{"id":1138473,"date":"2019-09-16T07:31:41","date_gmt":"2019-09-16T12:31:41","guid":{"rendered":"https:\/\/www.mining.com\/?p=1002024"},"modified":"2019-09-16T07:31:41","modified_gmt":"2019-09-16T12:31:41","slug":"petra-diamonds-shares-hit-all-time-low-as-loss-widens","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1138473","title":{"rendered":"Petra Diamonds shares hit all-time low as loss widens"},"content":{"rendered":"<p>Shares in African diamond miner Petra Diamonds (LON: PDL) hit an all-time low on Monday\u00a0after <a rel=\"noreferrer noopener\" aria-label=\"reporting a net loss of $258.1 million (opens in a new tab)\" href=\"http:\/\/ir.q4europe.com\/Tools\/newsArticleHTML.aspx?solutionID=3144&amp;customerKey=PetraDiamonds&amp;storyID=14444645\" >reporting a net loss of $258.1 million<\/a> for the year ending in June, compared to a $203.1 million-loss in 2018, amid challenging market conditions.<\/p>\n<div class='d-flex justify-content-center'>\n<div id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');});<\/script><\/div>\n<\/div>\n<p>The company, which<br \/>\nhas mines in South Africa and Tanzania, said the loss reflected an impairment<br \/>\ncharge of $246.6 million triggered by lower diamond price<br \/>\nassumptions.&nbsp;<\/p>\n<p>Richard Duffy, who has been at Petra\u2019s helm since April, said the diamond market was in its worst state since the financial crisis in 2008, but expects it to stabilize in the next 12 to 18 months.<\/p>\n<figure class=\"wp-block-pullquote alignright\">\n<blockquote>\n<p>Petra believes the diamond market is in its worst state since the financial crisis of 2008. <\/p>\n<\/blockquote>\n<\/figure>\n<p>The miner\u2019s share price fell to a<br \/>\nrecord low of 7.178 pence, recovering slightly to trade down 8% by 08:30 London<br \/>\ntime at 7.45 pence. The stock is down about 80% this year, which gives the<br \/>\ncompany a current market value of \u00a365.64 million (about $82m a today\u2019s<br \/>\nrates).<\/p>\n<p>Petra has been trying to turn around its fortunes&nbsp;<a href=\"https:\/\/mining.com\/petra-diamonds-ceo-leave-following-shares-value-dip-debt-increase\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">after piling up debt<\/a>&nbsp;to expand its flagship Cullinan mine in South Africa, where the world\u2019s largest-ever diamond was found in 1905.<\/p>\n<p>The miner was able to generate positive<br \/>\ncash flow for the first time since embarking on the mine\u2019s major upgrade in<br \/>\n2011.<\/p>\n<p>Despite vowing in March to <a href=\"https:\/\/www.mining.com\/petra-diamond-keeps-founder-pouroulis-chairman\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">keep the company\u2019s founder as chairman<\/a>, Petra said Adonis Pouroulis would leave the board by the end of the third quarter 2020, once a successor had been appointed.<\/p>\n<h2><strong>Struggling market<\/strong><\/h2>\n<p>Diamond miners are&nbsp;<a href=\"https:\/\/mining.com\/web\/hunt-canadas-vast-diamond-riches-reaching-end\/\"  rel=\"noreferrer noopener\">struggling across the board<\/a>, especially those producing<br \/>\ncheaper and smaller stones, where there is an over-supply.&nbsp;<\/p>\n<p>The US-China trade row and protests in Hong Kong dented demand in Asian markets.<\/p>\n<p>Increasing demand for synthetic<br \/>\ndiamonds has also weighed on prices. Diamond prices<\/p>\n<p>Man-made diamonds require less<br \/>\ninvestment than mining natural stones and can offer more attractive margins.<\/p>\n<p>Synthetic producers spend around $300-500 per carat produced, according to a <a href=\"https:\/\/www.mining.com\/three-main-trends-shape-diamond-industry-2019\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">2018 report by Bain &amp; Company<\/a>. <\/p>\n<p>Lab-grown diamonds produced by De<br \/>\nBeers, the world\u2019s top diamond miner by value, sell for $800 per carat.<\/p>\n<p>Petra, by contrast, has to shift 20,000 tonnes of earth at Cullinan to yield just one cup of diamonds. Average average cost in the 2019 financial year was $110 per carat, 12% less than in 2018.<\/p>\n<p>Buyers, those that polish and cut<br \/>\ndiamonds for retailers, have been hit this year by lower prices and tighter<br \/>\ncredit, prompting them to delay purchases. Tiffany\u2019s reported in August<br \/>\na&nbsp;3% decline in like-for-like sales, while shares in Signet, the world\u2019s<br \/>\nlargest retailer of diamond jewellery, have lost more than 60% of their value<br \/>\nthis year.<\/p>\n<p>De Beers has responded by axing<br \/>\nproduction \u2014 with a target of 31 million carats this year compared with 35.3<br \/>\nmillion in 2018. It has also announced it would spend more on marketing.<\/p>\n<p>In March, Africa-focused&nbsp;Firestone<br \/>\nDiamonds (LON:FDI) put plans to extend the life of its 75%-owned Liqhobong mine<br \/>\nin Lesotho&nbsp;<a href=\"https:\/\/mining.com\/firestone-diamonds-halts-liqhobong-mine-expansion-plans-limits-h1-losses\/\"  rel=\"noreferrer noopener\">on the back burner<\/a>, saying that current market conditions didn\u2019t<br \/>\nsupport such project.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Miner said the diamond market was in its worst state since the financial crisis that began in 2008.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[2849,949,369,4],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1138473"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1138473"}],"version-history":[{"count":3,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1138473\/revisions"}],"predecessor-version":[{"id":1138486,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1138473\/revisions\/1138486"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1138473"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1138473"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1138473"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}