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Annual Report and Accounts 2011

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Koffiefontein

 

At a Glance About About
Koffiefontein:

Revenue contribution:

Graph

Revenue

US$30.8m
+35%

Diamonds sold

54,640 carats
-4%

Average price per carat

US$564
+40%

Koffiefontein is one of the world's top kimberlite mines by average value per carat, achieving US$564 for FY 2011, up 40% on the comparative period despite the fact that the overall average has to some extent been reduced by the higher proportion of lower value tailings production in the total sales mix.

Post-Period end, a six carat pink diamond from Koffiefontein was sold for US$601,000, illustrating the exceptional fancy pinks that this mine can produce.

The high average value per carat achieved in FY 2011 caused revenue at Koffiefontein to rise by 35% to US$30.8 million for the Period, despite the fall in production. ROM production for the year was 35,139 carats (H1 FY 2011: 27,390 carats; H2 FY 2011: 7,749 carats). Tailings production was 12,817 carats for the Period (H1 FY 2011: 7,110 carats; H2 FY 2011: 5,707 carats).

The reduced underground production at Koffiefontein was mainly due to a greater than expected level of waste ingress from the remnant columns at 48 Level resulting in revised plans and reduced extraction in H2. The tonnage shortfalls at Koffiefontein were exacerbated by the production stoppages, remedial actions and retraining at the mine following the fatality in January 2011. Production at the high grade 52 Recovery Level was interrupted for most of H2 FY 2011 as a result.

Whilst the waste ingress and reduced production from 52 Level have significantly affected the ROM grade at Koffiefontein (3.1 cpht in H2 FY 2011 as compared to 5.9 cpht in H1 FY 2011), the development work to access high grade ore at the 58 Level front cave has been expedited and cave initiation is planned for H2 FY 2013. As at Cullinan, Petra's development plan at Koffiefontein will eventually establish new production levels where the Company will have access to fresh, undiluted ore. Once this has been achieved, in the longer term Petra expects the overall grade at Koffiefontein to improve to ca. 8 cpht, but it is expected that lower grades will be reported until FY 2014.

To give operational flexibility, Petra has recommenced production at the satellite Ebenhaezer pipe, which is an open-cast operation at a maximum depth of 35m and with a surface area of five hectares. The Company will use tonnages from Ebenhaezer to augment the capacity of the plant at Koffiefontein.

The ramping up of the tailings programme at Koffiefontein is now complete, with the Company reaching its targeted throughput tailings material.

Unit costs per tonne improved during the Period due to the higher volumes of lower cost tailings tonnages processed.

Development plan update

Petra is well advanced in the establishment of an expansion plan at Koffiefontein and annual production is expected to exceed 1 Mtpa in approximately three years and reach 1.2 Mtpa in approximately five years. This will deliver over 100,000 carats per annum (ROM and tailings) by FY 2017.

Capex of US$11.0 million for the Period was mostly spent on underground development and mining equipment.

FY 2011 – gross numbers


  Unit FY 2011 FY 2010 Variance
Sales      
Revenue US$m 30.8 22.8 +35%
Diamonds sold carats 54,640 56,707 -4%
Average price per carat US$ 564 402 +40%
ROM production      
Tonnes treated tonnes 712,988 884,058 -19%
Grade cpht 4.9 6.0 -18%
Diamonds recovered carats 35,139 53,026 -34%
Tailings/Ebenhaezer production      
Tonnes treated tonnes 675,147 243,714 +177%
Grade cpht 1.9 3.0 -36%
Diamonds recovered carats 12,817 7,234 +77%
Total production      
Tonnes treated tonnes 1,388,135 1,127,772 +23%
Diamonds recovered carats 47,956 60,260 -20%
Costs      
On-mine cost per tonne ZAR 115 123 -7%
Total capex US$m 11.0 4.6 n/a