Petra’s development plan at Finsch is due to increase production from 1.89 Mct in FY 2014 to ca. 2 Mctpa by FY 2017. Petra’s initial mine plan has a life of 16 years, but resources in Block 6 and the adjacent Precursor kimberlite, which sits next to the main body of the Finsch kimberlite pipe, are expected to prolong the actual life of mine (“LOM”) for considerably longer. The mine has a significant gross resource of 51.3 Mcts.
Production is currently entirely from Block 4 on the 630 metre level (“mL”), which is a mature block that has been largely mined out, resulting in the ore being heavily diluted with waste rock. In order to provide earlier access to undiluted ore before the main Block 5 Cave is put in place, Petra will use the sub level cave (“SLC”) mining method over four levels in Block 5 from 700 mL to 780 mL. The new Block 5 Cave will then be installed at 900 mL. A schematic of the Finsch mine and orebody is available on Petra’s website at: http://www.petradiamonds.com/investors/analysts/analyst-guidance.
On 18 August 2014, Petra announced a value accretive scope change at Finsch which will provide for the enlargement of the mining area of the Block 5 SLC and the acceleration of the ramp-up to its steady state production level of 3.5 Mtpa by FY 2018 as opposed to by FY 2021. This has been made possible by enlarging the footprint of the SLC, as well as by opening up access from the 630 mL to the 780 mL to mine the South West Precursor.
The scope change has added ca. ZAR160 million to the mine’s FY 2015 Capex, however Petra’s internal company models show that it enhances overall project NPV (10% discount rate) by ca. US$100 million on a 100% attributable basis. It has also served to defer the capital required for the main Block 5 Block Cave, reducing overall expansion capital by ca. ZAR350 million for the period FY 2017 to FY 2019 compared to previous guidance.
During FY 2014, the development of the declines at Finsch continued apace, with a total of 4,055 development metres delivered during the Year (FY 2013: 2,311 metres). Raiseboring activities continued throughout FY 2014 and yielded 302 metres (FY 2013: 165 metres).
As the mine’s production profile gradually changes from diluted to undiluted ore, the ROM grade is expected to increase to ca. 46 cpht by FY 2016 and to ca. 58 cpht from FY 2017 onwards (up from previous guidance of 56 cpht, more accurately reflecting the impact of the plant changes).
The Block 5 Block Cave expansion capital (post FY 2019) is guided at ca. ZAR260 million per annum (FY 2015 money terms) to be incurred over the five year period FY 2020 to FY 2024, with this new block cave contributing 3.5 Mtpa from FY 2023 / FY 2024 up to FY 2030 at an average recovered grade of ca. 60 cpht.
Treatment of the ‘Pre 79 Tailings’ is planned at 2.6 Mt for FY 2015 and is expected to be mined for a further three years (including FY 2015) at a grade of 27.3 cpht (also increased from prior year guidance as a result of the aforementioned plant changes). The Pre 79 Tailings grade is guided at ca. 25 cpht for FY 2016 and ca. 22 cpht for FY 2017. The treatment of the ‘Post 79 tailings’ material has been removed from the mine plan.