Petra Takes Ownership of Cullinan Diamond Mine
The Petra Diamonds Cullinan Consortium (PDCC) completed its acquisition of the famed Cullinan diamond mine from De Beers, Petra Diamonds said Wednesday (July 16, 2008.) PDCC agreed to buy the mine which produced the world’s largest rough diamond from De Beers in November 2007 for ZAR 1 billion ($149 million,) and sought the regulatory approval necessary to close the deal.
Petra Diamonds chairman Adonis Pouroulis called the acquisition a landmark deal at one of the world’s most important diamond mines. “Cullinan is a major producer and Petra’s associated production and cash flows are therefore expected to rise substantially over the next few years,” Pouroulis said. Petra expects the mine to produce 700,000 to 850,000 carats of diamonds in its first year of operation under its portfolio, and to ramp up to 1 million carats a year at full production from 2009-10.
Annual revenues from the mine are expected to reach $100 million, Petra said. Cullinan comprises the current operating levels at a depth of 747 meters (“the B-Cut,”) the Centenary-Cut (“the C-Cut,”) which lies beneath the B-Cut section with a potential 133 million carat resource, and a substantial tailings resource, Petra explained. Petra said the acquisition cost has been settled in cash, with Petra and Al Rajhi Holdings, which each hold a 37 percent stake in PDCC, contributing $40 million equity funding to the consortium. Al Rajhi also provided a $95 million loan to PDCC bringing the total financing package to $175 million covering acquisition costs and working capital. Petra will operate the mine and has the option to raise its stake in PDCC to 60 percent. PDCC’s black economic empowerment partners, Thembinkosi Mining Investments own 14 percent of PDCC and a broad based Petra employee share trust own the remaining 12 percent.
The Cullinan diamond mine was renowned for producing many of the world’s most spectacular diamonds, including over 300 stones weighing more than 100 ct. It also yielded the famous 3 106 ct Cullinan diamond, which was cut into smaller gems, two of which were retained for the British Crown Jewels. Cullinan is also the world’s only significant source of rare and valuable blue diamonds.
Petra Diamonds chairman Adonis Pouroulis called the acquisition a landmark deal at one of the world’s most important diamond mines. “Cullinan is a major producer and Petra’s associated production and cash flows are therefore expected to rise substantially over the next few years,” Pouroulis said. Petra expects the mine to produce 700,000 to 850,000 carats of diamonds in its first year of operation under its portfolio, and to ramp up to 1 million carats a year at full production from 2009-10.
Annual revenues from the mine are expected to reach $100 million, Petra said. Cullinan comprises the current operating levels at a depth of 747 meters (“the B-Cut,”) the Centenary-Cut (“the C-Cut,”) which lies beneath the B-Cut section with a potential 133 million carat resource, and a substantial tailings resource, Petra explained. Petra said the acquisition cost has been settled in cash, with Petra and Al Rajhi Holdings, which each hold a 37 percent stake in PDCC, contributing $40 million equity funding to the consortium. Al Rajhi also provided a $95 million loan to PDCC bringing the total financing package to $175 million covering acquisition costs and working capital. Petra will operate the mine and has the option to raise its stake in PDCC to 60 percent. PDCC’s black economic empowerment partners, Thembinkosi Mining Investments own 14 percent of PDCC and a broad based Petra employee share trust own the remaining 12 percent.
The Cullinan diamond mine was renowned for producing many of the world’s most spectacular diamonds, including over 300 stones weighing more than 100 ct. It also yielded the famous 3 106 ct Cullinan diamond, which was cut into smaller gems, two of which were retained for the British Crown Jewels. Cullinan is also the world’s only significant source of rare and valuable blue diamonds.
Labels: Diamond Jewellery
posted by The Diamond Chicks at 6:12 PM
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