Petra Diamonds Limited
Annual Report and Accounts 2013
38
Performance Review
Operational Review continued
Performance in FY 2013
Cullinan’s revenue increased to US$133.0 million (FY 2012: US$112.0 million)
despite flat production, due to a higher contribution from ‘specials’.
Cullinan is renowned as an important source of large top-quality white
diamonds (Type IIa) and very rare top-quality blue diamonds (Type IIb),
and in FY 2013, nine diamonds (including the exceptional 25.5 carat blue
diamond) were each sold for more than US$1 million.
FY 2013 production of 868,975 carats (FY 2012: 867,780 carats) was impacted
by a combination of the lower ROM grade and the delay in the roll-out of the
tailings expansion project. The lower ROM grade of 30.7 cpht (FY 2012: 33.3 cpht)
was due to the increased dilution of the current mining areas.
As part of the Company’s ongoing initiatives to manage the lower ROM grade
prior to accessing the C-Cut, Petra has been working to open up access to
tonnages in the BA5 production area and on the 645 mL, which had formerly
been closed down. This part of the orebody has a historically proven higher
frequency of high value stones, and increased pillar mining from this area
in Q4 contributed towards both a strengthening ROM grade (to ca. 33.0 cpht)
and an increased number of special stone recoveries (H2 FY 2013 revenue
of US$84.4 million versus H1 FY 2013 revenue of US$48.6 million).
Petra will continue to support ROM grade in FY 2014 by mining Block B
pillar tonnes and accessing higher grade undiluted tonnes on the BA5 645 mL.
Given this approach, Petra is guiding ROM production of ca. 2.75 Mt
for FY 2014, at a grade of ca. 31 – 32 cpht.
Tailings production disappointed in FY 2013, as only 1.5 Mt were treated
(at a grade of 5.0 cpht) versus expectations of ca. 2.7 Mt. This lower
throughput was caused by various delays, including strikes in the transport
sector which hampered delivery of steel and other materials.
During the Year, Petra revised its plans for the tailings operation at Cullinan
due to the early production results and grades achieved. Further investment
in tailings treatment facilities has been put on hold whilst further analysis
is undertaken. Tailings production is currently planned to increase to
ca. 2.7 Mtpa for FY 2014 at a grade of ca. 5 – 6 cpht and to remain at this
level, rather than ramping up to the previous forecast of 4 Mtpa. However,
the grade is expected to increase to ca. 7.5 cpht from FY 2015, due to
continuous plant improvements, including the re-crush facilities.
Costs
Unit cash operating costs at Cullinan decreased by 11% to R158/t (FY 2012: R177/t)
mainly due to the increased volumes of tailings throughput. Longer-term, once
the development plan has significantly progressed in the years to come, unit
cost efficiencies are expected to be driven by initiatives such as a simplified
ore-handling system underground and further streamlining of the plant.
Development plan
Cullinan contains a world-class diamond resource of 200.8 Mcts (including
17.0 Mcts in tailings), and the Company is capitalising on this by undertaking
an expansion programme at the mine to take annual production to 2.2 Mcts
by FY 2019 (comprising 2.0 Mcts ROM and 0.2 Mcts tailings). This expansion
plan, known as C-Cut Phase 1, will establish a new block cave on the western
side of the orebody in the upper portion of the major C-Cut resource
(estimated to contain some 133 Mcts in total) and will also involve a large
tailings operation. Petra’s current mine plan has a life of 17 years, but
given that the major portions of this world-class resource will remain
untapped, the actual LOM could be in excess of 50 years.
As at Finsch, this development plan will enable the tonnage profile to
gradually switch from diluted to undiluted ore. Petra therefore expects
the ROM grade to increase to ca. 35 cpht by FY 2015, ca. 37 cpht by FY
2016 and to in excess of 50 cpht by FY 2019, when the C-Cut Phase 1 block
cave is in full production.
Cullinan
One of the world’s most celebrated diamond mines, Cullinan is renowned
as an important source of large, high value diamonds and very rare blue diamonds.
DELIVERING OUR STRATEGY
OUTPUT
Petra is opening up new
mining areas to manage ROM grade,
until the development plan delivers
access to undiluted ore.
RECOVERIES
Nine diamonds
sold for +US$1m each in FY 2013,
including 25.5ct blue diamond.
EFFICIENCIES
Development
plan will drive efficiencies (simplified
ore-handling and streamlined
processing plant).
AVERAGE PRICE PER CARAT
US$163
1
+27%
ROM TONNES
2,595,004
+4%
ROM GRADE
30.7 cpht
-8%
ON-MINE CASH COST PER TONNE
R158
-11%
REVENUE
US$133.0m
+19%
REVENUE CONTRIBUTION
33%
1. US$142 per carat excluding the 25.5ct blue diamond
sold for US$16.9m.
PRODUCTION
(ROM + TAILINGS)
carats
868,975
0%
1...,30,31,32,33,34,35,36,37,38,39 41,42,43,44,45,46,47,48,49,50,...142