Petra Diamonds Limited
Annual Report and Accounts 2013
36
Performance Review
Operational Review
Finsch
Performance in FY 2013
Finsch performed strongly for the Year, contributing 1,412,465 carats
(FY 2012: 1,104,618 carats) and revenue of US$160.6 million
(FY 2012: US$136.9 million).
In line with Petra’s strategy to optimise recoveries from each asset, the plant
cut-off was reduced at Finsch towards the latter part of the Year to increase
recovery of the high quality smaller goods produced by the Finsch orebody,
with a resultant increase in both ROM and tailings grades in Q4 over the
previous quarter. Although this plant change resulted in a reduced average
value per carat, due to the increased volumes of the smaller diamonds,
it served to increase gross revenues and contained value per tonne.
ROM grades for FY 2013 declined to 34.1 cpht (FY 2012: 36.8 cpht) due to the
increasing dilution of the current mature Block 4 working areas; however the
plant changes noted above are expected to provide some positive effect
on ROM grade before the development plan provides first access to
undiluted ore (from FY 2015 onwards).
Tailings throughput of 2,600,611 tonnes at a grade of 20.1 cpht delivered
522,106 carats.
Costs
The weighted average unit operating cost of R139/t (FY 2012: R134/t) at
Finsch was in line with management’s expectations. Above-inflationary
cost pressures associated with labour and electricity were partially offset
by increased levels of throughput resulting in a 4% unit cash cost increase
(compared to South African CPI of 5.5%).
Development plan
Petra’s expansion plan at Finsch will take production from ca. 1.4 Mctpa
to ca. 1.8 Mctpa by FY 2016 and then on to ca. 2.0 Mctpa by FY 2019. With
gross resources of 50.9 Mcts, Petra’s initial mine plan has a life of 17 years,
but resources in residual Block 6 and the Precursor kimberlite are expected
to prolong the actual LOM for considerably longer.
Production is currently entirely from Block 4, a mature block where the ore
is by now heavily diluted with waste rock. In order to provide earlier access
to undiluted ore before the main Block 5 Cave is put in place, Petra will use
the sub-level cave (“SLC”) mining method over four levels from the 710 metre
level (“mL”) to 780 mL at a rate of 3.2 Mtpa. Once the transition is then
made from mining the SLC to the main Block 5 Cave, which is currently
planned at the 900 mL, tonnages will increase to 3.5 Mtpa from FY 2021.
On 12 August 2013, Petra announced enhancements to the expansion plan
at Finsch, which focus on revisions to the ore-handling system (including
the implementation of a conveyor system which can transfer 710–780 mL
SLC material to the existing loading and hoisting infrastructure on 650 mL),
a further enlarged footprint of the Block 5 SLC and the doubling up of crusher
capacity to complement the enhanced ore-handling and engineering
infrastructure planned at the SLC and the Block 5 Cave (originally planned
on the Block 5 Cave elevation only).
These measures will serve to improve production flexibility, give
the ability to manage grades more efficiently and enable the earlier
decommissioning of the Block 4 automated ore-handling infrastructure,
resulting in long-term savings in operating costs, as well as the added
benefit of production efficiencies.
One of the world’s major diamond mines, Finsch benefits from top quality
infrastructure, including a modern processing plant which was recently upgraded.
DELIVERING OUR STRATEGY
OUTPUT
A strong first full
year under Petra management,
contributing 53% of Group
production by volume.
RECOVERIES
Plant cut-off
reduced to capture higher value
small diamonds.
EFFICIENCIES
Operating costs
held in line with expectations.
AVERAGE PRICE PER CARAT
US$120
-13%
ROM TONNES
2,609,935
+15%
PRODUCTION
(ROM + TAILINGS)
carats
1,412,465
+28%
ROM GRADE
34.1 cpht
-7%
ON-MINE CASH COST PER TONNE
R139
+4%
REVENUE
US$160.6m
+17%
REVENUE CONTRIBUTION
40%
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