Our Mines

Our portfolio incorporates major underground pipe mines and a large high-volume open cast mine

 
  • Finsch

    Finsch is a world-class mine which benefits from top quality infrastructure, including a modern processing plant

  • Finsch

    Finsch is a world-class mine which benefits from top quality infrastructure, including a modern processing plant

  • Finsch

    Finsch is a world-class mine which benefits from top quality infrastructure, including a modern processing plant

FINSCH

Finsch is one of the world’s significant diamond mines and South Africa’s second largest diamond operation by production (after De Beers’ Venetia mine). The mine benefits from state-of-the-art mining infrastructure, including a modern processing plant which was upgraded shortly before Petra acquired it at a total cost of approximately US$100 million.

Finsch has produced large, special diamonds in its history and produces a number of +50 carat stones annually. In addition, the mine is known for highly commercial goods of +5 carats and is rich in gem quality smaller diamonds.

Petra’s development plan at Finsch is due to increase higher value ROM production from 1.8 Mcts in FY 2017 to steady state production of ca. 2 Mcts by FY 2018. Petra’s initial mine plan has a life to 2030, 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”). The mine has a significant gross resource of 45.0 Mcts.

Mining is currently ramping up in the new Block 5 SLC over four levels from 700 mL to 780 mL and this is expected to deliver ca. 1.9 Mt in FY 2018. A new Block 5 Cave will be installed at 900 mL from FY 2023 / FY 2024.

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Key Facts

Location Northern Cape Province, South Africa
Size of kimberlite pipe at surface 18ha
Mine start date 1967
Acquisition by Petra Diamonds September 2011
Acquisition cost ZAR 1.425bn
Ownership Petra Diamonds Limited: 74%1
Kago Diamonds (Pty) Ltd: 14%
Itumeleng Petra Diamonds Employee Trust: 12%
Total Resources
(inclusive of Reserves)
49.07 Mcts
Current depth of Resources 1,000m
Mining Method Block cave and sub level cave
Depth of current mining 700m
Mine Plan To 2030
Potential Mine Life +25 years

 1. Refer to Petra’s ‘Effective Interest in Mines’ in the following document: Analyst Guidance Explanatory Notes.

Heritage

The Finsch kimberlite was discovered in 1960 and the mine was officially opened in 1967. Ore extraction was initially from the open pit. Sinking of the main shaft to access the mine from underground started in 1978. Two vertical shaft complexes, tunnels and ground handling infrastructure were prepared for the continuing exploitation of the pipe with the use of highly mechanised mining methods. In 2008 the treatment plant was upgraded at a cost of approximately US$100 million. On 14 September 2011, Petra purchased Finsch as a fully-staffed, operating mine from De Beers.

Finsch is known for highly commercial goods of +5 carats and is rich in gem quality smaller diamonds. Large, special diamonds are also a feature of the orebody, with a number of +50 carat stones recovered at the mine annually, and the mine also produces very rare fancy yellow diamonds.

Reserves & Resources

Gross
Category Tonnes (millions) Grade (cpht) Contained Diamonds (Mcts)
Reserves
Proved
Probable 43.0 60.2 25.89
Sub-total 43.0 60.2 25.89
Resources
Measured
Indicated 36.6 69.1 25.31
Inferred 35.6 55.2 19.67
Sub-total 72.2 62.3 44.98

1. Resource bottom cut-off: 1.0mm.
2. Reserve bottom cut-off: 1.0mm.
3. Block 4 Resource tonnes and grade are based on block cave depletion modelling and include external waste. The Block 4 PCBC Model was recalibrated to June 2017 pit scans.
4. Block 5 Resource stated as in situ.
5.Re-estimation of Block 5 SWPC Resource based on recent bulk sampling diamond drilling.
6. Block 5 Reserves are based on PCSLC and PCBC simulations, depleted for SLC development tonnes.
7. US$/ct values of 105-110 for ROM and 55-60 for tailings guided for FY 2018, based on sales values and production size frequency distributions.

FY 2017 Results

Unit FY 2017 FY 2016 Variance
Sales
Revenue US$m 216.7 186.4 +16%
Diamonds sold Carats 2,141,885 2,085,123 +3%
Average price per carat US$ 101 89 -14%
ROM Production
Tonnes treated Tonnes 3,212,169 3,547,798 +10%
Diamonds produced Carats 1,818,454 1,572,725 +16%
Grade1 Cpht 56.6 44.3 +28%
Tailings Production
Tonnes treated Tonnes 1,651,089 2,295,918 -28%
Diamonds produced Carats 331,442 641,339 -48%
Grade1 Cpht 20.1 27.9 -28%
Total Production
Tonnes treated Tonnes 4,863,258 5,843,716 -17%
Diamonds produced Carats 2,149,896 2,214,064 -3%
Costs
On-mine cash cost per tonne treated ZAR 253 183 -38%
Capex
Expansion Capex US$m 58.4 56.5 +3%
Sustaining Capex US$m 9.1 6.7 +36%
Borrowing Costs Capitalised US$m 18.1 10.6 +71%
Total Capex US$m 85.6 73.8 +16%

1. The Company is not able to precisely measure the ROM / tailings grade split because ore from both sources is processed through the same plant; the Company therefore back-calculates the grade with reference to resource grades.

