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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.

Mining is currently transitioning from the block cave on the 630mL to the SLC over four levels from 700mL to 780mL. Development of the 11 kimberlite extraction tunnels of 70 level Phase 1 was completed and the tunnels handed over to production for slot cutting and ring blasting during H1 FY 2017.

In FY 2019, the Block 5 SLC production ramp up delivered 2.5 Mt. The Block 5 SLC remains in a production build up phase and barring the delays experienced in December 2018 and in January and May 2019, the nameplate capacity of the underground system was achieved and exceeded at more regular intervals during H2 FY 2019. The focus is on maintaining these production rates at a steady and consistent rate. The ROM grade of 56.1 cpht (FY 2018: 62.5 cpht) compared to guidance of 56 – 59 cpht mainly due to lower grades  of the ROM surface stockpiles (overburden dumps), which are nearing depletion. In FY 2020 ROM throughput is planned at 2.9 – 3.0 Mt with tonnage from the Block 5 SLC planned at ca. 2.8 Mt (FY 2019: 2.5 Mt) with the remaining tonnes to be sourced from the remaining economically viable ROM surface overburden stockpiles.

Petra’s initial mine plan has a life to 2030, but resources in Block 6 and the adjacent Precursor kimberlite orebody, which sits next to the main body of the Finsch kimberlite pipe, are expected to prolong the actual LOM. The mine has gross resources of 42.9 Mcts.

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Key Facts

Unit FY 2019 FY 2018 Variance
Sales
Revenue US$m 170.2 231.9 -27%
Diamonds sold Carats 1,711,311 2,152,786 -21%
Average price per carat US$ 99 108 -8%
ROM Production
Tonnes treated Tonnes 3,073,479 3,084,395 -0%
Diamonds produced Carats 1,724,265 1,926,467 -10%
Grade1 Cpht 56.1 62.5 -10%
Tailings Production
Tonnes treated Tonnes 223,568 794,973 -72%
Diamonds produced Carats 31,503 147,010 -79%
Grade1 Cpht 14.1 18.5 -24%
Total Production
Tonnes treated Tonnes 3,297,047 3,879,368 -15%
Diamonds produced Carats 1,755,768 2,073,477 -15%
Costs
On-mine cash cost per tonne treated ZAR 388 329 +18%
Capex
Expansion Capex US$m 13.6 42.3 -68%
Sustaining Capex US$m 9.1 7.7 18%
Borrowing Costs Capitalised US$m 1.4 4.0 -65%
Total Capex US$m 24.1 54.0 -55%

 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 35.7 56.3 20.11
Sub-total 35.7 56.3 20.11
Resources
Measured
Indicated 31.6 67.6 21.34
Inferred 36.5 53.3 19.44
Sub-total 68.1 59.9 40.79

1. Resource bottom cut-off: 1.0mm.
2. Reserve bottom cut-off: 1.0mm.
3. Updated Resource estimate completed.
4. Block 4 remnants recalibrated to June 2019 pit scans.
5. Block 5 Resource stated as in situ.
6. Block 5 Reserves are based on PCSLC and PCBC simulations, depleted for sub-level cave development tonnes.
7.US$/ct values of 90-95 for ROM and US$/ct 40-50 for Pre-79 tailings, based on FY 2019 sales values and production size frequency distributions.

FY 2019 Results

Unit FY 2019 FY 2018 Variance
Sales
Revenue US$m 170.2 231.9 -27%
Diamonds sold Carats 1,711,311 2,152,786 -21%
Average price per carat US$ 99 108 -8%
ROM Production
Tonnes treated Tonnes 3,073,479 3,084,395 0%
Diamonds produced Carats 1,724,265 1,926,467 -10%
Grade1 Cpht 56.1 62.5 -10%
Tailings Production
Tonnes treated Tonnes 223,568 794,973 -72%
Diamonds produced Carats 31,503 147,010 -79%
Grade1 Cpht 14.1 18.5 -24%
Total Production
Tonnes treated Tonnes 3,297,047 3,879,368 -15%
Diamonds produced Carats 1,755,768 2,073,477 -15%
Costs
On-mine cash cost per tonne treated ZAR 388 329 +18%
Capex
Expansion Capex US$m 13.6 42.3 -68%
Sustaining Capex US$m 9.1 7.7 18%
Borrowing Costs Capitalised US$m 1.4 4.0 -65%
Total Capex US$m 24.1 54.0 -55%

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.

Overall production decreased 15% to 1,755,768 carats (FY 2018: 2,073,477 carats) with ROM carat production decreasing 10% to 1,724,265 carats (FY 2018: 1,926,467 carats) and tailings production decreasing to 31,503 carats (FY 2018: 147,010 carats) in line with the mine plan.

The contribution from underground ROM production remained mostly flat at 1,504,722 carats (FY 2018: 1,507,561 carats) with ore from the newly established Block 5 sub level cave (‘SLC’) replacing ore mined from Block 4 which was depleted during FY 2018. The decrease in overall ROM production is mainly due to the depletion of surface overburden ROM stockpiles, decreasing to 219,544 carats (FY 2018:  418,905 carats).

Overall Finsch managed to maintain a flat ROM tonnes treated profile at 3,073,479 tonnes treated (FY 2018: 3,084,395 tonnes). The tonnage contribution from the Block 5 SLC ramped up to 2.5 Mt (FY 2018: 1.6 Mt) with the remaining ROM ore supplemented from surface overburden ROM stockpiles which came at a much reduced grade as the stockpiles were depleted over the year.

The Block 5 SLC production ramp up delivered 2.5 Mt, compared to a plan of 2.7 Mt for the year, impacted by delays during the planned schedule for the winder upgrade project in December, a 600 metre belt tear on one of the main underground conveyor belts in January and low availabilities of the crusher and ground handling system in May. The Block 5 SLC remains in a production build up phase and barring the months mentioned above, it is encouraging to see the nameplate capacity of the underground system being achieved and exceeded at more regular intervals during H2 FY 2019. The focus is on maintaining these production rates at a steady and consistent rate.

The ROM grade of 56.1 cpht (FY 2018: 62.5 cpht) compared to guidance of 56 – 59 cpht mainly due to lower grades  of the ROM surface stockpiles (overburden dumps), which are nearing depletion.

Mine Plan

FY 2020 ROM throughput is planned at 2.9 – 3.0 Mt with tonnage from the Block 5 SLC planned at ca. 2.8 Mt (FY 2019: 2.5 Mt) with the remaining tonnes to be sourced from the remaining economically viable ROM surface overburden stockpiles. This is lower than previous guidance of 3.2 Mt due to a slower than planned ramp up of the SLC as well as the depletion of the surface ROM stockpiles.

The Company will continue to assess options to accelerate the ramp up of production from the SLC to the name plate capacity of 3.2 Mtpa.

Finsch’s underground ROM grade is expected to remain within guidance of 56 – 59 cpht. If the lower grade surface overburden ROM stockpiles are included, the overall ROM grade will reduce to 54 – 57 cpht.

Negligible tailings production is planned for FY 2020, with the pre-79 tailings resource coming to an end. Whilst tailings production post FY 2020 does not form part of the current mine plan, lower grade post-79 tailings material remains available to supplement the underground operations in the future.

Petra’s initial mine plan has a life to 2030, but resources in Block 6 are expected to prolong the actual LOM. The mine has gross resources of 40.79 Mcts.

 

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
  • 1.8m carats FY 2019 Production
  • 42.9m carats Total diamond resource

MaP

finsch Diamonds

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