PETRA DIAMONDS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
Building
resilience
Contents
Strategic Report
1 Our Purpose
2 At a Glance
3 2024 Performance highlights
4 Sustainability framework
5 Business model
6 Investment case
8 Chair’s statement
10 Chief Executive Officer’s statement
14 Financial review
20 Strategy in action
26 Market review
32 Operational review
39 FY 2024 Resource statement
41 Non-financial and sustainability
information disclosures
42 Key Performance Indicators
44 Sustainability review
49 Section 172 statement
52 TCFD disclosures
56 Risk management and
Principal risks
64 Viability statement
Corporate Governance
66 Chair’s Introduction to Governance
68 Board of Directors
70 Executive Committee (Exco)
72 Corporate Governance Statement
78 Governance Framework
84 Report of the Audit and
Risk Committee
93 Report of the Nomination
Committee
96 Report of the Safety, Health and
Sustainability Committee
99 Report of the Investment
Committee
103 Directors’ Remuneration Report
Financial Statements
115 Directors’ Responsibilities
Statement
116 Independent Auditor’s Report
123 Consolidated Income Statement
124 Consolidated Statement of Other
Comprehensive Income
125 Consolidated Statement
of Financial Position
126 Consolidated Statement
of Cashflows
127 Consolidated Statement
of Changes in Equity
128 Notes to the Annual Financial
Statements
Supplementary Information
167 Alternative Performance Measures
168 Five-year Summary of Consolidated
Figures
169 FY 2024 Summary of Results and
Non-GAAP Disclosures
170 Annexure 1
171 Shareholder and Corporate
Information
175 Glossary
Petra Diamonds is a leading independent
diamond mining group, supplying rare
and precious diamonds to the jewellery
industry, safely and to the highest ethical
standards.
For more information
please visit our website:
www.petradiamonds.com/
about-us/
Notes to financial measures
1. For all non-GAAP measures, please refer to the Summary of Results table within the
Financial Results section.
2. Metrics have been affected by the Koffiefontein Mine being on care and maintenance
during part of FY 2024.
3. Scope 1, 2 and 3 GHG emissions: Scope 3 emissions are calculated according to four
of the fifteen GHG Protocol Corporate Value Chain categories, including: purchased
goods and services (limited), waste generated in operations, business travel and
employee commuting.
Navigation (reading and web)
ABOUT US
Website driver
Online Sustainability Report
Annual Report page driver
LISTED ON MAIN MARKET
LSE SINCE
2011
OPERATING MINES IN
SOUTH AND EAST AFRICA
3
EMPLOYEES AND
CONTRACTORS
4,500+
Front cover image:
The 39.3 carat blue
diamond from the Cullinan
Mine sold for US$40.2
million in July 2021.
Creating abundance
from rarity
OUR PURPOSE
Abundance
for our people
in realising their full
potential to deliver
extraordinary
outcomes
Abundance
for our investors
in generating
sustainable
returns
Abundance for
our communities
through partnering
to provide enduring
benefit for future
generations
Abundance
for our customers
in celebrating
love, friendship
and life’s
achievements
Read more on
page 46
Read more on
pages 6-7
Read more on
pages 46-48
Read more on
pages 28-30
1
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
AT A GLANCE
We are one of the world’s largest
producers of rough diamonds by value
Our mines
Our mines produce a range of diamonds, from very large,
high-quality diamonds spanning Type II white and blue,
to yellow, champagne, pink and smaller size fractions.
31 2
REVENUE BY MINE (%) TOTAL ROUGH DIAMOND
PRODUCTION BY MINE (%)
Cullinan Mine
Type IIa white and Type IIb
blue diamonds.
Finsch
A consistent producer of
sought-after octahedral
diamonds.
Williamson
A reliable source of high-value
pink diamonds.
TOTAL PRODUCTION
(MCTS)
1.40
FY23: 1.49
REVENUE
(US$M)
189
FY23: 182
GROSS GROUP RESOURCES (MCTS)
213.73
1
FY23: 217.94
1. As at 30 June 2024, excluding Koffiefontein.
GROSS GROUP RESERVES (MCTS)
27.78
FY23: 28.35
POTENTIAL MINE-LIFE: POTENTIAL MINE-LIFE: POTENTIAL MINE-LIFE:
FY 2024 Resource Statement
pages 40-41
Sustainability
pages 46-55
Market review
pages 26-31
2048 2038 2050
3
1
2
TANZANIA
SOUTH
AFRICA
TOTAL PRODUCTION
(MCTS)
1.00
FY23: 1.04
REVENUE
(US$M)
120
FY23: 93
TOTAL PRODUCTION
(MCTS)
0.32
FY23: 0.14
REVENUE
(US$M)
57
FY23: 49
Cullinan Mine
52%
Finsch
33%
US$367m
Williamson
15%
Cullinan Mine
51%
Finsch
37%
2.7 MCTS
Williamson
12%
Our diversified portfolio incorporates interests in underground mines
in South Africa and one open pit mine in Tanzania
2
Petra Diamonds Limited Annual Report and Financial Statements 2024
Notes to financial measures
1. For all non-GAAP measures refer to the Summary of Results table within the Financial
Results section.
2. Consolidated net debt includes cash and cash equivalent and all environmental
rehabilitation funds held by the cell captive.
3. Metrics have been affected by Koffiefontein and Williamson being on care and
maintenance during part of FY 2023.
4. Scope 1, 2 and 3 GHG emissions. Scope 3 emissions calculated according to four
of the 15 GHG Protocol Corporate Value Chain categories, including: purchased
goods and services (limited); waste generated in operations; business travel and
employee commuting.
5. Includes Koffiefontein.
Delivering safely and efficiently
Petra’s sustainability credentials Diamonds are a consumer
product and Petra recognises
its ethical and social
responsibilities
Petra adheres to the strict standards
of industry bodies that we are
affiliated to
Continued investing in operations with a
focus on debt reduction
SAFETY
(LTIFR)
0.16
FY23: 0.24
ADJUSTED EBITDA
(US$M)
66
FY23: 113
PRODUCTION
(MCTS)
2.73
FY23: 2.67
ADJUSTED EBITDA MARGIN
1
(%)
18
FY23: 35
REVENUE
1
(US$M)
367
FY23: 325
BASIC LOSS PER SHARE FROM
CONTINUING OPERATIONS
1
(CENTS)
43
FY23: 38
CAPITAL EXPENDITURE
(US$M)
84
FY23: 117
CONSOLIDATED NET DEBT:
ADJUSTED EBITDA
1,2
3.0x
FY23: 1.6x
CONSOLIDATED NET DEBT
1,2
(US$M)
201
FY23: 177
GROSS DEBT
(US$M)
271
FY23: 248
Operating sustainably
CARBON EMISSIONS
3,4,5
(KTCO
2
-E)
423
FY23: 431
WATER INTENSITY
3,5
(M
3
/T)
0.70
FY23: 0.61
WOMEN IN THE WORKFORCE
5
(%)
22
FY23: 21
TRAINING SPEND ON
EMPLOYEES
5
(US$M)
4.0
FY23: 4.6
B-
Climate Change
Rating from CDP 2024 Rated by
ISS-Corporate 2024
Rated by
Sustainalytics
(May 2023)
B
Water Security
#20
Among 118 precious
metals peers
C+
K
S
Y
2024 PERFORMANCE HIGHLIGHTS
Delivering safely and efficiently
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Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
SUSTAINABILITY FRAMEWORK
Delivering on our commitments
Petra is embedding sustainability into every part of its business operations.
We believe that Earth’s rare and precious legacy can, through responsible mining, create
abundant outcomes for our people, communities, investors, customers, and all other
stakeholders, giving expression to life’s special moments.
This approach allows us to generate and maintain value for both the Company and our
stakeholders. It also ensures a safe, healthy work environment while fostering a diverse and
skilled workforce with access to growth and development opportunities. For communities
near our operations, our sustainability focus helps drive lasting local economic development
even beyond the lifespan of our mines.
Valuing
our people
Driving shared
value partnerships
Delivering reliable
production
Respecting
our planet
Safety
Health, hygiene and
wellness
Diversity and inclusion
Training, development
and upskilling
Stakeholder relations
Community and social
investment
Responsible sourcing
Climate change
Water management
Circular economy
Biodiversity
Mining to plan
Processing to plan
Asset reliability
Capex and Opex efficiency
Read more on
page 47
Read more on
page 46
Read more on
page 47
Read more on
page 46
Continuous Business Improvement
Production efficiency
Business processes
improvements
Ethical and responsible business practices, good governance
and constructive, transparent stakeholder engagement
Digitalisation & innovation
Our Sustainability Framework aligns with our business
strategy, guiding our decisions and holding us
accountable to our stakeholders.
Since its introduction in FY 2022, we have been embedding
the framework across the Group, influencing everything
from organisational design to performance management.
The framework is built on our Petra Culture Code, ethical
conduct, strong governance, and open, transparent
stakeholder engagement.
Our framework provides structure, ensuring sustainability is
seamlessly integrated into our business strategy and fully
embedded in our operations. We are dedicated to ethical
business practices, sound governance, and constructive,
transparent engagement with all stakeholders.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
BUSINESS MODEL
Our capitals
People & skills
Petra Culture
Code
Value-led
growth strategy
Productive
workforce
Specialist
skills
High-quality
assets
Significant
resources
Multiple assets
and diverse
product
range
Financial
Responsible
capital
allocation
Access to
diversified
sources of
capital
Relationships
Mutually
beneficial
partnerships
Effective
internal and
external
stakeholder
engagement
Natural capital
Access to and
responsible
use of natural
resources
Technology
and equipment
Extension
of mine lives
Optimisation
Trialling
traceability
technologies
Investors
US$30m of
interest paid to
lenders with US$5m
of 2026 2L Notes
repurchased in
FY 2024. No
dividends were paid
to shareholders.
Through sustainable
cost reductions and
a smoothed capex
profile, we expect to
boost future cash
generation.
Creating value through responsible
use of our capitals
Our purpose
Creating
abundance
from rarity
Outputs and outcomes
Planet
2.7 Mcts of natural
diamonds mined in
FY 2024, producing
0.16 tCO
2
e/ct
and consuming
0.7M
3
/t of water.
An increase in
diamond production
is guided for FY 2025
with slightly lower
CO
2
e emissions per
carat and similar
water consumption
per tonne.
Customers
Quality and consistent
product offering.
Confirmed provenance
and heritage.
Our aim is to deploy
technologies that will
enable traceability
and provenance for
gem and near gem
quality diamonds
above 0.5 carats in
FY 2025.
Employees
US$119m paid in
salaries and other
benefits in FY 2024.
This is expected to
reduce in FY 2025
as a consequence of
reducing headcount
to rebase costs to
match lower future
production at Finsch.
Wage agreements
were reached
covering our SA
operations until
30 June 2029.
Host
governments/
communities
US$48m paid in
taxes and royalties.
C. 45,000
1
dependents on
our operation.
This is expected to
reduce in FY 2025
due to headcount
reduction.
Suppliers
US$223m
discretionary
procurement
expenditure with
100% and 93% of
total procurement
spend with local
suppliers in SA
and Tanzania
respectively.
Operations
Our mines are bulk tonnage
operations which use
sophisticated mining and
processing technologies to
mine efficiently and safely
Reinvest
We have one of the
world’s largest diamond
resources. Through
investing in extension
projects our mines
have decades
of potential
Sales
We maximise the
value of our product
through our competitive
tender process with
further value uplift from
sharing cutting and
polishing profits
Risk &
opportunity
Resource
allocation
Outlook
1. Using the accepted x10 multiplier effect for South Africa and Tanzania.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
INVESTMENT CASE
A resilient business with a compelling
value proposition
With an operating model focused on cash generation, Petra is well-positioned
to benefit from market recovery
Disciplined capital
allocation
Debt and interest payment
optimisation is a priority
Repurchased US$5m of
2026 2L Notes in FY 2024
We aim to maximise stakeholder value through a disciplined capital
allocation approach that balances the profitability and growth of the
Company with broader stakeholder returns.
PRIORITY 1
PRIORITY 3PRIORITY 2
DISCRETIONARY
ALLOCATION
Operational and
social licence to
operate
Optimise stay in
business capital
Service debt
obligations
Objective:
Ensure business
sustainability
Further brownfield
extension
Growth projects
Early debt redemption
Dividends to
shareholders
Objective:
Optimise debt, grow
the business and
return capital to
investors
Execute approved
mine extension
projects
Objective:
Generate value
through mine
life-of-mine
extensions
Special dividends
Share buybacks
Opportunistic growth
opportunities
Objective:
Excess cash returned
to shareholders or
reinvested in the
business
A diversified
portfolio of
long-life assets
Cullinan Mine is a
world-class asset
Clients increasingly interested
in provenance and Petra’s
goods are considered a brand
Our significant resource base supports extension opportunities well
beyond current mine plans, with further potential to mine ore at depth.
Approved mine plans expected to be self-funded.
Finsch production now rebased
to a 2.2 Mtpa operation to
improve maintenance, smooth
capex, lower underground risk,
rationalise equipment and extend
infrastructure life (eg no tailings
storage facility replacement
needed)
Cullinan Mine will rebase toc.3.7
Mtpa from FY 2027 to smooth
capex, with approved mine plan
to develop CC1E, C-CutExt 1 & 2
and a new ventilation shaft
which will also enable future
life extensions
Williamson
Cullinan
Mine
Finsch
Proactive
approach to
managing
price cycles
Smoothed capital profile
of c. US$100m p.a.
Reset cost base by
US$44m p.a.
Through the detailed replanning and re-engineering work undertaken
in FY 2024, our aim is to be cash generative from FY 2025 through
market and price cycles and to deleverage below 1.5x Net Debt:EBITDA.
2030 2040 2050
Resource (Mcts) Approved mine plan Future extension Orebody continues at depth
142.25
34.32
37.17
1
2
3
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Petra Diamonds Limited Annual Report and Financial Statements 2024
Operating model
focused on cash
generation
US$76m capex savings and
deferrals in FY 2024
Projects self-funded until at
least the early 2030s
De-risked production profile with a focus on delivering cash generation
from FY 2025. Building resilience through a self-funded, smoothed
capital profile able to withstand market cycles.
Embedding
sustainability
Safety is our Number 1 priority
2030 GHG reduction target
Wide reaching social
programmes
Leveraging sustainability
credentials with consumers
We continue to strive for a zero harm working environment and have
embedded our KPIs into our business objectives. Developments of our
Sustainability Framework and the implementation of the Petra Culture
Code continue to support our business strategy, guide our actions, and
hold ourselves accountable in our commitment to stakeholders.
Supportive natural
diamond market
Mined supply has peaked
Lack of new discoveries of
significance over the past
two decades
Supply of natural diamonds has peaked and growth is muted over the
next half decade.
Producers have curtailed
production or sales in response
to lower prices
Several key mines such as
Venetia and Karowe are
transitioning from open pit
to underground mining
Stabilising operations
to deliver reliable
production
Maximise value from
existing operations,
including approved
extension projects
Building resilience
to withstand weaker-
for-longer market
conditions
Production growth
to over 3.4 Mcts
expected by FY 2028
Renewed advertising efforts
to promote natural diamonds
to US, Chinese and Indian
consumers
India could be the next big
spenders in the diamond market
Traceability technologies set to
empower customers to know
origin of natural diamonds
4
5
6
7
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
I am delighted to deliver my inaugural update to shareholders
as your Chair. It has not been an easy year for Petra, nor the
industry, but I am proud of the way management and employees
have faced the many challenges to deliver creative solutions and
build a stronger and more resilient Petra for our stakeholders in
the future. Unfortunately, this did involve job losses and I would
like to begin by acknowledging and thanking those affected,
as well as the remaining employees who have continued to
demonstrate commitment and resolve, despite this Year’s many
uncertainties.
From the sale of Koffiefontein to the life-of-mine plan revisions
and value engineering work that deferred Capex and smoothed
future capital spending, Petra has demonstrated the talent that is
at the heart of this Company and the agility which has enabled it
to adapt to an unprecedented diamond price environment. This
work ensures Petra is well-protected against the instabilities of
the market and is able to function through both market and
capital cycles.
Underpinning all of this is our Purpose, which is fundamental to
our strategy and ability to deliver value. It has been even more
important to nurture our culture through a challenging year to
maintain the morale and momentum, and I am pleased the latest
culture performance analysis survey conducted post-Year end,
in July, remained in positive territory despite the fall in diamond
prices and effects of the organisational restructuring.
The team has also worked hard to deliver on our stakeholder
engagement objectives: delivering wage agreements, the
successful rehabilitation of Williamson following the tailings
storage facility breach and ensuring a responsible exit from
Koffiefontein. It has always been a part of Petra’s DNA, as a
South African business, to focus on community and environment
and be a responsible miner; and this Year was a period of
demonstrating our commitment through putting this into action.
Sustainability is truly embedded in the Company and we
continue to strive to achieve more. For example, this Year
we are delighted to have secured long-term Power Purchase
Agreements that will deliver renewable energy to our Cullinan
and Finsch Mines from FY 2026. Not only will this benefit the
environment, it reduces costs and improves the predictability
of these costs for budgeting purposes. Reducing our carbon
footprint also feeds into our traceability journey for end
consumers as they increasingly look for more clarity on
sustainability credentials before making their purchase.
Our operating environment
It has been a difficult year for the diamond industry. I am
privileged to have had a 30-year career in the diamond industry
and must admit these are unprecedented times. From the
Russian G7 import ban to a prolonged slowdown in China, a
new generation of consumers, lack of historic marketing ‘power’
for over a decade, and the emergence of lab-grown diamonds
(LGDs) – I have not seen the industry face so many different
developments. As would be expected, the industry and Petra
have risen to these multiple challenges to adapt and become
stronger. Producer discipline has emerged as Petra and its larger
peers have cut production budgets, while the Indian import
moratorium of last year has shown discipline from the mid-
stream. Spending on marketing of natural diamonds is set to
increase, with partnerships forming between major producers
and jewellery chains and the Natural Diamond Council also
collaborating with jewellery chains in China to boost demand.
We remain confident of the long-term demand for natural diamonds
given their rarity, uniqueness and allure, and are well-positioned to
weather the current market and benefit from a price recovery.
Varda Shine, Non-Executive Chair
CHAIR’S STATEMENT
A stronger Petra
8
Petra Diamonds Limited Annual Report and Financial Statements 2024
Faced with several internal challenges, in addition to the external
ones, Petra has reacted and addressed these in earnest.
Williamson’s operations were successfully ramped up, resulting
in improved Group production, however, total diamond production
for the Year fell slightly below the guidance largely as a result of
volatility in production at Finsch caused by the maturity/depletion
of the Upper Block 5 SLC and a combination of the lower ROM
grade at Cullinan Mine together with lower than expected tailings
tonnes treated at Cullinan Mine. Petra took the necessary steps
to manage these operational challenges which is again
testament to the expertise and talent at the heart of
the Company.
At Petra, we have world-class assets and are a responsible
source of some of the world’s rarest and most precious gems.
We remain confident of the long-term demand for natural
diamonds and are in a position to weather the headwinds
of the current market.
Towards the end of the Year, South Africa also held national
elections with a coalition forming for the first time since the ANC
came to power. Despite this, Petra remains confident regarding
its and the mining industry’s positive relations with the
Government.
Board development and committees
Alongside my appointment as Chair, there were several other
developments during the Year as we moved to a smaller and
more efficient Board which reduced Board fees by at least
c. 25% on an annualised basis. This saw the Board reduced to
seven Directors from ten prior to the Company’s last AGM. It
also led to the merger of the Sustainability and Health & Safety
Committees.
For further details of these Board changes, including the
Directors that stepped down, please refer to my Introduction
to Governance on pages 66 to 67 and to the Report of the
Nomination Committee on pages 93 to 95.
Value creation
The steps taken this Year have been focused on building
resilience and creating value for shareholders in the long term.
We are managing capital in accordance with our capital
allocation programme and continue our focus on reducing our
debt levels, having prioritised open-market bond repurchases.
As mentioned at the Investor Day, our target is to be cashflow
generative from FY 2025.
Outlook
There continues to be volatility in the market, but I hope I have
reassured shareholders of our resilience in this reflection
on the Year. Since the Year-end, we have announced the
postponement of Tender 1 of FY 2025 to seek to benefit from
seasonally stronger conditions later in the year by combining it
with Tender 2. This demonstrates our ability to be flexible to
adapt to market conditions, while maintaining our operations and
managing our working capital. We also repurchased a total of
US$ 12 million of our 2L Notes since May 2024. Petra is assessing
options for the refinancing of its 2L Notes which mature in March
2026, and has started discussions with potential lenders. The
Board will be focused on overseeing the refinancing efforts and
has appointed a sub-committee to help in this regard.
We remain cautious in the short term but believe the long-term
fundamentals remain positive, with increased marketing
spending, new consumer markets, such as India, emerging and
the LGDs market declining in value. More importantly, we have
now adapted the business to a weaker price environment which
means it is well-positioned to benefit from any strengthening of
prices. Through the optimisation work undertaken as part of our
life-of-mine replanning, we have a clear plan to deliver upon with
a committed, high-quality team to drive its delivery.
Thank you to all our shareholders for their support as we
navigate this period, for a stronger future.
Varda Shine
Non-Executive Chair
23 September 2024
9
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
I am pleased to provide an update to our shareholders and
stakeholders for FY 2024 as we continue to improve our
business resilience. Despite ongoing challenges at the macro-
economic level and a few operational challenges through the
Year, we have continued to proactively resolve these issues. As
a responsible business, we have carefully considered our actions
to ensure long-term sustainability through future market and
capital cycles to deliver value to our shareholders.
We are confident in the steps we have taken and remain
optimistic about the future, having built a stronger foundation
without compromising our commitment to continuous
improvement. While we cannot control market cycles, we have
ensured our ability to withstand market downturns with a clear
focus on targeting the delivery of free cashflow through
the cycle.
As we close the Year, I am proud of the progress we have made
and the exceptional qualities of our business, including our
world-class mines, highly skilled teams, embedded sustainability
and renewed commitment to our value-led growth strategy.
Our focus is to create short, medium and long-term value through:
• Targeting consistent net cash-flow generation from FY 2025
• Right-sizing cost structures to enhance our resilience
• Replanning our business to support a smoother capital profile,
incorporating value engineering through this process
Navigating the landscape
We have stabilised operations and further optimised the balance
sheet through our disciplined capital allocation approach.
Williamson successfully completed its ramp-up, bringing the
Group’s total tonnes treated for the full year to 11.7 Mt compared
to 9.04 Mt in FY 2023. Unplanned maintenance issues at Finsch
led to total diamond production of 2.73 Mct for the Group which
was slightly below our guidance. Cullinan Mine was broadly in
line with FY 2023, although grades were lower due to natural
variations in the orebody.
During the Year, we undertook a detailed review to respond to
operational challenges, particularly at Finsch, which has now
rebased to a more sustainable 2.2 Mtpa operation. We have had
to adjust our cost base accordingly, which regrettably led to job
redundancies both at Finsch and the Corporate Office. I would
like to thank all our employees who have worked tirelessly
through this challenging period and to those we’ve had to
say goodbye to; I wish you all the best.
The deferred capital programme has been a key focus of
FY 2024, following the announcement of a capital deferral
programme in November 2023 in response to the weaker-for-
longer diamond market. The Year has seen us focus on revising
life-of-mine plans, leading to a smoothed capital profile with
approved life-of-mine plans self-funded until at least the early
2030s, and optimising the long-term potential of our assets.
We lowered anticipated cash expenditure in the Year by
US$75 million through deferring capital expansion programmes
and reducing our cost base.
We have demonstrated our agility and built resilience into the
business along with the ability to generate sustainable net free
cash flow through the market cycle. Our focus is now on delivery.
Richard Duffy, Chief Executive Officer
CHIEF EXECUTIVE OFFICER’S STATEMENT
An agile and proactive approach
10
Petra Diamonds Limited Annual Report and Financial Statements 2024
Creating value for our stakeholders and
building a sustainable business
Our Values
Our value-led growth strategy
Let’s do no harm
Rewarding our
stakeholders
How we measure
success
Managing
our risks
Let’s make
a difference
Let’s do it right Let’s take control Let’s do it better
Current
operations:
Develop further projects
toextend life of existing
assets tobeyond 2031/32
Brownfield organic
expansion projects:
Inorganic and corporate
opportunities:
Complete capital projects at
Cullinan Mine and Finsch
Maximise value from
existing operations
Assess orebodies either
inornearproduction
Pursue value-accretive
corporateopportunities
Supported by our Culture Code
Read more on our Culture Code
page 46
See Stakeholder Engagement
on pages 49-51
See Strategy
on pages 20-25
See our KPIs
on pages 38-39
Read more about our Risks
on pages 56-65
See more on our website
www.petradiamonds.com/petra-diamonds-
culture-code-creating-abudance-from-rarety-
industrial-theatre-2023/
Our Purpose
Creating abundance from rarity
Longer-term strategic driversShort-term strategic drivers
Employees
Customers
Host governments/regulators
Shareholders/noteholders/
lenders
Local communities
Suppliers
Financial
Operational
Safety
Environment
Social
Share performance
External
Strategic
Operational
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Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
CHIEF EXECUTIVE OFFICER’S STATEMENT / CONTINUED
This resulted in a reduction in our cash costs for FY 2024 of
US$11 million, exceeding our initial target of between US$7-10
million, and we expect a sustainable reduction in our operating
costs of US$44 million per annum (US$30 million at our SA
operations and US$14 million at Willamson) from FY 2025
onwards.
We also made some progress with our debt, decreasing net debt
by US$11million to US$201 million as at 30 June 2024, compared
to US$212million at our half-year in 31 December 2023 and
repurchasing US$12 million of our 2L Notes since May 2024.
We have responded to the challenging business environment
through our agile approach and have ended the Year in a much
stronger position as a result.
Safety, Culture and Values
We have maintained our unwavering focus on safety through our
reassessment of the business. We were pleased to announce the
anniversary of 7 fatality-free years, together with a reduction in
our lost time injuries, following a focus on remedial actions and
behaviour-based intervention programmes in response to an
uptick in incidents last year. The safety, health and wellbeing
of each employee, and of the communities surrounding our
operations, remains our main priority.
We announced the launch of the Petra Culture Code in FY 2023,
which continues to evolve as a framework that enables our
Purpose of creating abundance from rarity and supports our
operating model and future growth aspirations. You will see more
of this from Thashmi Doorasamy, Group HR & Public Affairs, in
Valuing our people onp46.
Our Purpose goes beyond being a responsible mining company,
as we look to leverage Earth’s rare and precious legacy to create
abundant outcomes for our people, communities, investors,
customers and all other stakeholders.
In December 2023, we announced our entry into an agreement
to sell Koffiefontein which, once completed, will ensure ongoing
economic activity in the region and reduce our future closure-
related costs by US$15-18 million.
With regard to Williamson, we are continuing discussions with
Pink Diamonds regarding the sale transaction announced in FY
2023. Likewise, discussions with the Government of Tanzania
regarding the completion of the Framework Agreement are also
ongoing.
We were also very pleased to have reached five-year wage
agreements with organised labour, led by the National Union
of Mineworkers, at our South African mines to provide certainty
around our labour costs and provide for a stable working
environment to support the delivery of our revised life-of-
mineplans.
And, of course, while people are important, so is our environment.
We were delighted to announce the signing of long-term Power
Purchase Agreements (PPAs) in May 2024 to procure wheeled
renewable energy at our South African operations, which is
expected to provide c. 36-72% of expected load requirements
at Cullinan Mine and FInsch from FY 2026. At the same time as
reducing our Scope 1 and 2 GHG emissions well ahead of our
2030 target, we expect these PPAs to provide predictable,
sustainable cost savings.
We are currently trialling traceability technology, through the
collaboration between De Beers’ Tracr
TM
platform and Sarine
Technologies Diamond Journey, that will enable our diamonds
(gem-quality larger than 0.5 carats) to be mapped and then
traced from mine to finger. While we have always produced
diamonds to the highest ethical standards, with provenance
assured through our tenders being laid out mine-by-mine and as
members of the Kimberley Process, this technology will not just
provide physical verification of the provenance of our diamonds,
but also showcase the benefits and positive impacts that natural
diamonds create on their journey. A physical or virtual certificate
would share information about the diamond, its provenance and
the community and social projects it supports, together with its
sustainability credentials (eg its carbon footprint).
We are targeting implementation of this traceability technology
by the end of this calendar year. This will enhance our offering
through to retail customers, with opportunities to enhance
demand and desirability as a result.
At Williamson, we continue to make progress on the
implementation of the Independent Grievance Mechanism, to
address the historical allegation of human rights abuses, as well
as the implementation of the Restorative Justice Projects. For
more information on these, see our Sustainability Report at
pages 31 and 32.
Market
I’ve touched on traceability and provenance and the benefits we
believe will accrue to Petra, but we can’t deny the backdrop of a
challenging diamond market throughout the Year. CY 2023 saw a
significant decline in prices, following the post-COVID highs of
CY 2022. China, the second largest market for diamonds, has not
recovered as expected, post-COVID, and with global inflation
and interest rates remaining high, this led to elevated inventory
levels across the value chain. The significant increase in the
supply of cheap LGDs has created further market pressure.
The diamond industry has taken a number of steps to mitigate
these challenges. The two-month Indian diamond import
moratorium, which ended in December 2023, helped reduce
inventory levels in the mid-stream, while several marketing
initiatives have been announced by major players across
different jurisdictions from the US to China and India. Producers
have also shown discipline in restricting supply to the market
to assist with rebalancing inventory levels.
With LGD pricing continuing to significantly decline and margins
also shrinking, LGDs are now firmly established as a different
product category to natural diamonds. It appears that jewellery
retailers are again favouring natural diamonds over LGDs to
improve both revenues and margins.
Whilst acknowledging the difficult market in FY 2024, we remain
cautiously optimistic that prices will stabilise through the end
of CY 2024 with some modest improvement in CY 2025.
12
Petra Diamonds Limited Annual Report and Financial Statements 2024
Outlook
At our Investor Day in June, we outlined our revised life-of-mine
plans and provided 5-year guidance for all of our operations.
We believe that this information demonstrates our resilience as
a business and ability to generate sustainable net free cashflow
through the market cycle. Our focus is now on delivery.
Our life-of-mine plans highlight the longevity of our operations
and our ability to self-fund our now smoothed capital profile, to
deliver circa 500,000 of carat production growth in the next
three years. Leading with our Purpose, we will ensure delivery
of our value-led growth strategy to the benefit of all of our
stakeholders.
In the coming months, our balance sheet remains the priority,
and we are assessing options for the refinancing of our 2L Notes
that mature in March 2026, and have started discussions with
potential lenders.
I’ve already thanked our team but would like to reiterate our
appreciation to all our employees for their hard work in what has
been a difficult year. I would like to thank our outgoing CFO,
Jacques Breytenbach for his significant contribution to the
business during his 18 years at Petra and welcome his
replacement, Johan Snyman, who I look forward to working
with as we embark on this next chapter of Petra’s journey.
Richard Duffy
Chief Executive Officer
23 September 2024
13
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
FINANCIAL REVIEW
The actions taken to reduce costs and Capex
have improved our resilience and enhanced our
ability to generate free cashflow and position
Petra well to refinance its debt obligations.
Jacques Breytenbach, Chief Financial Officer
A proactive approach to
managing pricing weakness
As we reflect on the Year, it is evident the diamond industry has
faced unprecedented challenges, leading to a softer-for-longer
diamond pricing environment and the two-month Indian diamond
import moratorium which ended on 15 December 2023. In
response to these market conditions, Petra took decisive actions
to navigate this period of uncertainty. We increased our debt
facilities by US$40 million to ensure sufficient liquidity and
reduced cash outflows by US$75 million for the Year through
cost savings and the deferral of certain capital projects. These
actions have continued into FY 2025 and beyond through the
implementation of rigorous cost-reduction measures and a
smoothed capital profile and revisions to the life-of-mine plans
(LOM) at our South African mines.
By taking these actions we have enhanced our financial
resilience while minimising the impact on our business, thus
enabling future growth and targeting cash generation through
the cycle. Together with detailed five-year operating and
production guidance, these actions were shared at an Investor
Day held in London in June 2024, the details of which are
available on our website. Since releasing our new LOM plans,
Petra is assessing options for the refinancing of its 2L Notes
which mature in March 2026 and has started discussions with
potential lenders.
Since placing Koffiefontein on care and maintenance in FY 2023
and subsequently announcing its sale in FY 2024, these
operations have been classified as ‘discontinued operations’.
Relevant numbers in this section consequently exclude
Koffiefontein for FY 2024 and FY 2023 unless otherwise stated.
Revenue (KPI)
We manage the risk associated with diamond prices by
maximising achieved prices through the timing and competitive
nature of our tenders. Our flexible approach means we may
withhold parcels until later tenders when demand might be
stronger or propose a profit-sharing agreement to capture
additional value from cutting and polishing selected stones.
Total revenue from rough diamond sales for FY 2024 was
US$366 million compared to US$324 million in FY 2023 and
US$367 million (FY 2023: US$325 million), including revenue
from profit share agreements of US$1 million (FY 2023: US$1
million). Year-on-year volume variances were affected by the
deferral of certain parcels from FY 2023, which were sold as part
of Tender 1 of FY 2024, as well as the ramp-up at Williamson to
full production following the tailings storage (TSF) failure in
FY 2023.
No Exceptional Stones (≥US$15 million) were recovered or sold
during FY 2024 or FY 2023.
Mine-by-mine average prices are shown in the table below which
highlights the decline in prices in FY 2024. Refer to the Market
Review section on pages 26 to 31 for a discussion on the state of
the diamond market.
Average US$/carat FY 2024 FY 2023
Cullinan Mine 116 139
Finsch 98 110
Williamson 191 280
14
Petra Diamonds Limited Annual Report and Financial Statements 2024
Mining and processing costs
Mining and processing costs comprise on-mine cash costs and other operational expenses.
On-mine
cash
costs
1
US$m
Diamond
royalties
US$m
Diamond
inventory and
stockpile
movement
US$m
Group
technical,
support and
marketing
costs
2
US$m
Adjusted
mining and
processing
costs
US$m
Williamson
tailings facility
– remediation
costs
US$m
Group
restructure
costs
3
US$m
Depreciation
and
amortisation
US$m
Total mining
and
processing
costs (IFRS)
US$m
FY 2024 236 5 37 18 296 — 3 94 393
FY 2023 210 4 (34) 22 202 11 — 84 297
% movement +11% +25 -18% +47% +11% +32%
1. Includes all direct cash operating expenditure at operational level, ie labour, contractors, consumables, utilities and on-mine overheads.
2. Certain technical, support and marketing activities are conducted on a centralised basis.
3. Restructure costs include retrenchment payments made to employees as part of Finsch’s change from continuous operations to a five-day shift structure and a reduction
of corporate costs.
Total on-mine cash costs in FY 2024 increased 11% compared to FY 2023 due to the ramp-up at Williamson following the TSF failure,
inflation estimated at 5% across operations, electricity price increases and one-off labour restructuring costs. These increases were
partly offset by a reduction in corporate expenditure and a weaker ZAR/US$ exchange rate.
Government royalties on rough diamond revenue marginally increased to US$5 million (FY 2023: US$4 million).
Adjusted profit from mining activities
Adjusted profit from mining activities decreased to US$73 million (FY 2023: US$123 million), impacted by the increase in adjusted
mining and processing costs (primarily diamond inventory movements), which was partly offset by higher revenues. Cullinan Mine and
Finsch contributed positively to adjusted profit from mining activities. Williamson posted a gross loss for FY 2024 due to the ramp-up
to full production during the Year.
FY 2024 FY 2023
US$ million Cullinan Mine Finsch Willamson Total Cullinan Mine Finsch Williamson Total
Revenue 190 120 57 367 183 93 49 325
Adjusted mining and
processing costs
1
(123) (109) (64) (296) (82) (65) (55) (202)
Other direct
mining income 1 1 — 2 — — — —
Adjusted profit (loss)
from mining activities 68 12 (7) 73 101 28 (6) 123
Adjusted profit margin 36% 10% (12%) 20% 55% 30% (12%) 38%
Adjusted Group G&A
Not allocated per mine
(7)
Not allocated per mine
(10)
Adjusted EBITDA 66 113
1. Adjusted mining and processing costs include certain technical and support activities which are conducted on a centralised basis. These include sales & marketing, human resources,
finance & supply chain, technical and other functions. For the purposes of the above, these costs have been allocated 60% to Cullinan Mine and 40% to Finsch. For more information,
refer to the operational cost reconciliation available on the analyst guidance pages on our website.
Adjusted EBITDA (KPI)
Adjusted EBITDA, being profit from mining activities less adjusted corporate overhead, reduced to US$66 million (FY 2023: US$113
million), representing an adjusted EBITDA margin of 18% (FY 2023: 35%), driven by the increase in adjusted mining and processing
costs (primarily diamond inventory movements) and partly offset by higher revenues.
Impairment charge
Full details of impairment charges recorded at Cullinan Mine and Finsch are included in note 5 to the Consolidated Financial Statements.
