9%, and the total intake for the two tenders — the miner’s first for the fiscal year — was 42% lower than the $131 million from the equivalent tenders a year ago.
“Our combined first and second tenders indicate continued weakness in the rough-diamond market,” said Petra CEO Ruchard Duffy, noting that the product mix had contributed 22% to the increase in overall average prices.
The main contributor was an 18.85-carat blue diamond that the company sold into an offtake agreement for $8.5 million. It also sold a 405-carat, top-light-brown diamond of “exceptional clarity” from its Cullinan mine for $4.7 million. Meanwhile, the miner withdrew a parcel containing 88,000 carats of lower-value brown diamonds because of poor demand for the category, Petra explained.
Revenue for the company’s first fiscal quarter, which ended September 30, plunged 77% year on year to $23 million, reflecting only the $8.5 million from the blue diamond and $14 million for rough from the Williamson mine in Tanzania.
Due to the lower sales figures, Petra drew $48 million from its revolving credit facility, but intends to replace that amount once the total proceeds from the first two tenders come in, it said. The miner’s debt increased to $285 million by the end of September, from $201 million on June 30.
Meanwhile, sales volume slid 91% to 85,449 carats. The primary reason for the drop was the deferral of goods from the first tender; in August, Petra announced it was pushing the majority of rough from its Cullinan and Finsch mines in South Africa to the current tender in order to improve prices.
Total output for the quarter slipped 2% year on year to 679,625 carats. However, it was 7% higher than in the previous quarter, Petra reported, as the company mined higher-grade ore from Cullinan and increased its total tonnage from Williamson.
Despite the prolonged slowness in the market, Petra believes rough prices will bounce back this year.
“We continue to expect prices to show some improvement in 2025, with market fundamentals being supportive in the medium to longer term,” Duffy said.
Image: The Cullinan mine. (Petra Diamonds)
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