Petra Diamonds shares plunge after warning on annual results
Shares in Petra Diamonds tanked on Wednesday after the group warned that annual results would be lower than market expectations.
The stock fell over 7% to 105.1p as the FTSE 250 miner announced full-year 2017 production will come in 8% to 9% lower than guidance of 4.4 million carats, due to slower-than-anticipated build-up of its expansion programmes.
Revenue is also expected to be 8% to 9% below market consensus, dragging down overall financial results for its full year ending on Friday.
The Africa-focused group said it is still on track to achieve "record" revenue and production figures for the year, but its shares were punished as investors reacted to the lower output outlook.
In a statement, the firm said it has had initial discussions with its lenders and is "confident" the likely shortfall in the upcoming ratio measurement, arising from the lower production levels, will not be an issue.
Petra added that it has reached an operational run rate which supports its 2018 full-year production guidance of around five million carats.
The ramp-up of production from the sub level cave at the Finsch mine is operating "at the required levels", while at the new Cullinan plant, both mills and crushing circuits have been commissioned.
Petra has also built up a run-of-mine stockpile at the Kimberley Ekapa Mining joint venture of around 100 kilotonnes.
The group will release its full-year 2017 trading and 2018 guidance update on July 24.