15
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
FINANCIAL REVIEW / CONTINUED
Net financial expense
The net financial expense of US$24 million (FY 2023: US$59 million) comprises:
US$ million FY 2024 FY 2023
Gross interest on Notes, bank loans and overdrafts 33 28
Other debt finance costs, including facility fees and IFRS 16 charges 5 2
Unwinding of the present value adjustment for Group rehabilitation costs 6 6
Notes redemption premium and acceleration of unamortised bank facility and Notes costs — 8
Net foreign exchange losses — 27
Offset by:
Interest received on bank deposits (3) (4)
Interest receivable on the BEE Partner loans and other receivables (6) (5)
Foreign exchange gains on settlement of forward exchange contracts (5) (2)
Net foreign exchange gains (5) —
Gain on extinguishment of 2026 Loan Notes (1) (1)
Net financial expense 24 59
Tax credit/charge
The income tax credit of US$32 million (FY 2023: US$23 million charge) is comprised of a deferred tax credit of US$34 million
(FY 2023: US$22 deferred tax charge), primarily due to the deferred tax impact of impairments and a current tax charge of
US$2 million (FY2023: US$1 million).
Sale of Koffiefontein
On 8 April 2024, Petra announced the signing of a definitive transaction agreement for the sale of Koffiefontein, which is expected to
result in Petra avoiding closure-related costs of US$15-18 million, currently included in balance sheet provisions. Completion of the
sale remains subject to obtaining the consent of the Department of Mineral and Petroleum Resources in accordance with Section 11
of South Africa’s Mineral and Petroleum Resources Development Act.
The Koffiefontein operations are classified as discontinued operations in the annual Financial Statements.
Earnings per share
A basic loss per share of 43 cents (FY 2023: 38 cents loss) was recorded from continuing operations.
Adjusted loss per share from continuing operations (adjusted for restructure costs, impairment charges, transaction costs and
accelerated unamortised costs, fees relating to investigation and settlement of human rights abuse claims, taxation credit on net
unrealised foreign exchange losses and net unrealised foreign exchange gains and losses) of 21 cents was recorded (FY 2023: 3 cents).
Operational free cashflow (KPI)
Operational free cashflow of negative US$17 million (FY 2023: negative US$65 million) improved by US$48 million during FY 2024,
mainly reflecting a decrease of US$34 million in profit before working capital changes, a US$49 million cash inflow from working
capital changes and a reduction of US$33 million in total capital expenditure following the deferral of certain capital projects during
H1 FY 2024 in response to the depressed diamond market.
Capital expenditure (KPI)
FY 2024 FY 2023
US$ million
Cullinan
Mine Finsch Williamson Central Total
Cullinan
Mine Finsch Williamson Central Total
Extension 36 19 — — 55 41 31 — — 72
Stay in Business 12 6 10 1 29 12 12 19 2 45
Total 48 25 10 1 84 53 43 19 2 117
Total capital expenditure reduced to US$84 million from US$117 million in the prior year following the planned deferral of capital
projects. Through rebasing future capital expenditure to c. US$100 million per annum on a sustainable basis, the Group expects
to be able to generate free cashflow should a weaker-for-longer diamond market scenario persist.
Total shareholder return (KPI)
No dividend was paid in FY 2024. Petra’s share price declined by 40% from 67 pence per share as at 30 June 2023 to 40 pence per
share as at 30 June 2024, principally due to a weak macro-economic environment and its impact on diamond pricing and sentiment
towards equities as well as rough diamond production coming in just below the lower end of guidance.
16
Petra Diamonds Limited Annual Report and Financial Statements 2024
Balance sheet snapshot
Unit
As at 30 June
2024
As at 30 June
2023
Cash at bank US$m 21 58
Diamond debtors US$m 30 9
Diamond inventories US$m 32 66
Cts 286,303 715,222
2026 2L Notes US$m 246 247
Bank loans and borrowings US$m 25 —
Consolidated net debt US$m 201 177
Bank facilities undrawn and available US$m 72 53
Consolidated net debt: Adjusted EBITDA (rolling 12 months) times 3.0x 1.6x
Cash and diamond debtors
As at 30 June 2024, Petra had a net cash and cash equivalent of
US$21 million (FY 2023: US$58 million). Included in this cash
balance, is US$28 million held as unrestricted cash (FY 2023:
US$44 million) offset by an US$8 million overdraft (FY 2023:
US$nil) reported at Williamson, and US$1 million (FY2023:
US$14 million) held in security deposits and bonds to fund
environmental rehabilitation obligations.
Diamond debtors as at 30 June 2024 were US$30 million
(FY 2023: US$9 million), arising from revenue in the last
tender of FY 2024, all of which was received in July 2024.
Loans and borrowings
In response to the depressed diamond market, the Group
increased its commitments under the ZAR1 billion (c. US$53
million) Revolving Credit Facility with Absa Bank to ZAR1.75
billion (c. US$93 million) providing an additional c. US$40 million
of liquidity headroom.
During the Year, the Group repurchased US$5 million of 2L
Notes in an Open Market Repurchase programme for a cash
consideration of US$4 million.
At 30 June 2024, US$25 million was drawn on the Revolving
Credit Facility (FY 2023: nil) and US$246 million was outstanding
on the 2L Notes (FY 2023: US$247 million) (including accrued
interest and unamortised transaction costs).
Consolidated net debt as at 30 June 2024 increased to US$201
million (FY 2023: US$177 million) due to the draw-down on the
Revolving Credit Facility.
Bank debt facilities undrawn and available to the Group as at
30 June 2024 were US$72 million (FY 2023: US$53 million).
Consolidated net debt: Adjusted EBITDA (KPI)
Consolidated net debt:Adjusted EBITDA increased to 3.0x
(FY 2023: 1.6x) due to an increase in consolidated net debt to
US$201 million (FY 2023: US$177 million) and a reduction in
Adjusted EBITDA to US$66 million (FY 2023: US$113 million).
Going concern considerations
For the basis of preparation, please refer to note 1.4 of the
Financial Statements on page 131. In the financial statements for
the year ended 30 June 2023, the Company highlighted material
uncertainties that could affect its ability to continue as a going
concern, particularly due to volatility in diamond prices driven by
low demand. To mitigate this, major diamond producers reduced
supply, and the Gem and Jewellery Export Promotion Council of
India imposed a two-month import moratorium from mid-October
to mid-December 2023.
Since 30 June 2023, the Company has taken several measures
to enhance financial resilience amid ongoing market challenges.
Key actions include:
• Capital Expenditure Reduction: On 1 November 2023, Petra
announced a deferral of capital programmes, reducing FY
2024 capital expenditure by over US$65 million. After revising
the Life of Mine plans for Finsch and Cullinan Mine, average
annual capital expenditure for the South African operations is
projected at around US$100 million from FY 2025 onwards;
• Cost Savings: US$10 million in once-off operating and group
cash savings were implemented during FY 2024, alongside a
re-based operating cost profile that results in US$44 million in
sustainable cost reductions for FY 2025 and beyond. As part
of this, Group functions were decentralised, resulting in a
reduction of c. 80 roles and a reduction in planned production
levels at Finsch from 2.8 Mtpa to 2.2 Mtpa saw c. 350 positions
being impacted;
• Financing: On 15 February 2024, Absa Bank approved a
ZAR750 million (c. US$40 million) increase in the Group’s
revolving credit facility; and
• Asset sale: The sale of Petra’s interest in the Koffiefontein
Diamond Mine was announced on 8 April 2024 which, once
completed, will avoid closure costs of US$15-18 million (see
note 21 for further information).
These steps have significantly improved the Group’s liquidity and
solvency outlook.
The performance of the diamond market remains uncertain
within the global macroeconomic conditions and the
repercussions impacts of the Indian moratorium. Furthermore,
the natural diamond market continues to be impacted by the
lab-grown diamonds market, affecting diamond prices. However,
with interest rates expected to have peaked and the G7’s
sanctions on Russian diamonds, some medium-term pricing
support is anticipated.
To support steps taken by major producers to restrict supply in
the seasonally weaker demand period, the August / September
2024 tender from the South African operations was deferred and
forms part of the Tender 2 cycle, expected to close in mid-
October 2024.
17
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
FINANCIAL REVIEW / CONTINUED
The going concern assessment includes assumptions on
forecast diamond prices and is based on average prices
achieved over the past year, adjusted where there are
specific expectations regarding changes in product mix.
Whilst the Company remains cautious about near-term market
conditions, it believes the long-term fundamentals remain sound.
This uncertainty is built into downside sensitivities described below.
The group’s 2L Notes mature in March 2026, with the Revolving
Credit Facility maturing 60 days ahead of this, with some uncertainty
remaining around the Group’s ability to successfully refinance or
restructure the debt on similar terms as existing facilities.
Cash generated from operations less acquisition of property,
plant and equipment of negative US$17 million (FY 2023: US$67
million negative) improved by US$52 million during FY 2024,
mainly reflecting a decrease of US$33 million in profit before
working capital changes, a US$56 million cash inflow from
working capital changes and a reduction of US$33 million in
total capital expenditure following the deferral of certain capital
projects during H1 FY 2024 in response to the depressed
diamond market.
Williamson restarted operations in Q1 FY 2024 with current
production at its annual steady-state run rate. As stated in the
FY 2023 year-end reporting, both the Framework Agreement
with the GoT and the Share Sale Agreement with Pink Diamonds
are pending satisfaction of certain suspensive conditions and
regulatory approvals.
The Group’s going concern assessment is performed excluding
Williamson’s operating results, as Williamson is considered a
ring-fenced operation for these purposes, as per the definitions
and requirements set forth in the Group’s financing agreements.
Williamson successfully upsized its overdraft facility from US$7
million to US$10 million in September 2023, and to US$12.6
million in September 2024. Williamson, however, continues to
encounter short-term liquidity challenges, and its short-term
liquidity is receiving focused attention on an on-going basis.
Forecast Liquidity and Covenants
The Board reviewed the Group’s cash flow forecasts, which
were based on a number of estimates and assumptions that are
consistent with the estimates used in the life of mine plans.
Subject to refinancing the 2026 2L Notes and Revolving
Credit Facility that mature in March 2026 and January 2026
respectively, these forecasts show that the Group will have
sufficient liquidity throughout the going concern period
(ie. up to 31 December 2025).
In light of the uncertainties inherent in the forecasts, the Board
also reviewed forecasts, applying various downside sensitivities,
including:
• A 5% decrease in forecast rough diamond prices from
July 2024 to December 2025;
• A 2.5% strengthening in the forecast South African Rand (ZAR)
exchange rate against the US Dollar from July January 2024 to
December 2025%;
• A 5% increase in operating costs from July 2024 to
December 2025;
• Combinations of the sensitivities above.
Under certain downside scenarios listed above, the forecasts
show that there is a risk of a future covenant breach on the
Group’s Revolving Credit Facility. In addition, the Group may face
a covenant breach by June 2025 if the debt is not refinanced
before this date. The Board considers the risk of a future
covenant breach to be unlikely and has a reasonable expectation
that in the event of a downside scenario there would be a
number of mitigating actions to avoid a breach, including
obtaining a waiver.
As previously stated, the Group may have to refinance the full
outstanding 2L debt of c. US$250 million and the drawn down
Revolving Credit Facility, and management has engaged with
banks with a view to refinance prior to the 2L Notes becoming a
current liability in March 2025. The Group remains confident in
its ability to refinance its debt on the back of the underlying
operational cashflow generation, as well as strong net cashflow
generation projected from FY2027 onwards, as the Group sees
the benefit of an increase in carats recovered from higher-grade
areas that are currently in development. The outcome of a
refinance, however, remains outside of the Group’s control. If the
Group is unable to successfully refinance the existing debt on
account of the willingness of existing Noteholders and/or
the terms and conditions of such a refinance or new debt
instruments, the Group would consider whether other options
are available such as an equity raise or asset sales in order to
settle its obligations.
Conclusion
Based on its assessment of the forecasts, principal risks and
uncertainties and mitigation actions considered available to the
Group, including steps already undertaken or being executed by
management to improve resilience in the business, in the event
of downside sensitivities, the Board confirms that it is satisfied
that the Group will be able to continue to operate and meet its
liabilities as they fall due over the next going concern period.
However, the Board recognises the risks associated with
persisting market volatility which may lead to lower diamond
prices for longer, as well as the risk to refinancing the Group’s 2L
Notes and Revolving Credit Facility, given this remains outside
of the Group’s control. These factors indicate the existence of
material uncertainties which may cast significant doubt on the
Group’s ability to continue as a going concern and therefore it
may be unable to realise its assets and discharge its liabilities in
the normal course of business. The Financial Statements do not
include the adjustments that would result if the Group were
unable to continue as a going concern.
Jacques Breytenbach
Chief Financial Officer
23 September 2024
18
Petra Diamonds Limited Annual Report and Financial Statements 2024
Summary of results
Year ended
30 June 2024
(FY 2024)
US$ million
Year ended
30 June 2023
(FY 2023)
US$ million
Revenue 367 325
Adjusted mining and processing costs (296) (202)
Other net direct mining income 2 —
Adjusted profit from mining activity 73 123
Other corporate income — 1
Adjusted corporate overhead (7) (11)
Adjusted EBITDA 66 113
Depreciation and amortisation (95) (81)
Share-based expense (1) (2)
Net finance expense (29) (22)
Adjusted (loss) profit before tax (59) 8
Taxation, excluding taxation credit on impairment of operational assets and unrealised foreign exchange movements 13 (10)
Adjusted net loss after tax (46) (2)
Impairment (charge)/reversal – operations and other receivables, net of taxation (60) 53
Impairment reversal/(charge) – operations and non-financial receivables 5 (38)
Transaction costs and acceleration of unamortised costs on partial redemption of Loan Notes — (9)
Gain on extinguishment of Loan Notes 1 1
Williamson tailings facility – remediation costs — (11)
Williamson tailings facility – accelerated depreciation — (5)
Williamson Diamonds Limited Blocked Parcel inventory write-down and related receivable recognition — (12)
Williamson Diamonds Limited receivable recognition — 12
Restructure costs (5) —
Human rights IGM claims provision and transaction (costs)/reversal of settlement agreement (2) (9)
Net unrealised foreign exchange gain/(loss), net of taxation 3 (42)
Loss from continuing operations (104) (62)
Loss from discontinued operations, net of tax (3) (40)
Net loss from continuing and discontinued operations, after tax (107) (102)
Earnings per share attributable to equity holders of the Company – US cents
Basic loss per share – from continuing and discontinued operations (44) (54)
Basic loss per share – from continuing operations (43) (38)
Adjusted loss per share – from continuing operations (21) (3)
19
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
Our Purpose and value-led growth strategy
Our Purpose is central to everything we do and underpins the
values we hold as an organisation. It supports our approach to
delivering on our strategy of creating value for our stakeholders
and defines the way we integrate risk, opportunity and
remuneration into our strategic thinking.
While growth did not materialise on the back of market weakness
witnessed over the past c. 18 months, FY 2024 proved to be a
watershed year for Petra with a replanned capital profile and
sustainably lower cost base allowing Petra to extract maximum
value from current operations, while favourably positioning us to
pursue growth in the medium to long term as markets recover
from the current lower-for-longer pricing scenario.
Petra remains steadfast in applying the value generation lens in
all its decision-making, including maintaining its sustainability
ambitions to generate value for all stakeholders.
De-risked business plan
On the back of deferring a number of extension projects in
November 2023 due to the potential for a lower-for-longer
diamond market, we rebased Finsch to a 2.2 Mtpa operation with
Cullinan Mine rebasing to c. 3.7 Mtpa from FY 2027 onwards –
these changes are discussed in more detail on page 24 and in
the operational review section (pages 32 to 37). We believe this
de-risks these operations given the lower intensity placed on the
operations through concurrent mining and development which
uses the same underground infrastructure. The smoother Capex
profiles announced at our Investor Day in June 2024 are also
aimed at de-risking Petra through future market cycles.
Corporate activities
In addition to the focus on liquidity management which led to the
deferral of extension projects at both Cullinan and Finsch Mines,
discussed in more detail on page 24, a number of key value-
accretive initiatives were executed during FY 2024. These
include the sale of Koffiefontein which is awaiting section 11
approval from the Department of Mineral and Petroleum
Resources. Once the sale is completed, this will save Petra
c. US$15-18m in avoided closure and rehabilitation costs.
Another key milestone was the entering into agreements to
supply the Cullinan and Finsch Mines with renewable energy.
From FY 2026, these agreements are expected to supply
between 36-72% of the mines’ energy requirements, thereby
meeting our 2030 GHG reduction target well ahead of time.
Furthermore, these agreements will result in both cost savings
and cost predictability, while allowing us to further differentiate
our diamonds due to their enhanced environmental and social
credentials, in keeping with our focus on provenance and
traceability which is discussed in more detail on page 28.
Another key event was the conclusion of five-year wage
agreements with the National Union of Mineworkers covering our
South African operations for the period 1 July 2024 to 30 June
2029. This allows for continued certainty on fixed labour costs
and enables us to renew our focus on operational delivery.
Debt management
Our immediate focus on the back of the replanning effort is for a
successful refinancing of our 2026 2L Notes, but with a clear
focus on continued gross debt reduction going forward which
remains a high priority in our capital allocation decision process
as shown on page 6.
We are well positioned to deliver on our value-led
growth strategy through an extensive replanning
effort that has resulted in a more resilient Petra.
Vivek Gadodia, Planning and Corporate Development Executive
Resilient business plan
enabling our Strategy
STRATEGY IN ACTION
20
Petra Diamonds Limited Annual Report and Financial Statements 2024
How we deliver value
to stakeholders
Key behaviours and frameworks for strategic delivery,
with performance linked to KPIs
A value-led growth strategy
underpinned by our Operating Model
A diversified portfolio
of long-life assets
Cullinan Mine is a
world class asset
Brownfield
extension projects
Further growth
opportunities
Disciplined capital
allocation
Debt and interest payment
optimisation is a priority
Operating model
focused on cash
generation
Maximise value from
existing operations,
including approved
extension projects
Production growth
to over 3.4 Mcts
expected by FY 2028
Embedding
sustainability
Safety our
Number 1 priority
2030 GHG
reduction target
Wide reaching social
programmes
Leveraging sustainability
credentials with consumers
Current
operations
1 2 3
Creating abundance
from rarity
Focused on delivering Our Purpose
Abundance
for our people
in realising their full
potential to deliver
extraordinary outcomes
Abundance
for our investors
in generating
sustainable
returns
Abundance for our
communities
through partnering to
provide enduring benefit
for future generations
Abundance
for our customers
in celebrating
love, friendship and
life’s achievements
Maximise value
from existing operations
including approved
extension projects
Develop further extension
projects to extend life of
existing assets to unlock
resource potential
Assess orebodies either
in or near production
Pursue accretive
corporate opportunities
Read more on
sustainability
pages 44-48
Read more on our
operating model
page 5
Read more on capital
allocation policy
page 6
Read more on
life-of-mine plans
pages 33-38
See more on our website
www.petradiamonds.com/about-us/our-purpose-values/
21
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
STRATEGY IN ACTION / CONTINUED
Our purpose-driven
strategy
Our strategic objectives FY 2024 progress Risk & opportunities Focus for FY 2025
Unlock value
through corporate
activities
Optimise efficiency and business resilience
Power purchase agreements for renewable energy
Place Koffiefontein on care & maintenance, or sell
Progress supply chain transformation project
Continued debt optimisation
• Group liquidity, managed
through disciplined capital
allocation and optimising cost
and asset base
• Active engagement with capital markets
to refinance debt
• Limit exposure to Williamson while
retaining control
• Complete sale of Koffiefontein
• Continue with supply chain
transformation project
Maximise value
from current
operations
Continuous improvement culture
to optimise value from existing operations
Sustainably reduce operating costs
Limit dilution to optimise ROM grades
Embed new Culture Code
Maintain flexibility at tenders
Williamson restart and ramp-up
• Rough diamond prices,
managed through reduced
capital requirements, RCF,
tender process and piloting
traceability technologies
• Currency fluctuations,
managed through ZAR
hedging
• Country and political,
managed through monitoring
and ongoing engagement
with Government
• Reduce operating costs sustainably,
targeting US$44m per annum from
FY 2025
• Limit dilution to optimise ROM grades
• Maintain flexibility at tenders
• Ongoing optimisation of currency
movements through hedging
• Maintain strong labour relations
Life-of-mine
extension
projects
Unlock value from existing asset base
Life-of-mine plan review to smooth Capex profile
Progress CC1E & C-Cut Ext 1 projects at Cullinan Mine
Progress Lower Block 5 3L-SLC project at Finsch
Develop further extension projects to extend
life beyond current mine plan
• Prioritise high return projects
such as CC1E at Cullinan Mine
• Need to continually re-invest
in assets and maintain social
licence to operate
• Ramp up in activity in new
mining areas and mitigate
ROM grade and product
mix risks
• Progress CC1E & C-Cut Ext 1 projects at
Cullinan Mine
• Progress Lower Block 5 3L-SLC project
at Finsch
• Develop further projects to extend life
beyond current mine plan
Growing
externally
Consolidate Petra’s position as the leading
independent diamond miner
Assess orebodies either in or near production
Continuously improve balance sheet
to provide optionality for the future
Pursue value-accretive corporate opportunities
• Few orebodies available,
Petra’s market position and
skill-set are advantages
• Assess orebodies either in or near
production
• Pursue value-accretive corporate
opportunities
• Continuously improve balance sheet to
provide optionality for the future
Short-term strategic driversLonger-term strategic drivers
22
Petra Diamonds Limited Annual Report and Financial Statements 2024
Our strategic objectives FY 2024 progress Risk & opportunities Focus for FY 2025
Unlock value
through corporate
activities
Optimise efficiency and business resilience
Power purchase agreements for renewable energy
Place Koffiefontein on care & maintenance, or sell
Progress supply chain transformation project
Continued debt optimisation
• Group liquidity, managed
through disciplined capital
allocation and optimising cost
and asset base
• Active engagement with capital markets
to refinance debt
• Limit exposure to Williamson while
retaining control
• Complete sale of Koffiefontein
• Continue with supply chain
transformation project
Maximise value
from current
operations
Continuous improvement culture
to optimise value from existing operations
Sustainably reduce operating costs
Limit dilution to optimise ROM grades
Embed new Culture Code
Maintain flexibility at tenders
Williamson restart and ramp-up
• Rough diamond prices,
managed through reduced
capital requirements, RCF,
tender process and piloting
traceability technologies
• Currency fluctuations,
managed through ZAR
hedging
• Country and political,
managed through monitoring
and ongoing engagement
with Government
• Reduce operating costs sustainably,
targeting US$44m per annum from
FY 2025
• Limit dilution to optimise ROM grades
• Maintain flexibility at tenders
• Ongoing optimisation of currency
movements through hedging
• Maintain strong labour relations
Life-of-mine
extension
projects
Unlock value from existing asset base
Life-of-mine plan review to smooth Capex profile
Progress CC1E & C-Cut Ext 1 projects at Cullinan Mine
Progress Lower Block 5 3L-SLC project at Finsch
Develop further extension projects to extend
life beyond current mine plan
• Prioritise high return projects
such as CC1E at Cullinan Mine
• Need to continually re-invest
in assets and maintain social
licence to operate
• Ramp up in activity in new
mining areas and mitigate
ROM grade and product
mix risks
• Progress CC1E & C-Cut Ext 1 projects at
Cullinan Mine
• Progress Lower Block 5 3L-SLC project
at Finsch
• Develop further projects to extend life
beyond current mine plan
Growing
externally
Consolidate Petra’s position as the leading
independent diamond miner
Assess orebodies either in or near production
Continuously improve balance sheet
to provide optionality for the future
Pursue value-accretive corporate opportunities
• Few orebodies available,
Petra’s market position and
skill-set are advantages
• Assess orebodies either in or near
production
• Pursue value-accretive corporate
opportunities
• Continuously improve balance sheet to
provide optionality for the future
Supported by:
Operating model
Read more on
page 5
Sustainability
Framework
Read more on
page 4
Governance
Read more on
pages 66-83
Achieved
In progress
Not achieved
23
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
STRATEGY IN ACTION / CONTINUED
Our replanning work
Replanned business profile
FY 2024 has been a remarkably difficult year, both for Petra and
the natural diamond industry with softer demand and prices from
H2 FY 2023 continuing into FY 2024. This resulted in a two-
month Indian diamond import moratorium.
In responding to these market challenges and the risk of
lower-for-longer diamond prices, Petra prudently took the
decision in early November 2023 to defer certain extension
projects at our South African operations to preserve liquidity
and embarked on a cost optimisation initiative.
The deferral of the extension projects required a full replanning
of Petra’s life-of-mine (LOM) plans with the goal of creating a
business that is resilient and able to withstand weaker-for-longer
and future market cycles, while also executing on our extension
projects to keep our future production profiles intact.
The aim was to generate free cash-flow through periods of
diamond pricing weakness after self-funding our capital projects
at a more smoothed level, also enabling Petra to generate more
meaningful free cash-flow during periods of stronger pricing.
This also allows Petra to target further gross debt reduction and/
or pursue opportunistic growth opportunities. Furthermore,
our replanning efforts do not assume contribution from
Exceptional Stones (≥US$15 million) even though these may be
extracted on a periodic basis, especially from the Cullinan Mine.
The outcome of the replanning effort was shared at an Investor
Day in late June 2024, with the following highlights worth noting:
• A smoothed total capital profile at c. US$100 million per annum
for our SA operations
• An optimised cost base targeting US$44 million of annual
saving (US$30 million at our SA operations and US$14 million
at Williamson) on a sustainable basis from FY 2025
• Finsch rebased to a c. 2.2 Mtpa operation to align with the
smoother capital profile, with the potential to continue mining
into the late 2030s
• Cullinan Mine continuing at c. 4.4 Mtpa for the next two years
and then rebasing to c. 3.7 Mtpa from FY 2027 onwards, with
the potential to continue mining into the early 2040s without
the need for a new production shaft
Lowering our cost base on a sustainable basis
As part of this replanning work, we reviewed both our short-term
and long-term strategic drivers and undertook a comprehensive
review of our organisational structure.
Having initially set a target of reducing operating costs (defined
as costs at our SA operations, centralised services and
overheads) of between US$8-10 million for FY 2024, this target
was increased to US$30 million on a sustainable basis for FY
2025 onwards with a further US$14 million of sustainable savings
at Willliamson. Around half of the savings at our South African
operations are expected to come through a rebasing of fixed and
variable costs associated with reduced throughput at Finsch,
with the remaining half as savings across operating costs and
overheads at Cullinan Mine and at the Group level, with the latter
reflecting a more streamlined business with the pending sale of
Koffiefontein and potentially reduced interest in Williamson.
Vivek Gadodia
Planning & Corporate Development Executive
23 September 2024
Future proofing the business.
24
Petra Diamonds Limited Annual Report and Financial Statements 2024
Demonstrating
our agility
FY 2022 FY 2023 FY 2024
Achieved Not achieved
Business
Project 2022 success, delivering
US$265 million in net free cash
over its three years
Purpose, culture, sustainability
and strategic reset
Implementation of Culture Code
Embedding of Sustainability
Framework
Organisation restructuring
delivering US$11m FY 2024
operating cost savings and
US$44m annual sustainable
cost reduction from FY 2025
5-year wage agreement
Between 36-72% of SA energy
requirements through renewables
from FY 2026 at Cullinan Mine
and Finsch
Piloting mine-to-finger traceability
Operations
Cullinan Mine CC1E Capex
project approved
Finsch 3-Level SLC Capex
project approved
C-Cut Ext 1 approved
Williamson TSF failure
Finsch under-performance
Koffiefontein on care and
maintenance
Smoothed capital profile,
following US$75m cost savings
and capex deferrals in FY 2024
Finsch production rebased
to 2.2 Mtpa
Williamson ramped up to full
production
Koffiefontein sale terms agreed
Financial
Settled 1L gross debt (US$103m)
Reduced 2L gross debt by US$145m
Increased RCF and repurchased
US$5m of 2L Notes
Diamond market
Record diamond prices Diamond market softens Diamond market remains weaker
25
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
Overview
While we continue to expect a supportive diamond market in the
medium to longer term as a result of a structural supply deficit,
FY 2024 was a weak year for diamond prices due to macro-
uncertainty, weak Chinese demand and industry overstocking
that followed the easing of COVID-19 restrictions.
A key event in the Year was the Indian diamond import
moratorium, announced late September 2023, aimed at
rebalancing inventories in the mid and downstream segments
of the market. The two-month moratorium ended in December
2023, and was successful in bringing some much-needed
stability to prices.
However, persistent weakness in the Chinese economy,
the world’s second-largest consuming nation and ongoing
macro-economic and geopolitical uncertainty in the rest of
the world meant that demand did not strengthen following the
end of the import moratorium.
The other key event was the tightening of G7 restrictions on
the import of diamonds of Russian origin. From 1 March 2024,
a phased import ban began, initially requiring documentary
evidence of origin for all rough or polished diamonds weighing
more than one carat. From 1 March 2025, this ban is expected to
be further extended to require traceability technologies to prove
the origin of all diamonds weighing more than 0.5 carats.
From a Petra perspective, this provides a generational
opportunity to document the provenance of our diamonds from
mine to finger while highlighting the unique and rich heritage
of our mines and the socio-economic uplift they deliver. This
exciting new development is discussed more on page 28.
Clients are increasingly interested in provenance. I am excited by the
benefits that traceability technology will bring to end-users. Petra is well-
placed to benefit from this trend given its goods are considered a brand and
our mines have produced many of the world’s most famous diamonds.
Gregory Stephenson, Sales and Marketing Executive
MARKET REVIEW
Diamond market
Pricing trends
Throughout the Year, Petra fully utilised its flexible approach
to selling diamonds by holding a total of seven tenders
and withholding diamonds from sale where there was an
expectation that higher prices could be achieved at a later date.
Prices were weak in the early part of FY 2024 prior to the
two-month Indian import moratorium, with the Company
choosing to adapt its tender cycles to fit around the moratorium.
Following a 14% decline year-on-year in like-for-like prices in the
period prior to the moratorium, prices rebounded as a result of
the moratorium, with a 19% increase between Tender 2 and
Tender 3 as inventory was reduced in the mid and downstream
segments leading to a more balanced pipeline of supply.
The positive impacts of the moratorium continued into the early
part of this calendar year with prices increasing further at our
fourth tender, although weakness was becoming evident in the
coarser goods categories, which is something we largely
attribute to weaker demand from China. However, as we
approached the seasonally slower summer months, markets
again softened which impacted prices and ultimately led us to
proactively defer sales of our South African goods from the early
part of FY 2025 in expectation of achieving higher prices in
mid-October.
26
Petra Diamonds Limited Annual Report and Financial Statements 2024
Outlook
Current diamond market weakness is expected to continue
through to the end of this calendar year with some price volatility.
With demand remaining soft, mid-stream inventories have risen
again, although production cuts from mining companies should
help restore balance with De Beers cutting 2024 forecasts by
around 20% and Petra deferring capital spending and reducing
throughput at Finsch. The lab-grown diamond (LGD) market
continues to grow rapidly, but several recent LGD producer
bankruptcies and disclaimers appearing in some US jewellery
stores regarding depreciating values points to the issues
of oversupply and falling prices that the sector is facing.
Furthermore, as a consequence of depreciating prices, margins
for jewellery retailers once again favour natural diamonds. This
calendar year has seen a step up in the marketing of natural
diamonds with several collaborations forming, such as Signet
(the world’s largest diamond jewellery retailer) and Chow Tai
Fook (China’s largest jewellery retailer) collaborating with De
Beers to drive demand for natural diamonds.
The Natural Diamond Council (NDC) and Chow Tai Fook have
also partnered to market natural diamonds, particularly to
younger consumers, while the Shanghai Diamond Exchange has
partnered with the World Federation of Diamond bourses to
promote natural diamonds. With India’s economy growing rapidly,
it has the potential to soon overtake China to become the world’s
second-largest diamond consuming nation. With constrained
supply going forward, we remain optimistic in market fundamentals
providing pricing support in the medium and longer term.
Traceability technologies will soon enable natural diamonds
to tell their unique story directly to consumers, which means
the purchasing experience is about to change drastically and
in line with consumer preferences for sustainability and brand
awareness. This will also enable Petra to leverage its strong
sustainability credentials and the unique and rich heritage of
our mines which have produced some of the world’s most
famous diamonds.
ROUGH DIAMOND PRICE INDEX
1
(US$, REBASED TO 100)
0
Q3 2008
Q2 2009
Q1 2010
Q4 2010
Q3 2011
Q2 2012
Q1 2013
Q4 2013
Q3 2014
Q2 2015
Q1 2016
Q4 2016
Q3 2017
Q2 2018
Q1 2019
Q4 2019
Q3 2020
Q2 2021
Q3 2022
Q4 2022
Q3 2023
Q2 2024
50
100
150
200
250
140.5
1. The Zimnisky Global Rough Diamond Price Index. Starting Index value 100 as of end-2007.
More information can be found at www.paulzimnisky.com/roughdiamondindex
GLOBAL NEW POLISHED DIAMOND DEMAND SHARE BY
GEOGRAPHY (% OF GLOBAL DEMAND VALUE IN US$)
0
10
20
30
40
50
60
70
80
90
100
2022202120202019
USA
China*
India
Japan
Gulf
Rest of world
Source: 2023 De Beers Group Diamond Insight Report, www.debeersgroup.com.
*Includes Mainland China, Hong Kong and Macau.
53
12
10
3
5
17
PETRA’S AV. PRICE SPLIT BY RUN-OF-MINE (ROM)
AND EXCEPTIONAL STONES (US$15 MILLION OR HIGHER)
2
H1
FY 21
0
20
40
60
80
100
120
140
160
180
ROM
Exceptional Stones
H2
FY 21
H1
FY 22
H2
FY 22
H1
FY 23
H2
FY 23
H1
FY 24
H2
FY 24
80
102
141
25
166
24
104
165
162
117
113
119
2. ROM prices are US$/ct achieved without the contribution from Exceptional Stones.
AVERAGE ANNUAL PRICE (INCLUDING EXCEPTIONAL STONES)
IN US$/CT
3
FY 2023
FY 2024
139
116
110
98
280
191
0
50
100
150
200
250
300
Cullinan Finsch Williamson
3. Average carat prices impacted by deferred sale of higher valued diamonds from FY 2023
to FY 2024.
27
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
MARKET REVIEW / CONTINUED
Our external operating
environment
RETAILER INCENTIVES AGAIN FAVOUR NATURAL DIAMONDS
0
CAGR -1.9%
CAGR 3%
1,000
2,000
3,000
4,000
5,000
Dec 18 Dec 19 Dec 20 Dec 21
1ct natural
2ct LGD
Dec 22 Dec 23
Source: De Beers Group (May 2024), www.debeersgroup.com.
1. Loose stone sales. Calculations based on D-I, FL-SI round diamonds. Diamonds with unknown
properties (carat, colour, clarity) excluded from denominators. Data to end of Feb 2024.
Data is based on ERA independent US Point-of-Sales data. Results shown are for ~950
retailers. Retailers are independents and small chains (2-3 doors) accounting for ~40%
of the US diamond value sales.
Av. annual absolute gross margin (US$) – loose stones1
Lab-grown diamonds
Lab-grown diamonds are a fast-growing segment, estimated by
industry expert Paul Zimnisky to currently account for 20% of
global diamond jewellery demand, noting that some of this is
incremental from buyers who would never have considered a
natural diamond. FY 2024 saw continued price divergence for
larger diamonds with the industry chasing remaining pockets
of margin as prices continued to decline due to the proliferation
of supply.
Sanctions & traceability
With the G7 strengthening its resolve on the ban of diamonds of
Russian origin, a phased import ban began from 1 March 2024,
initially requiring documentary evidence of origin for all rough
or polished diamonds weighing more than one carat.
However, there have been reports that buyers in Europe and
USA have been refusing to buy goods of any size without
confirmation of origin, which suggests the impact of the ban
is more wide-ranging. Further reports emerged soon after the
introduction of the ban that the Gokhran of Russia (Russia’s
state gemstone and precious metals repository) was purchasing
diamonds mined in Russia.
Our tenders enable buyers to identify the mine from which our
diamonds were mined. Petra continues to promote the GIA
Origin programme with its clients for use on single stones and
+2 carat gem/near gem diamonds. This has become popular
with South African clients and overseas clients purchasing blue,
yellow and D colour stones from Cullinan Mine in particular.
The programme enables customers to know a diamond’s origin
and know that it was mined responsibly and positively impacted
the local community.
Read more about the GIA Diamond Origin programme on its
website at: discover.gia.edu/diamond-origin.html
During the Year, the Company began trialling traceability
technologies to enable our clients to meet the more stringent
G7 import restrictions that require traceability technologies to
prove the origin of all diamonds weighing more than 0.5 carats.
This digital technology enables the tracing of natural diamonds
from source to consumer, offering the possibility of enabling the
mass market to be able to explore a diamond’s provenance for
the first time.
LGD DISPLACEMENT OF NATURAL DIAMONDS IN THE US
EXPECTED TO REDUCE (US$BN REAL)
2018
Natural diamond jewellery demand
LGD displacement of natural1
LGD separate category
2023 2030
44
56
64
43 54
7
1
6
9
0
10
20
30
40
50
Source: De Beers Group (May 2024), www.debeersgroup.com.
1. Absent sales of LGD, natural diamond jewellery demand would otherwise have been
US$50bn in 2023 and US$55bn in 2030.
60
70
Multichannel purchase
experience could
soonbe enhanced
byenabling purchasers
of retail jewellery
to understand the
uniqueness of a Petra
diamond and the
benefits it has created.
0
2,000
4,000
6,000
8,000
-100
-80
-60
-40
-20
0
MARKET PRICE DIVERGENCE BETWEEN 1CT LGD AND NATURAL DIAMONDS
1
US$/ct
Source: Paul Zimnisky shown as values for polished goods: www.paulzimnisky.com
LGD price discount vs. natural (%)
Q1 16
Q2 16
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
Q1 18
Q2 18
Q3 18
Q4 18
Q1 19
Q2 19
Q3 19
Q4 19
Q1 20
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
Q2 22
Q3 22
Q4 22
Q1 23
Q2 23
Q1 24
Q2 24
Q3 23
Q4 23
1ct LGD
1ct Natural LGD discount (%)
28
Petra Diamonds Limited Annual Report and Financial Statements 2024
1 2 3
Expanding upper and
middle class
India’s luxury market could expand
to 3.5 times current size by 2030
led by younger customers and an
expanding upper and middle class.