ROM production increased 16% to 1,818,454 carats further to initial production from the new Block 5 SLC, which delivered ca. 750 Kt of undiluted ore. The inclusion of significantly higher volumes of undiluted ore from the new mining areas had a positive impact on production, with Finsch’s ROM grade up 28% from 44.3 cpht in FY 2016 to 56.6 cpht in FY 2017.

This output was below initial expectations due to the slower than expected ramp-up of the SLC. The shortfall in ROM tonnes mined compared to guidance relates to challenges associated with the allocation of equipment and work streams in the transitioning period as the old Block 4 is decommissioned and the Block 5 SLC ramps up. The commissioning of additional mining equipment at the start of Q4 addressed the challenges mentioned above with the mine ending the Year operating at the required levels.

Total production decreased 3% to 2,149,896 carats (FY 2016: 2,214,064 carats), due to the planned decrease in tailings production to 331,442 carats (FY 2016: 641,339 carats).

Mine Plan

Petra’s development plan at Finsch is due to increase higher value ROM production from 1.8 Mcts in FY 2017 to steady state production of ca. 2 Mcts by FY 2018. Petra’s initial mine plan has a life to 2030, 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”). The mine has a significant gross resource of 45.0 Mcts.

Mining is currently ramping up in the new Block 5 SLC over four levels from 700mL to 780mL and this is expected to deliver ca. 1.9 Mt in FY 2018. A new Block 5 Cave will be installed at 900 mL from FY 2023 / FY 2024.

Click on schematic to enlarge.

The orange blocks indicate the Block 5 SLC and the Block 5 Block Cave that are currently in our mine plan to 2030. The blue block indicates the potential future block to be accessed post 2030.

Mining Right

Finsch Diamond Mine (Pty) Ltd (“FDM”) holds a valid new order mining right (the ‘‘Finsch Mining Right’’) dated 15 October 2008. The Finsch Mining Right was initially issued to De Beers under item 7 of Schedule II of the Mineral and Petroleum Resources Development Act, 28 of 2002 (“MPRDA”) and was ceded to FDM by notarial deed of cession on 8 September 2011 and duly notarially executed and registered in the Mineral and Petroleum Titles Registration Office.

The Finsch Mining Right confers on FDM the exclusive right to mine for diamonds in relation to the areas it refers to until 14 October 2038. Pursuant to the MPRDA, the Finsch Mining Right is renewable (for periods of up to 30 years for each renewal) on the basis more fully set out in section 24 of the MPRDA.

Section 2 of the Mineral and Petroleum Resources Royalty Act No. 28 of 2008 (“the Royalty Act”) requires FDM to pay the South African Government a royalty for minerals recovered under the Finsch Mining Right. Pursuant to section 4 of the Royalty Act, the royalty is to be paid on gross sales in accordance with a defined formula set out in the Royalty Act. The formula applicable to rough diamonds is as follows: 0.5% + (earnings before interest and taxes, as defined in Section 5 of the Royalty Act / (gross sales x 9) x 100) but not exceeding 7%.

In addition, South Africa has a rough diamond export levy requirement of 5% as set out in section of the Diamond Export Levy Act 15 of 2007 (“Export Levy Act”). Producers are however exempt from this levy in respect of production that is exported provided that a certain percentage of their production is sold to local diamond beneficiation licence holders, on the basis more fully set out in sections 7, 8 and 9 of the Export Levy Act.

FDM is also subject to corporate tax in South Africa at the rate of 28% in terms of section 5 and other provisions of the Income Tax Act 58 of 1962.

There are no fiscal stabilisation provisions in place in relation to Finsch Diamond Mine.

Media

“Finsch: A world-class operation: Every now and again, you come across a real gem of a mine that isn’t just about the commodity, but rather the entire mine, and the manner in which it is managed and operated. Petra’s Finsch diamond mine is such a mine.” Tony Stone

Read an article on Finsch in Inside Mining, June 2015

Highlights

  • Sept 2011 Acquisition by Petra
  • 2.1m carats FY 2017 Production
  • 45m carats Total diamond resource

Map

finsch Diamonds

Two Finsch diamonds of 36 carat and 43 carat – November 2013