London-listed Petra Diamonds has shared its plan for a sustainable reduction of $30-million a year in operating costs from the 2025 financial year, as well as a smoothing of its development and sustaining capital profile to about $100-million a year at its South African operations to target free cash generation through the cycle.

At an investor day presentation, in London, England, on June 27, Petra said approved extension projects were expected to be self-funded, with production growth to over 3.4-million carats expected by the 2028 financial year.

The company also announced that the Cullinan life-of-mine (LoM) potential was extended to 2048 with a new shaft for D-Cut not required before 2035, subject to further studies. Additionally, the Finsch LoM potential was extended to 2038.

“We have worked hard to deliver an updated business profile in response to ongoing market challenges and to further enhance our resilience to future market and capital cycles.

“We . . . present a derisked production profile focused on sustainable cash generation, having reduced costs by $30-million annually from the 2025 financial year and delivering a smoothed capital programme self-funded until at least the early 2030s. In doing so, we provide a compelling value proposition, while positioning for a successful refinancing of our 2026 2L Notes,” Petra CE Richard Duffy said.

NEW CFO

Petra also announced the appointment of Johan Snyman as CFO, with effect from October 1.

Snyman will succeed Jacques Breytenbach, who will be stepping down from his position as CFO and director at the end of September for personal reasons.

“[Snyman] has made significant contributions to Petra since joining in January and I look forward to working with him in his new role,” Duffy said.

Snyman joined Petra in January as group financial controller. Prior to that, he was VP of group financial reporting at AngloGold Ashanti, where he worked for 17 years.

Snyman has extensive experience in various financial roles in the mining sector. He started his career at KPMG and is a qualified chartered accountant with an MBA from the University of Cape Town.

GUIDANCE

In addition to Snyman’s appointment, Petra also announced that, as part of its focus on debt optimisation, the company has further reduced its 2L Notes through open market purchases totalling $5-million.

As such, group guidance for the 2025 financial year to 2029, indicative estimates of the 2024 financial year performance and pricing assumptions for the 2025 financial year, show that the company expects to recover between 2.8-million and 3.1-million carats in 2025, rising steadily to peak at between 3.4-million and 3.7-million carats in 2029 at costs rising from an upper estimate of $257-million to $266-million in 2029.

Extension capital expenditure (capex) is expected to fall from between $62-milion and $67-million in 2025 to a maximum of $44-million in 2029, while sustaining capex will go from a maximum $30-million in 2025 to $25-million in 2029.

This is based on indicative estimates of the 2024 financial year performance, which show that between 2.74-million and 2.78-million carats will be recovered at costs ranging between $261-million and $269-million, with expansion capex peaking at $57-million and sustaining capex peaking at $30-million.