Petra Diamonds revealed expansion plans for its Finsch and Cullinan mines in South Africa, targeting production of between 3.4 to 3.7 million carats by 2028, representing a 15% to 17% increase over three years.
CEO Richard Duffy stated that the expansion, requiring about $100 million in annual sustaining and expansion capital, will be self-funded.
The UK-listed diamond producer also announced the appointment of Johan Snyman as CFO, effective October, succeeding Jacques Breytenbach who announced his departure in March for personal reasons.
Petra’s growth trajectory and funding have been uncertain amidst volatility in the diamond market this year.
Earlier projections for the year’s production were adjusted due to market conditions and restructuring efforts at the Finsch mine.
An investor day scheduled for today aims to provide further details on Petra’s growth plans, capital expenditures, and the life of its key operations.
CEO Duffy aims to navigate Petra through market volatility, highlighted by recent challenges in the diamond sector, including disappointing sales from De Beers.
De Beers CEO Al Cook indicated a prolonged recovery in diamond demand, with recent sales figures reflecting ongoing market pressures.
Morgan Stanley’s report underscored a downward trend in polished diamond prices, suggesting a prolonged recovery ahead.
Duffy emphasized Petra’s efforts to strengthen resilience amid market challenges, including cost reductions of $30 million annually.
Despite recent pressures on Petra’s valuation, shares showed a modest gain in early London trading.