Above average growth
in millionaires
India is projected to see a 69%
growth in the number of millionaires
between 2022 and 2027 compared
to a 45% rise globally.
Luxury jewellery market
experiencing a surge in demand
India’s luxury jewellery market is
experiencing a surge in demand
as affluent consumers seek
traditional and intricately designed
pieces that showcase the
country’s rich cultural heritage.
Ultra-high-net-worth individuals worldwide
continue to grow
Despite a challenging economic backdrop, the
number of individuals with a net worth of at least
US$30 million has seen an increase of 4.2% this
Year and, by 2028, this is expected to increase
28.1%. Asia will lead the way with India (+50%),
mainland China (+47%), Malaysia (+35%) and
Indonesia (+34%). The US will also see a 33%
increase in newly wealthy people.
3.5x
Potential growth of India’s
luxury market by 2030, led
by younger consumers and
a growing upper and
middle class.
69%
Growth in number of
millionaires projected
between 2022 and
2027 vs. 45% globally.
The next big spenders
India’s economic growth has outperformed a slowing world.
According to Barclays, with the right policy mix, the economy
could become the largest contributor to global growth by the
end of this decade. Consumption already forms a bigger part of
the Indian economy (58%) than in most large consumer-led
economies. This, coupled with an expected surge in India’s
population, suggests the country’s consumption is primed for
significant growth and could reach the size of China’s current
consumption with an economy only c. 68% of China’s present size.
In fact, the Natural Diamond Council believes that India is
expected to lead global natural diamond demand in 2024 due
to its strong financial position and changing demographics.
Forevermark has also said it will refocus on India due to the
growing consumer market for diamonds.
India, with its rich heritage and celebratory culture, could become
the next big spender in the diamond market.
65+
50-64
25-49
15-24
5-14
0-4
300 200 100 0 100 200 300
Female
Male
INDIA: AGE DISTRIBUTION BY 2030, BY GENDER AND AGE GROUP
(MILLION PERSONS)
Source: Barclays Research.
29
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
MARKET REVIEW / CONTINUED
Our flexible approach to sales
Our typical sales process
Petra adopts a flexible approach to diamond sales in order to
achieve the best possible route to market, subject to prevailing
market conditions. South African goods are prepared for sale
(cleaned and sorted) and sold at tenders in South Africa while
goods from our Tanzanian mine, Williamson, are sold at tenders
in Antwerp. We offer up to 10% of our rough production to the
State Diamond Trader in South Africa, with fair market pricing
verified by the Government Diamond Valuator.
We carry out sales in-house through a competitive tender
process which allows us to achieve the best possible price at the
time. Our product mix is highly sought-after and attracts a wide
range of clients which stimulates bidding. When diamonds are
sold, they are separately grouped per source mine, providing
clear provenance for purchasers. High-value stones are sold
as individual lots and may be subject to an independent
sales process. Where we consider that bids do not match our
expectations of value, we may propose sharing any profits
generated through cutting and polishing with our customers
on a 50:50 basis, through our Partnership Stones programme,
or withhold the sale until a future date.
We have the world’s third-largest
diamond resource
We have the world’s third-largest diamond resources which,
combined with the significant size of our orebodies, suggests
there is significant potential to extend the lives of our mining
operations through further development.
Reserves and resources (100% interest basis)
1
Resources,
M&I,I
(Mcts)
Reserves
(Mcts)
Alrosa 1,064 628
De Beers 855 359
Petra 219 28
1. Company data.
Exceptional Stones and Cullinan Mine’s legacy
Petra’s mines produce some of the world’s most beautiful
and rare diamonds. Cullinan Mine is believed to produce
80% of the world’s blue diamonds and is a renowned
producer of high-quality Type IIa white diamonds. Following
the closure of Argyle, Williamson has become one of
the world’s most reliable sources of pink diamonds. No
Exceptional Stones were recovered in FY 2024 or FY 2023.
In September 2023, Petra decided to update its definition
of Exceptional Stones as being rough diamonds that sell for
US$15 million or more, a threshold which more accurately
depicts the rarity and exceptional nature of these high-
value stones. The last stone recovered under this definition
was a 39.3ct Type IIb blue diamond mined at Cullinan Mine
which sold for US$40.2 million in FY 2022, believed to be
the highest price per carat ever paid for a rough diamond.
Cullinan Mine has a legacy spanning over a century and
is one of the world’s most famous diamond mines, having
produced the largest gem diamond ever at 3,106 carats
and other infamous diamonds such as the Great Star of
Africa, the Taylor Burton and the Oppenheimer Blue which
sold at auction for US$57.5m in May 2016, making it the
most expensive diamond sold at auction.
A typical year (in FY 2024 there were seven tenders)
JUL AUG SEP
H1 H2
OCT NOV DEC JAN FEB MAR APR MAY JUN
1 2 3 4 5 6
A 39.3 carat blue diamond mined at Cullinan Mine and sold
for US$40.2m
30
Petra Diamonds Limited Annual Report and Financial Statements 2024
Snap Lake
Diavik Ekati
Gahcho Kué
Victor
Renard
Miba
Williamson
Catoca
Murowa
Karowe,
Orapa,
Jwaneng,
Letlhakane
Ghaghoo
Venetia,
Koffiefontein
Cullinan,
Finsch,
Kimberley
Underground
Letšen
Liqhobong
Udachniy
Jubilee
Aikhal
Zarnitsa
Komsomolsky
Botuobinsky
Nyurbinsky
International
Mir
Grib
Argyle
Ellendale
Attractive supply & demand fundamentals
The number of producing diamond mines globally continues to contract
Key
1
1. List of diamond mines is not exhaustive.
Producing mine
Producing mine with mine life
of <5 years
Placed on care and maintenance
or uncertain future
Mine now closed
NATURAL DIAMOND ANNUAL DEMAND GROWTH OF 3% TO 2030
1
RoW CAGR +1%
India CAGR +10%
China CAGR +3%
US CAGR +2%
ChinaUS2023 2030Rest of WorldIndia2022
Source: De Beers Group (May 2024), www.debeersgroup.com.
1. Natural diamond jewellery demand, converted to polished wholesale price (PWP) at 2023 prices. 2022 demand of US$28.9bn equates to nominal US$27.6bn.
Numbers may not add up due to rounding.
(0.2)
2.7
0.5
28.9
25.2
2.4
7
2.8
13.0
2.3
31.1
7.3
5.5
15.5
2.8
Diamond demand by region,
PWP real (US$bn)
NATURAL DIAMOND SUPPLY IS EXPECTED TO FALL1
2023
10
15
20
2024 2025
Renard
(Canada)
closure
Luele
(Angola)
ramp-up
Venetia
underground
(South Africa)
ramp-up
Canadian mine closures
Russian mine declines
Russian mine closures
Mir underground (Russia) restart
Jwaneng underground (Botswana) ramp-up
CAGR -1%
Diavik
(Canada)
closure
2024
market-driven
production cuts
2026 2027 2028 2029 2030 2031 2032 2044 2034 2035 2036 2037 2038 2039 2040
Rough production (US$bn)
Source: De Beers Group (May 2024), www.debeersgroup.com.
1. Constant DB Index prices 2023.
31
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
Production
Total tonnes treated at a Group level increased to 11.7 Mt
compared to 9.0 Mt in FY 2023 which largely reflects the early
restart and successful ramp-up of Williamson. Cullinan Mine’s
production was essentially flat year-on-year, while Finsch’s fell
14% due to tunnel availability challenges relating to the depletion
of the Upper Block 5 Sub-level cave (SLC) together with the
planned transition to a two-shift, five-day configuration from
Q4 FY 2024.
Grade performance was variable across operations, with
Cullinan Mine and Williamson falling 8% and 11% year-on-year,
respectively. At Cullinan Mine, lower grades related to dilution
caused by waste ingress associated with the maturity of the
C-Cut block cave. This was exacerbated by capital deferrals
which slowed development that would have accessed fresh ore
from new production blocks. At Williamson, the drop was due
to anticipated grade variations in the orebody although grades
were 9% above expectations given replanning work that
followed the TSF failure. Finsch’s grades improved through FY
2024 with better recoveries due to lower dilution and renewed
focus on operational stability following the transition from
continuous operations to a two-shift, five-day configuration.
OPERATIONAL REVIEW
Focused on safe, reliable production
Diamond production increased slightly from FY 2023,
benefitting from the successful ramp-up at Willamson.
Rough diamond production (KPI)
Overall Group diamond production for the Year came in at
2.73Mcts, just below the lower end of guidance. This was largely
a result of production volatility at Finsch caused by the maturity
and depletion of the Upper Block 5 SLC and a combination
of lower run-of-mine (ROM) grades coupled with lower than
expected tailings tonnes treated at Cullinan Mine. Lower ROM
grades at Williamson were a function of grade variances in the
orebody which were partially mitigated by the replanning work.
LTIFR and LTI (KPI)
Safety is Petra’s number one priority and our approach to health
and safety is focused on identifying, mitigating and managing
risk in order to prevent harm to our people, visitors, equipment
and the broader environment. We are focused on integrating
industry best practices around health and safety awareness into
our approach to doing business.
In particular, behavioural-related accidents have resulted in
Petra, in line with our Petra Culture Code, placing considerable
focus on key initiatives to enhance safety performance and
promote a positive mindset, ensuring a healthy and safe working
environment.
Production and capital expenditure summary
1
Unit FY 2024 FY 2023 Variance
Production
ROM diamonds Carats 2,593,471 2,517,3 0 9 3%
Tailings diamonds Carats 136,389 149,216 -9%
Total diamonds Carats 2,729,861 2,666,525 2%
Tonnages treated
ROM tonnes Mt 11,325,340 8,637,232 +31%
Tailings tonnes Mt 369,546 399,877 -8%
Total tonnes Mt 11,694,886 9,037,109 +29%
Adjusted mining and processing costs US$m 296 202 +47%
Capex
Extension US$m 55 72 -24%
Stay in business US$m 29 45 -36%
Total US$m 84 117 -28%
1. Numbers may not add up due to rounding.
32
Petra Diamonds Limited Annual Report and Financial Statements 2024
Following a renewed safety focus on remedial actions and
behaviour-based intervention programmes, we saw a significant
improvement in our safety performance for the Year following a
small regression in FY 2023, with our lost time injury frequency
rate (LTIFR) reducing by 33% from 0.24 in FY 2023 to 0.16 in FY
2024. Lost time injuries (LTI) were reduced by 41% from 17 in the
FY 2023 to 10 in FY 2024.
We were also pleased to celebrate 7 fatality-free years and
continue to pursue health and wellbeing programmes to support
our culture and performance. We continually focus on providing a
zero harm working environment and we will make every effort to
reduce the risk of harm in the workplace.
Reserves and resources
As at 30 June 2024, the Group’s gross diamond resources
(inclusive of reserves) decreased 1.9% to 218.97 Mcts (30 June
2023: 223.17 Mcts), predominantly due to depletion resulting
from ore mined at all our operations in FY 2024. The Group’s
gross diamond reserves decreased 2.0% to 27.78 Mcts (30 June
2023: 28.85 Mcts) primarily due to mining depletions and
changes in mine plans driven by curtailment of capital
expenditure on life-of-mine (LOM) extensions at Cullinan Mine
and Finsch. These changes included the addition of future
mining areas at Cullinan Mine (C-Cut Phase 2) and at Finsch (81
Level) as well as the revision of existing and future production
areas already included in reserves and FY 2023 LOM planning.
Internal restructuring and five-year wage agreement
During the Year, the Company underwent an internal
restructuring exercise to adapt its cost base in response to a
lower-for-longer price environment and in recognition of the
reduced size of the business. The reduced size reflects
Koffiefontein being placed on care and maintenance in CY 2022,
with entry into an agreement for its sale announced on 8 April
2024, and the anticipated reduction in Petra’s holding in
Williamson. As a consequence, the Company reduced the
headcount of its head office and decentralised certain functions
to each South African operation, which included Juan Kemp
assuming the newly-created role of Operations Executive,
Cullinan Mine and Jaison Rajan assuming the newly-created role
of Operations Executive, Finsch Diamond Mine. This also saw the
creation of a Planning and Corporate Development Executive
role with oversight of planning and development of Petra’s
operations. Further headcount reductions occurred at Finsch
related to the rebasing of its production to 2.2 Mtpa and the
related move to a reduced shift pattern.
Towards the end of the Year, Petra concluded five-year wage
agreements with the National Union of Mineworkers (NUM)
covering its South African operations for the period from 1 July
2024 to 30 June 2029. This allows for continued certainty on
fixed labour costs at our SA operations and enables Petra to
focus on operational delivery. Further cost predictability was
added through the entry into two long-term Power Purchase
Agreements in May 2024 which are expected to provide c.
36-72% of the expected electrical load requirements at the
Cullinan and Finsch Mines from renewable energy from FY 2026.
Revised life-of-mine planning
As part of our efforts to ensure free cashflow generation through
the price cycle, a significant amount of time was spent on
reconfiguring our mine plans to optimise production whilst
smoothing the capital profile of our projects. Through this work,
and the internal restructuring mentioned above, we are targeting
a sustainable reduction in operating costs of US$44 million per
annum (US$30 million at our SA operations and US$14 million at
Willamson) from FY 2025 onwards and for capex to be smoothed
to c. US$100 million per annum at our SA operations. More on this
can be found on pages 23 and 24.
Focus for FY 2025
At an operating level, safe and reliable production remains a key
focus. Further operating stability and an improvement in ROM
grades is expected at Finsch as a result of better draw control,
accessing fresher ore at 78-Level Phase II with the majority of
tunnels commissioned by the end of June 2024. The change to a
two-shift, five-day configuration is intended to align resourcing
levels with a 2.2 Mtpa production capacity. This, together with
the introduction of a non-production “preparation shift” for the
first 5 hours of the day that will focus on planned maintenance,
is aimed at more predictable and stable operations.
At Cullinan Mine, the focus is to transition from producing only
from the C-Cut block cave to producing from a combination of
the block cave and the CC1E SLC and the successful ramp-up of
SLC production. At Williamson, the focus is on waste stripping to
provide sufficient access to the orebody to maintain the LOM
plan and to provide materials for construction of the new TSF
which commenced in Q1 FY 2025.
33
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
Cullinan Mine
Renowned for many famous diamonds and
producing very rare and highly valuable
Type IIb blue diamonds and large
high-quality Type IIa white diamonds.
GROSS RESOURCES
(MCTS)
142.25
FY23: 145.09
CARBON EMISSIONS
(TCO
2
-E/CT)
0.16
FY23: 0.16
LTIFR
0.27
FY23: 0.47
EMPLOYEES AND
CONTRACTORS
1,460
FY23: 1,827
WATER EFFICIENCY
(M
3
/T)
0.04
FY23: 0.04
Mining method:
Underground block
cave and sub-level cave
Mine plan:
Self-funded to early 2040s
with further life-of-mine
extension opportunities
Juan Kemp
Operations Executive – Cullinan Mine
Cullinan Mine saw a small 3% increase in tonnes mined from
FY2023 at the upper end of guidance of between 4.3 to 4.5 Mt.
ROM grades, however, were below expectations due to waste
ingress associated with the C-Cut cave maturity. Several mitigating
actions were undertaken to address the underperformance,
including maximising tailings treatment and the re-opening of
Tunnels 36 and 41. However, tailings treatment tonnes were
below expectations and ROM grades were affected by capital
curtailment which delayed the contribution of fresh ore from
newdevelopment and production blocks. As a result, there was
increased reliance on the diluted ROM ore from the C-Cut to
meet production targets.
Five-year guidance period and beyond
The graph to the right illustrates the currently approved mine
plan and future self-funded extension opportunities. The smooth
capital development profile results in production stepping down
to 3.5–3.7 Mtpa from FY 2027 onwards with carat production
increasing to over 1.4 Mcts from FY 2028 as higher grade and
fresher orebodies are accessed in the eastern part of the mine.
The approved mine plan comprises completing the development
of CC1E, C-Cut Ext 1 & 2 and a new ventilation shaft which will
also enable future life extensions. Total extension capital over
the five-year period is anticipated to be between US$205-225
million and deliver an IRR of above 20%.
Beyond the five-year guidance period, Cullinan Mine has
significant potential, with a further c. 9.6 Mcts that can be mined
from the CC1E Phase II and C-Cut Ext 3 orebodies which would
require construction of a new TSF. Indicative capital for these
projects is expected to be between US$185-205 million and
deliver an IRR of above 20%.
OPERATIONAL REVIEW / CONTINUED
34
Petra Diamonds Limited Annual Report and Financial Statements 2024
CULLINAN MINE MEDIUM-TERM LOM PROFILE TO EARLY FY 2040S SHOWING BASE CASE AND FUTURE EXTENSION
POTENTIAL
0
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
FY 2030
FY 2031
FY 2032
FY 2033
FY 2034
FY 2035
FY 2036
FY 2037
FY 2038
FY 2039
FY 2040
FY 2041
FY 2042
FY 2043
FY 2044
FY 2045
FY 2046
ROM tonnes (million)
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
A new ventilation shaft to be operational by
FY 2029 (enables future life extensions) –
capital to start from FY 2026/27
Approved life-of-mine
A phased new TSF to be operational from
FY 2033 (enables future life extensions) –
capital to start from FY 2031/32
Future extension
potential
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
ROM carats (million)
C-Cut CC1E PhI C-Cut Ext 1 & Ext 2
CC1E PhII C-Cut Ext 3 Total carats recovered (RHS)
FY 2024 performance
FY 2024 FY 2023 Variance
Sales
Revenue (US$m) 189 182 +4%
Diamonds sold (carats) 1,633,456 1,306,457 +25%
Average price per carat (US$) 116 139 -17%
Total production
Tonnes treated (tonnes) 4,866,990 4,728,970 +3%
Diamonds produced (carats) 1,404,791 1,485,846 -5%
Grade
1
ROM (cpht) 28.2 30.7 -8%
Tailings (cpht) 36.9 40.5 -9%
Operating profit
2
(US$m) (10) 47 n/a
Costs and Capex
On-mine cash cost per total tonne treated (ZAR/t) 356 332 +7%
Total Capex (US$m) 48 53 -9%
1. Petra 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.
2. Operating profit includes depreciation of US$45 million (FY 2023: US$54 million) and impairment losses of US$33 million (FY 2023: US$nil).
35
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
Finsch
Renowned for highly commercial diamonds
of +5 carats and rich gem-quality
smaller diamonds together with large
and very rare fancy yellow diamonds.
GROSS RESOURCES
(MCTS)
34.32
FY23: 35.35
CARBON EMISSIONS
(TCO
2
-E/CT)
0.13
FY23: 0.14
LTIFR
0.22
FY23: 0.22
EMPLOYEES AND
CONTRACTORS
1,813
FY23: 1,880
WATER EFFICIENCY
(M
3
/T)
1.21
FY23: 0.98
Mining method:
Underground
sub-level cave
Mine plan:
Self-funded to
late 2030s
Jaison Rajan
Operations Executive – Finsch Diamond Mine
Finsch’s tonnes mined dropped 14% year-on-year to 2.1 Mt while
carat production dropped by only 3% to 1.0 Mcts owing to higher
ROM grades. Early in the Year, Finsch suffered from tunnel
availability issues in the mature Upper Block 5 SLC with mitigating
actions taken to improve draw control that saw an improvement
in ROM grades. Issues that occurred with Finsch’s winder in the
third quarter also contributed to lower mined tonnes and the
issue has now been fully resolved. Grade improvements were
seen from March 2024 with mining commencing in the 78-Level
Phase II which resulted in dilution from waste rock reducing to
more normal levels. The phased ramp-up of 78-Level Phase II
should be fully complete in Q1 FY 2025. The rebasing of
production to a 2.2 Mtpa operation is expected to have multiple
benefits, including facilitating more proactive and longer-term
maintenance programmes, enabling a smoothed concurrent
development Capex profile and reducing risks with regards to
truck loop and materials handling and through rationalising
equipment.
5-year guidance period and beyond
The graph to the right illustrates the currently approved mine
plan as well as future self-funded extension opportunities. With
a smaller orebody than Cullinan Mine and Williamson, Finsch’s
mine life is more limited, although no account is currently made
of the potential of the South West Precursor. The approved mine
plan includes development of 81L (new level added) as well as
completing the deferred 86-90L 3L-SLC project, with remaining
capital expected to between US$150-165 million. Future
extension potential could see Finsch continue mining to the late
2030s to the 100 level, though this requires further sampling and
resource work. Importantly, it is unlikely that any new
infrastructure will be required.
OPERATIONAL REVIEW / CONTINUED
36
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINSCH EXTENDED LOM PROFILE TO FY 2037 SHOWING BASE CASE AND FUTURE EXTENSION
POTENTIAL
0
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
FY 2030
FY 2031
FY 2032
FY 2033
FY 2034
FY 2035
FY 2036
FY 2037
FY 2038
ROM tonnes (million)
0.5
1.0
1.5
2.0
2.5
Approved life-of-mine
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
ROM carats (million)
Future extension
potential
Upper Block 5 (up to 78L) 3L-SLC (86-90L) 81L
92L-100L Total carats recovered (RHS)
FY 2024 performance
FY 2024 FY 2023 Variance
Sales
Revenue (US$m) 120 93 28%
Diamonds sold (carats) 1,227,409 848,236 +45%
Average price per carat (US$) 98 110 -11%
Total production
Tonnes treated (tonnes) 2,096,730 2,478,764 -15%
Diamonds produced (carats) 1,001,636 1,040,164 -4%
Grade
1
ROM (cpht) 47.8 42.5 +12%
Tailings (cpht) — 13.8 —
Operating profit
2
(US$m) (65) 63 n/a
Costs and Capex
On-mine cash cost per total tonne treated (ZAR/t) 744 576 +29%
Total Capex (US$m) 25 43 -42%
1. Petra 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.
2. Operating profit includes depreciation of US$30 million (FY 2023: US$20 million) and impairment losses of US$45 million (FY 2023: US$53 million reversal of impairments).
37
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
Williamson
Renowned for ‘bubble gum’ pink diamonds and
rounded white diamonds of high quality.
GROSS RESOURCES
(MCTS)
37.17
FY23: 37.50
CARBON EMISSIONS
(TCO
2
-E/CT)
0.15
FY23: 0.23
LTIFR
0.00
FY23: 0.00
EMPLOYEES AND
CONTRACTORS
988
FY23: 989
WATER EFFICIENCY
(M
3
/T)
1.14
FY23: 1.86
Mining method:
Open pit
Mine plan:
To 2030 reflecting remainder of
Special Mining Licence
Further life-of-mine extension
opportunities beyond
Ayoub Mwenda
Country and Mine Manager: Tanzania
Williamson restarted production in July 2023 ahead of schedule,
followed by a steady ramp-up through the Year. ROM grades,
while down 11% on FY 2023, were 9% above expectations, having
benefitted from replanning related to the production ramp-up
after the stoppage linked to the TSF failure. This enabled access
to higher-grade ore which was originally scheduled for FY 2025.
The Williamson grade profile is not homogenous and is governed
by the rate of mining and stripping and which areas can be
opened up for production at any given time.
Five-year guidance period and beyond
As one of the largest kimberlites in the world, open pit mining
has the potential to continue until at least 2040. During the
five-year guidance period, ROM production is expected to
remain steady at between 5.4 and 5.6 Mt, producing between
360 and 400 kcts per annum, with no additional extension
capital expected before 2030.
OPERATIONAL REVIEW / CONTINUED
FY 2024 performance
FY 2024 FY 2023 Variance
Sales
Revenue (US$m) 57 49 +16%
Diamonds sold (carats) 297,915 175,124 +70%
Average price per carat (US$) 191 280 -32%
Total production
Tonnes treated (tonnes) 4,731,166 1,829,376 +159%
Diamonds produced (carats) 323,434 140,516 +130%
Grade (cpht) 6.8 7.7 -11%
Operating profit/(loss)
1
(US$m) (19) (65) +70 %
Costs and Capex
On-mine cash cost per total tonne treated (US$/t) 13 24 -46%
Total Capex (US$m) 10 19 -47%
1. Operating profit/(loss) includes depreciation of US$14 million (FY 2023: US$8 million) and impairments of US$nil (FY 2023: US$31 million).
38
Petra Diamonds Limited Annual Report and Financial Statements 2024
The Company or the Group) manages one of the world’s largest diamond resources of c. 219 million carats (Mcts). This major resource
implies that the potential mine lives of Petra’s core assets could be considerably longer than the current mine plans in place at each
operation, or could support higher production rates.
Gross resources
As at 30 June 2024, the Group’s gross diamond resources (inclusive of reserves) decreased 1.9% to 218.97 Mcts (30 June 2023:
223.17 Mcts), predominantly due to depletions resulting from to ore being mined at all our operations in FY 2024.
Gross reserves
The Group’s gross diamond reserves decreased 2.0% to 27.78 Mcts (30 June 2023: 28.85 Mcts) primarily due to mining depletions
and changes in mine plans driven by curtailment of capital expenditure on LOM projects at Cullinan Mine and Finsch. These changes
included the addition of new mining areas at Cullinan Mine (C-Cut Ext 2) and at Finsch (81 Level), as well as the revision of existing and
future production areas already included in reserves and FY 2023 LOM planning. The following table summarises the gross reserves
and resources status of the combined Group operations as at 30 June 2024.
FY 2024 Resource statement
Category
Gross
Tonnes
(millions) Grade (cpht)
Contained
diamonds
(Mcts)
Reserves
Proved — — —
Probable 94.5 29.4 27.78
Subtotal 94.5 29.4 27.78
Resources
Measured — — —
Indicated 306.2 47.1 144.37
Inferred 1,281.9 5.8 74.60
Subtotal 1,588.1 13.8 218.97
Cullinan Mine
Category
Gross
Tonnes
(millions) Grade (cpht)
Contained
diamonds
(Mcts)
Reserves
Proved — — —
Probable 42.9 32.6 13.96
Subtotal 42.9 32.6 13.96
Resources
Measured — — —
Indicated 210.2 59.5 125.06
Inferred 169.5 10.1 17.19
Subtotal 379.7 37.5 142.25
1. Resource bottom cut-off: 1.0mm.
2. Reserve bottom cut-off: 1.0mm.
3. B-Cut Resource tonnes and grade are based on block cave depletion modelling using
Geovia PCBC software and include external waste. A portion of the Resources in these
remnant blocks report into the current caving operations as low-grade dilution.
4. C-Cut Resource stated as in-situ.
5. Reserves are based on scheduling using Geovia PCBC software on the C-Cut Phase I
and C-Cut Phase II block caves, and Geovia PCSLC software for the CC1E sub-level cave.
6. Factorised grades and carats are derived from a calculated Plant Recovery Factor
(PRF). These factors account for the efficiency of sieving (bottom cut-off), diamond
liberation and recovery in the ore treatment process.
7. The PRF has been revised in line with the current Resource model and production
plant. The PRFs currently applied for the new mill plant per rock type are: Brown
kimberlite = 73.8%, Grey kimberlite = 67.9%, Black kimberlite = 70.6% and Coherent
kimberlite = 68.0%.
8. US$/ct values of 120-140 for ROM, excluding exceptional stones, and US$/ct values of
50-70 for tailings (with reference to FY 2024 sales, diamond price modelling and
production size frequency distributions).
Finsch
Category
Gross
Tonnes
(millions) Grade (cpht)
Contained
diamonds
(Mcts)
Reserves
Proved — — —
Probable 18.6 61.9 11.4 8
Subtotal 18.6 61.9 11.4 8
Resources
Measured
Indicated 21.8 69.8 15.24
Inferred 40.6 47. 0 19.08
Subtotal 62.4 55.0 34.32
1. Resource bottom cut-off: 1.0mm.
2. Reserve bottom cut-off: 1.0mm.
3. Block 4 Resource tonnes and grade are based on block cave depletion modelling and
include external waste. A portion of this remnant Resource reports into the current
caving operations as low-grade dilution.
4. Pit scaling and waste ingress have been included in the Reserve models.
5. Block 5 and Block 6 Resource stated as in-situ.
6. Reserves are based on sub-level cave scheduling using Geovia PCSLC software.
7. US$/ct values of 90–110 for ROM (with reference to FY 2024 sales, diamond price
modelling and production size frequency distributions).
39
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
OPERATIONAL REVIEW / CONTINUED
Koffiefontein
Category
Gross
Tonnes
(millions) Grade (cpht)
Contained
diamonds
(Mcts)
Reserves
Proved — — —
Probable — — —
Subtotal — — —
Resources
Measured
Indicated 16.0 8.0 1.28
Inferred 121.3 3.3 3.96
Subtotal 137.4 3.8 5.24
1. Resource bottom cut-off (Koffiefontein underground and Ebenhaezer): 1.15mm.
2. Main Pipe resources above 490L are remnants of the front cave mining block and
include external waste. A portion of this remnant Resource reports into the current
caving operations as low grade dilution.
3. Resources below 490L are stated as in-situ.
4. US$/ct values of 380-430 for ROM (based on FY 2023 sales results and production
size frequency distributions, adjusted for current market conditions).
Williamson
Category
Gross
Tonnes
(millions) Grade (cpht)
Contained
diamonds
(Mcts)
Reserves
Proved — — —
Probable 33.0 7.1 2.34
Subtotal 33.0 7.1 2.34
Resources
Measured
Indicated 58.1 4.8 2.80
Inferred 950.5 3.6 34.37
Subtotal 1,008.6 3.7 37.17
1. Resource bottom cut-off: 1.15mm.
2. Reserve bottom cut-off: 1.15mm.
3. Resource depletions based on the June 2023 surveyed pit surface.
4. Reserves are stated to the end of the Special Mining Licence in 2030.
5. Reserves are based on a production rate of 5.5 Mtpa using open pit planning and
scheduling software.
6. US$/ct values of 190-240 for ROM (with reference to FY 2024 sales, diamond price
modelling and production size frequency distributions).
General notes on reporting criteria
1. Resources are reported inclusive of Reserves.
2. Tonnes are reported as millions; contained diamonds are reported per million carats (Mcts).
3. Tonnes are metric tonnes and are rounded to the nearest 100,000 tonnes; carats are rounded to the nearest 10,000 carats;
rounding off of numbers may result in minor computational discrepancies.
4. Resource tonnages and grades are reported exclusive of external waste, unless where otherwise stated.
5. Reserve tonnages and grades are reported inclusive of external waste, mining and geological losses and plant modifying factors;
reserve carats will generally be less than resource carats on conversion and this has been taken into account in the applicable
statements.
6. Reserves and Resources have been reported in accordance with the South African code for the reporting of mineral reserves and
mineral resources (SAMREC 2016).
7. The Petra FY 2024 Resource Statement as shown above is based on information compiled internally within the Group under the
guidance and supervision of Andrew Rogers, Pr. Sci. Nat. (reg. No. 120664). Andrew Rogers has 24 years’ relevant experience in
the diamond industry and is a full-time employee of Petra.
8. All Reserves and Resources have been independently reviewed and verified by John Kilham, Pr. Sci. Nat. (reg. No. 400018/07),
a competent person with 44 years’ relevant experience in the diamond mining industry, who was appointed as an independent
consultant by the Company for this purpose.
40
Petra Diamonds Limited Annual Report and Financial Statements 2024
Non-financial and sustainability information disclosures
Petra’s commitment
As a Bermuda incorporated company, Petra is not subject to the UK Companies Act, and to the non-financial reporting requirements
contained in sections 414CA and 414CB. However, in light of our listing on the Main Market of the London Stock Exchange, and
recognising the importance of good governance and a high standard of disclosure, we set out our non-financial and sustainability
information disclosures statement below.
The table below outlines our principal policies, risks and KPIs in relation to key non-financial and sustainability matters. The location
of further relevant information and outcomes is provided on the pages highlighted below and is incorporated into this statement by
cross reference.
Matter and policies Principal risks Non-financial KPIs Outcomes
Environment
• Environmental Policy Statement: sets out Petra’s commitments to
a sustainable environment through the effective management of
strategic environmental risks and opportunities
• Climate change Position Statement: sets out Petra’s climate change
commitments, including our GHG emission reduction targets, and the
steps we are taking to mitigate the impact of climate change risks on
our business
• Tailings Management Policy: sets out Petra’s commitment to
continually improving the safety and environmental performance
of its tailings storage facilities and how it achieves its performance
objectives for its tailing storage facilities in alignment with the GISTM
• Environment (page 62)
• Climate change (page 63)
• Licence to operate – regulatory
and social impact and community
relations (page 60)
• Embedding sustainability See pages
7, 42-43, 45
and 47
Climate related financial disclosures
• Climate Change Position Statement: see the description set out above
• TCFD Statement: as an issuer on the Main Market of the LSE, Petra
is required to annually prepare a TCFD statement. The content of
this statement is substantially aligned to the requirements of section
414CB of the UK Companies Act.
• Climate change (page 63) • Embedding sustainability See pages
52-55 (TCFD
Statement)
People
• Code of Ethical Conduct: sets out the conduct and behaviours that
are expected from all of our staff and business partners
• Diversity and Inclusion Policy: sets out Petra commitments to
promoting an organisational culture that values a diverse and
inclusive workforce
• Whistleblowing Policy: sets out processes for reporting any concerns
and ensures those that raise good faith concerns are protected from
reprisal or victimisation
• Safety (page 62)
• Labour relations (page 61)
• Licence to operate – regulatory
and social impact and community
relations (page 60)
• Creating a safe working
environment
• Embedding sustainability
See pages 7,
42-43, 45
and 46
Social and community
• Code of Ethical Conduct: see the description set out above
• Social and Labour Plans for the Cullinan, Finsch and Koffiefontein
Mines: set out our commitments for each of our South African mines
on a range of social, labour and community issues over a five-year
cycle, as required by the MPRDA
• Stakeholder Engagement and Management Policy: sets out who our
stakeholder categories are and a framework for how we interact and
manage our relationships with them
• Licence to operate – regulatory
and social impact and community
relations (page 60.
• Embedding sustainability See pages 7,
42-43, 45
and 46
Respect for Human Rights
• Human Rights Policy Statement: sets out Petra’s commitment to
conduct its business in a manner which respects the human rights
and dignity of all people and in a way which is honest, fair and lawful
• Code of Ethical Conduct: see the description set out above
• Modern Slavery Transparency Statement: outlines the steps which
Petra has taken to address modern slavery and human trafficking
risks throughout its supply chain
• Licence to operate – regulatory
and social impact and community
relations (page 60)
• Embedding sustainability See pages 7,
42-43, 45
and 46
Anti-corruption and anti-bribery
• Code of Ethical Conduct: see the description set out above
• Public Officials Expenditure Policy: ensures that all expenditure
related to Public Officials complies with applicable laws and is for a
legitimate business purpose
• Declaration of Interest Policy: identifies and mitigates actual and
potential conflicts of interest across Petra
• Whistleblowing Policy: see the description set out above
• Licence to operate – regulatory
and social impact and community
relations (page 60)
• Embedding sustainability See pages 7,
42-43, 45
and 88
Our business model is set out on
page 5
The non-financial KPIs highlighted above, that are used to monitor our progress, are detailed on pages 42 and 43.
Further information, including the key policies and documents set out above, is available on our website at
https://www.petradiamonds.com/sustainability/policies-important-information/
41
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
KEY PERFORMANCE INDICATORS
How we measure success
Petra uses a wide range of financial and non-financial metrics that are linked to our
strategic objectives to help evaluate the performance of the business. The following
KPIs are considered by management to be the most important.
Production and development
Generating free cashflow
Rough diamond production (Mcts)
The number of diamonds
recovered from Group operations.
Link to remuneration
pages 103-107
Link to governance (risks)
pages 61 and 63
Read more on
page 32
3.3
3.2
3.3
2.7 2.7
20 2221 23 24
FY 2024 target
2%
Value drivers
Reliable production
Revenue (US$m)
Revenue from rough diamond and
partnership sales.
Link to remuneration
pages 103-107
Link to governance (risks)
pages 59-60
Read more on
page 14
243
407
564
325
367
20 2221 23 24
13%
Value drivers
Free cashflow generation
Adjusted EBITDA
1,2
(US$m)
Earnings before interest, tax, depreciation
and amortisation.
–
Link to governance (risks)
pages 59-60
Read more on
page 15
67
130
278
113
66
20 2221 23 24
-42%
Value drivers
Free cashflow generation
Operational free cashflow
1,2
(US$m)
Cash generated from operations less
acquisition of property, plant and equipment.
Link to remuneration
pages 103-107
Link to governance (risks)
pages 59-60
Read more on
page 16
-12
20 2221 23 24
120
230
-66
43
165%
Value drivers
Free cashflow generation
Capital expenditure
1,2,3
(US$m)
Capital expenditure incurred by the
operations, comprising extension and
sustaining Capex.
Link to remuneration
pages 105-107
Link to governance (risks)
page 63
Read more on
pages 17 and 24
29
23
52
117
84
20 2221 23 24
FY 2024 target
-28%
Value drivers
Investment in future cashflow
Delivering returns to shareholders
Total shareholder return (% change)
Share price performance.
