Petra Diamonds has announced that it has entered into an agreement to acquire the Finsch diamond mine in South Africa from De Beers.
Finsch is one of the world’s major diamond mines and South Africa’s second largest diamond mine by production. Petra said its acquisition marked a continuation of the company’s strategy to build a world-class diamond mining group.
Finsch will become Petra’s second major mine producing over one million carats per annum (mctpa), and will become its eighth producing diamond mine.
Finsch will bring Petra 48.1 million carats (mcts) of diamond resource, including 26.6 mcts of reserves, and will increase Petra’s gross resource base to approximately 309 mcts.
Commenting, Johan Dippenaar, CEO of Petra, said: “This acquisition is a landmark development for Petra and a further progression of our strategy to build one of the world’s leading independent diamond producers.”
He went on to say: “We believe that Petra offers an exceptional growth profile at a time when there is a very positive outlook for our industry and a strong rough diamond price environment.”
Adonis Pouroulis, executive chairman of Petra, said:“Petra is delighted to have carried out such a successful fundraising and to have received overwhelming support from existing and new shareholders in our heavily oversubscribed issue. The Placing has served to further diversify the Company’s high quality shareholder base and reflects the increasing interest from the investor community in the compelling fundamentals of the diamond market.
“We believe that the Company offers a unique investment vehicle for those wishing to gain exposure to diamonds, combining as we do a broad portfolio of producing diamond mines, all of which are in expansion mode, with a major resource base that underpins our growth strategy for many years to come.”
Finsch is expected to produce over 1.5 mctpa in its first full year of production, more than doubling Petra’s current production of around 1.3 mctpa. The company hopes that total production (including Finsch) will increase to around four mctpa by the 2014 financial year, and to over five mctpa by the financial year 2019.
Headquartered in Jersey, Petra is London’s largest quoted diamond company. In South Africa, the company has six producing mines—Cullinan, Koffiefontein, Kimberley Underground, Helam, Sedibeng and Star (the Fissures). In Tanzania, Petra has a 75 per cent interest in the Williamson mine.
