Star Diamond acquires Buffalo Hills project in Alberta
Located approximately 400 kilometres northwest of Edmonton, the Buffalo Hills project includes 21 mineral leases covering 4,800 hectares.
London-listed Petra Diamonds (LON:PDL), known for major findings in the past year, said Monday that despite challenging market conditions the sector’s future looks promising.
Reporting preliminary results for the year ended June 30, the diamond miner said it expected production to rise up to 24.3% in 2017 from the previous year and grow further to hit 5 million carats (mcts) in 2018, a year earlier than expected.
The Africa-focused company, which operates four diamond mines in South Africa and one in Tanzania, forecast production to surge to 4.4-4.6 mcts in the year ending June 30, 2017 from 3.7 mcts achieved in the same period last year.
Petra sees production rising up to 24.3% in 2017 from the previous year and growing further to hit 5 million carats (mcts) in 2018, thanks to its recent acquisitions and mine expansions.
The output growth would be mostly thanks to the imminent conclusion of a seven-year expansion program to boost its key South African mines Finsch and Cullinan. The recent acquisition of De Beer’s majority stake on the historic Kimberly mine is also expected to help lifting the company’s diamond overall production.
Petra’s chief executive Johan Dippenaar noted the company had completed a “transitionary period” as it contended with the dilution in the old mining areas of its underground mines, while the expansion programs worked hard to open up the new, undiluted areas.
“However by keeping the development work on track, Petra has navigated the most difficult stretch of this journey, and our progress is evident in the improving ROM grade and product mix achieved at both Finsch and Cullinan for the year,” he said in the statement.
Petra has attracted media and investors interest in recent months after finding three major diamonds at its Cullinan mine in South Africa, which were sold at record prices. One of those rocks, the “Blue Moon” became the world’s most expensive diamond after fetching $48.5 million at a Sotheby’s auction in November.
In July, it sold a massive 121-carat white diamond unearthed at the same mine for $6 million. And last month it recovered yet another huge stone at the mine — a 138.57-carat white diamond, classified as type IIa, D colour.
Not surprisingly, the company embarked on a project to extend the life of the iconic Cullinan, located north-east of Pretoria. The new pit is due to come on stream before the end of the year, with a full ramp-up in 2017.
While Petra remains “cautious” for the rest of 2016, it’s confident in the long term outlook for the diamond industry, as it expects a growing middle classes in emerging markets to fuel demand for the precious rocks.
As a result, the miner is banking on becoming cash flow positive in the second half of the current financial year and said it would consider resuming dividend payments.