Link to remuneration
pages 103 and 107
Link to governance (risks)
pages 60, 62 and 65
Read more on
page 17
-91
-21
21.8
-25.1
-40
20 2221 23 24
FY 2024 target
-40%
Value drivers
Lower cost of capital
Notes:
1. All Alternative Performance Measures (APMs) used are defined on page 219.
2. During FY 2023, Koffiefontein was placed on care and maintenance activities in the run-up to a responsible closure. Koffiefontein is classified as a
discontinued operation in FY 2023 and FY 2024 in terms of IFRS 5.
3. Excluding capitalised borrowing costs.
4. Certain environmental figures for FY 2021 relating to Petra’s carbon emissions and water consumption have been restated further to the independent
verification of the Company’s 2021 GHG inventory by TikoTech.
5. Includes Koffiefontein.
Increase Decrease No change
42
Petra Diamonds Limited Annual Report and Financial Statements 2024
Embedding sustainability
Consolidated net debt: Adjusted
EBITDA
1,2
(x)
Ratio of consolidated net debt to Adjusted
EBITDA for the relevant 12-month period.
–
–
Read more on
page 18
10.8
1.75
0.15
1.6
3.0
20 2221 23 24
FY 2024 target
88%
Value drivers
Embedding sustainability
Carbon emissions
4,5
(TCO
2
-E/CT)
Carbon emissions intensity for Scope 1 and 2.
Link to remuneration
pages 103-107
Link to governance (risks)
page 63
Sustainability Report
page 14
0.134
0.126
0.139
0.164
0.155
20 2221 23 24
FY 2024 target
-5%
Value drivers
Embedding sustainability
Water efficiency
4,5
(M
3
/T)
Total fresh water used in production
(ROM plus tailings) per tonne treated.
Link to remuneration
pages 103-107
Link to governance (risks)
page 62
Sustainability Report
page 14
0.97
0.55
1.00
0.61
0.70
20 2221 23 24
FY 2024 target
15%
Value drivers
Embedding sustainability
Staff turnover
5
(%)
Staff and fixed term contractors’
voluntary turnover.
–
Link to governance (risks)
page 61
Sustainability Report
page 45
2.7
3.8
3.5
3.7
2.4
20 2221 23 24
FY 2024 target
-35%
Value drivers
Embedding sustainability
Training expenditure
5
(US$m)
Investment in employee training
and development.
–
Link to governance (risks)
page 61
Sustainability Report
page 14
5.8 5.8
6.1
4.6
4.0
20 2221 23 24
FY 2024 target
-13%
Value drivers
Embedding sustainability
Social expenditure
5
(US$m)
Total social expenditure on local community
development programmes.
–
Link to governance (risks)
page 60
Sustainability Report
page 15
1.4
0.7
0.9
2.8
1.5
20 2221 23 24
FY 2024 target
-47%
Value drivers
Embedding sustainability
Creating a safe working environment
LTI FR
Lost time injury frequency rate.
Link to remuneration
pages 103-106
Link to governance (risks)
page 62
Sustainability Report
page 14
0.29
0.44
0.22
0.24
0.16
20 2221 23 24
FY 2024 target
-33%
Value drivers
Productivity
LTI
Lost time injuries.
–
Link to governance (risks)
page 62
Sustainability Report
page 14
19
25
15
17
10
20 2221 23 24
FY 2024 target
-41%
Value drivers
Productivity
Increase Decrease No change
43
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
Delivering value through
embedded sustainability
We have embedded sustainability into every aspect of our business.
Thisenables us to create and sustain value for the Company and our
stakeholders. It also ensures that we have a safe and healthy work
environment that supports a diverse, talented workforce that has access
totraining and development opportunities. For communities close to our
operations, our focus on sustainability means helping to create alternative
local economic development that lasts beyond the lives of our mines.
Thashmi Doorasamy, Group HR and Public Affairs Executive
Our Sustainability Framework
Our Sustainability Framework supports our business strategy,
guides our actions and helps us hold ourselves accountable in
our commitment to our stakeholders.
Since its development in FY 2022, we have been integrating the
Sustainability Framework across the Group, from organisational
design to performance management. The framework is
underpinned by our Petra Culture Code, ethical behaviour,
robust governance practices, and constructive and transparent
stakeholder engagement processes.
The framework provides structure and guides the integration
of sustainability into our strategy and is fully embedded in our
business.
We are committed to ethical and responsible business practices,
good governance and constructive, transparent stakeholder
engagement.
Petra supports the pursuit of the UN Sustainable Development
Goals (SDGs). We focus on the following five SDGs which we
believe we can contribute to the most:
SUSTAINABILITY REVIEW
Please read more in our
Sustainability Report 2024
44
Petra Diamonds Limited Annual Report and Financial Statements 2024
Material Topics FY2023 Material Topics FY2024
Effective tailings management Responsible tailings management
Community relations and social investment Socio-economic development of and engagement with communities
Climate change impact on mining operations Energy security, decarbonisation and climate change resilience
Employee safety, health and wellness Occupational health, safety and wellbeing
Water management Water security and quality
Traceability Traceability of our product (including responsible sourcing)
Compliance and risk management
Responsible sourcing
Ethical business Ethics and integrity (including compliance, risk management and anti-corruption practices)
Geopolitical risks Managing geopolitical risks
Industrial action
Digitalisation and innovation
Diversity, inclusion and employee
development
Valuing employees (retaining employees, diversity & inclusion, constructive labour relations,
training and development)
Economic sustainability of the business (including marketing and capital allocation)
Legend
Topic merged with another
Topic discontinued
New topic
Biodiversity management, closure and rehabilitation
Waste management
Respecting human rights (including security practices)
Material issues
Petra’s materiality process plays an important role in providing
uswith a detailed understanding of the material topics and
stakeholder concerns that affect our business and how our
business impacts our stakeholders. For a detailed discussion
onthe process and outcomes, see our Sustainability Report,
pages 10 to 11.
In FY 2024 we conducted a double materiality assessment
inthree phases:
Phase 1: We identified a broad range of material issues based on
our risk register, peer group analysis, ratings agency and investor
relations feedback, sector trends and through leadership
feedback. In total, 40 issues were identified.
Phase 2: We asked key stakeholders – shareholders, suppliers,
management and employees – to rank issues from both a
financial and impact materiality perspective using the following
definitions:
• Impact materiality assesses how our activities, operations,
and value chain affect a wide range of internal and external
stakeholders, as well as the environment; and
• Financial materiality considers how sustainability impacts
related to the external environment and stakeholders
influencethe Company’s financial performance, cashflows
and prospects
Phase 3: In Phase 3, our leadership considered the
recommended list of material issues and made amendments
based on market knowledge and strategic priorities.
The final list of material issues was assessed from both a financial
and impact materiality perspective and these material issues are
discussed and referenced throughout our reporting suite.
See more in Principal risks section
pages 57-63
Changes from FY 2023
The updated list introduces the following new material issues:
economic sustainability of the business (including marketing and
capital allocation); biodiversity, closure and rehabilitation;
respecting human rights (including security practices) and
energy security, decarbonisation and climate change resilience.
These additions underscore Petra’s commitment to aligning with
global sustainability standards and addressing critical areas of
concern for stakeholders.
In contrast, Digitalisation and innovation, as well as Industrial
action from last year, have been omitted from this Year’s list. This
shift suggests a strategic realignment, prioritising issues with the
most significant impact on Petra’s operations and long-term
sustainability.
45
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
SUSTAINABILITY REVIEW / CONTINUED
Our employees are a vital part of our operations, purpose and
strategy. Westrive to ensure their safety, health and wellbeing,
while creating a compelling culture. Additionally, we are
committed to supporting diversity andinclusion, employing
and retaining the right people for each role anddeveloping
our employees so they can reach their full potential.
Petra Culture Code
Petra’s unique Culture Code is a key enabler for the Group to
ensure successful delivery of our objectives and was co-created
by all of our employees in FY 2022. The Culture Code works as a
measurable index that reflects the relationship between enabling
and disabling organisational factors that are surveyed on a
biannual basis and can provide granularity by operation and
by function.
The results provide important quantitative and qualitative
information on cultural performance and identify high-priority
focus areas and recommend actions on how improvements
can be made.
While it is our intention to undertake a Petra Culture Survey
biannually, FY 2024 was a particularly challenging year for the
Company and it was not considered appropriate to undertake
a survey in the midst of an internal restructuring. However, the
third Petra Culture Code survey was undertaken in July 2024 for
our South African assets, even though it was expected that the
culture would have been negatively impacted by such
restructuring.
Contrary to expectations, we achieved a participation rate of
92% (second survey in FY 2023: 89%) and a Culture Index of 1.03
(second survey in FY 2023: 1.04). This index was slightly weaker
than the previous May 2023 measurement but remains positive,
which indicates that Petra has been able to maintain its positive
culture despite significant organisational disruptions.
Safety, health and wellbeing
FY 2024 was another fatality-free year for Petra. In the course of
the Year, we recorded:
• 31 total injuries, a decline from 41 in FY 2023, making the total
injury frequency rate (TIFR) 0.48 per 200,000 hours worked,
down from 0.58 in FY 2023
• 10 lost time injuries (LTI), down from 17 in FY 2023. This is a lost
time injury frequency rate (LTIFR) of 0.16 (FY 2023: 0.24) per
200,000 hours worked.
Petra also saw a significant reduction in noise induced hearing
loss cases, from 11 in FY 2023 to four in FY 2024.
Attracting, developing and retaining talent
We employed 4,544 people at the end of FY 2024. Of the total,
3,004 are permanent employees and 1,540 contractors. Women
represented 32% of Petra’s Senior Management, 43% of our
Board and 32% of management.
Petra continued to invest in training and development, spending
US$4.0 million on employees, including Koffiefontein. This was
a 13% decline from FY 2023’s US$4.6million due to financial
constraints and operational disruptions as a result of the
organisational restructuring at Finsch and our corporate office.
We are committed to creating shared value through our activities
andcontribute to socio-economic growth in the communities
and countriesweoperate in.
Petra aims to invest 1% of net profit after tax (NPAT), at an asset
level, on social expenditure. Contributing to the development
of communities based near our operations ensures legal
compliance and secures our social licence to operate. Social
expenditure decreased in FY 2024 to US$1.5 million from
US$2.8 million due to delays in SLP 4 approvals and projects
taking longer to implement.
One of the ways we create shared value is through our
community training and development programmes. In FY 2024,
we invested US$0.2 million towards these programmes (FY
2023: US$0.4 million), with the 50% decline due to the financial
constraints and restructuring processes across the Group.
Petra also contributes to host community economies by
procuring local goods and services through an integrated supply
chain. In FY 2024, our Group discretionary procurement spend
was US$215.3 million (FY 2023: US$233.6 million) and 100% of
our total procurement in South Africa went towards local supplier
procurement. Williamson spent 93% of its total procurement on
local goods and services.
We support the principles of the Extractive Industries
Transparency Initiative (EITI) and Publish What You Pay.
In FY 2024, the Group paid a total of US$48 million (FY 2023:
US$46 million) in taxes and royalties, with US$32 million
in South Africa and US$16 million in Tanzania.
Petra’s social investment expenditure totalled US$1.5 million
including Koffiefontein, comprising US$1.1 million of spending in
South Africa and US$0.4 million in Tanzania. Our ESD community
fund, which helps local businesses gain access to financing and
markets, has approved 468 SMME loans valued at US$3 million
since its inception in 2015. This has created 2,718 jobs and
supported 206 local businesses.
Progress continued to be made on the Independent Grievance
Mechanism (IGM) and Restorative Justice Projects (RJP)
at Williamson, as outlined on pages 29 to 32 of the
Sustainability Report.
In FY 2024, Petra supported 13 students through bursaries
(FY2023: 14). Among these bursary holders, 62% are women
and92% are HDSAs. Two female bursars qualified with Chemical
Engineering and Metallurgical Engineering degrees respectively.
One male bursar graduated with an Industrial Engineering
Honours degree.
Labour relations
The business successfully concluded wage negotiations in South
Africa, reaching five-year agreements with the National Union of
Metalworkers for the period 1 July 2024 to 30 June 2029. Wage
negotiations at Williamson will continue into FY 2025.
Valuing our people
Driving shared value
partnerships
46
Petra Diamonds Limited Annual Report and Financial Statements 2024
Respecting our planet Delivering reliable production
We strive to ensure that we manage the environmental impacts
of our business throughout the mining life cycle. Responsible
consumption and production are an integral part of our
operational planning, with a dedicated focus on improved energy
and water consumption, responsible waste management,
biodiversity protection, rehabilitation and responsible closure.
We had no significant environmental incidents in FY 2024
(FY 2023: 1).
The business purchases 80% of our electricity from power
utilities in South Africa and Tanzania. Although 87% of our energy
is currently from non-renewable resources, we anticipate this will
decline once we between 36-72% of our energy consumption in
South Africa from renewable resources by FY 2026. Our Scope 1
and 2 carbon emissions decreased by 2%, due to reduced
electricity consumption at the South African operations and
improved grid factors at Eskom. Most of our emissions are Scope
2 (91%), with Scopes 1 and 3 making up 9% and 0.5% respectively.
We recycle 86% (FY 2023: 88%) of the water used at operations,
in line with our commitment to reducing our freshwater usage,
as water scarcity deepens.
We made progress towards compliance with the requirements of
the Global Industry Standard on Tailings Management (GISTM).
Petra has also completed most of the socio-economic
remediation at the site of the Williamson TSF failure.
Read more about our progress against GISTM on
pages 59-60 of our FY 2024 Sustainability Report:
https://wp-petra-diamonds-2023.s3.eu-west-2.
amazonaws.com/media/2023/11/Document-2.pdf
We are committed to delivering reliable production which
generates value for the business and its stakeholders and is
a key enabler that underpins our Sustainability Framework.
Not only is this imperative for the Company to reach its
objectives, but it also ensures stability for employees,
contractors and unions, customers, financial stakeholders and
suppliers. Petra continues to use the Diamond Value
Management Framework; a framework that optimises value
creation at each stage in the production, recovery and sales
process and aims to create abundance through reliable
economic extraction. FY 2024 presented several operational
challenges which affected production, particularly at Finsch,
which has now been rebased to a more reliable and sustainable
2.2 Mtpa operation. This shortfall was partly offset by the
successful restart and ramp-up of production at Williamson
during the Year. As a result, total diamond production for the
Group was slightly below guidance of 2.73Mct, but up from
FY 2023 by 3%.
Capital expenditure supports the maintenance of our operations
and further enables our growth and sustainability. We announced
capex deferrals earlier in the Year to adapt to the weaker-for-
longer market backdrop while minimising the impact on
production. There was then a strategic revision of the life-of-mine
plans, which has led to a smoothed capital profile at our South
African operations, self-funded until at least the early 2030s, and
which should optimise the long-term potential of our assets.
Capex spend in FY 2024 was US$84 million (FY 2023:
US$117 million).
While diamond prices weakened in FY 2024, carats sold
increased by 36% with revenue up 13% to US$367 million
(FY 2023: US$324 million).
As for internal operational processes that drive reliable production,
digital technologies and capabilities continue to be regularly
reviewed to unlock new operational efficiencies.
47
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
SUSTAINABILITY REVIEW / CONTINUED
Driving shared value partnerships: Koffiefontein case studies
As part of our ongoing commitment to community
development, we have been involved in various
projects at Koffiefontein to enable employability,
skills development and income generation for our
local residents.
In FY 2024, Petra invested ZAR2 million in a driving
licence training programme aimed at enhancing the
skill-set of local residents in Ditlhake, Koffiefontein,
as well as investing ZAR1.3 million to bolster food
security and empower informal farmers via a
Food Nutrition and Farmers Development
Project in Letsemeng Local Municipality.
Running from April to September 2024, the drivers
licence training initiative, in partnership with Sophia
Drivers Academy, provided comprehensive Code 14
driver training, covering both theory and practical
components. Participants can earn certifications
enabling them to drive heavy vehicles; increasing
their employability beyond the mining sector.
Although Petra’s involvement ends in September
2024, the skills gained are expected to have a
lasting positive impact on the community’s
economic resilience and personal development.
Petra, in partnership with Letsemeng Local
Municipality Council, COGTA’s Community Work
Programme, Small Economic Development Agency
(SEDA), and Buhle Development Academy, launched
a six-month initiative from January to June 2024 to
support 25 informal farmers in Koffiefontein. The
project provided skills training, resources and
infrastructure, including a borehole for water access,
to help farmers produce vegetables for their families
and local markets. Buhle Development Academy
offered technical training, while SEDA facilitated the
formation of a co-operative to ensure sustainability.
Although Petra exited the project in June 2024,
ongoing support from SEDA, Buhle Academy, and
COGTA aims to establish a self-sustaining
agricultural model for the community.
In September 2023, Petra launched the Schools
Support Programme in Ditlhake, Koffiefontein,
investing ZAR2.5 million to support high school
learner in grades 10 to 12. The initiative focuses on
improving performance in mathematics, physical
science and accounting, crucial subjects for
university admission. Qualified teachers from the
Letsemeng Local Municipality conduct weekend
classes, with meals provided to help students
concentrate. The programme aims to boost grade
12 pass rates and university eligibility. Petra’s
involvement will conclude in November 2024 with
the hope of leaving a lasting positive impact on
educational outcomes in the community.
Farmers at Ditlhake, in Koffiefontein.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
Section 172 statement
BY THE BOARD OF DIRECTORS PURSUANT TO THE UK CORPORATE GOVERNANCE CODE
Petra is incorporated in Bermuda and is not subject to the UK
Companies Act, 2006. However, it is required, as a company
listed on the Main Market of the London Stock Exchange, to
comply with the UK Corporate Governance Code (the Code). The
Code requires Petra to describe how the interests of
stakeholders and the matters set out in Section 172 of the UK
Companies Act, 2006 have been considered in both Board
discussions and decision-making. We believe that considering
our stakeholders in key business decisions is not only the right
thing to do but is fundamental to our ability to drive value
creation in the long term. It should be noted that, in some
situations and despite engagements by Petra, our stakeholders’
interests may not be aligned with Petra’s and interests between
different stakeholders may conflict with one another. In these
situations, the Board will still seek to understand and consider
stakeholders’ interests in its discussions and decisions, even if
alignment cannot be achieved. Stakeholder considerations
continue to be embedded throughout Petra’s business, with our
Executive Directors and Senior Management actively involved in
initiatives to engage and communicate with our stakeholders,
including through stakeholder engagement forums.
Some examples of how the Board considered the various
elements contained in Section 172(1) of the UK Companies Act,
2006 in its discussions and decisions in FY 2024 are set
out below.
Section 172(1)(a): the likely consequences of any
decision in the long term
The Board regularly considers the steps needed to provide
investors and stakeholders with a compelling value proposition
and resilient business in the medium to long term, recognising
the evolving environment in which Petra operates. Some
examples from FY 2024 of the Board’s consideration of the
longer-term consequences of its decisions in relation to Petra’s
stakeholders included:
• Board strategy session: in February 2024, the Board held an
extensive in-person strategy session. After considering the
Company’s current external and internal context, the Board
agreed on a number of immediate short-term focus areas for
delivery by management, which included the transitioning of
the Finsch Mine to production output of 2.2 Mtpa, the setting
of further cost savings targets and the development of
smoothed capital profiles for the revised LOM plans at the
Cullinan and Finsch Mines, holding an Investor Day that
presented these revised LOM plans to the market and
executing a refinancing of Petra’s 2L Notes. The Board
regularly reviews the progress of these key focus areas at
Board meetings. It was also agreed at the strategy session to
maintain Petra’s Value-led Growth Strategy which had been
approved by the Board in February 2022, with potential
longer-term growth opportunities being reviewed and noting
that priority was being given to the short-term focus areas
listed above. Updates were also given on the negotiation of
Power Purchase Agreements with Etana Energy for the
long-term supply of renewable energy to the Cullinan and
Finsch Mines and the negotiations for the sale of Koffiefontein
Mine to Stargems.
For more information on Petra’s strategy, see pages 20 to 24.
• Deferral of life extension projects and initial cost savings:
the Board approved a number of steps to improve Petra’s
ability to withstand weaker-for-longer diamond market
conditions, resulting in an announcement in November 2023
which targeted aggregate capex reductions of up to US$65
million for FY 2024 by (i) deferring the C-Cut extension project
and partially deferring the CC1E project at the Cullinan Mine
and (ii) deferring the 3-Level SLC Project at the Finsch Mine.
In addition, US$7-10 million of cost savings were targeted for
FY 2024. This led to the suspension of production guidance for
FY 2025 to 2026 whilst revised LOM plans were worked on. In
addition to the long-term interests of the Company, the Board
also considered the interests of employees and the impact on
suppliers and the communities surrounding the mines in
approving these deferrals and cost savings.
• Approval of revised LOM plans for Cullinan and Finsch Mines:
shortly before the end of the Year, the Board reviewed and
approved revised LOM plans for the Cullinan and Finsch Mines
which included the approval of the following life extension
projects: at Cullinan Mine, CC1E Phase 1, C-Cut Extensions 1 &
2 and a new ventilation shaft; at Finsch, 81 Level and 86, 88
and 90 Level SLC. Management developed these plans in
response to the ongoing diamond market challenges referred
to above and with a view to enhancing Petra’s resilience to
future market and capital cycles. In its review of the LOM plans,
the Board focused on, amongst other things: the LOM plans’
ability to deliver free cash flow through the cycle; the longer-
term potential of the Cullinan and Finsch Mines (and the need
for this to be communicated to the market at the Investor Day
on 27 June); and how these plans support a refinancing of the
2L Notes. For more information on the revised LOM plans,
see pages 99 to 100. In addition to the long-term interests of
the Company, the Board also considered the interests of
employees and the impact on suppliers and the communities
surrounding the mines in approving the revised LOM plans.
Section 172(1)(b): the interests of the Company’s
employees
Without a safe, healthy, skilled and productive workforce, Petra is
unable to implement its strategy and create shared value for all
its stakeholders. Recognising that Petra’s employees are at the
heart of its business, and that Petra’s success is dependent on
attracting, retaining, and motivating talented employees, the
Board considered and assessed the impact of its decisions on
employees throughout FY 2024. For further detail on how the
Board engages with employees, see page 76.
Some examples illustrating the Board’s inclusion of employee-related
issues in their discussions and decisions in FY 2024 included:
• Oversight of negotiation of long-term wage agreements:
the Board (and the Safety, Health and Sustainability
Committee, in particular) received regular updates on wage
agreement negotiations with organised labour in South Africa,
culminating in Petra entering into five-year wage agreements
with the National Union of Mineworkers in June and July 2024.
Wage agreements are a key element in Petra’s licence to
operate and in providing operational stability. The Board
recognises the challenge of balancing the interests of Petra’s
employees with Petra’s financial interests, particularly when
faced with challenging diamond market conditions.
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• Review of workforce remuneration as part of cost saving
initiatives: as part of setting cost reduction targets to enable
Petra to withstand weaker-for-longer diamond market
conditions, management made the difficult decision of
cancelling the FY 2024 annual bonus for D-Band employees
and above and freezing salaries for FY 2025 for E-Band
employees and above. These decisions were overseen and
supported by the Board, with the Board having to consider the
Company’s financial resilience, whilst also taking into account
the interests of Petra’s employees. These decisions also
resulted in the cancelling of the FY 2024 annual bonus for the
Executive Directors and Exco and the freezing of their salaries
for FY 2025, as outlined in the Directors’ Remuneration Report
(see pages 103 to 114).
• Organisational restructuring and Section 189 process:
in response to weaker-for-longer diamond market conditions
and the need for Petra to reset its cost base, management
commenced an organisational restructuring that led to Section
189 retrenchment consultation processes being undertaken at
the Finsch Mine (which reduced its throughput tonnage to 2.2
Mtpa) and for all Group employees. This resulted in a number
of employee retrenchments and voluntary separations. These
decisions and the Section 189 processes were overseen by
and supported by the Board, involving regular updates, with
the Board having to consider the Company’s financial
resilience and organisational efficiency, whilst also taking into
account the interests of Petra’s employees.
Section 172(1)(c): the need to foster the Company’s
business relationships with suppliers, customers
and others
The delivery of Petra’s strategy requires strong and mutually
beneficial relationships with suppliers, customers and host
governments. Petra’s suppliers are critical to the development
and safe running of our operations, while its customers are the
source of Petra’s revenue.
Some examples illustrating the Board’s consideration of
relationships in FY 2024 included:
• Board changes: in December 2023 and in response to
feedback from Petra’s major shareholders, as well as the
challenging diamond market conditions, the Board made a
series of changes resulting in a smaller and more efficient
Petra Board. These included reducing the Board from ten to
seven Directors, merging the Sustainability and Health &
Safety Committees and reducing fees for the Chair and
Non-Executive Directors. These changes also saw the
appointment of José Manuel Vargas, who currently holds
8.75% of Petra’s issued share capital, as a non-independent
Non-Executive Director, and Alex Watson stepping down from
her role as a non-independent Non-Executive Director but
becoming a Board Observer, nominated by Franklin Templeton,
one of Petra’s major shareholders. In addition, in May 2024,
Amre Youness, principal owner of Terris Fund SPC, was
appointed as a Board Observer to represent the interests of
Terris Fund SPC, Petra’s largest shareholder. These changes
have brought about greater representation by some of Petra’s
largest shareholders on the Board.
• Partnership stones: in FY 2024, Petra continued to make use
of partnership agreements with key customers for the sale of
certain high-value stones recovered from the Cullinan Mine.
These agreements enable Petra to retain an interest in the
profit uplift of the proceeds of polished stones, after taking
into account all costs. The Board considered the impact such
partnerships have in strengthening Petra’s relationships with
key customers, as well as the ongoing potential for Petra to
retain more value from its higher value stones.
Section 172(1)(d): the impact of the Company’s
operations on the community and the environment
The sustainability of Petra’s business in the medium to long term
requires that the interests of the environment in which Petra
operates (including communities and host governments) be
aligned, as far as possible, with Petra’s interests, and that we
operate in a way which minimises the adverse impact on
these stakeholders. The support of local communities, host
governments and NGOs are a critical components of Petra’s
licence to operate. Petra seeks to ensure that it complies in all
material aspects with relevant legislation in the countries in
which it operates. The Board, and in particular, the Safety, Health
and Sustainability Committee, regularly assesses the impact
of Petra’s operations on the community and the environment.
Below are specific examples of how these impacts were
included in discussions and decision-making in FY 2024:
• Approval of long-term Power Purchase Agreements: in May
2024, the Board reviewed and approved entry into long-term
Power Purchase Agreements (PPAs) with Etana Energy for the
procurement of wheeled renewable energy for its Cullinan and
Finsch Mines. In approving these agreements, the Board
considered how they would enable Petra to fulfil its target of
reducing scope 1 and 2 GHG emissions by 35-40% by 2030
(against its 2019 base line) well ahead of time and further
strengthen the sustainability credentials of Petra’s diamonds.
In addition to reducing the Company’s carbon footprint, the
portion of the energy sourced from Etana will contribute to
predictable energy costs and is expected to result in
sustainable cost savings over the term of the PPAs.
• Oversight of the IGM and RJP implementation at the
Williamson Mine: the Board and Safety, Health and
Sustainability Committee continued to oversee progress on
the IGM and RJPs required under the terms of the settlement
agreement with Leigh Day. During FY 2024, the IGM started to
make remedy payments to complainants and is targeting to
process all grievances around the middle of FY 2025. The IGM
is a key step to promote reconciliation between WDL, directly
affected parties and the broader community by providing
remedy to those individuals who have suffered severe
human rights impacts. One of the RJPs is an Agribusiness
Development Initiative that is being implemented to develop
charco-dams to improve water availability for surrounding
communities and increase the number of poultry businesses
amongst the surrounding communities. For more details on the
IGM and the RJPs, see pages 29 to 32 of the Sustainability
Report. Apart from reviewing the IGM and RJPs, the Board
regularly discussed the incidence of illegal mining incursions
at the Williamson mine, as well as its security operations, and
continued to deepen its understanding of the underlying
factors which drive illegal mining at Williamson and ways in
which it might be addressed.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
• Sale of Koffiefontein: in FY 2023, the Board took the difficult
decision of ceasing operations at Koffiefontein and placing it
on care and maintenance, with preparations being made for a
responsible closure. However, following this decision, Petra
continued to explore a potential sale of the mine and, the
Board approved the entry into, in April 2024, definitive
agreements for the sale of the Koffiefontein Mine to Stargems.
Upon completion of the sale, Petra will no longer be
responsible for Koffiefontein’s environmental rehabilitation
liabilities and care and maintenance costs, though it will remain
liable for funding certain ongoing social commitments relating
to the mine that were made during Petra’s ownership. One of
the Board’s considerations in approving the transaction was
that it would, once completed, provide ongoing economic
activity for the local community. A further requirement of the
responsible exit was the buyer having the technical and
financial capability to conduct operations in a responsible
manner for all stakeholders.
Section 172(1)(e): the desirability of the Company
maintaining a reputation for high standards of
business conduct
The Board periodically reviews and approves material policies and
standards which apply to Petra and which embed high standards
of business conduct across the Petra Group. In FY 2024:
• The Audit and Risk Committee (ARC) reviewed and approved
the adoption of a Risk Appetite and Tolerance Framework, a
key element of the Company’s risk management system. This
Framework requires the Company to measure its risk
exposures by reference to certain key risk indicators and
determine whether they remain within levels approved by the
ARC, with regular updates on these key risk indicators being
provided to the Exco and the ARC. Further details can be
found on page 58
• The SHS Committee reviewed and approved updated versions
of the Stakeholder Engagement and Management Policy, the
Diversity and Inclusion Policy and the Human Rights Policy
Statement
• The ARC considered the updated Global Internal Audit
Standards and Petra’s plan to implement them by the end of
CY 2024
• The ARC considered the potential impact of the UK Economic
Crime and Corporate Transparency Act, noting and reviewing
the measures Petra proposed implementing to ensure
compliance. These measures include, but are not limited to,
assessments of Petra’s fraud risk profile, enhanced due
diligence on entities which perform or may perform services
for Petra, mapping of senior manager roles to identify those
potentially in-scope for knowledge attribution and providing
further targeted training to these individuals
• Shortly after the end of FY 2024, South African and UK
management-level employees received annual online training
on Petra’s Code of Ethical Conduct and were required to
complete an annual certification that they have complied with
the requirements of the Code. Employees below this level will
receive their training and provide their certifications when they
go through their annual refresher training. The ARC received
updates on this training and certification process
Section 172(1)(f): the need to act fairly as between
members of the Company
After weighing up all relevant factors, the Board considers the
course of action which best positions Petra to deliver its strategy
in the long term, taking into consideration the effect on key
stakeholders. Pertinent examples of the factors and engagements
taken into account by the Board are set out above. In doing so,
our Directors act fairly as between the Company’s members, but
are not necessarily required to balance the Company’s interests
with those of other stakeholders. This can sometimes mean that
certain stakeholder interests may not be fully aligned and in
some situations, may conflict.
In relation to the broader issue of stakeholder engagement, see
pages 16 to 19 of the Sustainability Report.
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Petra’s response to climate change:
TCFD recommended disclosures
Our reports comply with the London Stock Exchange (LSE)
Listing Requirements and the UK Corporate Governance Code.
We have adopted and aligned our reporting with best practice
principles and guidelines. We report in accordance with the
Global Reporting Initiative (GRI) Standards: 2021, the Sustainability
Accounting Standards Board (SASB) Metals & Mining
Sustainability Accounting Standard (now part of the IFRS
Foundation), and the Task Force on Climate-related Financial
Disclosures (TCFD). As a member of the Natural Diamond
Council, we adhere to its membership requirements and
sustainability pledges. We support the principles of the
Extractive Industries Transparency Initiative and report
accordingly. We also support the United Nations Sustainable
Development Goals (SDGs) and report on our contribution to
these throughout this Report.
Key achievements in FY 2024 included the following:
• We advanced our decarbonization objectives during the Year
by entering into long-term Power Purchase Agreements (PPAs)
with Etana Energy to supply renewable energy to our Cullinan
and Finsch Mines. Renewable energy will account for between
36-72% of their energy requirements, starting from FY2026.
• We continue to transparently disclose climate-related
information, consistent with global benchmarks and standards,
including the TCFD Recommendations.
The contents of this Report have been reviewed by Petra’s Exco,
the Safety, Health and Sustainability Committee and was
approved by the Board on 23 September 2024. Petra engaged
an independent third party to verify its carbon footprint.
We re-affirm our committment to our long-term target of
achieving net zero Scope 1 and 2 GHG emissions by 2050,
though we aspire to reach this goal by 2040 or earlier. We are
also still committed to a short-term target of reducing our Scope 1
and 2 emissions by 35% to 40% by 2030, against a 2019 baseline.
The table below sets out where Petra has made climate
disclosures consistent with the TCFD. Certain of these
disclosures are contained in our Sustainability Report, to
alignwith how we report on our sustainability and climate
change ambitions.
Governance
Recommended disclosures Discussions/ or key developments in FY 2024 Further info
1. Describe the Board’s oversight
of climate-related risks and
opportunities
The Board, supported by the Audit and Risk, Safety, Health and Sustainability and
Remuneration Committees, has ultimate accountability for the Group’s strategy, risk and
governance of climate-related risks and opportunities. Adopting this approach ensures that
the Board sets the risk appetite and tolerances, strategic objectives and accountability for
climate-related risks and opportunities.
The Board monitors progress against Petra’s Climate Change Mitigation and Adaptation
Strategy and GHG Roadmap while providing oversight of climate change risk processes and
related controls, ensuring that management implement appropriate governance processes
and controls that are effective in managing climate change risks and opportunities. The
Board is kept apprised of material developments in relation to climate change (and
significant environmental events) as and when they occur. To ensure effective oversight,
the Board and relevant Committees receive regular updates on climate-related matters,
including climate-change-related data and performance information.
Previously the Health and Safety and Sustainability Committees operated separately,
however these committees were merged in January 2024, to establish the new Safety
Health and Sustainability Committee, adopting new Terms of Reference which were
approved by the Board. The new merged committee provides effective oversight and
monitoring role in relation to Group-wide environmental matters, including climate-change.
The Committee meets formally at least quarterly and oversees implementation and
compliance with the Group’s climate-related policies and monitors performance. The Chair
of Petra has also been formally designated as the NED with primary responsibility for ESG
matters (which includes climate change). Climate change is classified as one of Petra’s
principal risks, monitored monthly by Petra’s Exco while the Audit and Risk Committee
receives quarterly updates on movements in principal risks (including climate change).
Additional Group governance
developments during FY 2024
that are related to our climate-
related risks and opportunities
may be found in the reports
of the Safety, Health and
Sustainability Committee (page
96), Audit and Risk Committee
(page 84) and Remuneration
Committee (page 101).
For the Terms of Reference
of the Audit and Risk, Safety
Health and Sustainability and
Remuneration Committees, see
https://www.petradiamonds.
com/about-us/corporate-
governance/
Petra has made disclosures against all the TCFD Recommended Disclosures,
weacknowledge and recognise that we remain on a journey in relation to climate change.
We continuously seek to improve the robustness of these disclosures. In addition to this
report on our approach to climate change, refer also to the Petra Sustainability Report,
whichwill be published at the same time as this Report.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
Governance continued
Recommended disclosures Discussions/ or key developments in FY 2024 Further info
2. Describe management’s role
in assessing and managing
climate related risks and
opportunities
The Group CEO has overall executive accountability for climate-related risks and
opportunities, which includes decarbonisation and energy-related matters. The CEO,
assisted by Exco, acts upon the most material risks and opportunities to implement Petra’s
strategy and unlock maximum stakeholder benefit. The Group CFO holds overall executive
accountability for integrating climate-related risks and opportunities into annual budgets,
business plans and financial disclosures. Management is responsible for identifying
climate-related risks and opportunities including the implementation of adequate processes
to enhance the control environment to effectively manage climate change risks and
opportunities.
Exco meets at least once a month and includes representation from key internal functions.
Each Exco member is responsible and accountable for integrating consideration of climate-
related risks and opportunities as they relate to their respective functions and overseeing
the management of climate-related risks and opportunities that fall within their remit. Petra’s
performance management system also involves the setting of KPIs which include requiring
all managers to effectively identify, assess and manage risks (including climate-related)
within their remit and performance against these KPIs is assessed at least biannually.
Additional Group governance
developments during FY
2024 that are related to risk
management (which includes
identification and management
of climate related risks) may be
found at pages 56 to 58 and 91.
Strategy
3. Describe the climate-related
risks and opportunities the
organisation has identified
over the short, medium and
long term.
The Group has identified several physical and transition risks that our operations are
exposed to (which have a medium (-2030) to long-term (-2040) impact on Petra’s business)
and opportunities that we can investigate and respond to. The key risks and opportunities
were:
• Physical risks: increased precipitation (acute); temperature and droughts/water stress
(chronic).
• Transition risks: access to capital, carbon tax and market risk owing to change in consumer
behaviour and policy and legal risks.
• Physical opportunities to be investigated: improved water use strategies and innovative
water remediation and recycling technologies. Innovative use of new technologies
focused on the health and safety of employees and the reduction of excessive
evaporation.
• Transition opportunities to be investigated: reduce the Group’s exposure to carbon
tax and increasing fossil fuel prices by securing renewable energy supply. Positioning
Petra as a responsible mining company could increase capital investment and customer
preference for Petra’s diamonds.
All these risks are applicable to the South African and Tanzanian operations.
The detailed risk descriptions
are available in the
Supplementary information of
the Sustainability Report (see
pages 54 to 58).
4. Describe the impacts
of climate-related risks
and opportunities on the
organisation’s business,
strategy and financial
planning.
