Petra targets lower operating costs, appoints new CFO

27th Jun 2024 14:33

(Sharecast News) - Petra Diamonds updated the market on its strategic developments on Thursday, as well as the appointment of a new chief financial officer in Johan Snyman, effective 1 October.

The London-listed firm said Snyman, who joined Petra in January as group financial controller, brought extensive financial experience from his 17-year tenure at AngloGold Ashanti and a background with KPMG.

He would succeed Jacques Breytenbach, who was stepping down at the end of September for personal reasons.

Petra said it was targeting a sustainable reduction in operating costs of $30m per annum from the 2025 financial year.

The company said it was aiming to smooth its total capital expenditure to approximately $100m annually at its South African operations, with the goal of generating free cash flow through economic cycles.

Approved extension projects were expected to be self-funded, with production growth projected to exceed 3.4 million carats by the 2028 period.

Petra noted that Cullinan Mine's life of mine could potentially extend to 2048, with no new shaft required for the D-cut before 2035, pending further studies.

The Finsch Mine's life of mine potential was meanwhile projected to 2038.

In line with its focus on debt optimisation, Petra said it had reduced its second lien (2L) notes by $5m through open market purchases, as part of its broader strategy to strengthen its financial position.

"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," said chief executive officer Richard Duffy.

"We are pleased to present a de-risked production profile focused on sustainable cash generation, having reduced costs by $30m annually from the 2025 financial year, and delivering a smoothed capital programme self-funded until at least the early 2030s."

Duffy said that in doing so, Petra had a compelling value proposition while positioning for a successful refinancing of its 2026 2L notes.

"We also announce today the appointment of Johan Snyman as CFO from October.

"Johan has made significant contributions to Petra since joining in January and I look forward to working with him in his new role."

At 1321 BST, shares in Petra Diamonds were up 0.08% at 40.83p.

Reporting by Josh White for Sharecast.com.