Petra defers refinancing as diamond prices slide yet again

PETRA Diamonds has embarked on a fresh round of restructuring at its South African mines and has deferred a refinancing plan to this year.This follows the results from its third tender in which the company lowered its price assumptions for the 2025 financial year to March 31. Average prices in the third tender fell 7% compared to the average price of the first two tenders of the financial year.The UK-listed miner said in an update on December 20 that Cullinan rough diamonds would sell at between $120 to $130 per carat compared to a previous estimate of $125 to $135/carat.The revision reflected “a continued weak market across most size ranges,” said Petra CEO Richard Duffy.Average prices for Finsch production would range between $80 to $90/carat and between $170 and $200/carats for Williamson mine production.These assumptions compare to previous estimates of $98 to $105/carat for Finsch and $200 to $225/carat for Wiliamson.“Despite the market backdrop, we are encouraged by the majors’ ongoing discipline around restricting the volume of rough diamonds to support the market and initiatives by upstream, midstream and retail sectors to collaborate in the category marketing of diamonds,” said Duffy.The Financial Times reported last month that De Beers had built up a stockpile of diamonds worth $2bn – the largest since the 2008 world financial crisis.Petra sold a total of 700,803 carats in its third tender, a 17% increase over the first two tenders of the year combined. Commenting at its interim results in October, Petra said it had to that point deferred a large portion of lower value South African production in the hope the market would recover.The absence of that recovery spells bad news for Petra Diamonds which last year unveiled steps aimed at easing pressure on its balance sheet. Net debt reached $285m at end-September from $201m at end-June. In response, the company “smoothed out” capital spend over a five years and said cost cutting would generate $180m in cash flow over that period, even at conservative diamond prices.Looming large in the plan’s thinking is $273m in loan notes that are due to mature in March 2026.Duffy said in the third tender update the company remained “committed” to its cash generation targets “and have commenced additional cash generation and savings initiatives”.“This has regrettably required us to initiate a section 189 (retrenchment) process affecting our group and South African operations support functions,” he said. Vivek Gadodia has been appointed chief restructuring officer to complete the cost cutting process.Refinancing discussions have also been deferred to this year to enable cash generation plans to take effect, said Duffy. “We remain confident of a successful refinancing of the 2026 2L Notes and a further update will be provided at the time of our interim results in February 2025,” said Duffy.The post Petra defers refinancing as diamond prices slide yet again appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.comWeiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com