Sustainability and climate change are embedded in our strategy, which supports our
ambition to create value for our stakeholders and build a sustainable business. Petra
prioritises the effective management of climate-related matters as this contributes to the
Group’s performance and ability to deliver its strategic objectives in both the short and
long-term. The impacts of climate change risks are classified into four main categories
ie (i) precipitation and flooding, (ii) rising temperatures, (iii) drought hazard and water stress
and (iv) transitional risks. The key climate change priority risks across these categories relate
to increased cost and capital investments, potential production stoppages and employee
health and safety including socio-economic impacts on our surrounding communities
resulting from potential climate change risks materialising.
5. Describe the resilience of the
organisation’s strategy, taking
into consideration different
climate-related scenarios,
including a 2 degree or
lowerscenario
We have bolstered our resilience against identified climate-related risks through our
operational health, safety, environmental and risk management processes, monitoring and
continuous review through our climate change performance indicators supplemented by
our continuous monitoring of key risk indicators. Based on the nature of the risks identified,
the appropriate remediation to address these risks is being considered in Petra’s business
strategy and financial planning process.
We have committed to decarbonisation targets and secured renewable energy supply for
our operations from FY 2026. Our decarbonisation targets and renewable energy supply
will assist us in reducing our carbon emissions and potential future carbon tax liabilities.
Our history of climate and sustainability reporting will enable us to proactively address any
further reporting requirements. We will continue to report transparently against appropriate
ESG disclosure standards (including climate-related requirements) and engage with
stakeholders on ESG-related matters.
Please see the following pages
in the Sustainability Report to
read more about how Petra is
improving its resilience: page
38 (Safety, Health & Wellbeing),
59 (entry into PPAs) and 60
(implementation of the GISTM).
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Risk management
Recommended disclosures Discussions/ or key developments in FY 2024 Reference
6. Describe the organisation’s
processes for identifying and
assessing climate-related risks
The Group has implemented a robust Enterprise Risk Management (ERM) Framework to
identify, assess and manage current and emerging risks and uncertainties. To ensure that
climate-related risks and opportunities are adequately identified and assessed, a multi-
pronged approach (detailed below) has been implemented. The risk identification process
considers external and internal climate risks including strategic and operational risks and
climate risks identified through review of climate change publications and professional
and regulatory bodies, globally. The Company conducts climate change scenario analysis
with guidance and support from external independent climate change specialists to
inform current, medium and long-term climate risks. These risks are processed through
the Company’s ERM processes focusing on controls in place to mitigate climate risks to
acceptable levels and consequent quantification of climate risks to determine the potential
impact of these risks on the Company and its operations, and stakeholders.
Climate change scenario analysis
Climate change scenario analysis uses a standard set of Representative Concentration
Pathways (RCP) scenarios (published by the United Nations Intergovernmental Panel on
Climate Change) to identify climate-related risks and opportunities based on projected
future greenhouse gas concentrations.
The Group climate-related scenario analysis include the below pathways and will be
reviewed periodically as appropriate:
• RCP1.9 (a pathway that limits global warming to below 1.5 °C by 2100) as the worst-case
scenario for transitional risks.
• RCP8.5 (a pathway that estimates global warming at 4.3 °C by 2100) as the worst-case
scenario for physical risks.
• RCP 2.6 (a pathway that limits global warming to below 2.0 °C by 2100) as a
reasonable case.
Our assessment of climate-related risks and opportunities was conducted across two
timeframes, namely 2030 and 2040 – based on current LOM plans across our operations.
These timelines will be reviewed should our operations’ LOM plans be extended
beyond 2040.
The Petra climate-related scenario analysis incorporated 11 climate indicators listed under
four climate-related categories, namely temperature and heat, drought, water stress, and
precipitation. The evolution of these indicators in considered scenarios was used to identify
potential physical and transitional climate-related risks and opportunities for our operations.
Additional Group governance
developments during FY 2024
that relate to risk management
(which includes identification
and management of climate-
related risks) may be found at
pages 56 to 58 and page 91.
7. Describe the organisation’s
processes for managing
climate-related risks
We recognise that the potential materialisation of climate-related risks has widespread
consequences throughout the Company, its operations, employees and broader
stakeholders. The Company’s ERM Framework clearly sets out acceptable risk management
practices for managing climate risks. In most instances the Company treats climate risks
through remediation by implementing governance processes and controls that either
prevent, detect or minimise the impact of climate related risks. The Company also transfers
certain catastrophic climate risks that exceed the Company’s risk-bearing capacity to
external third parties such as insurers.
The outputs from the scenario analysis indicate how hazards and risks could potentially
change over the respective timescale to provide a view of the resilience of our operations
and will be reviewed every three to five years to adjust scenario projections, extended
timescales and strategy as needed (due to care and maintenance, mine closure and LOM
extensions).
The output of the climate scenario analyses is used to supplement our ERM process as it is
critical to the analysis, management and control of risks and informs analysis techniques and
risk control mechanisms for implementation to mitigate the impacts of climate-related risks
on operations and stakeholders, including:
• ensuring that identified risks of climate change continue to inform business strategy and
decision making;
• scaling up the development and implementation of appropriate adaptation response
measures to the identified risks and opportunities; and
• increasing our support to building community resilience through engagement on shared
climate change risks and opportunities.
Additional Group governance
developments during FY 2024
that relate to risk management
(which includes identification
and management of climate-
related risks) may be found
at pages 56 to 58 and page
91. Also see the discussion
on Petra’s updated materiality
assessment at pages 10 and 11
of the Sustainability Report.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
Risk management continued
Recommended disclosures Discussions/ or key developments in FY 2024 Reference
8. Describe how processes for
identifying, assessing and
managing climate-related
risks are integrated into the
organisation’s overall risk
management.
The identification of climate risk is set out in point 6 above. The assessment of climate
related risks and opportunities is conducted in accordance with the Company’s Enterprise
Risk Management (ERM) and Risk Appetite and Tolerance (RAT) Frameworks. The ERM has
defined qualitative and quantitative criteria in evaluating likelihood and consequence of
climate risks, while the RAT framework proactively measures management’s performance
against risk mitigation actions through established Key Risk Indicators (risk appetite and
tolerance thresholds), providing an early warning indicator of risks breaching acceptable
appetite and tolerance thresholds, prompting immediate management action. The
identification and assessment of climate risks forms the focal point and underpins strategic
and operational decision-making, further including standardised, uniform and appropriate
internal controls in our policies and procedures to strengthen the Company’s control
environment relating to climate risks. The Company’s integrated risk management process
highlights climate risk impacts across multiple functions and assists management in
drawing inferences and correlation between various climate risks and its impact, enabling
management to implement remediation steps in an integrated and holistic manner.
Additional Group governance
developments during FY 2024
that relate to risk management
(which includes identification
and management of climate-
related risks) may be found
at pages 56 to 58 and page
91. Also see the discussion
on Petra’s updated materiality
assessment at pages 10 and 11
of the Sustainability Report.
Metrics and targets
9. Disclose the metrics used
bythe organisation to assess
climate-related risks and
opportunities in line with its
strategy and risk management
processes
Petra discloses an array of climate-related metrics including energy usage and intensity,
Scope 1, 2 and 3 GHG emissions and Scope 1 and 2 emissions intensity. When renewable
energy becomes a significant part of our energy mix, its percentage will be disclosed. The
key metrics linked to the assessment of our GHG emissions include:
• Absolute gross GHG emissions generated during the reporting period, measured in
accordance with the Greenhouse Gas Protocol Corporate Standard, and Corporate Value
Chain Standard expressed as metric tonnes of CO
2
equivalent, classified as Scope 1, 2
and 3 emissions;
• Verified GHG emission for scope 1 and 2;
• Measurement of temperatures (underground and surface) as per health and safety
protocols; and
• Dam levels are monitored in real time to prevent flooding.
Additional Group performance
metrics during FY 2024 that are
related to our climate-related
risks and opportunities may be
found at pages 55 to 77 of the
Sustainability Report.
10. Disclose Scope 1, Scope
2 and if appropriate,
Scope 3 greenhouse gas
(GHG) emissions, and the
relatedrisks
The majority of Petra’s GHG emissions (approximately 90%) are related to electricity
consumption (Scope 2) and therefore represents our biggest risk and focus in relation to
emission reduction activities. With respect to our Scope 3 GHG emissions, we are identifying
appropriate steps and reporting boundaries of the GHG Protocol’s Corporate Value Chain
(Scope 3) Accounting and Reporting Standard to calculate and measure our baseline and
report on Scope 3 emissions. We recognise the challenge in reporting accurate and reliable
Scope 3 emissions data.
• Scope 1 emissions for FY 2024 were 36,586 tCO
2
-e
• Scope 2 emissions for FY 2024 were 384,283 tCO
2
-e
• Scope 3 emissions for FY 2024 were 2,098 tCO
2
-e
11. Describe the targets used
by the organisation to
manage climate-related
risks and opportunities and
performance against targets
We continue to transparently disclose climate-related targets, consistent with global
benchmarks and standards, including the TCFD Recommendations.
• We have committed to a long-term target of achieving net zero Scope 1 and 2 GHG
emissions by 2050, though we aspire to reach this goal by 2040 or earlier.
• We have committed to a short-term target of reducing our Scope 1 and 2 emissions by
35%-40% by 2030, against our 2019 baseline.
55
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
Risk Management and Principal Risks
Risk Management Framework
The Board has ultimate responsibility for risk management and
receives reports and updates from the Board Committees on the
key risks facing the business and the steps taken to manage
them. The Board delegates responsibility to the Audit and Risk
Committee which is responsible for monitoring and assessing
Petra’s risk management and internal control systems. The ARC
receives quarterly updates from the Risk, Assurance and
Compliance function on Petra’s principal risks, including tracking
Petra’s risk appetite and tolerance thresholds and risk mitigation
action plans. The Safety, Health and Sustainability Committee
also monitors developments related to safety, health,
environment, climate and social performance, providing
strategic direction, oversight and risk assurance.
Exco receives monthly updates on Petra’s principal risks,
including Petra’s risk appetite and tolerance thresholds and
risk mitigation action plans and monitors and facilitates the
implementation of effective risk management through the
organisation, including driving a culture of individual risk owner
and employee accountability. Petra’s Risk, Assurance and
Compliance function continuously reviews, analyses and
reports on risks, which includes monitoring emerging risks and
consolidating key risks. Internal Audit provides assurance, in
conjunction with external assurance providers and the Risk,
Assurance and Compliance function, on the effective functioning
of the internal control systems.
Petra deploys the four lines of defence model to enable better
risk governance. A summary of how this model works is set out
below. Petra’s risk governance applies the principles of good
governance to the identification, assessment, management
and communication of risks.
Petra has an Enterprise Risk Management (ERM) Framework
which outlines the process for identifying, analysing, evaluating,
treating and managing the impact of Petra’s risks. This ERM
Framework is based on ISO 31000 and is illustrated in the
diagram on the opposite page (Petra’s Risk Assessment Process).
Management within each function and operation is responsible
for using this ERM Framework to identify the key risks in their
area and for establishing appropriate and effective management
processes to control and mitigate the impact of such risks,
including assigning risk owners who are accountable for
managing these risks. Once assessed, risks are aggregated
and integrated into the Group’s risk register and ultimately the
Group’s principal risks. Members of the Exco are assigned
ownership of and are accountable for stewardship of each of
the principal risks.
The Group is exposed to a number of risks which could have a material impact on its
performance and long-term viability. The effective identification, evaluation, management
and mitigation of these risks is a core focus of management and the Board,
as this is key to the Company’s strategy and objectives being achieved.
Risk governance – four lines of defence model
Board and sub-committees
(performs oversight and
sets tone)
• Approves Enterprise Risk Management (ERM) Framework
• Establishes risk appetite/tolerance and strategy
• Leverages risk information into decision-making
• Evaluates the strategy and business performance on a risk-adjusted basis
Fourth line External assurers For example:
• Regulatory audits (DMRE)
• ISO certification
• Technical audits (resources and reserves)
Third line Internal audit
(test and verify)
Planning and execution informed by ERM; aims to identify control weaknesses
Second line Regulatory/legal compliance Monitors compliance with regulations
• Informed by ERM
• Risk-based compliance testing
Enterprise Risk Management (ERM)
• Designs Group’s ERM Framework
• Monitors compliance with Framework
and reports on aggregated risks
First line Business units • Management: identifies, owns, mitigates and reports on risks for ERM
Updates to baseline risk assessments are conducted at least
annually to re-evaluate existing risks and identify emerging risks,
including the effectiveness of mitigating actions resulting from
process changes, significant incidents, or disasters, or by
instruction from regulatory bodies, amongst others. The relative
significance of all identified risks is determined by using the ERM
Framework to apply consequence and likelihood criteria,
with management evaluating risks prior to internal controls
to determine inherent risk levels and also assessing the
effectiveness of internal controls to determine residual
risk levels.
PRINCIPAL RISKS AND UNCERTAINTIES
56
Petra Diamonds Limited Annual Report and Financial Statements 2024
Principal risks matrix
Petra’s Risk Assessment Process
External
Rough diamond prices
Currency fluctuations
Country and political
Strategic
Group liquidity
Licence to operate (social impact)
Operational
Mining and production
(including ROM grade
and product mix volatility)
Labour relations
Safety
Environment
Climate change
Capital projects
Supply chain
Group Principal Risk
6
7
8
9
10
11
12
CONSULTATION
MONITOR
A N D
REVIEW
ESTABLISHING THE CONTEXT
RISK ASSESSMENT
RISK IDENTIFICATION
RISK ANALYSIS
RISK EVALUATION
RISK TREATMENT
1
2
3
4
5
LIKELIHOOD
IMPACT
Low
Low
High
High
12
10
11
8
9
7
6
1
32
5
4
57
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
Risk appetite and tolerance
During FY 2024, management developed and implemented a
Risk Appetite and Tolerance Framework which was reviewed and
approved by the Audit and Risk Committee. Petra accepts there
are risks associated with its business activities that cannot be
fully eliminated and which must be accepted if we are to deliver
our strategy. The initial purpose of the Risk Appetite and
Tolerance Framework is to determine Petra’s levels of risk
appetite and tolerance. Petra has done this by reference to a
set of Risk Appetite Statements (that are summarised below)
PRINCIPAL RISKS AND UNCERTAINTIES / CONTINUED
and Key Risk Indicators (KRIs) that are aligned to Petra’s principal
risks. Petra then actively monitors these KRIs to prompt
management to take necessary action(s) where appetite
and tolerance thresholds are exceeded.
Petra’s KRIs are kept under review by management and the Audit
and Risk Committee to ensure that they align with the Company’s
Purpose, Values and Strategy and evolving risk profile. Any
changes to the KRIs that are used to measure risk appetite and
tolerance require the approval of the Audit and Risk Committee.
GOVERNANCE
Reputation and ethics
Petra has zero tolerance for illegal or unethical behaviour. To this end,
Petra will not (i) participate in fraud, bribery and corruption by Petra, any
director, employee or business partner; (ii) do business with sanctioned
entities and individuals or those involved in modern slavery or human
rights violations; and (iii) sell rough diamonds which have not been
certified through the Kimberly Process.
Corporate governance and regulatory compliance
Petra mandates full compliance with governing laws and regulations,
as well as the application of prescribed governance principles.
Reporting
Petra commits to accurate reporting to its stakeholders in accordance
with prevailing legislation and reporting standards.
People
Petra operates in a diverse
and inclusive manner, and
motivates the workforce to
realise their full potential and
deliver extraordinary outcomes
in support of its strategic intent.
Social License to Operate
Petra conducts operations in a
manner that compromises our
reputation or our ability to
operate, or in a manner that
does not support compliance
with the relevant legislation
in the jurisdictions
in which we operate.
Stakeholders
Petra endeavours to act in a
manner that is respectful and
gives due consideration to the
impact on all stakeholders.
Operational performance
Petra pursues mining
operations in a manner that
supports business resilience
and sustainable mining within
its targeted cost curve.
Capital allocation
Petra allocates growth
and sustaining capital that
promotes our strategic intent,
provided it meets investment
hurdles set by the Board and
does not breach liquidity and
funding thresholds.
Safety, health and
environment
Petra does not pursue
operations unless all
prescribed and reasonable
measures have been taken
to ensure the safety and
wellbeing of our employees
and the environment.
Climate Change
Petra does not pursue
operations unless prescribed
and reasonable measures have
been taken to mitigate the
impact of climate change on
the well-being of our people
and the environment.
58
Petra Diamonds Limited Annual Report and Financial Statements 2024
Our principal risks
During the Year, Petra’s risk profile has been closely monitored, with no new principal risks being identified but some movements in
principal risks being tracked as summarised below. Our assessment of the likelihood of our principal risks occurring and the potential
consequence of such risks (after taking into account the risk management processes and mitigation action plans we implement) is
summarised in the heatmap above. A summary of the Group’s principal external, operational and strategic risks (in no order of priority)
is set out below.
Risk Description Mitigation
1. Rough Diamond Prices
Our financial performance is closely linked to rough diamond prices
which are influenced by global macro-economic conditions, supply
and consumer trends. Anecdotal evidence suggests a slowing of
growth in LGDs.
While long-term market fundamentals remain supportive, diamond
market weakness was experienced throughout FY 2024 and is
expected to continue through to the end of CY 2024. Average like-
for-like prices for FY 2024 were down 12.4% compared to FY 2023.
• Increased the RCF in FY 2024 by c. $40m (from ZAR1 billion to
ZAR1.75 billion)
• Reduced capital requirement for FY 2024 by $75m through cost
savings and capital deferrals
• Targeting sustainable reduction in operating costs of US$44 million
in total per annum (US$30 million for the South African operations
and US$14 million for Williamson) from FY 2025 onwards
• Through the increased RCF, retain the ability to defer timing of sales
tenders in lower pricing environments
• Entry into profit sharing agreements to realise additional value from
selected diamonds
• Regular monitoring of diamond market through dialogue with client
base and external publications (eg Future of the Natural Diamond
Industry by BCG)
• Various marketing campaigns conducted, through partners and third
parties, across value chain in FY 2024 with the aim of stimulating
demand for natural diamonds, eg by NDC, Signet (world’s largest
diamond jewellery retailer) and De Beers (world’s largest producer of
natural diamonds)
• Piloting new technologies from Tracr and Sarine to improve the
traceability of Petra’s diamonds, which has the potential to enable
higher prices to be achieved
Change in risk profile
during the year
Category
External Risk, Long term
Risk Owners
• CFO
• Group Sales and Marketing Executive
Impact
• Reduction in revenue, cashflow, profitability and overall business
performance
• Increased cost to, and adverse impact on the refinancing of the
2L Notes due in March 2026
• Capital programmes negatively impacted
2. Currency Fluctuations
Group revenue is received in US$ with costs incurred in ZAR. The
average exchange rate in FY 2024 was ZAR 18.70/US$1 compared to
ZAR17.77/US$1 in FY 2023.
• Group policy is to hedge a portion of South African diamond sales
when weakness in ZAR allows
Change in risk profile
during the year
Category
External Risk, Long term
Risk Owner
• CFO
Impact
• Whist a weaker Rand has a positive financial impact on Petra,
it also tends to contribute towards greater uncertainty from a
planning and budgeting perspective
3. Country and Political
Our mining operations are located in emerging market economies
(South Africa and Tanzania) which may be subject to greater legal,
regulatory, tax, economic and political risks. These risks may be
subject to rapid change
• Extensive operational experience in South Africa and Tanzania
• Active monitoring of political, regulatory and legal developments
• Ongoing engagement with Government at both national and
regional levels
Change in risk profile
during the year
Category
External Risk, Long term
Risk Owners
• Operations Executives (Cullinan and Finsch Mines)
• Country and Mine Manager (Williamson Mine)
Impact
• These risks may negatively impact our operations and the cost
of doing business in these jurisdictions
Higher External risk
Lower Strategic risk
No change Operational risk
59
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES / CONTINUED
Risk Description Mitigation
4. Group Liquidity
We require sufficient liquidity to meet our current and future financial
commitments, including capital and interest payments on our RCF
and 2L Notes noting that these mature in January and March 2026,
respectively, and will need refinancing. Our ability to generate this
liquidity is affected by a number of factors which include (i) the
demand for rough diamonds (which remains subdued and which
impacts diamond prices), (ii) global economic uncertainty (which has
the potential to both reduce demand for rough diamonds and have an
inflationary impact on our cost base)and (iii) operational performance,
including in relation to product mix.
• Adoption of a disciplined capital allocation process, prioritising
expenditure on operations and social licence to operate, stay in
business capex and servicing of debt obligations
• Reduced cash requirements for FY 2024 by $75m through cost
savings and capex deferrals
• Targeting sustainable reduction in operating costs of US$44 million
in total per annum (US$30 million for the South African operations
and US$14 million for Williamson) from FY 2025 onwards
• Revised LOMs for Cullinan and Finsch Mines have smoothed capex
to c. $100m per annum to target free cash generation through
the cycle
• Debt optimisation opportunities pursued, with 2L Notes reduced
in FY 2024 through open market purchases totalling $5m
• Assessing options for the refinancing of its 2L Notes which mature
in March 2026 and starting discussions with potential lenders
• Agreed sale of Koffiefontein Mine which avoids closure-related
costs of c. $15-18m when deal completes (following receipt of
DMRE’s s.11 approval)
• Long-term Power Purchase Agreements for Cullinan and Finsch
Mines expected to lead to a sustained reduction in our electricity
supply costs at our South African operations from FY 2026
Change in risk profile
during the year
Category
Strategic Risk,
Short-Medium term
Risk Owners
• CFO
• Planning and Corporate Development Executive
Impact
• Failure to deliver our business plan may negatively impact
cashflow and our ability to reduce and refinance our debt, which
may affect our ability to meet our financial obligations when they
fall due
5. Licence to operate – regulatory and social impact and community relations
Maintaining our social licence to operate involves, in particular: (i)
managing the social impact of mining activities, (ii) complying with
applicable legislation, and (iii) implementing and sustaining Local
Economic Development Projects. Our social licence to operate is
affected by, amongst other items:
• historical allegations of human rights abuses at the
Williamson Mine
• integration and alignment of Integrated Development Plans with
DMRE requirements and SLPs in South Africa to ensure
community projects are fit for purpose
• community factionalism, personal agendas and political influence
which may delay implementation of community projects
• lack of business skills and know-how in communities, resulting in
failed projects
• impact on communities of major hazards (eg shaft collapse or
TSF failure
• Ringfencing of opportunities for SMMEs to achieve enterprise
and supplier development targets at our South African operations,
strengthening our relationships with communities and business forums
• Ongoing monitoring of SLP projects’ implementation
• Structured stakeholder engagement programmes involving regular
engagement with local municipalities, host communities and
the DMRE
• Inclusion and active participation of local business forums and
communities in procurement opportunities
• For the Williamson Mine, IGM fully operational, with grievance
registrations closed, payments of remedies to complainants
commenced and targeting resolution of all grievances around the
middle of FY 2025, with RJPs continuing to be implemented
Change in risk profile
during the year
Category
Strategic Risk, Long term
Risk Owners
• Group HR and Public Affairs Executive
• Operations Executives (Cullinan and Finsch Mines)
• Country and Mine Manager (Williamson Mine)
Impact
• Failure to successfully implement SLP projects, deal effectively
with community grievances and/or provide employment and
business opportunities for local communities may have significant
social impacts for surrounding communities which could in turn
affect Petra’s operations and its ability to meets its regulatory
obligations
60
Petra Diamonds Limited Annual Report and Financial Statements 2024
Risk Description Mitigation
6. Mining and Production including ROM grade
Mining diamonds from kimberlite deposits involves various risks,
including geological, geotechnical and industrial and mechanical
accidents, unscheduled plant shutdowns, technical failures, ground
or water conditions, access to energy and inclement or hazardous
weather conditions. Current mining blocks at the Finsch and Cullinan
Mines are reaching their end of life, resulting in lower levels of ROM
grade and higher product mix variability. ROM grade and product mix
may be further impacted by the mix of ore produced from the current
mining areas, the level of dilution experienced from waste rock
ingress and the inclusion of production from surface resources.
• Extensive existing knowledge of the deposits (which have long
histories of production) by a team with substantial and specialist
knowledge of kimberlite mining and diamond recovery mitigates
some of these risks, including through geotechnical modelling,
planned maintenance and regular inspections.
• Approval of the revised LOM plans for the Cullinan and Finsch Mines
(including the life extension projects) will allow a ramp-up in activity
in the new mining areas which, over time, will provide additional
mining flexibility and mitigate some of the ROM grade and product
mix risks
• Operational issues experienced at the Finsch Mine in FY 2023 and
H1 FY 2024 are being addressed through a revised shift arrangement
to enhance planned maintenance at the mine
Change in risk profile
during the year
Category
Operational Risk,
Long term
Risk Owners
• Operations Executives (Cullinan and Finsch Mines)
• Country and Mine Manager (Williamson Mine)
Impact
• Failure to deliver on production plan could have a material
negative impact on cashflow and in turn on our ability to further
reduce and refinance our debt and continue strengthening the
balance sheet, which may affect Petra’s ability to meet its financial
obligations when they fall due
7. Labour Relations
Production is dependent on a stable and productive labour
workforce, with labour relations in the mining sector in South Africa
being historically volatile.
• Petra maintains open and effective communication channels with its
employees and trade union representatives at its operations
• In June and July 2024, five-year wage agreements were concluded
with the NUM and UASA covering the South African operations for
the period July 2024 to June 2029 in respect of employees in the
A to C Paterson bands.
Change in risk profile
during the year
Category
Operational Risk,
Short-medium term
Risk Owners
• Operations Executives (Cullinan and Finsch Mines)
• Group HR and Public Affairs Executive
Impact
• Potential instability at the operations, leading to strike action and
consequent production disruptions which in turn impact Petra’s
liquidity position
Higher External risk
Lower Strategic risk
No change Operational risk
61
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES / CONTINUED
Risk Description Mitigation
8. Safety
• The operation of large mining and processing facilities carries a
potential risk to the health and safety of the workforce, visitors
and the community.
• Prioritisation of health and safety by management, with a clear set of
KPIs that are regularly tracked
• Well-established and comprehensive safety policies and procedures
• Regular updates to policies and procedures following ongoing risk
assessment and safety investigations
• Ongoing hazard identification programme
• Regular training and updates on safety protocols/requirements for
the workforce
• Regular self-assessments on compliance with safety laws,
regulations, policies and procedures and remedial actions where
areas of potential non-compliance are noted
• Oversight, monitoring and reporting of safety compliance and
regular engagement with external service providers to conduct
independent and objective reviews and inspections
• Monitoring of workforce health (physical and mental) and access to
wellbeing and education programmes
Change in risk profile
during the year
Category
Operational Risk,
Short-medium term
Risk Owners
• Operations Executives (Cullinan and Finsch Mines)
• Country and Mine Manager (Williamson Mine)
Impact
• Potential fatalities and injuries for our workforce, visitors and the
community, impacting Petra’s licence to operate
• The risk of fines or other sanctions by regulators
• Potential production stoppages impacting Petra’s
liquidity position
• Reputational damage
9. Environment
Mining and processing operations can have a significant impact on
the environment and local communities, if not managed appropriately.
Some examples of environmental risks include:
• TSF failure, resulting in an outflow of fines residue deposits which
could severely impact communities and the environment
• Loss in ecosystem and ecological functions (eg water purification,
prevention of soil erosion) through mismanagement of
biodiversity commitments
• Failure to conduct continuous rehabilitation activities resulting in
higher than expected financial commitments at mine closure
• Non-compliance with material environmental legislation
• Prioritisation of environmental compliance by management, with a
clear set of KPIs that are regularly tracked
• Well-established and comprehensive safety policies and procedures
• Regular updates to policies and procedures following ongoing risk
assessment and safety investigations
• Compliance with conditions attached to water use licences and other
environmental authorisations
• Performance reviews, legal inspections and audits conducted on
an ongoing basis, including conducting concurrent rehabilitation
processes
• Annual waste audits conducted at the Cullinan and Finsch Mines
• Environmental Management Programmes in place for all operations
contain management options for mining waste disposal
• Tailings deposition plans underway for each mine
Change in risk profile
during the year
Category
Operational Risk,
Short-medium term
Risk Owners
• Operations Executives (Cullinan and Finsch Mines)
• Group HR and Public Affairs Executive
• Country and Mine Manager (Williamson Mine)
Impact
• Environmental damage impacting the local community and
Petra’s licence to operate
• The risk of fines or other sanctions by the regulator
• Potential production stoppages impacting Petra’s
liquidity position
• Reputational damage
62
Petra Diamonds Limited Annual Report and Financial Statements 2024
Risk Description Mitigation
10. Climate Change
We are exposed to physical, transitional and potential liability risks
which arise as a result of the long-term shift in global and regional
climate patterns. Specific risks associated with this include:
• Adverse weather changes such as intense storms (eg rainfall,
lightning) which may result in flooding of our mining shafts and
overflowing of tailings storage facilities. These events increase
our safety risks and the risk of severe socio-economic impacts on
our communities, including the sustainability of Petra’s business
• Medium- to long-term transitioning costs in mitigating the
likelihood and severity of physical climate change risks
• Escalating insurance costs and limitations on cover increases the
Group’s liability risk in the event of adverse climate change events
• Escalating carbon tax
• Developing a Climate Change Mitigation and Adaptation Strategy, aligned
to the TCFD recommendations and our Sustainability Framework
• Adoption of Climate Change Position Statement by Board
• Developing our GHG Roadmap to guide us towards our target of
reducing Scope 1 & 2 emissions by 35-40% by 2030 (against our
2019 baseline) and our net zero 2050 target
• In May 2024, entering into long term PPAs that secure the supply of
wheeled renewable energy for our South African operations,
enabling Petra to meet its interim 2030 target ahead of time
• Appropriate insurance cover in place in the event of a catastrophic
climate change incident
• Continuous monitoring against annual targets set for on-mine water
and electricity consumption and efficiency
Change in risk profile
during the year
Category
Operational Risk,
Short-medium term
Risk Owners
• Operations Executives (Cullinan and Finsch Mines)
• Country and Mine Manager (Williamson Mine)
• Group HR and Public Affairs Executive
Impact
• Our ability to implement our strategy, our licence to operate and
our reputation
• Reduces access to capital and our ability to attract and retain talent
• Potential safety and environmental-related incidents impacting
employees and local communities
• Operations impacted by adverse climate change events which in
turn impacts production and liquidity
• Undertaking scenario analyses to refine relevant climate-related
risks across different scenarios
11. Capital Projects
Major life extension capital projects at the Cullinan and Finsch
Mines were replanned during FY 2024 and approved by the
Board as part of the updated LOM plans. These projects are to be
executed concurrently and in the same parts of the orebody with
ongoing production, consequently requiring continuous interfacing
between operations and project teams. These replanned projects
with a smoothed capital profile have an inherently lower risk profile
compared to the previous baseline.
• The Projects Steering Committee, Exco, Investment Committee and
Board continue to monitor progress of all projects against approved
budgets and schedules
• Continuous identification, assessment and mitigation of project risks
Change in risk profile
during the year
Category
Operational Risk,
Short-medium term
Risk Owners
• Operations Executives (Cullinan and Finsch Mines)
• Planning and Corporate Development Executive
Impact
• Failure to deliver on our planned capital projects could lead to (i)
cost overruns impacting Group liquidity and (ii) future production
shortfalls due to delayed execution
12. Supply Chain
We continue to implement supply chain improvements that were
proposed by an independent expert in FY 2023. The aim of these
improvements is to improve internal service delivery and value,
including through supply chain contracts.
• A supply chain integrated solution project has been approved for
implementation in FY 2025, that will enhance and improve
shortcomings identified during the gap analysis project
• The implementation of the project will address the following key areas:
(i) supplier portal, (ii) “source to contract” and “procure to pay”
services, (iii) inventory management, (iv) contract lifecycle management,
(v) risk management, and (vi) master date governance framework
• New supply chain policy has been drafted and will be approved in H1
FY 2024, with associated procedures to be concluded as part of the
implementation of the improvement project
• Demand planning to improve inventory management is being rolled
out in FY 2025
Change in risk profile
during the year
Category
Operational Risk,
Short-medium term
Risk Owners
• Chief Financial Officer
• Operations Executives (Cullinan and Finsch Mines)
Impact
• Production interruptions and/or shortfalls due to delayed
procurement and missed value opportunities through inefficient
contract management
• A failure to conduct appropriate due diligence and vetting of
suppliers may lead to legal, financial and reputational risks
• Inadequate segregation of duties between roles and a lack of
adequate audit trails may contribute to weakness in the internal
control environment
• Ineffective and unclear functioning of a tender committee for
awarding contracts to suppliers may create uncompetitive pricing
and/or conflicts of interest
• Gap analysis of existing supply chain processes and systems
conducted by an independent external expert in FY 2023
Higher External risk
Lower Strategic risk
No change Operational risk
63
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES / CONTINUED
Viability statement
The UK Corporate Governance Code requires that the Directors
assess the viability of the Group over an appropriate period of
time selected by them. The Board has concluded that the
relevant time period for this assessment is the three-year period
ending June 2027, reflecting the business planning cycle, the
March 2026 maturity date of the 2L Notes, the peak capital
expenditure years of the approved extension projects at the
Cullinan and Finsch Mines, the transition of Koffiefontein from
care and maintenance to sale, and the potential impact of the
principal risks that could affect the viability of the Group. This
assessment is carried out annually before the approval of the
annual Financial Statements and informed by continuous
business planning processes throughout the Year.
The review of the Group’s viability is led by the Executive
Directors and involves all relevant functions, including
operations, sales and marketing, finance, treasury and risk.
The Board actively participates in the annual review process by
means of structured Board meetings. As part of this review, the
Board considered detailed forecasts in respect of liquidity and
the covenants related to the Group’s banking facilities, the 2L
Notes and their maturity date, and the principal risks of
the Group.
Diamond prices and market outlook
For a review of the diamond market, see pages 26 to 31.
Over the past 12 months, diamond prices have experienced
significant fluctuations due to a combination of factors, including
global macro-economic conditions, changes in consumer
behaviour, and industry developments such as the Indian
diamond import moratorium. Initially, prices surged after the
COVID pandemic due to pent-up demand, but they have since
softened amid rising inflation, higher interest rates, and reduced
disposable incomes. Additionally, the growing market for
lab-grown diamonds, driven by technological advancements
and ethical considerations, has further segmented the market,
impacting the traditional natural diamond industry. Natural and
lab-grown diamonds are expected to coexist, with lab-grown
diamonds offering a different purchase proposition and opening
the market to a broader spectrum of consumers. With interest
rates expected to have peaked and the G7’s sanctions on
Russian diamonds, some medium-term pricing support is
anticipated. Whilst the Company remains cautious about
near-term market conditions, it believes the long-term
fundamentals remain sound. For liquidity evaluation, diamond
prices are assumed to grow at 1.88% real annually (3.88%
nominal), supported by De Beers’ guidance projecting
a nominal increase of 3-5% from 2025 onward.
Capital structure
The Group’s US$93 million (ZAR1.75 billion) senior Revolving
Credit Facility (RCF) was drawn by US$25 million as at 30 June
2024. Post Year End, the Group utilised a further US$22 million
following a decision to defer tender 1 of FY 2025 to October
2024. The Group anticipates settling the drawn balances of
its RCF during FY 2025 from the proceeds of sales tenders.
Since May 2024, US$12 million of the total outstanding 2L
Notes was repurchased in an Open Market Repurchase (OMR)
programme. While the OMR will continue to be used, Petra is
assessing options for the refinancing of its 2L Notes which
mature in March 2026 and has started discussions with potential
lenders.
In addition, the Group will either extend the current RCF or
introduce a new revolving credit facility, keeping in mind the debt
structure and working capital requirements of the Group. Any
extension of the RCF or any new revolving credit facility is likely
to be dependent on the successful refinancing of the 2L Notes.
The Group remains confident in its ability to refinance its 2L
Notes on the back of the underlying strong operational cash flow
generation, as well as the expected net cash-flow generation
after the peak FY25-FY27 capital expenditure periods.
Operational update
For a review of our operations, refer to pages 32 to 33 of the
Operational Review and pages 34 to 38 for individual mine
overviews.
Over the past Year, total tonnes treated increased to 11.7 Mt,
largely due to the successful ramp-up at Williamson, while
production at the Cullinan Mine remained flat and the Finsch
Mine saw a 14% decline due to tunnel challenges and a shift
change. Grades varied across operations, with the Cullinan Mine
and Williamson experiencing declines due to factors such as
waste ingress and orebody variations. Overall, Group diamond
production was slightly below guidance at 2.73 Mcts, impacted
by lower grades and production volatility at Finsch and
Cullinan Mines. The Company also undertook an organisational
restructuring to align with the reduced scale of its operations,
reducing headcount and decentralising Group functions.
Five-year wage agreements with NUM and long-term Power
Purchase Agreements to secure renewable energy for our
South African operations were entered into, contributing to cost
predictability and operational focus. Efforts to optimise mine
plans and stabilise operations are expected to yield sustainable
cost reductions and smoother capital profiles.
Refer to page 129 in the Financial Statements for an overview of
actions taken by management to enhance financial flexibility
amid ongoing market challenges.
Review of principal risks
The Group’s principal risks and uncertainties, set out in detail on
pages 59 to 63, have been considered over the period. Whilst
all the risks identified could have an impact on the Group’s
performance, the specific risks which could materially impact
the Group’s financial position have been determined to be:
• Rough diamond prices
• Currency fluctuations
• Group liquidity
• Mining and production, including ROM grade
• Capital projects
64
Petra Diamonds Limited Annual Report and Financial Statements 2024
To assess, either directly or by proxy, the potential impact of
these principal risks over the forecast period, the Group has run
downside scenarios:
• a 5% decrease in forecast rough diamond prices throughout
the period to June 2027
• a 2.5% strengthening in the forecast South African Rand
exchange rate throughout the period to June 2027
• a 5% increase in operating costs throughout the period to
June 2027
• a 5% increase in extension capital throughout the period to
June 2027
• a combined sensitivity: revenue down 5% plus opex up 5%
plus total capex up 5%.
