Petra spends P65m to advance CKGR project
Brian Benza | Friday February 26, 2016 16:55
In their 2015 annual report published recently, the London Stock Exchange (LSE) -listed company said its exploration expenditure, before depreciation, increased two fold
to $5.7 million from $2.8 million in 2014 due to the work programme underway at KX36 in Botswana, including the costs to relocate and commission the bulk sampling plant at site.
“Petra expects exploration spending to remain at circa $5 million in 2016, which will include both the Botswana work programmes as well as field and other work relating to the Reivilo project in South Africa,” the company stated.
The KX36, which lies 60 kilometres South-East of Ghaghoo Mine is part of a 14,492 square kilometres prospecting area held by Petra Diamonds in Botswana.
As at the end of last year, circa 415 carats had been recovered and the programme is well on track to obtain the required carats from this phase towards the end of 2016.
Further to the work carried out to date, a maiden inferred resource of 24.9 million tonnes at a grade of 35.2 Carats Per Hundred Tonnes (Cpht) containing 8.8 million carats has been identified for KX36.
“However, it should be noted that there is no guarantee that the company will elect to proceed with the development of KX36 into a mine at this point in time,” added the company.
The drilling programme is expected to be completed towards the end of the first quarter of the 2016 financial year.
While there have been no discoveries of economic kimberlites to date, preliminary results, which will be released in the course of the year, are outstanding on various targets. Petra noted that diamond prices weakened last year and the short-term outlook remains uncertain, though it comments that long-term fundamentals suggest a positive outlook.
The company says it also has its eye on synthetic diamond production techniques, which have continued to advance, but believes that the product category is not a significant risk in the short term.
Petra also notes that Botswana is Africa’s premier mining jurisdiction, according to the latest Fraser Institute Annual Survey of Mining Companies, and the world’s largest diamond producer by value. The company says it is amenable to getting involved in interesting projects at any stage of the mining cycle – from grassroots exploration to production.
Currently the company owns four diamond mines in South Africa and one in Tanzania.
The diamond producer sold seven percent fewer diamonds in the first half of its financial year, as falling demand and a glut of supply pushed prices down by nine percent.
That resulted in a $2.2 million loss after tax in the six months to the end of December, compared with a $39.1 million profit a year earlier.