Petra Diamonds talked about on Tuesday it purchased a 425-carat diamond, recovered at its flagship Cullinan mine in South Africa in March, to Belgium-based Stargems Group and Choron (Belgium) BVBA for $15 million, doubtlessly serving to it flip free cash motion optimistic this 12 months.
Petra talked about the sale of the diamond, named ‘Legacy of the Cullinan Diamond Mine’, highlighted the usual of the ore inside the mine.
The miner bought Cullinan from De Beers in 2008, aiming to breathe new life into the mine renowned for yielding the most important robust gem diamond ever found – 3,106 carats – and being the world’s important provide of unusual blue diamonds.
BMO Capital Markets analyst Edward Sterck talked about the $15 million purchase worth was consistent with its estimate, together with that realised prices at Cullinan have these days been “exceedingly weak”.
Shares of the miner have been down 3.8% at 23.90 pence by 1405 GMT, lagging the small-cap index which was inside the optimistic territory.
Petra has been struggling to clear its multi-million-dollar cash owed after it borrowed intently to revamp the Cullinan facility and commenced mining a model new a part of ore remaining July.
However, Cullinan has been worthwhile yearly since Petra acquired it in 2008 and the mine is predicted to generate free cash motion this 12 months.
Sterck talked about the sale of the diamond, which could motion almost on to the underside line, will help Petra Diamonds in its purpose to point out free cash motion optimistic this 12 months.
Petra Diamonds remaining month launched the restoration of a 209.9 carat ‘Type II’ diamond at Cullinan mine, the third restoration of a gem of that dimension since March.
“With additional higher value stones likely to be sold in the quarter … pricing for Q4 looks likely to be stronger than forecast,” talked about Sterck.
Reporting by Samantha Machado in Bengaluru and Barbara Lewis in London; Editing by Shailesh Kuber and Saumyadeb Chakrabarty