These downside scenarios were performed in combination with
a reverse stress test to determine if the Group is forecast to have
sufficient liquidity and covenant compliance headroom.
The potential impact of each of the Group’s other principal risks
on the viability of the Group during the forecast period, should
that risk arise in its unmitigated form, has been assessed. The
Board has considered the risk mitigation strategy for each of
these other principal risks and believes they are sufficient to
reduce the impact of each risk such that it would be unlikely to
jeopardise the Group’s viability during the forecast period.
For the purpose of assessing the Group’s viability, the Board
focused its attention on the critical principal risks. In order to
determine the likelihood and impact of those risks, the Board
assessed the Group-wide principal external, operational
and strategic risks by undertaking consultations with Senior
Management (see Risk Management and Principal Risks on
pages 56 to 63). Through this analysis, the Board also identified
low probability, high loss scenarios – ‘singular events’ – with the
potential magnitude to severely impact the solvency and/or
liquidity of the Group. The scenarios tested considered the
Group’s revenue, underlying EBITDA, cashflows, covenant ratios,
as well as the impact on facility availability over the three-year
period excluding repayment of the 2L Notes.
Under certain downside scenarios listed above, the forecasts
show that there is a risk of a future covenant breach for the
Group’s Revolving Credit Facility. In addition, the Group may face
a covenant breach by June 2025 if the debt is not refinanced
before this date. The Board considers the risk of a future
covenant breach to be unlikely and has a reasonable expectation
that in the event of a downside scenario there would be a
number of mitigating actions to avoid a breach, including
obtaining a waiver.
As previously stated, the Group will have to refinance the full
outstanding 2L Notes debt of c. US$250 million and the drawn
down Revolving Credit Facility, and management has engaged
with potential lenders with a view to refinance prior to the 2L
Notes becoming a current liability in March 2025. The Group
remains confident in its ability to refinance its debt on the back of
the underlying operational cash-flow generation, as well as
strong net cash-flow generation projected from FY2027
onwards, as the Group sees the benefit of an increase in carats
recovered from higher-grade areas that are currently in
development. The outcome of a refinancing, however, remains
outside of the Group’s control. If the Group is unable to
successfully refinance the existing debt on account of the
willingness of existing Noteholders and/or the terms and
conditions of such a refinancing or new debt instruments, the
Group would consider whether other options are available such
as an equity raise or asset sales in order to settle its obligations.
Conclusion
The Board is of the view that the longer-term fundamentals of the
diamond market remain sound and that the Group will continue
to benefit from the revised LOM plans for the Finsch and Cullinan
Mines and the newly embedded operating model throughout the
review period.
Based on its assessment of the forecasts, principal risks/
uncertainties and mitigating actions considered available to the
Group in the event of downside scenarios, the Board confirms
that it has a reasonable expectation that the Group will be able to
continue to operate and meet its liabilities as they fall due over
the review period.
If the Group is unable to raise the necessary debt capital to
refinance the remaining 2L Notes, the Group may have to resort
to an equity raise or asset sales to settle its obligations. The
Group is of the view that a successful equity raise would be
supported by the long-term resource potential at both the
Cullinan Mine and the Finsch Mine, extending their current LOM
plans to mid-2030s and beyond.
65
Petra Diamonds Limited Annual Report and Financial Statements 2024
STRATEGIC REPORT
Dear Shareholder,
On behalf of the Board, I am pleased to present Petra’s
Corporate Governance Report for FY 2024. Strong and effective
corporate governance, including effective Board oversight, are
essential to Petra’s success. During FY 2024, the Board has
continued to monitor the execution of the Company’s strategy
and its performance and to ensure that Petra has the appropriate
resources, leadership and controls in place to support long-term
sustainable value for our shareholders and wider stakeholders.
Board changes
Various changes in FY 2024 have resulted in a smaller and more
efficient Petra Board consisting of seven Directors, having been
ten Directors at the start of the Year.
Peter Hill CBE elected not to offer himself for re-election at
Petra’s AGM in November 2023 and retired from the Board at
the conclusion of that meeting. Johannes Bhatt also retired
as a non-independent NED at the conclusion of that meeting.
Jon Dudas and Alex Watson stepped down from their roles
as independent NED and non-independent NED, respectively,
in February 2024. Alex has assumed a role as Board Observer,
nominated by shareholder Franklin Templeton. Jon assumed
a six month role as a Board Adviser which ended in August
2024. Finally, it was announced in March 2024 that Jacques
Breytenbach will step down as CFO and Director at the end of
September 2024, with Johan Snyman being appointed as CFO
with effect from 1 October 2024. When Jacques steps down, this
will reduce our Board further to six directors. Once again, I would
like to take the opportunity to thank Peter, Johannes, Jon, Alex
and Jacques for their extensive service and contributions to the
Board in recent years.
Following Peter’s departure, I was appointed as Chair of Petra,
as well as Chair of the Nomination and Investment Committees,
and stepped down from the Audit & Risk and Remuneration
Committees. Initially my appointment was in an interim
capacity, whilst a search for a permanent Chair was conducted.
Subsequently, Petra’s largest shareholders requested that I
remain in role over the next 18-24 months from my appointment,
with a search for a permanent Chair then being conducted if I do
not wish to continue in the role.
After the AGM in November 2023, Bernard Pryor took over
my previous roles as Senior Independent Director and then,
in January 2024, as Chair of the Remuneration Committee.
We also announced the merger of the Company’s Health
and Safety and Sustainability Committees to form the Safety,
Health and Sustainability Committee, with effect from January
2024. Lerato Molebatsi was appointed Chair of this new
Committee, again with effect from January 2024.
In January 2024, we also welcomed the appointment of José
Manuel Vargas as a non-independent NED. José Manuel has
extensive executive and board experience across a range of
sectors and is also a significant shareholder of Petra, currently
holding c. 8.75% of Petra’s issued share capital. For José
Manuel’s biography, see page 69.
In May 2024, Petra appointed Amre Youness, principal owner
of the Terris Fund SPC (the Company’s largest shareholder),
as a Board Observer, entitling Amre (like Alex) to attend but
not vote at Board meetings. On behalf of the Board, I would like
to thank Amre and Alex for all the contributions they have made
to the Board during FY 2024 in their roles as Board Observers.
Amidst Board changes and a challenging year, Petra’s
commitment to robust governance remains strong.
Varda Shine, Non-Executive Chair
CORPORATE GOVERNANCE
Chair’s Introduction to Governance
66
Petra Diamonds Limited Annual Report and Financial Statements 2024
Diversity
The Board is composed of a diverse mix of gender, social and
ethnic backgrounds, knowledge, personal attributes, skills and
experience. This diversity is reflective of the areas in which
we do business and provides a mix of perspectives, which
contributes to effective Board dynamics.
The Board remains committed to improving diversity levels
throughout Petra’s workforce and supports the recommendations
of the FTSE Women Leaders Review on gender diversity and the
Parker Review on ethnic diversity. Further information on the
diversity profile of the Board and senior management is included
on page 77.
Culture
In striving to fulfil our purpose of creating abundance from rarity,
the Board recognises the critical role that culture plays in shaping
Petra’s success. In FY 2023, the Board oversaw the co-creation
of the Petra Culture Code and in FY 2024 remained committed in
its efforts to further embedding the Petra Culture Code across
the organisation. Despite the challenges which Petra has faced
in FY 2024, the Board continued to monitor the Petra Culture
Code scores and feedback, further details of which can be found
on page 46. We firmly believe that a strong culture is key to
attracting and retaining top talent, driving performance and
ultimately creating long-term sustainable value for Petra’s
stakeholders.
Shareholder engagement
At the AGM in November 2023, resolution 15 (which granted
the Board authority to issue and allot shares) passed with a
62.82% majority, though 37.18% of shareholders opposed it.
In accordance with our obligations under the UK Corporate
Governance Code, Petra consulted with dissenting shareholders
to understand their concerns. The consultations revealed a
preference for approving equity capital changes on a case-by-
case basis rather than granting general or annual authorities.
One shareholder highlighted a policy of voting against
authorities that could lead to dilution without a specific
transaction in mind. Petra clarified that the authority was
intended to provide flexibility in capital management and align
with UK institutional shareholder guidelines and market practice.
After considering shareholder feedback, the Board has decided
not to seek the granting of Board authority to issue and allot
shares at Petra’s AGM in November 2024. For more information
on the engagements, see page 83. We thank our shareholders
for their feedback and emphasise the importance of ongoing
engagement.
Code compliance
The Board remains committed to the highest standards of
corporate governance as set out in the 2018 UK Corporate
Governance Code. I am pleased to confirm that the Board
considers Petra to be in full compliance with the requirements of
the Code. The Board is cognisant of the changes to the Code
that were published in January 2024 and is well positioned to
comply with them when they become effective.
Board evaluation
In Q4 FY 2024, the Board undertook an evaluation of its own
performance, facilitated by the Company Secretary, which
indicated that Petra’s Board remains effective. A summary of how
the evaluation was carried out and certain areas identified for
improvement are outlined on page 80.
Should any stakeholder like to speak to me or Bernie Pryor, the
Senior Independent Director, about any aspects of this Report or
the Company’s performance, please do not hesitate to contact
us through the Corporate Communications in London (see page
171 for contact details).
Varda Shine
Non-Executive Chair
23 September 2024
67
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Varda Shine
Non-Executive Chair
Appointment date: January 2019 and as Chair
in November 2023
Nationality: British and Israeli
Qualifications: MSc Executive Coaching (Hult/
Ashridge) with various business and management
courses at Technicon (Israel), Templeton College
(Oxford), Cranfield and INSEAD.
Skills and experience: Varda is a Non-Executive
Director, executive coach (Meryck & Co since
2014) and diamond industry expert. A 30-year
career with De Beers culminated in an appointment
as CEO of De Beers Trading Company and the
first woman to be awarded honorary lifetime
membership of the Israel Diamond Exchange.
Varda has also received Honorary Membership
of the London Diamond Bourse.
External appointments: Varda is the Senior
Independent NED of Ecora Resources plc and an
iNED of Sarine Technologies Limited (Singapore
listed). Varda is also a trustee of the Teenage
Cancer Trust.
Interest in the Company as at 30 June 2024:
24,755 shares (30 June 2023: 24,755 shares).
Jacques Breytenbach
Chief Financial Officer
Appointment date: February 2018
Nationality: South African
Qualifications: CA (SA), BCompt (Hons) (University
of South Africa) and Postgraduate Diploma in
Auditing (University of the Witwatersrand).
Skills and experience: Appointed as CFO in
2018, Jacques is responsible for financial and
management accounting and reporting, business
development, treasury, financial controls and
reporting, having previously held the role of
Finance Manager for Operations at Petra from
2006. Before joining Petra, Jacques held various
roles at Anglo Platinum, including Finance
Manager for Capital Projects.
External appointments: None.
Interest in the Company as at 30 June 2024:
419,747 shares (30 June 2023: 183,742 shares).
Committee key
A
Audit and Risk Committee
N
Nomination Committee
R
Remuneration Committee
S
Safety, Health and
Sustainability Committee
I
Investment Committee
E
Executive Committee (Exco)
Chair
N
SS
Deborah Gudgeon
Independent Non-Executive
Director
Appointment date: July 2021
Nationality: British
Qualifications: BSc (Econ) (London School of
Economics and Political Science) and CA (ICAEW).
Skills and experience: Deborah, a Chartered
Accountant with over three decades’ experience
across corporate finance, restructuring and debt
management, qualified at PWC (Coopers &
Lybrand) before spending eight years as Finance
Executive with the Africa-focused miner, Lonrho
plc. Since then, Deborah has held positions with
Deloitte, BDO and Gazelle Corporate Finance.
Deborah has extensive boardroom experience,
having been appointed as an iNED and Audit
Committee Chair at Acacia Mining, Highland Gold,
EVRAZ and latterly at Ithaca Energy and Serabi Gold.
External appointments: Deborah is an iNED (and
Chair of the Audit and Risk Committees) of Ithaca
Energy plc and Serabi Gold plc.
Interest in the Company as at 30 June 2024:
Nil (30 June 2023: Nil).
N A R I
I I I
EE
Board of Directors
N I A R S
Bernard Pryor
Senior Independent
Non-Executive Director
Appointment date: January 2019
Nationality: British and Australian
Qualifications: Metallurgical Engineer (Royal
School of Mines, Imperial College) and Chartered
Engineer (Institute of Mines and Metallurgy).
Skills and experience: Bernie has over 35 years’
experience in the mining industry, with a diverse
skill-set, including project acquisition,
development, construction and M&A. As CEO of
several mining companies, including Alufer Mining,
MC Mining, African Minerals Limited and Q
Resources plc, he has managed large-scale,
operating assets. Earlier in his career, Bernie held
senior positions within Anglo American and was
COO at Adastra Minerals Inc.
External appointments: Bernie is the Managing
Director of Karo Mining Holdings, which has a
concession for a platinum development in Zimbabwe.
Interest in the Company as at 30 June 2024:
13,000 shares (30 June 2023: 13,000).
Richard Duffy
Chief Executive Officer
Appointment date: April 2019
Nationality: South African
Qualifications: BCom (University of the Witwatersrand)
and MBA (Henley Management College).
Skills and experience: Richard has significant
business, strategic and financial skills, along with
extensive experience in open pit and underground
mining. With over three decades of global mining
industry experience, initially with Anglo American
and then AngloGold Ashanti, he has consistently
prioritised safety, productivity and sustainability,
leading numerous large-scale mining operations in
Africa. Richard was previously CFO and Executive
Director of AngloGold Ashanti and founded African
Energy Management Platform, a developer of
renewable energy plants for mining and industrial
clients across Africa.
External appointments: Richard is a Director
of the Natural Diamond Council.
Interest in the Company as at 30 June 2024:
879,993 (30 June 2023: 272,792 shares).
68
Petra Diamonds Limited Annual Report and Financial Statements 2024
Lerato Molebatsi
Independent Non-Executive
Director and designated Workforce
Engagement iNED
Appointment date: April 2023
Nationality: South African
Qualifications: BA (Psychology) (University of
Johannesburg), Senior Executive Leadership
Programme for Africa (Harvard University), Diploma
in Senior Management Development (University of
Stellenbosch Business School) and Diploma in
Rural Development Programme (University of the
Witwatersrand).
Skills and experience: Lerato has broad executive
and non-executive expertise in South Africa, and is
experienced on ESG, corporate social investments
and black economic empowerment. She served
as CEO of General Electric South Africa (2016-
2019), prior to which she was Executive VP for
Communications and Public Affairs at Lonmin.
Lerato has also held senior roles at Old Mutual
and Sanlam. In the public sector, Lerato was the
Deputy Director-General (Corporate Services) at
the Department of Labour and also a Special
Adviser to the South African Minister of Transport.
External appointments: Lerato is the lead iNED
of the South African Reserve Bank and is an iNED
of Spur Corporation, the JSE-listed restaurant
franchiser, where she also chairs the Social, Ethics
and Environmental Sustainability Committee.
Lerato is also a member of the Remuneration
Committee of South Africa’s Financial Sector
Conduct Authority.
Interest in the Company as at 30 June 2024:
Nil (30 June 2023: Nil)
José Manuel Vargas
Non-independent Non-Executive
Director
Appointment date: January 2024
Nationality: Spanish
Qualifications: Licenciatura (Economics and
Business) (University of Madrid) Licenciatura (Law)
(Universidad Nacional de Educación a Distancia),
licenced attorney (Madrid Bar Association) and
Chartered Accountant.
Skills and experience: José Manuel has extensive
executive and board experience across various
sectors. From 2020 until January 2024, he was
Chair and CEO of MAXAM, a leading explosives
manufacturer. He was previously Chair and CEO
of Aena SME S.A., where he led its restructuring,
partial privatisation and IPO in 2015. Before Aena,
he held senior management positions at Vocento
S.A., including CFO and later CEO. He also served
as CFO and General Secretary of JOTSA and has
been on the boards of several other companies,
including Vocento, Diario ABC and Wellbore
Integrity Solutions LLC.
External appointments: José Manuel is Chair of
MAXAM, on the board of Fluidra S.A. and ASK
Chemicals, and is a Managing Director of
Rhône Capital.
Interest in the Company as at 30 June 2024:
17,000,000 shares (30 June 2023: n/a)
Board changes in FY 2024
1. Johannes Bhatt retired from the Board at
the conclusion of the Company’s AGM on
14 November 2023.
2. Peter Hill CBE notified the Company that he
would not offer himself for re-election at the
2023 AGM, and retired from the Board at the
conclusion of that meeting on 14 November
2023.
3. Varda Shine was appointed Chair of the Board
and Chair of the Nomination and Investment
Committees following Mr Hill’s retirement from
the Board. Ms Shine ceased being the Senior
Independent Director, as well as a member of
the Audit Committee with effect from this date.
Varda ceased being a member and the Chair of
the Remuneration Committee with effect from
1 January 2024. In accordance with Code
Provision 10 of the UK Corporate Governance
Code, Ms Shine was assessed to be independent
upon her appointment as Chair. In her capacity
as Chair, Ms Shine continues to be the Director
designated as responsible for ESG matters.
4. Bernie Pryor was appointed as Senior
Independent Director with effect from the
conclusion of the Company’s AGM on
14 November 2024. Mr Pryor was appointed
as Chair of the Remuneration Committee
with effect from 1 January 2024.
5. José Manuel Vargas was appointed to the
Board as a non-independent NED effective
1 January 2024. While Mr Vargas was not
appointed to any of the Board’s Committees,
he, like all members of the Board remains
entitled to attend and speak at all Board and
Committee meetings.
6. The Health and Safety Committee and
Sustainability Committee merged to form the
Safety, Health and Sustainability Committee
with effect from 1 January 2024. Lerato
Molebatsi was appointed the Chair of this
Committee and Varda Shine, Richard Duffy
and Bernie Pryor as members of it.
7. Alex Watson stepped down from the Board on
17 February 2024 and took up a role as a Board
Observer from that date, nominated by Franklin
Templeton.
8. Jon Dudas stepped down from the Board
on 17 February 2024 and took up a role as a
Board Adviser for six months. This appointment
terminated on 17 August 2024.
9. On 8 March 2024, Jacques Breytenbach
resigned as Chief Financial Officer and
Director of the Company for personal reasons,
but will remain in this role until 30 September
2024 to deliver the Company’s FY 2024
results. Johan Snyman, the Group Financial
Controller has been appointed to succeed
Mr Breytenbach with effect from
1 October 2024.
10. In May 2024, Amre Youness was appointed
as a Board Observer.
N S A R I
Board Observers
Alex Watson
• Nominated by: Franklin Templeton which
has a 5.03% shareholding in the Company
• Appointment date: February 2024
• Nationality: South African
• Qualifications: BCom (Hons) (University of
Cape Town), CA (SA) and Emeritius Professor
of Accounting (the University of Cape Town).
• Skills and experience: Alex is a chartered
accountant with expertise across corporate
governance, financial and other forms of
corporate reporting, investment, broad
business and financial experience. With
almost three decades’ experience in
corporate governance, she has held
positions on listed boards for nearly
20 years. With a distinguished career in
corporate reporting, Alex is currently an
adjudicator of EY’s Excellence in Integrated
Reporting Awards and is the Chair of the
South African Financial Reporting
Investigations Panel. Alex was previously
the Vice-Chair of the Global Reporting
Initiative as well as of the Accounting
Practices Committee, the technical
accounting committee of the South
African Institute of Chartered Accountants.
• External appointments: Alex is the Chair
of both Coronation Fund Managers and
Advetch Limited and until June 2024, was
an independent non-executive director
of Steinhoff International Holdings NV
(also chairing Steinhoff’s Audit and Risk
Committee). Alex is also a Non-Executive
Director of the South African chapter of the
World Wildlife Fund.
Amre Youness
• Nominated by: Terris Fund SPC, the
Company’s largest shareholder, with
a 29.49% shareholding
• Appointment Date: May 2024
• Amre is the principal owner of the
Terris Fund SPC.
69
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Juan Kemp
Operations Executive:
Cullinan Diamond Mine
Qualifications: BSc (Metallurgical Engineering)
(Potchefstroom University); and MA (Business
Administration) (North West University Business
School).
Experience: Juan joined Petra after the purchase
of the Cullinan Mine from De Beers and was
appointed Surface Manager and Group
Metallurgical Manager for all seven of Petra’s
treatment plants. He was subsequently promoted
to General Manager of the Cullinan Mine in 2011,
and in July 2019 was appointed as Project
Executive, becoming Chief Technical Officer
later that year. In 2024, Juan was appointed as
Operations Executive for Cullinan Diamond Mine.
He has nearly 30 years’ experience, with a deep
knowledge of the Cullinan Mine (where he acted
as Metallurgical Manager for several years) and
was an integral member of the team that
re-engineered De Beers’ South African business
model. Before to his time at De Beers, Juan
worked at the East Rand Gold and Uranium
Division of Anglo American as a Mineral
Processing Engineer.
Jaison Rajan
Operations Executive:
Finsch Diamond Mine
Qualifications: BSc (Mining Engineering)
(University of the Witwatersrand), MBA (Mineral
Economics and Business Administration)
(University of Cape Town) and Mine Manager’s
Certificate of Competency (South Africa).
Experience: Jaison has over 20 years’ industry
experience across a range of commodities,
including heavy minerals, diamonds, manganese
and coal. Jaison was appointed COO at Petra in
2022, having been General Manager at the
Cullinan Mine for the previous three years. Given
Jaison’s deep understanding of Finsch (having
started his career there), he was appointed as
Operations Executive. Jaison has acted as a
section leader, ensuring safe control, management,
direction of underground excavations and
infrastructure. Before joining Petra, Jaison worked
as General Manager at Khutala Colliery (BHP).
Vivek Gadodia
Planning and Corporate
Development Executive
Qualifications: BSc Eng (Hons) in Chemical
Engineering (University of KwaZulu-Natal).
Experience: Vivek has over 18 years of experience
in the extractives industry. Before joining Petra,
Vivek spent nearly 15 years with Sasolin a wide
range of engineering, project management and
corporate positions. For nearly 6 years, he worked
at Sasol’s flagship Secunda facility in a range
of technical/engineering roles, before being
seconded to Houston, Rome, and Seoul on various
projects. On his return to South Africa in 2016,
Vivek pivoted to the Corporate Strategy function
and was appointed as Sasol’s Head of Strategy
for Sustainability, responsible for the formulation
of the Sasol 2.0 framework. After joining Petra
in 2021, Vivek was appointed to head up the
Planning and Corporate Development function,
which includes corporate strategy formulation,
business development, business planning and
corporate finance.
Thashmi Doorasamy
Group HR and Public
Affairs Executive
Qualifications: BAdmin (Hons) (Public Finance)
(University of Durban Westville).
Experience: Thashmi joined Petra in February
2020 as HR and Public Affairs Executive after
spending 18 years at the Massmart Group, a
leading South African retailer. At Massmart, her
main role was as HR Director for Massbuild, their
building division, from 2003 to 2013. During this
time, Thashmi oversaw the integration of the
newly acquired building supply company, Builders
Warehouse, into the Massmart group. The merger
expanded successfully into the wider South
African and African market, leading to Thashmi’s
promotion in 2013 to Group Compliance Officer.
Later that year, Massmart was purchased by the
US-based Walmart Group, with Thashmi leading
the integration of Massmart’s South African
businesses into the Walmart Group. In 2015, she
joined the Taste Group, overseeing the People
Roll-Out plan for Starbucks, which followed their
acquisition of the Starbucks licence for
Southern Africa.
Rupert Rowland-Clark
General Counsel and
Company Secretary
Qualifications: BSc (Economics and Politics)
(Bristol University) and Solicitor (England
and Wales).
Experience: Rupert assumed the role of General
Counsel and Company Secretary in June 2021.
He leads Petra’s Legal, Company Secretary, Risk,
Assurance and Compliance functions and reports
into the Chief Executive Officer and Chair. He has
over 20 years’ legal and executive experience,
most recently at Tullow Oil plc, an African-focused
FTSE 250 oil and gas exploration and production
company, where he was General Counsel from
2015 to 2020. Prior to Tullow, Rupert was a
mergers and acquisitions lawyer at global law firm,
Freshfields Bruckhaus Deringer LLP, where he
worked on a broad range of public and private
transactions across multiple sectors and jurisdictions.
Executive Committee (Exco)
70
Petra Diamonds Limited Annual Report and Financial Statements 2024
Johan Snyman
Group Financial Controller and
Chief Financial Officer (designate)
Qualifications: BCom (Hons) (University of
Pretoria), MBA (University of Cape Town),
Chartered Accountant (SA and ICAEW) and
Certified Internal Auditor.
Experience: Johan has more than 20 years’
experience in global mining and metals, latterly
as Vice President for Group Financial Reporting at
Anglogold Ashanti. At Anglogold, Johan led key
finance functions, including group reporting,
finance systems, and shared services and played
an instrumental role in the strategic re-domiciliation
of AngloGold to the United Kingdom. After
joining Petra in January 2024 as Group Financial
Controller, Johan was appointed to the role of
Chief Financial Officer, and will take over this role
from October 2024.
Greg Stephenson
Sales and Marketing Executive
Experience: Greg has more than three decades’
experience in the buying and selling of diamonds
and has led the Sales team at Petra Diamonds
since 2008. In this role, Greg oversees the
preparation, valuation and marketing of Petra’s
rough diamonds, managing the full sales process
for the South African and Tanzanian production.
Before joining Petra, Greg owned and managed
GDR Diamonds, Johannesburg, for ten years
where he purchased rough diamonds throughout
southern Africa, provided independent valuations
in Angola and acted as head valuator for a large
Belgian company in Moscow. Greg started his
career in the London office of De Beers as a
trainee diamond buyer. His career with De Beers
included eight years in the Overseas Purchasing
Division where he went on multiple tours and
secondments, including to Kinshasa, Brazzaville,
Mbuji-Mayi, Kahemba, Luanda, Johannesburg
and Antwerp.
The biographies for Richard Duffy (CEO) and
Jacques Breytenbach (CFO) appear on page 68.
71
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE STATEMENT
UK Corporate Governance
Code compliance
Petra recognises the importance of maintaining high standards of corporate governance.
The Company looks to not only comply with all applicable governance regulations in the
jurisdictions in which it operates but also to meet best practice wherever possible.
Petra is not subject to a code of corporate governance in its
country of incorporation, Bermuda. However, as a company
which is listed on the Main Market of the London Stock Exchange
(LSE), Petra is required to comply with the UK Corporate
Governance Code 2018 (the Code) and to explain in this
statement any areas of non-compliance with the Code.
As at the date of this Report, and for the financial year under
review, the Board considers that Petra has complied in full
with the provisions of the Code. A copy of the Code can be
obtained from the Financial Reporting Council’s website
(https://www.frc.org.uk). This Report, together with the other reports
in the Corporate Governance section, explains how the principles
of the Code have been applied by the Company.
Code Section 1: Board leadership and
Company purpose
Details on how the Board promotes the long-term success of the Company is provided in the
Strategic Report on pages 4 to 5. The Company’s purpose and values are set out on pages 1,
5 and 11. Petra’s strategy is outlined on pages 22 to 23. Our Section 172 statement is set out
on pages 49 to 51.
Code Section 2: Division of responsibilities Details of the Board and Exco, as well as Petra’s governance structure and Board activities
for FY 2024, are described at pages 68 to 71 and 81 to 82 respectively.
Code Section 3: Composition, succession
and evaluation
The findings of the internally facilitated FY 2024 Board Evaluation are set out at page 80.
The report of the Nomination Committee is at pages 93 to 95.
Code Section 4: Audit, risk and
internal control
The report of the Audit and Risk Committee is at pages 84 to 91. A description of Petra’s risk
management and principal risks is set out at pages 56 to 63.
Code Section 5: Remuneration Petra’s Directors’ Remuneration Report for FY 2024 is set out at pages 103 to 114.
Matters reserved
for the Board
• Purpose and strategy
• Financial Statements and reporting
(supported by the Audit and Risk
Committee) and operating updates
• Financing strategy, including material
borrowings
• Budgets, mine plan extension projects,
capital expenditure and business plans
(supported by the Investment
Committee)
• Material acquisitions and divestments
• Material contracts
• Corporate governance, ethics
and culture, including significant
Group policies
• Risk management and internal controls,
including consideration of the Viability
Statement (supported by the Audit and
Risk, Remuneration and Safety, Health
and Sustainability Committees)
• Oversight of health, safety, employee,
social and environmental matters
(supported by the Safety, Health and
Sustainability Committee)
• Appointments and succession plans
(supported by the Nomination
Committee)
• Executive Director remuneration
(supported by the Remuneration
Committee)
SHS
Strategy and Risk
Corporate and finance
Operations and projects
Governance, social, ethics and diversity
%
15
25
20
30
10
BOARD TIME IN FY 2024
1
1. This split of Board time is an estimate only and is
calculated using the Board meeting agendas and
rough time split allocated to each item in advance.
MINING INDUSTRY
AFRICA
CAPITAL MARKETS
DIAMOND MARKETING
ACCOUNTING AND FINANCE
EXECUTIVE MANAGEMENT
SUSTAINABILITY
(Including Health and Safety)
6/7 7/7
3/7
6/7 6/7
5/7
3/7
BOARD EXPERIENCE (AS AT THE DATE OF THIS REPORT)
72
Petra Diamonds Limited Annual Report and Financial Statements 2024
The role of the Board
The Board is responsible for the long-term success of the Company. Petra’s Board should have the necessary combination of skills,
experience and knowledge, as well as independence (with regard to the iNEDs), to properly discharge its responsibilities and duties.
In order to fulfil its role, the Board:
• Sets the Company’s strategic aims, ensures that the necessary resources are in place for the Company to meet its objectives, and
reviews management performance in achieving such objectives
• Provides leadership of the Company within a framework of effective systems and controls which enable risks to be assessed
and managed
• Develops the collective vision of the Company’s purpose, culture, values and the behaviour it wishes to promote in conducting
business and ensures that its obligations to its shareholders and other stakeholders are understood and met
• Carries out all duties with due regard for the sustainability and long-term success of the Company
The role of the Non-Executive Chair
Varda Shine
The role of the Chief Executive Officer
Richard Duffy
• Leads the Board and is primarily responsible for the effective
working of the Board
• In consultation with the Board, ensures good corporate
governance and sets clear expectations with regards to
Company culture, values and behaviour
• Sets the Board’s agenda and ensures that all Directors are
encouraged to participate fully in the activities and decision-
making process of the Board
• Is the ultimate custodian of shareholders’ interests
• Engages with shareholders and other governance-related
stakeholders, as required
• Meets with the Senior Independent Director and with the
iNEDs without the Executive Directors present, in order to
encourage open discussions and to assess the Executive
Directors’ performance
• Identifies induction and development needs of the Board and
its Committees
• Chairs the Nomination Committee, thereby playing an
important part in assessing and advising on the appropriate
composition of the Board and its skill-set
• Chairs the Investment Committee, which makes recommendations
to the Board on the Group’s most significant capital
expenditure, investment proposals and disposals
• Is primarily responsible for implementing Petra’s strategy
established by the Board and for the operational management
of the business
• Leads and provides strategic direction to the Company’s
management team
• Runs the Company on a day-to-day basis
• Implements the decisions of the Board and its Committees,
with the support of Exco
• Monitors, reviews and manages key risks
• Ensures that the assets of the Group are adequately
safeguarded and maintained
• Is the Company’s primary spokesperson, communicating with
external audiences, such as investors, analysts and the media
• Leads by example in establishing a performance-orientated,
inclusive and socially responsible Company culture
• Chairs the Exco and is a member of the Safety, Health and
Sustainability Committee, thereby having direct involvement
in the strategic management of Petra’s health, safety and
sustainability issues, including labour relations, and is also
a member of the Investment Committee
The role of the Senior Independent Director
Bernie Pryor
The role of the NEDs
Bernie Pryor, Deborah Gudgeon, Lerato Molebatsi
and José Manuel Vargas
• Provides a sounding board for the Chair and serves as an
intermediary for the other Directors as necessary
• Is available to shareholders if they have concerns which
contact through the normal channels has failed to resolve, or
for which such contact is inappropriate
• Leads the iNEDs in undertaking the evaluation of the Chair’s
performance
• Is a member of Petra’s Audit and Risk, Remuneration,
Nomination, Safety, Health and Sustainability and Investment
Committees, thereby having oversight of the Group’s material
risks, issues and opportunities, and bringing his skill-set and
independent judgement to the benefit of these Committees
• Challenge the opinions of the Executive Directors, provide
fresh insights in terms of strategic direction and bring their
diverse experience and expertise to the benefit of the
leadership of the Group
• Assess the performance of the Chair
• Scrutinise the performance of the Executive Directors in terms
of meeting agreed goals and objectives
• Ensure that the governance, financial information, controls and
systems of risk management within the Group are robust and
appropriate
• Determine the appropriate levels of remuneration of the
Executive Directors
• Provide a breadth of skills and experience to Board
Committees and, in the case of the iNEDs, independence
73
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
How our Board operates
Board and Committee meetings
The full Board normally meets formally in person at least four times a year for Board meetings, but, as can be seen from the table
below, meets in person or virtually, at other times as necessary in order to discuss, amongst other things, operational matters and
ongoing performance against the Group’s development and production plans, including internal budgets and external guidance to
the market. There is frequent communication between Board members outside of the set meeting dates, in order to stay abreast of
business developments.
The formal Board and Committee meeting dates are scheduled to address key events in the corporate calendar and are allocated
sufficient days to allow for considerable interaction by the members, both inside and outside of the formal meetings. Rolling agendas
have been developed for the Board and for the Audit and Risk and Remuneration Committees to ensure the necessary standing
items are covered during the course of the Year, and sufficient time is allocated to strategic discussions, with extra time factored in for
ad hoc and additional items. Agendas are agreed with the Chair of the Board and the Chairs of the Committees and timeframes set in
advance for the various meetings, thereby ensuring that the full agenda can be covered in the time allotted. Site visits, dinners and
other social engagements are also attended by Board members outside of the meeting times to allow for better understanding and
more informal discussion of issues; this assists in clarification and engagement, meaning that consensus during the meeting is more
easily attained.
Papers for the meetings are prepared by management following input on the agendas formulated by the Company Secretary and
the respective Chairs, and made available electronically prior to the meeting via a secure online Board portal, thereby allowing the
Directors adequate time to consider the variety of issues to be presented and discussed. In the meetings, issues for follow-up are
identified, ensuring that matters raised by the Directors are actioned and reported back in a timely manner.
In addition to formal Board and Committee meetings, the Chair holds frequent meetings with NEDs during the Year, enabling free
discussions without the Executive Directors present.
Board
(11 held)
Audit and Risk
Committee
(7 held)
Remuneration
Committee
(4 held)
Nomination
Committee
(1 held)
H&S
Committee
(2 held)
Sustainability
Committee
(2 held)
SHS
Committee
1
(2 held)
Investment
Committee
(1 held)
Annual
General
Meeting
(1 held)
Varda Shine
2
11/11 3/3 2/2 1/1 2/2 2/2 2/2 1/1 1/1
Peter Hill
3
4/4 n/a n/a 1/1 n/a n/a n/a n/a 1/1
Richard Duffy 11/11 n/a n/a n/a 2/2 2/2 2/2 1/1 1/1
Jacques
Breytenbach 11/11 n/a n/a n/a n/a n/a n/a 1/1 1/1
Bernie Pryor
4
11/11 7/7 4/4 1/1 2/2 n/a 2/2 1/1 1/1
Deborah Gudgeon 11/11 7/7 4/4 1/1 n/a n/a n/a 1/1 1/1
Alexandra Watson
5
8/8 n/a n/a n/a n/a 2/2 n/a n/a 0/1
Johannes Bhatt
6
4/4 n/a n/a n/a 2/2 n/a n/a n/a 1/1
Jon Dudas
7
8/8 5/5 3/3 1/1 n/a n/a n/a n/a 1/1
Lerato Molebatsi 11/11 7/7 4/4 1/1 n/a 2/2 2/2 1/1 1/1
José Manuel
Vargas
8
5/5 n/a n/a n/a n/a n/a n/a n/a n/a
1. The Health and Safety Committee and Sustainability Committee merged to form the Safety, Health and Sustainability Committee with effect from 1 January 2024. Lerato Molebatsi was
appointed the Chair of this Committee and Varda Shine, Richard Duffy and Bernie Pryor as members of it.
2. Varda Shine was appointed Chair of the Board and Chair of the Nomination and Investment Committees with effect from the conclusion of the Company’s AGM on 14 November 2024,
following Peter Hill’s retirement from the Board. Varda ceased being a member of the Audit and Risk Committee with effect from her appointment as Chair of the Board. Varda ceased
being Chair and a member of the Remuneration Committee with effect from 1 January 2024.
3. Peter Hill did not offer himself for re-election at the Company’s AGM on 14 November 2023 and retired from the Board at the conclusion of that meeting.
4. Bernie Pryor was appointed as Senior Independent Director with effect from the conclusion of the Company’s AGM on 14 November 2024. Bernie was appointed as Chair of the
Remuneration Committee with effect from 1 January 2024.
5. Alex Watson stepped down from the Board on 17 February 2024 and took up a role as a Board Observer from that date, nominated by Franklin Templeton.
6. Johannes Bhatt retired from the Board at the conclusion of the Company’s AGM on 14 November 2024.
7. Jon Dudas stepped down from the Board on 17 February 2024 and took up a role as a Board Adviser for six months. This appointment terminated on 17 August 2024.
8. José Manuel Vargas was appointed to the Board as a non-independent NED effective 1 January 2024.
CORPORATE GOVERNANCE STATEMENT / CONTINUED
74
Petra Diamonds Limited Annual Report and Financial Statements 2024
Site visits
The full Board’s annual site visit in FY 2024 was cancelled as part of the Company’s cost savings initiatives. The Board recognises the
importance of visiting Petra’s operations, as these visits provide useful context on developments and progress at the operations, as
well as allowing for interaction with and feedback from employees at a range of levels throughout the business and assisting with the
ongoing evaluation of Petra’s culture. The Board will be looking to reinstate their annual site visit when it is appropriate to do so.
Even though the Board’s annual site visit was cancelled, the Executive Directors regularly visited the operations as part of their
day-to-day business and there were several visits conducted by NEDs which included:
• January 2024: Varda Shine and Bernie Pryor visited the Bryanston office for discussions with the management team.
• April 2024: Deborah Gudgeon visited the Bryanston office as part of the planning process for the FY 2024 audit and also to discuss
CFO succession plans, following the announcement in March 2024 that Jacques Breytenbach will resign as CFO and Director for
personal reasons at the end of September 2024.
• June 2024: Varda Shine and Bernie Pryor visited the Bryanston office for discussions with the management teams at the Cullinan
and Finsch Mines and Group and also with members of Exco.
• July 2024: Lerato Molebatsi, in her capacity as Workforce Engagement iNED, attended CEO roadshow sessions held with the
Cullinan and Finsch Mines. These sessions were held following completion of the S.189 retrenchment processes at Finsch and
Group and saw the CEO provide an overview of what had been presented at the Investor Day held on 27 June 2024, including
the revised LOM plans for the Cullinan and Finsch Mines. During these visits, Lerato had the opportunity to speak directly with
employees, attend the briefings provided by management and engage with union leadership to hear any concerns first hand.
The visits also provided Lerato with insights into Petra’s culture. Lerato was impressed by the employees’ level of engagement
and understanding of the Company’s business challenges and also the transparency shown by management and reported this
and other observations from these visits and engagements to the Board, the effect of which is to enhance communication, promote
transparency, and ensure that employee voices are heard and considered in the Board’s discussions and decision making.
Gender and ethnicity representation on the Board and executive management (Exco)
Number of
Board members
Percentage on
the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage of
executive
management
Men 4 57% 3 8 89%
Women 3 43% 1 1 11%
Not specified/prefer not to say – – – – –
White British or other White (including minority-white groups) 6 86% 4 6 67%
Mixed/multiple ethnic groups – – – – –
Asian/Asian British – – – 3 33%
Black/African/Caribbean/Black British 1 14% – – –
Other ethnic group, including Arab – – – – –
Not specified/prefer not to say – – – – –
75
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
Board and Committee meetings
A number of senior employees are standing
invitees to meetings of the Board and its
Committees and other employees attend
these meetings on an ad hoc basis. These
employees will regularly be asked to present
on and engage in matters being discussed
at these meetings.
Petra Culture Code
A strong culture is key to attracting and
retaining top talent, driving performance and
ultimately creating long-term sustainable
value for Petra’s stakeholders. The Board is
committed to Petra’s Culture Code (which was
adopted in FY 2023) and efforts to continue to
embed it across the organisation – please see
page 46 for more details. A key part of this
commitment involves the Board monitoring
changes in the scores across the Group and
assessing key themes in the feedback
received, with scores and feedback being
assessed across the organisation.
Employee wellness
At each Safety, Health and Sustainability
Committee meeting, updates are provided
on employee health, hygiene and wellness
issues, including in relation to employee
utilisation of Petra’s Employee Assistance
Programme. In FY 2024, the Safety, Health
and Sustainability Committee reviewed the
outcomes of an employee mental health
study, including the benchmarking data
from this study and proposed actions.
Engagements with Unions
With 79% of Petra’s workforce in South Africa
being unionised, an appreciation of the
interests and dynamics relating to the key
unions which represent Petra’s employees
is essential for meaningful employee
engagement. The Board, through the
Safety, Health and Sustainability Committee,
receives regular updates on Petra’s union
membership and key engagements with
unions, including, for example, negotiations
of any collective bargaining agreements,
retrenchment processes and shift configuration
changes. Union leadership are also invited
to and attend the Exco town hall meetings
which are also often attended by Petra’s
designated workforce engagement NED. In
FY 2024, the key areas of union engagement
were in relation to the successful negotiation
of five-year wage agreements, as well as the
S.189 restructuring process undertaken in
respect of the Finsch Mine and Petra’s Group
employees, with the Board providing
oversight of these engagements.
How does the Board
engage with
Petra’s employees?
Exco town hall meetings
Petra’s Exco seeks to regularly host town hall
meetings at Petra’s operations to ensure that
employees are provided with updates on
Petra’s performance and also to enable key
corporate initiatives to be explained and
discussed. These meetings were less
frequent in FY 2024 but in July 2024, CEO
roadshow sessions were held at the Cullinan
and Finsch Mines and with Group employees
following completion of the S.189 retrenchment
processes at Finsch and Group. These
sessions saw the CEO provide an overview
of what had been presented at the Investor
Day held on 27 June 2024, including the
revised LOM plans for the Cullinan and
Finsch Mines. Petra’s designated workforce
engagement iNED, Lerato Molebatsi,
attended sessions at the Cullinan and
Finsch Mines in July 2024. Employees are
encouraged to ask questions of management
in these sessions (including anonymously
if preferred).
CORPORATE GOVERNANCE STATEMENT / CONTINUED
Designated Workforce Engagement iNED
Lerato Molebatsi is the Company’s designated workforce engagement
NED, having assumed this role with effect from 1 July 2023. The aim
of the role is to ensure the views and concerns of the workforce are
brought to the Board’s attention and taken into account in deliberations
and decisions, helping the Board understand if employees are aligned
to, and able to respond to, the Company’s priorities. A formal document
outlining the key principles and parameters of the role was approved
by the Board in FY 2021. Lerato accompanied the Exco on the CEO
roadshow meetings at the Cullinan and Finsch Mines in July 2024 at
which sessions were held with representatives of the workforce,
unions and management. Lerato reported back to the Board her
observations of these sessions (which overall were generally positive,
duly noting areas of concern.
Site visits
Several site visits are scheduled throughout the Year, giving the Board
the opportunity to engage directly with employees. The site visits
include an opportunity for formal engagement through business
updates, tours of operations and briefings provided by Petra’s
employees to the Board, as well as informally through the dinners
and social events arranged as part of the site visits.
The full Board’s annual site visit in FY 2024 was cancelled as part of
the Company’s cost savings initiatives. However, certain key Board
members (including the Chair, Senior Independent Director, Chair of
the Audit and Risk Committee and Chair of the Safety, Health and
Sustainability Committee in her capacity as Designated Workforce
iNED) each individually visited Petra’s sites, engaging extensively with
the workforce. For more information on these site visits, see page 79.
Workforce Engagement
Petra has an experienced, diverse and dedicated workforce, which is a key business asset, with engaged employees being critical
to Petra’s success. The Board uses formal and informal ways of engaging with its employees, which are summarised below. For more
information on how the Board considered the interests of Petra’s employees in its discussions and decision making in FY 2024,
see pages 49 and 50.
76
Petra Diamonds Limited Annual Report and Financial Statements 2024
0-3 years = 3 directors
3-6 years = 3 directors
6-9 years = 1 director
%
43
43
14
TENURE OF DIRECTORS
DIRECTORS’ NATIONALITIES
1
9
3
3
1
1
1
South African (33%)
British (33%)
Israeli (11%)
Spanish (11%)
Australian (11%)
%
33
50
17
Executive Directors = 2
Independent Non-Executive
Directors = 3
Non-Independent Non-Executive
Directors = 1
BOARD COMPOSITION
2
%
9.5
90.5
Directors
Other
PERCENTAGE OF PETRA SHARES HELD
Why our Board is effective
Director commitment
The Directors’ biographies and duties can be found on pages 68 to 69 and 73. During the Year, there were no significant changes to
the iNEDs’ external commitments and they are considered to have sufficient time to fulfil their duties, as confirmed by the internally
facilitated Board evaluation, carried out in Q4 FY 2024 – see page 80. The Non-Executive Chair is also considered to have sufficient
time to fulfil her duties.
Executive Directors may, subject to Board consent, accept external appointments to act as Non-Executive Directors of other
companies. However, the Board reserves the right to review such appointments to ensure no conflicts of interest, and that the
time spent on fulfilling such obligations would not affect the respective Director’s contribution to Petra. Any fees for such
appointments would normally be retained by the Director concerned. Currently, the Executive Directors’ external appointments
do not affect their contributions to Petra. For more information, see the report of the Nomination Committee.
The Chair and NEDs are required to inform the Board of any proposed new directorships and a similar review process is undertaken
to ensure they can adequately continue to fulfil their obligations as Directors of the Company and that there are no conflicts of interest.
1. Where directors hold multiple nationalities, all nationalities have been reflected.
2. Varda Shine, Petra’s Non-Executive Chair, who is considered to be independent and was considered to be
independent on her appointment as Chair is excluded from this calculation, in accordance with the Code.
Board composition and diversity statistics
All statistics on this page are given as at 30 June 2024
77
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
Governance Framework
(AS AT THE DATE OF THIS REPORT)
The Board
The Board is responsible for Petra’s long-term success and sets the Company’s strategic aims,
monitoring management’s performance against these objectives.
Our strategy
See pages 22-23
Principal risks
See pages 59-63
Board biographies
See pages 68-69
Key activities in FY 2024
See pages 81-82
The Board delegates certain matters to its six principal committees
The Terms of Reference for each of the Board Committees is available at
https://www.petradiamonds.com/about-us/corporate-governance/board-committees-2/
Audit and Risk
Committee
Remuneration
Committee
Nomination Committee Safety, Health and
Sustainability
Committee
Investment Committee
Oversees matters
relating to the Group’s
financial reporting,
internal and external
audit, internal control,
ICT, risk management,
ethics, compliance,
whistleblowing and fraud
Determines the policy
for Executive Director
remuneration, sets
remuneration for the
Chair, Executive Directors
and senior management
and reviews workforce
remuneration and
related policies
Leads the process for
Board appointments and
ensures plans are in place
for orderly succession to
both the Board and senior
management positions
Oversees the Group’s
health, safety and
sustainability matters,
including: health and safety
systems, policies and
compliance; tailings and
water storage facilities; on-
mine water management
and environmental
compliance and social and
environmental matters
in supporting delivery of
the Group’s Sustainability
Framework
Considers and makes
recommendations to the
Board for the Group’s
most significant capital
expenditure, investment
proposals and disposals
See page 84 See page 101 See page 93 See page 96 See page 99
Chaired by
Deborah Gudgeon
Chaired by
Bernie Pryor
Chaired by
Varda Shine
Chaired by
Lerato Molebatsi
Chaired by
Varda Shine
Members
Bernie Pryor
Lerato Molebatsi
Members
Deborah Gudgeon
Lerato Molebatsi
Members
Deborah Gudgeon
Bernie Pryor
Lerato Molebatsi
Members
Varda Shine
Richard Duffy
Bernie Pryor
Members
Deborah Gudgeon
Bernard Pryor
Lerato Molebatsi
Richard Duffy
Jacques Breytenbach
To reflect the breadth and importance of ESG matters to Petra, and in addition to the oversight role
performed by the Safety, Health and Sustainability Committee, the Chair of the Board of Directors, Varda Shine,
has been designated as the NED with overall responsibility for ESG matters.
Executive Committee (Exco)
The Board has delegated the execution of the Company’s strategy and day-to-day management
of the Company’s business to the Executive Directors, supported by the Exco.
CEO’s statement
See page 10
Exco membership
See pages 70-71
Petra Culture Code
See page 46
Our performance
See page 3
78
Petra Diamonds Limited Annual Report and Financial Statements 2024
Assessment of Director independence
Upon her appointment as a Non-Executive Director on 1 January
2019 and at the time of assuming the role of Non-Executive
Chair on 14 November 2023, Varda Shine was considered to be
independent, and continues to be independent, in accordance
with the Code.
The Board also considers Bernie Pryor, Deborah Gudgeon and
LeratoMolebatsi and to be independent in accordance with
the Code.
All iNEDs are independent of any relationship listed in the
provisions of the Code. None of the NEDs received any fees from
the Company in FY 2024 other than their contractual iNED fees,
as set out on page 109 of the Directors’ Remuneration Report.
By virtue of his significant shareholding in the Company (c. 8.75%
of total voting rights as at the date of this Report) José Manuel
Vargas, was not considered to be independent in accordance
with the Code either at the time of his appointment or as at the
date of this Report.
Conflicts of interest
Whilst conflicts should be avoided, the Board acknowledges
that instances arise where this is not always possible. In such
circumstances, Directors are required to notify the Chair before
the conflict arises and the details are recorded in the minutes.
If a Director notifies the Board of such an interest, they may be,
if requested by the Chair, excluded from any related discussion
and will always be excluded from any formal decision.
Process used in relation to Board membership,
succession planning and appointment process
Petra’s Nomination Committee is responsible for reviewing the
skills, expertise, composition and balance of the Board on an
ongoing basis as part of the Company’s succession planning.
When considering new appointments, the usual process is for
a brief to be prepared and for an independent external
search agency to be utilised to identify potential candidates.
Read more about the work of the Nomination Committee
on pages 93 to 95.
Director induction, information, training and
development needs
Detailed knowledge of the specialist world of diamonds
(including diamond marketing), the global mining industry,
international capital markets, applicable UK legislation/LSE
regulation, Sub-Saharan Africa (particularly South Africa), ESG
matters and Petra’s unique business and operations, is crucial to
the Board’s ability to effectively lead the Company.
Petra has an induction programme designed to bring new
Directors up to speed as quickly as practicable, following their
appointment to the Board. Such an induction would typically
involve meetings with the Board and various members of Senior
Management and an information pack of all necessary corporate
documents, including the Company’s latest Annual Report,
Sustainability Report, the Bye-Laws, Committee Terms of
Reference and other key Group policies, such as the Code of
Ethical Conduct, enabling them to familiarise themselves with the
Group, its procedures and current activities. A site visit to one or
more of the Group’s key operations is usually held to provide the
new Director with further information on the operations, including
production updates, mine plans and extension projects and key
ESG considerations.
In order to help ensure that existing Board members retain the
relevant and up-to-date knowledge and skill-set to properly
discharge their duties, ongoing training and other professional
development opportunities are provided by the Company and/or
the Directors attend external courses and conferences on their
own professional behalf.
Training is arranged as appropriate to suit each Director’s
individual needs, and covers topics such as industry
developments, governance, technical subjects related to
diamond mining, communication strategies and ESG matters.
Board training on specific topics is requested by the Board
members and then provided by a specialist at the Board meeting.
During the Year, the Board received a presentation by law firm
Latham and Watkins on pending reforms to the UK’s capital
markets and listing regime. The Board also received a briefing
from John Raine CMG OBE, Senior Advisor for Geopolitical Due
Diligence at the International Institute for Security Studies on
current geopolitical issues and risks relevant to Petra.
As part of his induction programme, José Manuel Vargas
received training from Ashurst on directors’ duties and on
the regulatory framework for UK-listed companies.
The Company’s Corporate Communications team acts as
a conduit of regular information to the Board and Senior
Management, providing regular briefings by email on relevant
topics, such as key diamond industry trends, peer group
developments and socio-economic information about Petra’s
countries of operation, as well as internal Company news.
The Company Secretarial team also provides the Board
and Senior Management with ongoing updates on legal
and regulatory changes, including in relation to corporate
governance matters, and the Board has continual access to
the advice and services of the Company Secretarial function
and external legal advice as required.
79
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE STATEMENT / CONTINUED
Evaluation of the Board’s performance
An internally facilitated Board evaluation was undertaken in Q4
FY 2023, the results of which were reported on in the FY 2023
Annual Report. This followed an externally facilitated Board
evaluation that was undertaken in FY 2022 and reported on
in the FY 2022 Annual Report.
The overall assessment of the FY 2023 Board evaluation was
that the Petra Board is effective and high performing. The
assessment identified areas with scope for improvement that
were discussed in a September 2023 feedback session with the
Board. The Company Secretary then agreed an action plan with
the Board for how to address these areas for improvement.
Progress against this action plan was then tracked and assessed
and discussed by the Board during FY 2024, with good progress
being made in all areas and in particular on the following:
• Strategic focus: an increased focus on and discussion of
Petra’s strategic priorities and key issues, including by holding
more frequent ad hoc Board meetings to discuss these issues
(with 11 Board meetings being held in FY 2024 compared to six
in FY 2023)
• Value proposition: this issue was discussed extensively during
FY 2024, in particular when the Board reviewed cost savings
measures, approved the budget for FY 2025 and reviewed the
business plans for FY 2026-29 and the revised LOMs for the
Cullinan and Finsch Mines. This culminated in the Investor Day
presentation that was published on 27 June 2024 and which
outlines Petra’s value proposition
• Dynamics: actions were taken to strengthen Board dynamics
further which had already been evaluated as strong. Note that
extensive changes to the Board’s composition and size in FY
2024 have resulted in changes to the Board’s dynamics and
these were reassessed in the FY 2024 Board evaluation as
summarised below
• Board and Board Committee streamlining: various changes to
the Board’s composition in FY 2024 have resulted in a smaller
and more efficient Petra Board consisting of seven Directors
(reducing to six Directors when Jacques steps down as
Director at the end of September 2024), having been ten
Directors at the start of FY 2024. Further efficiencies were
achieved through the merger of the Company’s Health and
Safety and Sustainability Committees to form the Safety,
Health and Sustainability Committee, with effect from January
2024. Three additional Audit & Risk Committee meetings were
held in FY 2024 to address the Committee’s increased
workload
• Board papers and agendas: various improvements were made
during FY 2024 to the content and format of the Board and
Committee papers and agendas, including to support the
Board’s focus on strategic objectives, key issues and risk
management. The merger of the Company’s Health and Safety
and Sustainability Committees to form the Safety, Health and
Sustainability Committee also resulted in a significant
improvement to this Committee’s papers and agendas
The Board’s annual evaluation for FY 2024 was undertaken in
Q4 FY 2024 and was facilitated by the Company Secretary. The
evaluation consisted of each Director completing a focused
questionnaire, with the questions being informed by the findings
of the internally facilitated Board evaluation undertaken in Q4
FY 2023. The Company Secretary used the responses to the
questionnaire to compile extensive feedback which was then
shared and discussed at a Board session held in September
2024 to identify actions to be taken forward during FY 2025.
The evaluation of the performance of the Chair was undertaken
by Bernie Pryor, the Senior Independent Director, based on
feedback obtained from the Board. The Chair appraised the
performance of each Director by meeting each of them
individually to review their knowledge and effectiveness
at meetings, and the overall time and commitment to their
role on the Board, using the feedback obtained from the
Board to support these appraisals.
The overall assessment from the FY 2024 Board evaluation
was that the Petra Board continues to be effective and high
performing, with improvements having been made during
FY 2024 to address the findings of the internally facilitated
evaluation undertaken in FY 2023, though also noting the
significant changes to the Board’s composition and size that
occurred during FY 2024. The Company Secretary compiled
a list of priorities for the Board to focus on for FY 2025 which
address these areas for improvement identified. These priorities
were discussed and agreed by the Board at a September
feedback session and will be tracked and discussed by the
Board and Company Secretary throughout FY 2025.
Areas for improvement and priorities for the Board identified
in the FY 2024 Board evaluation include, amongst others:
• Strategic focus: maintain focus on delivering short-term
priorities but without losing sight of the long term,
broader strategy
• Operational delivery: increase the Board’s focus on delivering
strong operational performance (including execution of the life
extension projects at Cullinan and Finsch Mines), particularly in
the near-term and perform operational ‘deep-dives’ during
FY 2025
• Dynamics: whilst Board dynamics remain strong (despite the
significant changes to Board composition and size during
FY 2024), various actions were identified to further strengthen
Board dynamics
• Board papers and agendas: implement various improvements
to Board and Committee papers and agendas to support the
Board’s effectiveness and its oversight of strategic objectives
and key issues
• Increased senior management exposure: with there
being no annual Board site visit in FY 2024, look for further
opportunities to increase exposure to senior management.
Look to reinstate Board’s annual site visit when appropriate
to do so
• Increased NED engagements: increase the frequency
of NED-only engagements, particularly over the next
12-18 months
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Petra Diamonds Limited Annual Report and Financial Statements 2024
Key Board and Board Committee activities in FY 2024
Category Activity Stakeholders considered
Strategic • Approved the deferral of capital extension projects at the Cullinan Mine (C-Cut extension project
and part of the CC1E project) and the Finsch Mine (3 level SLC)
• Reviewed and oversaw project that targets cost savings of $10m in FY 2024 and a sustainable reduction
in operating costs of US$30 million per annum for the South African operations from FY 2025 onwards
(with a further US$14 million per annum for Williamson identified and targeted post-Year end)
• Reviewed and oversaw Group restructuring resulting in section 189(3) processes under the South
African Labour Regulations Act (LRA) for all Group employees and affected Finsch employees
• Reviewed rebasing of the Finsch Mine by reducing throughput tonnages from circa 2.8 to
2.2 million tonnes per annum
• Reviewed and approved revised LOM plans for the Cullinan Mine (including capital expenditure for
the CC1E Phase 1 and C-Cut Extensions 1 & 2 life extension projects and a new ventilation shaft)
and the Finsch Mine (including capital expenditure for the 81L (5 tunnels), 86L (12 tunnels), and
88-90L life extension projects). These revised LOMs involve a smoothed capital profile of
c. $100m per annum to target free cash generation through the cycle
• Approved entry into long-term PPAs for the procurement of wheeled renewable energy for the
Cullinan and Finsch Mines from Etana Energy enabling Petra to fulfil its target of reducing scope 1
and 2 GHG emissions by 35-40% by 2030 (against its 2019 baseline) well ahead of time as well as
contributing to predictable energy costs which are expected to result in sustainable cost savings
over the term of the PPAs
• As part of Petra’s focus on debt optimisation, approved the open market repurchases of
$5 million of Petra’s 2L Notes
• Held Board strategy session in February 2024, setting immediate short-term priorities for Petra’s
management and reviewing longer-term strategic opportunities
• Reviewed progress towards completion of definitive transaction documents for the sale of
50% (less one share) of Petra’s holding in WDL, with Petra retaining a controlling interest
• Reviewed updates on the progress of the Independent Grievance Mechanism (IGM) and
Restorative Justice Projects (RJPs) at Williamson
• Reviewed progress on the implementation of the Framework Agreement for Williamson and
engagements with the Government of Tanzania in this regard
• Approved the sale of the Koffiefontein Mine to Stargems, following the decision to place the mine
onto care and maintenance in FY 2023, which, once completed, is expected to enable Petra to
avoid incurring closure-related costs of $15-18 million
• Reviewed and approved KPIs to deliver strategy during the Year and assessed performance
against KPIs on an ongoing basis
• Received and discussed presentations from the Company’s advisers on strategic options
Shareholders,
Financial
Stakeholders, Host
Governments,
Employees, Unions,
Local Communities,
Suppliers
Operations • Received reports at every Board meeting from the CEO and, where necessary, senior
management on operational performance, including on safety, health and environment, mining
and processing, security (including security operations at the Williamson Mine), sales and
marketing, human resources and community relations
• Site visits by the Workforce Engagement iNED to the Cullinan and Finsch Mines in July 2024
• Received regular updates on completion of the remediation activities for the community at
Williamson following the TSF failure
Shareholders,
Financial
Stakeholders,
Regulators,
Employees, Unions,
Local Communities,
Suppliers
Safety,
Health and
Sustainability
• Approved Petra’s GHG emissions reduction roadmap
• Received reports at every Board meeting from the CEO and the Chair of the Health & Safety
Committee and then the Chair of the Safety, Health and Sustainability Committee on health and
safety performance across the Group
• Received updates on the implementation of and compliance with the Tailings Management Policy
which is aligned to the Global Industry Standard on Tailings Management (GISTM) and on the
timeline for GISTM compliance
• Received an update on the outcome of Petra’s double materiality assessment of its material ESG issues
• Approved the FY 2023 Sustainability Report
• Received updates on the operationalisation of Petra’s Sustainability Framework
• Received regular reports from the Chair of the Sustainability Committee (which then became the
Safety, Health and Sustainability Committee), including in relation to, amongst others, the IGM,
community projects (including the RJPs) and remediation of the TSF failure at Williamson
Employees, Local
Communities,
Regulators, Host
Governments, NGOs,
Shareholders
81
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE STATEMENT / CONTINUED
Category Activity Stakeholders considered
Finance,
reporting
and risk
management
• Approved the ZAR750 million increase in available commitments under the Company’s revolving
credit facility with Absa Bank to provide additional operational and sales flexibility
• Approved the Group’s preliminary results for FY 2023, interim results for H1 FY 2024, operating
updates and sales tender results for FY 2024
• Approved the FY 2023 Annual Report
• Approved the Group’s FY 2025 budget and reviewed business plans for FY 2026 to FY 2029
• Received reports at every Board meeting from the CFO regarding the Group’s financial
performance and on the diamond market
• Approved a new Risk Appetite and Tolerance Framework and reviewed on a quarterly basis the
Group’s Key Risk Indicators
• Reviewed the Group’s internal audit findings and principal risks on a quarterly basis including any
material outstanding actions to address audit findings and/or mitigate risks
• Improved effectiveness of the Audit and Risk Committee with additional meetings held ahead of
the Group’s preliminary results for FY 2023 and interim results for H1 FY 2024
• Received regular reports from the Chair of the Audit and Risk Committee
Shareholders,
Financial
Stakeholders, Host
Governments,
Regulators, NGOs
Governance • Approved the appointment of Varda Shine as Chair of the Board and Bernie Pryor as Senior
Independent Director, in each case with effect from 14 November 2024
• Approved the appointment of José Manuel Vargas to the Board with effect from 1 January 2024
• Approved the appointment of Bernie Pryor as Chair of the Remuneration Committee with effect
from 1 January 2024
• Approved the appointment of Alex Watson as Board Observer, having stepped down as Director
with effect from 17 February 2024
• Approved the appointment of Jon Dudas as a Board Adviser, having stepped down as Director
with effect from 17 February 2024
• Approved the merger of the Health & Safety and Sustainability Committees to form the Safety,
Health and Sustainability Committee and the appointment of Lerato Molebatsi as the Chair of the
merged Committee
• Approved a reduction in the Chair’s fee and the NED fees (including the SID fee, Committee Chair
fees and basic NED fees) by 5% with effect from 1 January 2024
• Approved the appointment of Amre Youness as Board Observer with effect from 1 May 2024
• Approved changes to the Executive Committee, including the appointments of (i) Vivek Gadodia as
Planning and Corporate Development Executive and member of Exco and (ii) Johan Snyman as
Chief Financial Officer and member of Exco with effect from 1 October 2024
• Engaged with significant shareholders throughout the Year
• Conducted an annual evaluation of the Board’s performance facilitated by the Company Secretary
• Reviewed succession plans for Board and Senior Management
• Approved cancellation of FY 2024 annual bonuses and freezing of salaries for Executive Directors
and Exco and freezing of fees for Chair and NEDs
• Approved awards and vestings under the PSP to Executive Directors and Exco
• Reviewed Directors’ independence and conflicts of interest
Shareholders,
Employees, Host
Governments,
Regulators, NGOs
Culture • Reviewed scores and feedback from the Petra Culture Code survey held in July 2024
• Received regular briefings on employee and community relations
• Received regular reports from the Chair of the Sustainability Committee (which became the
Safety, Health and Sustainability Committee)
• Considered Lerato Molebatsi’s employee engagement reports for her CEO roadshow meetings at
the Cullinan and Finsch Mines in July 2024
• Met with Women in Mining groups during June 2024
Employees, Local
Communities,
Shareholders, Host
Governments, NGOs
82
Petra Diamonds Limited Annual Report and Financial Statements 2024
Annual General Meeting (AGM)
The FY 2023 AGM was held at One Heddon Street, London, W1B 4BF at 9am on 14 November 2023.
Results of our FY 2023 AGM
A summary of the proxy voting for the AGM was made available via the London Stock Exchange and on the corporate website as
soon as reasonably practicable on the same day as the meeting.
Total votes for
(as a % of
votes cast)
Total votes
against for (as a
% of
votes cast)
Votes withheld
(as a % of total
shares with
voting rights)
Total number
of votes
withheld
1 Receive the 2023 Annual Report 99.77 0.23 0.066 127,4 8 5
2 Approve Directors’ Remuneration Policy 98.03 1.97 0.001 1,013
3 Approve Directors’ Annual Remuneration Report 98.03 1.97 0.001 1,013
4 Re-appointment of BDO LLP as auditors 99.77 0.23 0.001 1,013
5 Authority to fix the remuneration of the auditors 99.77 0.23 0.001 1,013
6 Re-election of Mr Hill RESOLUTION WITHDRAWN
7 Re-election of Mr Duffy 99.77 0.23 0.001 1,013
8 Re-election of Mr Breytenbach 89.4 10.59 0.001 1,013
9 Re-election of Ms Shine
1
97.69 2.31 0.001 1,013
10 Re-election of Mr Pryor 84.91 15.09 0.001 1,013
11 Re-election of Ms Gudgeon 84.90 15 .10 0.001 1,013
12 Re-election of Ms Watson 83.54 16.46 0.001 1,013
13 Re-election of Mr Dudas
2
99.42 0.58 0.001 1,013
14 Election of Ms Molebatsi 99.77 0.23 0.001 1,013
15 Authority to allot relevant securities 62.82 37.18 0.001 1,013
1. Varda Shine ceased to be a member of the Committee when she was appointed as Non-Executive Chair at the conclusion of the Company’s AGM on 14 November 2023.
2. Jon Dudas ceased to be a member of the Committee when he stepped down from the Board on 17 February 2024.
Notes:
1. As announced on 13 November 2023, and following publication of the notice of the FY 2023 AGM, Peter Hill CBE elected not to
offer himself for re-election as a Director at the AGM and ceased to be a Director and Chair of the Board and the Nomination
and Investment Committees immediately following the conclusion of that meeting. Varda Shine was appointed as Chair of the
Board and Chair of the Nomination and Investment Committees with effect from the conclusion of the FY 2023 AGM. Ms Shine
also stepped down from the Audit and Risk Committee and, with effect from 1 January 2024, as a member and Chair of the
Remuneration Committee. Bernard Pryor, Non-Executive Director was appointed as Senior Independent Director with effect
from the conclusion of the FY 2023 AGM and as Chair of the Remuneration Committee with effect from 1 January 2024.
2. Resolution 15, which involved granting the Board authority to issue and allot shares, was passed with a 62.82% majority. However,
37.18% of shareholders voted against this resolution, indicating significant opposition. Following the AGM, Petra consulted with the
dissenting shareholders to understand their concerns. These discussions revealed a common preference among shareholders to
avoid granting general or annual authorities for changes in equity capital. Instead, they favoured reviewing and approving specific
transactions on a case-by-case basis. One shareholder specifically highlighted a policy against authorities that could lead to
dilution without a clear transaction in mind. In this consultation, Petra explained to shareholders that the requested authority aimed
to provide flexibility in capital management and would only be exercised if deemed in the best interests of the Company and its
shareholders. Petra also emphasised that this authority aligns with UK institutional shareholder guidelines and market practices
for UK-listed companies. Petra decided, after considering shareholder feedback, that it will not seek authority for the allotment of
relevant securities at the FY 2024 AGM, a departure from the practice of previous years. The Board expresses its gratitude to
the shareholders who participated in the consultation process and acknowledges the importance of ongoing engagement
with shareholders on issues of this nature. For more information on the consultation process, see page 67.
83
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
REPORT OF THE AUDIT AND RISK COMMITTEE
Report of the Audit and Risk Committee
The Audit and Risk Committee (the Committee) continued to
focus on its key responsibilities as set out in its Terms of
Reference during FY 2024. In particular:
• Ensuring the integrity of the Group’s interim and annual
financial reporting including compliance with financial
reporting standards and governance requirements, the
material areas where significant accounting judgements have
been made, the critical accounting policies and substance,
consistency and fairness of management estimates, the clarity
of disclosures and whether the Annual Report, taken as a
whole is fair, balanced and understandable
• Overseeing and monitoring the Group’s internal control
framework and enterprise-wide risk management structure
including reviewing and approving the Group’s new Risk
Appetite and Tolerance Framework
• Ongoing consideration of control systems to ensure they
remain effective, relevant and appropriate to the business and
the associated risks thereto
• Monitoring the ongoing effectiveness and independence of
the external auditors as well as making recommendations to
the Board on the re-appointment of the external auditors
Dear shareholder,
The Committee plays a vital role at Petra by ensuring that the
Group has effective and appropriate risk management and
internal control systems, backed up by comprehensive financial,
governance, internal audit and reporting functions. As Chair of
the Committee, I am pleased to have this opportunity to
summarise some of the key developments during the Year,
as well as our ongoing responsibilities and objectives.
The following issues are deemed to be significant and were
considered by the Committee in respect of the Group’s FY 2024
Financial Statements, based upon its interaction with both
management and the external auditors during the Year:
• the Group’s going concern review and viability statement
• carrying value of mining assets and resultant impairment
considerations
• accounting treatment of the Blocked Parcel following its sale
by the Government of Tanzania during FY 2023
• provisioning for IGM grievance remedies at Williamson
• accounting for the sale of the Koffiefontein mine, including
provisioning for care and maintenance prior to the sale
concluding
• entry into Power Purchase Agreements (PPAs) for the Cullinan
and Finsch Mines.
For further detail on the significant issues mentioned above, see
page 89.
The Committee plays a vital role at
Petra by ensuring that the Group
has effective and appropriate
risk management and internal
control systems, backed up
by comprehensive financial,
governance, internal audit
and reporting functions.
Deborah Gudgeon
Audit and Risk Committee Chair
Members of the Audit and Risk Committee
Deborah Gudgeon – Committee Chair and iNED
Bernard Pryor (Senior Independent Director)
Lerato Molebatsi (iNED)
Varda Shine (Non-Executive Chair)
Jon Dudas (iNED) sasqs
84
Petra Diamonds Limited Annual Report and Financial Statements 2024
Committee experience and skill-set
The members of the Audit and Risk Committee are considered to
possess the appropriate skills and experience to monitor and
ensure the integrity of the Group’s financial reporting, internal
audit, internal financial control and risk management systems
and to support Petra’s overall governance.
Deborah Gudgeon, who was appointed as Committee Chair on
1 November 2021 (and who joined the Committee on 1 July 2021)
fulfils the requirements of the Code with regards to the required
level of financial and audit experience. Deborah qualified as a
chartered accountant with PwC before going on to hold a range
of roles at Deloitte, BDO and within a number of listed mining
companies. Most recently, she has extensive experience as a
Non-Executive Director and Chair of the Audit Committees of
Highland Gold Mining Limited, Acacia Mining plc and Evraz plc.
She is currently the Chair of the Audit Committees of Ithaca
Energy plc and Serabi Gold plc and has recent and relevant
financial experience as well as competence in accounting and
auditing, as required by the Code and the FCA’s Disclosure
Guidance and Transparency Rules (7.1.1A) (the DTRs).
In terms of the other Committee members, and consistent with
FRC Guidance, as well as the DTR 7.1.1A, the Committee as a
whole has extensive experience in relation to the sector within
which Petra operates:
• Bernie Pryor is a metallurgical engineer with 35 years of
experience in the international mining industry; and
• Lerato Molebatsi has extensive executive and non-executive
experience across a range of sectors, primarily in South Africa,
including as the lead independent Director of the South
African Reserve Bank.
All Committee members receive appropriate ongoing training
and development, as well as regular updates from management
and the Group’s external auditors on relevant financial reporting,
governance and regulatory developments.
The Committee may, if considered necessary, take independent
advice at the expense of the Company. Other than BDO LLP, as
the external auditors, no other external consultants assisted the
Committee during FY 2024.
The Committee’s responsibility towards
risk management
The Committee continued to execute its risk management
oversight responsibilities during the Year, receiving quarterly
updates on the Group’s principal risks from the Risk, Assurance
and Compliance function.
In addition, and during the Year, management developed and
implemented a Risk Appetite and Tolerance Framework which
was reviewed and approved by the Committee. Petra accepts
there are risks associated with its business activities that cannot
be fully eliminated and which must be accepted if we are to
deliver our strategy. The initial purpose of the Risk Appetite
and Tolerance Framework is to determine Petra’s levels of risk
appetite and tolerance. Petra has done this by reference to a set
of Risk Appetite Statements and Key Risk Indicators (KRIs) that are
aligned to Petra’s principal risks. Petra then actively monitors these
KRIs to prompt management to take necessary action(s) where
appetite and tolerance thresholds are exceeded. Petra’s KRIs are
kept under review by management and the Committee to ensure
they align with the Company’s Purpose, Values and Strategy and
evolving risk profile. Any changes to the KRIs that are used to
measure risk appetite and tolerance require the approval of
the Committee.
Committee composition
On 14 November 2023, and following her appointment as
the Company’s Non-Executive Chair, Varda Shine stepped
down from the Committee. This enabled Petra to meet the
requirements of the Code. Jon Dudas also ceased to be a
member of the Committee, when he stepped down as a member
of the Board on 17 February 2024. Jacques Breytenbach will also
step down as a member of the Committee when he leaves the
Board on 30 September 2024.
On behalf of the Committee, I extend my sincere thanks to Varda,
Jon and Jacques for the contributions they have made to the
Committee during their tenure as members and attendees. In
particular, I would like to thank Jacques, who leaves Petra after
18 years of service, including six as CFO.
Deborah Gudgeon
Audit and Risk Committee Chair
23 September 2024
85
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
Committee meetings
Seven meetings were held in FY 2024, with the Committee
holding three further meetings after the end of the Year to review
and approve the Group’s full year results and Annual Report.
At these meetings, the Committee invited the Non-Executive
Chair, other Non-Executive Directors, the Executive Directors,
members of senior management (including the Group Financial
Controller, Group Head of Planning and Business Development,
the General Counsel & Company Secretary, Group Head of
Internal Audit & Risk and the Group ICT Manager), as well as the
Board Observers to attend these meetings, as appropriate. In
addition, the Chair of the Committee met separately with the
BDO Audit Partner regularly without management present to
discuss significant audit and accounting matters, together with
relevant financial reporting and governance developments.
Committee members also met with the auditors without the
Executive Directors present on two occasions.
The Committee recognises the importance of allocating
significant time to fulfil its duties effectively. In advance of
each Committee meeting, a formal agenda and information
pack is circulated, allowing each member time to review the
information and prepare for the Committee meetings. During the
formal meetings, the members then engage in robust and open
debate and assessment of relevant matters.
Deborah Gudgeon, as Chair of the Committee, allocates a
significant amount of time to this role. In addition to chairing
formal meetings of the Committee and attending sessions with
the external auditors, Deborah Gudgeon regularly met with the
CFO, the Group Head of Internal Audit & Risk and the Group
Financial Controller in order to discuss and monitor the financial
controls, audit and risk management activities of the Group on a
timely basis.
While no formal site visits to the Group’s various operations were
arranged for the Committee as a whole during the Year, informal
discussions held around the Committee’s scheduled meetings
enabled the Committee and the Chair of the Committee to
maintain a comprehensive understanding of corporate and
finance developments and activities and any associated risks,
as well as the operational risks and issues and controls in place
at Petra. The Chair of the Committee also visited the Bryanston
office during April 2024 as part of the planning process for the
FY 2024 audit and also to discuss CFO succession plans.
Committee role and activities
The principal functions of the Committee are listed below, along with the corresponding activity and performance in FY 2024.
Summary of role Activities in FY 2024 Outcomes
To monitor the integrity of the
interim and full year results
announcements, as well as the
Annual Report and Financial
Statements published by the
Company, reviewing significant
financial reporting judgements
contained therein.
As contemplated by the UK’s Corporate Governance Code 2018
(the Code) and the Committee’s Terms of Reference, the Committee
considered whether the Group’s interim results for FY 2024 and the FY
2024 Annual Report and Financial Statements present a fair, balanced
and understandable assessment of the Group’s performance and
prospects.
The Committee, on behalf of the Board, has a specific process of review
that enables it to make this assessment. For further information on the
process which was followed in relation to the FY 2024 Annual Report
and Financial Statements, see page 92.
In particular, the Committee assessed the balance of information
reported against its understanding of the Group, as well as the tone and
language used in the reporting, ensuring that it is comprehensible to
readers of various backgrounds.
Outside of formal Committee meetings, accounting matters were also
discussed by the Chair of the Committee, the CFO and Group Financial
Controller. Key auditing, financial reporting and governance matters,
which typically focused on areas of significant judgement, estimation
or accounting policy selection, were discussed with the audit partner
ahead of Committee meetings and during Committee meetings
In accordance with the Code
and the Committee’s Terms
of Reference, the Committee
considers that the FY 2024
Annual Report and Accounts
taken as a whole is fair, balanced
and understandable and
provides information necessary
for shareholders to assess
the Company’s performance,
business model and strategy and
advised the Board accordingly.
To review and challenge,
where necessary, application
of accounting policies and
practices, decisions requiring a
major element of judgement, the
clarity of disclosures, compliance
with accounting standards, and
compliance with regulatory and
legal requirements.
As part of its work to approve the Group’s Financial Statements,
the Committee reviewed the key financial reporting judgements
and accounting policies therein. These judgements were assessed
through discussions with the Group’s auditors and presentations by
management in which the Committee, where appropriate, challenged
the basis for such judgements and estimates.
Details of the significant matters considered by the Committee in respect
of this Annual Report are set out on page 89.
The Committee considers that
the accounting policies used,
reporting disclosures, compliance
with accounting standards
and other requirements are
appropriate to the Group in all
regards, taking account of the
specialised nature of its business.
REPORT OF THE AUDIT AND RISK COMMITTEE / CONTINUED
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Petra Diamonds Limited Annual Report and Financial Statements 2024
Summary of role Activities in FY 2024 Outcomes
To review the effectiveness of
Petra’s risk management systems,
internal financial controls and
other internal controls.
The Committee assesses the Company’s risk management systems,
internal controls and internal controls, including internal financial controls
on an ongoing basis. As part of this, the Committee invites the Executive
Directors, other Exco members, the Group Head of Internal Audit & Risk
and the Group Financial Controller, as well as other members of the senior
management team, as appropriate, to attend Committee meetings.
During these meetings, the Committee was provided with updates on
the Group’s activities and the members considered the risk and control
implications on an ongoing basis. Additionally, the Board as a whole
received presentations and reports by management on operational and
financial performance each quarter that allowed for an assessment of
risk and internal controls.
The Committee meetings during FY 2024 included presentations
by BDO LLP regarding the results of the FY 2023 audit, the interim
review for H1 FY 2024 and the FY 2024 Audit Planning Report, with a
presentation by BDO LLP of the results of the FY 2024 audit subsequent
to the Year End. These presentations included the auditors’ observations
and recommendations in respect of internal controls that the Committee
incorporated into its overall assessment of the effectiveness of risk
management and controls.
The Committee considers that
Petra’s internal controls, including
its internal financial controls,
continue to be robust and
defensible.
The Committee will continue
to review and assess the
development of risk management
and internal control systems,
assisted by the work of
the Internal Audit and Risk,
Assurance & Compliance
functions.
To monitor and review the
effectiveness of the Internal Audit
function, review and approve the
Internal Audit Plan, review and
recommend the Internal Audit
Charter to the Board for approval
and ensure the Internal Audit
function is adequately resourced.
On a quarterly basis, the Committee receives internal audit reports
detailing any significant findings, progress on the resolution of
outstanding findings and progress against the Internal Audit Plan
approved by the Committee. The Committee continued to assess the
effectiveness, independence, resourcing and quality of Internal Audit
during the Year, following the Committee approving a revised Internal
Audit organisational structure which saw the Group Head of Internal
Audit and Group Head of Risk, Assurance & Compliance roles being
combined into a Group Head of Internal Audit & Risk role.
The Group Head of Internal Audit
& Risk and supporting teams,
will continue to work with the
Committee to ensure the integrity
and effectiveness of the Group’s
internal control procedures and
risk management systems.
To consider and recommend
to the Board the appointment,
re-appointment or removal of the
external auditors, to recommend
their remuneration (whether audit
or non-audit fees) and approve
their terms of engagement and
to assess the external auditors’
independence and objectivity.
To review the engagement of the
external auditors to ensure the
provision of non-audit services
by the external audit firm does
not impair their independence or
objectivity.
In advance of the FY 2024 audit, the Committee reviewed and
approved the external auditors’ audit planning presentation and
assessed the appropriateness of the audit strategy, scoping, materiality
and audit risks.
The Committee reviewed the audit fee as part of the audit planning
process.
The Committee also reviewed audit-related fees incurred in relation to
the interim review and agreed upon procedures over the Company’s
Sustainability Report, assessed the extent of such non-audit fees
and the possible impact on the external auditors’ independence and
confirmed that such non-audit fees are in compliance with the FRC’s
Revised Ethical Standard 2019 (noting that this will be replaced by the
Revised Ethical Standard 2024 from 15 December 2024). For further
detail related to audit and non-audit fees see page 90 under the section
headed “External Auditors”.
The Committee considered and updated the Group’s policy on non-
audit fees, the level of challenge provided to management and the
safeguards in place to protect their independence. Having considered
all these matters, the Committee ascertained that BDO LLP continue to
be independent and approved the services.
The Committee has taken
appropriate steps to assess the
independence of its auditors,
recognising the importance of
audit independence to the audit
process.
The Committee has reviewed and
gained a thorough understanding
of the external auditors’ strategy
and has satisfied itself that it
is robust and that the auditors
remain independent.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
Summary of role Activities in FY 2024 Outcomes
To review the effectiveness of
the Company’s whistleblowing
system, its fraud detection
procedures and the systems
and controls in place for bribery
prevention.
The Committee was kept updated on the annual Code of Ethical
Conduct training and certification for South African management and
UK-based employees for FY 2024.
The Committee was also kept updated on workshops that were
conducted with suppliers at the Cullinan and Finsch Mines in FY
2024 to increase awareness and visibility and enhance compliance
with the Code of Ethical Conduct and anti-bribery and corruption and
whistleblowing policies and also specialised workshops held with a
leading forensic services provider for all finance, shared services and
Group employees to increase awareness on cyber security risks.
During the Year, Petra continued to implement and embed its Ethics
and Compliance Due Diligence Policy and Supplier Compliance Due
Diligence Procedure which set out the risk-based approach Petra is
required to follow in conducting ethics and compliance due diligence
on its existing and prospective third parties – predominantly customers,
suppliers and social investment beneficiaries.
The independent, external whistleblowing and fraud hotline remains
in place and continues to be offered to all employees as well as other
stakeholders.
In FY 2024, Petra received 22
tip-off reports involving alleged
irregularities of a non-material
nature that were considered
necessary to investigate, relating
mostly to fraud, recruitment
scams, procurement irregularities,
non-compliance with Company
policies and procedures, theft
and corruption.
The Committee, which has
oversight of all ethics related
matters, was provided with
quarterly overviews of these
reports and investigations into
them, focusing on the most
material reports.
Of the 22 reports in total under
review, 17 were resolved and
closed, with all but one report
found to be unsubstantiated. For
this one case, appropriate actions
were then taken. Five remain
under investigation. Further
information is included in the
Sustainability Report on pages
22 to 23.
Significant issues considered by the Committee in FY 2024
The following are considered by the Committee to be the significant issues that were considered by the Committee in respect of the
Group’s Financial Statements, based upon its interaction with both management and the external auditors during the Year. These
issues align with those disclosed in the Independent Auditors’ Report on pages 117 to 119.
The Committee considered a number of key areas warranting specific focus, in particular:
• The Group’s going concern review and viability statement
• The carrying value of the mining assets and resultant impairment considerations
• Accounting treatment of the Blocked Parcel following its sale by the Government of Tanzania during FY 2023
• Provisioning for IGM grievance remedies at Williamson
• Accounting for the sale of the Koffiefontein mine, including provisioning for care and maintenance prior to the sale concluding
• Entry into PPAs for the Cullinan and Finsch Mines
The Committee assessed that all matters were adequately covered during the FY 2024 external audit.
REPORT OF THE AUDIT AND RISK COMMITTEE / CONTINUED
Committee role and activities continued
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Petra Diamonds Limited Annual Report and Financial Statements 2024
The Committee carefully evaluated several key accounting estimates and judgments that have been integral to the preparation of
Petra’s Financial Statements for the year ended 30 June 2024. These considerations are critical due to their potential material impact
on the Group’s financial position and performance. Below is a summary of the significant matters reviewed by the Committee during
FY 2024.
Significant matters considered Our response to these matters
Going concern and
viability statement
See pages 64-65 (Viability Statement)
and note 1.1 on page 128 (Going
Concern basis of preparation)
The Committee focused extensively on the Group’s going concern status and the preparation of
the Viability Statement, which extends to a three-year period ending in June 2027. The assessment
was influenced by the ongoing volatility in the diamond market, including the impact of LGDs, global
economic pressures, and fluctuations in diamond prices. The Group’s liquidity was bolstered by
the deferral of capital programmes, cash savings, and agreeing the sale of the Koffiefontein Mine,
alongside an increased Revolving Credit Facility.
Despite these measures, the Committee noted that the viability of the Group is contingent upon the
successful refinancing of the 2L Notes.
As part of its review, the Committee challenged the assumptions, sensitivities and mitigating actions
proposed by management in the going concern assessment and Viability Statement. Having done
this, the Committee concluded that while material uncertainties remain, the going concern basis is
appropriate for the preparation of the Financial Statements
The Committee assessed the disclosures in the FY 2024 Annual Report and Financial Statements
in respect of going concern, viability and covenant compliance and concluded that they were
appropriate.
Impairment of assets
See note 29 on page 156
(Impairment)
Significant external and internal factors, including fluctuations in diamond prices and operational
changes drove the impairment assessment for FY 2024. The review focused on the Cullinan, Finsch,
and Williamson mines, with impairment charges recognised for the Cullinan (US$33 million) and
Finsch (US$45 million) Mines. No impairment or reversal was deemed necessary for Williamson.
The Committee reviewed and challenged the critical estimates and assumptions by management
that were used for the impairment assessments, including in relation to diamond price growth, cost
inflation and discount rates.
Having done this, the Committee endorsed the impairment charges reflected in the Financial
Statements. The Committee further reviewed the relevant disclosure in the Financial Statements to
ensure compliance with reporting standards.
Williamson – Blocked
Diamond Parcel
See note 14 on page 143
(Trade and other receivables)
The Committee reviewed the accounting treatment for the Blocked Diamond Parcel, which remains
unrecovered due to ongoing discussions with the Government of Tanzania (GoT). The Group
expensed the full carrying value of the parcel (U$12.5 million) in FY 2023 and recognised a sundry
receivable of U$12.3 million based on a fair value calculation. As of 30 June 2024, no changes in
the fair value were necessary, and the receivable continues to be backed by the legal obligations
outlined in the Framework Agreement with the GoT. The Committee concurred with management’s
approach and the related disclosures in the Financial Statements.
Williamson – IGM grievances
See note 21 on page 148 (Provisions)
The IGM, established to address historical grievances related to past security operations at the
Williamson Mine, continued to operate throughout FY 2024. The Committee reviewed the provision
for the estimated future cost of remedies for successful grievances, which remained at U$7.9 million
as of 30 June 2024. This provision reflects the estimated costs of remedies based on the grievances
processed and the ongoing operational efficiency improvements within the IGM. The Committee
agreed with management’s judgment that the provision has been appropriately recognised in terms
of IAS 37.
Accounting consequences of the sale
of the Koffiefontein operations
See note 21 on page 148 (Provisions)
The sale of the Koffiefontein Mine to Stargems was another significant matter considered by the
Committee. As the sale remains subject to regulatory approval, Koffiefontein has been classified as
a discontinued operation, but has not been classified as held for sale. The Committee reviewed the
associated liabilities, which total U$22.9million, and agreed that the sale does not meet the criteria
for classification as held for sale under IFRS 5 as of the reporting date.
PPAs for the Cullinan and
Finsch Mines
The Committee evaluated the accounting treatment of the PPAs entered into with Etana Energy for
the Cullinan and Finsch Mines during FY 2024. The PPAs, aimed at reducing electricity costs and
supporting the Group’s GHG emission reduction targets, were analysed under IFRS 16 and IFRS 9.
The Committee endorsed management’s conclusion that the PPAs do not qualify as leases and that
they fall under the “Own Use” exemption, with cash flows from FY 2026 onwards reported under
operating activities. No assets or liabilities are to be recognised in FY 2024.
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CORPORATE GOVERNANCE
REPORT OF THE AUDIT AND RISK COMMITTEE / CONTINUED
Significant issues considered by the Committee
in FY 2024 continued
The Committee has rigorously reviewed these key accounting
estimates and judgements, ensuring that the Financial
Statements for FY 2024 are prepared in compliance with relevant
accounting standards. The Committee is satisfied that the
estimates and judgements applied are reasonable and
supported by appropriate assumptions and methodologies.
External auditors
During the Year, the Committee fully considered the effectiveness,
objectivity, skills, capacity and independence of BDO
considering all current ethical guidelines, and was satisfied
that all these criteria were met. The auditors’ fees were approved
as part of this process.
The effectiveness of the external auditors was reviewed, giving
consideration to FRC guidance on assessing audit quality. The
Committee places considerable importance on the following
attributes: African mining sector experience (given the
specialised nature of the industry), service levels, audit
quality, sound auditor judgement, the willingness and ability
to challenge management and provision of value for money.
In forming its assessment of the effectiveness of the external
auditor and prior to completion of the audit, the Committee
received formal presentations regarding the proposed audit
strategy and met separately with the audit partner without
members of management present. The Chair also met separately
with the audit partner to discuss the audit strategy in detail, with
the Chair reporting back to the Committee after doing so. These
forums enabled the Committee to assess the extent to which the
audit strategy was considered to be appropriate for the Group’s
activities and addressed the risks the business faces, including
factors such as: independence, materiality, the auditors’ risk
assessment versus the Committee’s own risk assessment, the
extent of the Group auditors’ participation in the subsidiary
component audits and the planned audit procedures to mitigate
risks. Post Year End, the external auditor presented to the
Committee the key findings of the FRC’s 2023 Audit Quality
Review in respect of a sample of BDO’s audits, together with the
actions being taken by BDO to address such findings.
Following the audit, BDO presented their findings to the
Committee and met separately with the Committee Chair to
discuss key audit judgements and estimates, with the Chair
reporting back to the Committee after doing so. During the Year,
BDO also met separately with the Committee without members
of management present.
These occasions provided an opportunity to assess the audit work
performed, understand how management’s assessments had
been challenged and assess the quality of conclusions drawn.
The Committee also made enquiries of senior management to
obtain its feedback on the audit process and considered this
feedback in its assessment. The key attributes for audit
effectiveness were considered in the Committee’s assessment
of the Group’s auditors for FY 2024.
Auditors’ remuneration US$ million FY 2024 FY 2023 FY 2022
Audit services 1.1 1.2 0.9
Audit-related assurance services 0.2 0.2 0.1
Non-audit related services
1,2
— — —
1.3 1.4 1.0
1. Audit services are in respect of audit fees for the Group.
2. Audit-related services are in respect of the interim review and specific agreed upon
procedures in relation to the Sustainability Report, under the International Standard on
Related Services 4400 as issued by the International Auditing and Assurances
Standards Board.
The Committee requires that any non-audit services to be
performed by BDO are formally approved by the Committee.
Audit-related services encompass actions necessary to perform
an audit, including areas such as: internal control testing
procedures; providing comfort letters to management and/or
underwriters; and performing regulatory audits. BDO provided
audit-related services in the Year in relation to the interim review
and specific agreed upon procedures on the Company’s
Sustainability Report.
The provision of any non-audit service requires the pre-approval
of the Committee and is subject to careful consideration, focused
on the extent to which provision of such non-audit service may
impact the independence or perceived independence of the
auditors. The auditors provided details of their assessment of the
independence considerations, as well as measures available to
guard against independence threats and to safeguard the audit
independence. There were no non-audit services provided by
BDO during the Year.
Internal controls and risk management
The Board, with assistance from the Committee, is responsible
for the Group’s system of internal control and for reviewing its
effectiveness. Such a system can only provide reasonable and
not absolute assurance against material misstatement or loss, as
it is designed to manage rather than eliminate those risks that
may affect the Company in achieving its business objectives.
The Code requires that the effectiveness of the system of
internal control be reviewed by the Directors, at least annually,
including financial, operational and risk management. This review
is supported by the work undertaken by the Risk Management
function, as outlined below.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
The Group’s Internal Audit Function
The Group’s Internal Audit function underwent significant
change during FY 2024, following a review of the Company’s
organisational structure and changes to the operating model.
This resulted in the Head of Internal Audit and Head of Risk,
Assurance & Compliance roles being combined into one role.
A key rationale for combining these roles is to increase co-
ordination between the Internal Audit and Risk functions to
ensure a more risk-based approach is taken to internal audit
planning. This combined role reports to the Chair of the
Committee. Various safeguards have been implemented to
maintain the independence of the Internal Audit function,
particularly with regards to the Risk, Assurance & Compliance
function.
Another key change will see the Internal Audit function engage
a co-source partner to undertake more specialist and technical
internal audits from FY 2025 onwards, with the aim of increasing
the effectiveness and value-add of the Internal Audit function.
This will also help maintain the independence of the Internal
Audit function.
As a result of the above organisational changes and with the
co-source partner yet to be engaged, the Internal Audit plan for
FY 2024 was revised and reduced in scope. In early FY 2025
and following a tender process, PWC was appointed as the
co-source partner and will start supporting the Internal Audit
Function in executing the Internal Audit Plan for FY 2025. In
making this appointment, the co-source partner’s independence
was considered.
Other key developments in FY 2024 saw the Internal Audit
function continue to implement actions to address the findings of
an independent quality assessment of the Internal Audit function
that was concluded in FY 2023, with such assessment being
performed in accordance with the International Standards for
Professional Practice of Internal Auditing.
Following the introduction in January 2024 of the new Global
Internal Audit Standards (GIAS), which become effective from
January 2025, Petra has also developed an action plan to ensure
it complies with GIAS and this has included the Committee
approving, after the Year End, the adoption of a new Internal
Audit Charter and Internal Audit Manual that are aligned to the
new GIAS.
In FY 2025, the Committee and the Internal Audit function will
also consider in greater detail what changes are needed to
address the UK’s new Corporate Governance Code (2024) and
in particular, Code Provision 29 which will require the Board to
provide various assurances regarding the effectiveness of the
Company’s material financial and operational controls in its
FY 2027 Annual Report.
The Group’s Risk Management function
FY 2024 saw the continued roll-out and implementation of
Petra’s Enterprise Risk Management (ERM) and Combined
Assurance Frameworks following their approval in FY 2023.
The roll-out involved a series of workshops held across the
Group to explain management’s role in identifying, evaluating
and managing risks including the implementation of controls.
Subsequent to these workshops management has conducted
numerous risk assessments in accordance with the ERM and
supported by the Risk, Assurance & Compliance function.
During FY 2024, management developed and implemented a
Risk Appetite and Tolerance Framework which was reviewed
and approved by the Committee. This Framework sets out a
number of Key Risk Indicators (KRIs) that are used to measure risk
appetite and tolerance for Petra’s principal risks. Petra actively
monitors these KRIs to prompt management to take necessary
action where appetite and tolerance thresholds are exceeded.
Petra’s KRIs are kept under review by management and the
Committee to ensure that they align with the Company’s
Purpose, Values and Strategy and evolving risk profile. Any
changes to the KRIs require the approval of the Committee.
During FY 2024, the Committee considered the potential impact
of the UK Economic Crime and Corporate Transparency Act,
noting and reviewing the measures Petra proposes implementing
to ensure compliance. These measures include, but are not
limited to, assessments of Petra’s fraud risk profile, enhanced
due diligence on entities which perform or may perform services
for Petra, mapping of senior manager roles to identify those
potentially in scope for knowledge attribution and providing
further targeted training to these individuals.
For more details on the Company’s approach to risk
management, see pages 56 to 58.
System of internal control
The Committee regularly reviews the adequacy and
effectiveness of the Group’s internal controls procedures and
risk management systems through regular reports from the
Group’s Head of Internal Audit & Risk and through consideration
of the external auditors’ reports to the Committee and face-to-
face discussions between the audit partner and Chair of the
Committee and Committee members, as well as, on occasion,
ad hoc reports from external consultants.
For FY 2024, the Group Head of Internal Audit & Risk and the
Committee remained satisfied that no material weaknesses in
internal control systems were identified. Whilst being satisfied
that controls and risk management remain appropriate for the
Group’s activities, the Committee continues to assess the
effectiveness and adequacy of the system of internal control, risk
management procedures, Internal Audit resourcing and strategy
to ensure that its practices develop and remain appropriate in
line with internal audit standards. When internal control reviews
identified necessary or beneficial improvements, appropriate
steps have been taken to help ensure the control environment is
effective. This includes systems to monitor the implementation
by management of recommended remedial actions and follow-
up audits.
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CORPORATE GOVERNANCE
REPORT OF THE AUDIT AND RISK COMMITTEE / CONTINUED
Fair, balanced and understandable reporting
Each year, as required by the UK Corporate Governance Code and the Committee’s Terms of Reference, the Committee advises
the Board on whether or not, in its opinion, the Annual Report is fair, balanced and understandable (FB&U) and whether or not it
provides the information required for shareholders to assess Petra’s position and performance, business model and strategy.
Petrahas adopted the process set out below to support the Committee in making this assessment:
1
Planning
In May, the Board and ARC commented on the key themes
and focus areas for the Annual Report, with the ARC
conducting an early review of potential sensitivities for
the viability statement.
2
Internal FB&U assessment
Petra established an internal FB&U Committee consisting of
representatives from the (i) Corporate Planning (ii) Investor
Relations, and (iii) Company Secretarial functions.
The FB&U Committee reviewed the Annual Report with the
aim of it being fair, balanced and understandable. In addition,
the FB&U Committee identified significant statements in the
Annual Report requiring verification and oversaw the
verification process for these statements.
3
External audit
Having conducted its FY 2024 audit, BDO presented the
results thereof to the Committee in September. Feedback
from BDO throughout the audit process was incorporated
into the Annual Report.
4
ARC FB&U assessment
The FB&U Committee tabled its FB&U assessment at a
Committee meeting in September, convened for the
Committee to review the Annual Report. The FB&U
Committee’s observations and conclusions were provided to
the Committee, and included a summary of the verification
process undertaken, as well as the outcomes of the reviews
conducted by BDO.
Following its review, the Committee concluded that it was
appropriate to confirm to the Board that the FY 2024 Annual
Report is fair, balanced and understandable, and provides the
information necessary for shareholders to assess Petra’s
position and performance, business model and strategy.
At a subsequent Board meeting, the Board then approved the
Annual Report, which includes the FB&U statement issued by
the Directors, as set out on page 115.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
Report of the Nomination Committee
I am pleased to present my first Report of the Nomination
Committee (the Committee) since being appointed
Non-Executive Chair of the Company and Committee Chair.
Board size and composition
One of the focus areas for the Committee in the Year was to
reduce the size and improve the efficiency of the Board, with the
number of Directors reducing from ten to seven during the Year.
Four Directors stepped down from the Board, one Director was
appointed and other Board changes were made as follows:
• After the end of FY 2023, Monarch’s shareholding reduced
below 5%, resulting in the automatic termination of the
Nomination Agreement between Monarch and the Company,
and with it, Monarch’s right to nominate a Director to Petra’s
Board. As a result of this, Johannes Bhatt, a Non-Executive
Director nominated by Monarch, retired from the Board from
the conclusion of the AGM on 14 November 2023. We thank
Johannes for his contributions to Petra and wish him every
success in his future endeavours
• Peter Hill elected not to offer himself for re-election at Petra’s
AGM on 14 November 2023, and retired from the Board at the
conclusion of that meeting. Peter joined Petra in January
2020 and became Chair in March 2020, just as the COVID-19
pandemic broke. He helped steer Petra through the pandemic
and the Company’s successful financial restructuring,
refreshing the Board in the process and working closely with
Richard and his management team to stabilise the Company.
On behalf of the Board and Petra, I am grateful to Peter for the
significant contribution he made during his tenure and wish
him every success in his future endeavours
• With effect from the conclusion of the AGM on 14 November
2023, I was appointed as the Non-Executive Chair of Petra, as
well as Chair of the Nomination and Investment Committees,
and stepped down from the Audit & Risk Committee and then,
with effect from 1 January 2024, the Remuneration Committee.
Initially my appointment was in an interim capacity, whilst a
search for a permanent Non-Executive Chair was to be
conducted. Subsequently, Petra’s largest shareholders
requested that I remain in role over the next 18-24 months
from my appointment, with a search for a permanent Chair
then being conducted if I do not wish to continue in the role
• With effect from the conclusion of the AGM on 14 November
2023, Bernie Pryor took over my previous roles as Senior
Independent Director and then, with effect from 1 January
2024, as Chair of the Remuneration Committee
• Petra’s Health and Safety and Sustainability Committees
were merged to form the Safety, Health and Sustainability
Committee, with effect from 1 January 2024. Lerato Molebatsi
was appointed as Chair of this new Committee, again with
effect from 1 January 2024
• Jon Dudas and Alex Watson both retired from the Board as
Non-Executive Directors with effect from 17 February 2024.
Jon then assumed the role of Board Adviser for six months
until 17 August 2024. After stepping down from the Board, Alex
assumed the role of Board Observer. Alex had been appointed
as a non-independent Non-Executive Director in July 2021,
having been nominated by Franklin Templeton pursuant to the
Nomination Agreement that was entered into following the
successful completion of the recapitalisation of the Company.
The Company’s Board of Directors
continued to evolve during the
Year, in line with the Nomination
Committee’s focus on succession
planning, encompassing the
priorities set out in our Diversity
and Inclusion Policy.
Varda Shine
Nomination Committee Chair
Members of the Nomination Committee
Varda Shine – Committee Chair and Non-Executive Chair
Bernard Pryor (Senior Independent Director)
Deborah Gudgeon (iNED)
Lerato Molebatsi (iNED)
Peter Hill (iNED)
1
Jon Dudas (iNED)
2
1. Peter Hill ceased to be a member of the Committee when he retired from the
Board at the conclusion of the Company’s AGM on 14 November 2023.
2. Jon Dudas ceased to be a member of the Committee when he stepped down
from the Board on 17 February 2024.
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The Nomination Agreement also gives Franklin Templeton
the right to nominate an Observer to Petra’s Board, with the
Observer being entitled to attend but not vote at Board
meetings. Petra asked Franklin Templeton for Alex to become
a Board Observer to reduce the size and costs of the Board.
Franklin Templeton agreed to this change, but they retain their
right to re-nominate Alex as a Director under the Nomination
Agreement. We very much appreciate the contributions Jon
and Alex made to the Board during their tenure as Directors
and are fortunate to have someone with Alex’ wealth of
experience continuing to provide input to the Board in her
role as Observer
• With effect from 1 January 2024, José Manuel Vargas was
appointed to the Board as a new non-independent non-
executive director of the Company. José Manuel is a significant
shareholder of Petra, currently holding c. 8.75% of Petra’s
issued share capital. For more information and José Manuel’s
biography, see page 69. We welcome José Manuel to the
Board and look forward to drawing on his extensive executive
and Board experience across a range of sectors. José Manuel
provides valuable commercial and entrepreneurial
perspectives to the Board during these challenging
market conditions.
• In March 2024, Jacques Breytenbach resigned as Chief
Financial Officer and as a Director of the Company for
personal reasons. Jacques will remain in his role until the end
of September 2024 to deliver the Company’s FY 2024 results,
and to ensure an effective transition of his responsibilities to
Johan Snyman who becomes Chief Financial Officer with
effect from 1 October 2024. Jacques has been in a variety
of roles since joining the Group in 2006, becoming Chief
Financial Officer in 2016 and becoming an Executive Director
in 2018. On behalf of the Board and Petra, I would like to thank
Jacques for his commitment and extensive contributions
during his time at Petra and we wish him all the best in his
future endeavours.
• In March 2024, Petra appointed Amre Youness, principal
owner of the Terris Fund SPC, which is the Company’s largest
shareholder, as a Board Observer, entitling Amre (like Alex) to
attend but not vote at Board meetings.
The Committee continues to assess the current skills, experience
(as summarised on pages 77 to 80), diversity and size of
the Board.
CFO succession and other changes to Exco
The Committee and the Board reviewed, advised on and
supported the appointment of Johan Snyman as Chief Financial
Officer with effect from 1 October 2024. Johan joined Petra in
January 2024, as Group Financial Controller, and has extensive
experience in various financial roles in the mining sector. For
Johan’s biography, see page 71. Johan has been appointed
as a member of Exco, but will not, at this stage, be appointed to
the Board and so the Board will be reduced to six Directors with
effect from 1 October 2024.
The Committee and the Board were also kept updated on
and reviewed other changes to Exco that resulted from the
organisational restructuring undertaken by the Company during
the Year. These changes resulted in Vivek Gadodia being
appointed to Exco as the Group’s Planning and Corporate
Development Executive and the appointment of Juan Kemp as
Operations Executive at the Cullinan Mine and Jaison Rajan as
Operations Executive at the Finsch Mine, with both Juan and
Jaison having previously been members of Exco as Chief
Technical Officer and Chief Operating Officer, respectively.
See pages 70 to 71 for each of the Exco biographies.
Board evaluation
The Board’s annual evaluation for FY 2024 was undertaken in
Q4 FY 2024 and was facilitated by the Company Secretary.
The evaluation consisted of each Director completing a focused
questionnaire, with the questions being informed by the findings
of the externally facilitated Board evaluation undertaken in Q4 FY
2022 and the internally facilitated Board evaluation undertaken in
Q4 FY 2023. The Company Secretary used the responses to the
questionnaire to compile extensive feedback which was then shared
and discussed at a Board session to identify actions to be addressed
during FY 2025. More detail around the process followed in
conducting the evaluation, as well as the results of the evaluation are
set out on page 80. I am pleased to report that the Board and its
Committees were found to be working effectively and efficiently.
Diversity
Increasing diversity is important in terms of facilitating the
Board’s ability to function effectively to the benefit of the
business as a whole and all of its stakeholders. The Board fully
supports the targets of the FTSE Women Leaders and Parker
reviews on gender and ethnic diversity at the board level.
This is supported by Petra’s Diversity and Inclusion Policy
(the D&I Policy), which can be found on our website.
In FY 2024, the D&I Policy was reviewed and updated, with the
Safety, Health and Sustainability Committee reviewing it on the
Board’s behalf. The D&I Policy requires the Board, as a whole, to:
• promote an organisational culture that values a diverse
workforce, which should be reflective in its diverse makeup.
The Safety, Health and Sustainability Committee is mandated
by the Board to advise it on issues of diversity in general and
gender diversity in particular as a strategic imperative for
the Group and monitors progress against approved targets
on issues such as race, gender, ethnicity, education, age,
experience, skills and people with disability throughout Petra; and
• take steps to ensure that appointments to the Board and Exco
consider the commitment of creating a diverse workforce and
not only the skills and competencies of the proposed incumbent
to a position, including the requirements set out in the UK
Corporate Governance Code and the UK Listing Rules. Petra’s
commitment to diversity in its broadest sense, is reflected
in the fact that in FY 2024 we again met or exceeded the
diversity targets set out in the UK Listing Rules, as described
in more detail on page 77 and as highlighted below. As at
the date of this report (and with the UK Listing Rules’ targets
reference in brackets below):
• 43% of Petra’s Board are women; from 1 October 2024, this
will increase to 50% (target: 40%)
• our Chair (Varda Shine) is a woman (target: one of the Chair,
CEO, CFO or SID should be a woman)
• one member of our Board (14%) is from an ethnic background
other than white; from 1 October 2024, this will increase to
17% (target: one Board member should be from an ethnic
background other than white).
REPORT OF THE NOMINATION COMMITTEE / CONTINUED
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Petra Diamonds Limited Annual Report and Financial Statements 2024
In relation to the wider workforce, the overall percentage of women employed in the Company increased marginally to 22%
(FY 2023: 21%). We have a number of initiatives in place to further increase female representation at Petra and we were pleased to
report further improvements in FY 2024. You can read more about these at pages 51 to 53 of the Sustainability Report.
Additional directorships
Non-Executive Directors must commit sufficient time to fulfil their duties, including, amongst others, attending Board and Committee
meetings, the AGM and other general meetings of the Company, site visits, shareholder meetings and informal Board events. They
are also expected to review all relevant papers before meetings and must seek the Chair’s approval before taking on additional
commitments that may affect their availability at Petra.
During the year, Lerato Molebatsi was appointed as a Non-Executive Director of Curro Holdings Limited, a South African private
education provider listed on the Johannesburg Stock Exchange. The Chair confirmed with Lerato that she would be able to undertake
this role without affecting her responsibilities at Petra or causing a conflict of interest.
Nomination Committee role and activities
The principal functions of the Nomination Committee are listed below, along with the corresponding activity and performance in
FY 2024. In addition to the below, the Committee carried out its annual review of its Terms of Reference.
Role Activities in FY 2024 Outcomes
To review the structure, size
and composition of the Board
(including appropriate skills,
knowledge, experience
and diversity), and to make
recommendations to the Board
with regard to any changes.
The Committee continued to review the size and efficiency of the Board,
particularly following feedback from the FY 2023 Board Evaluation and certain
major shareholders that the Board at the start of FY 2024 is too large with too
many Board Committtees.
This resulted in various changes to the Board in H1 FY 2024 which saw the Board
reduce in size from ten to seven Directors and the merger of the Health and
Safety and Sustainability Committees.
The Committee will continue to make
recommendations regarding the Board and
its Committees and Senior Management
composition and structures.
The FY 2023 and FY 2024 Board evaluation
and major shareholder feedback supports the
current size and composition of the Board.
To identify, nominate and
recommend, for the approval
of the Board, appropriate
candidates to fill Board,
Committee and Exco vacancies
as and when they arise.
Varda Shine was appointed as Non-Executive Chair and Bernard Pryor was
appointed as Senior Independent Director, in each case, with effect from 14
November 2024. José Manuel Vargas was appointed as a non-independent NED
with effect from 1 January 2024. Bernard Pryor was appointed as Remuneration
Committee Chair and Lerato Molebatsi was appointed as Safety, Health and
Sustainability Committee Chair, in each case, with effect from 1 January 2024.
Johan Snyman was appointed as Chief Financial Officer with effect from 1 October
2024, following the resignation of Jacques Breytenbach as Chief Financial Officer,
which was announced in March 2024.
Alex Watson was appointed as Board Observer with effect from 17 February 2024,
when she stepped down as a Director. In May 2024, Amre Youness (principal
owner of the Terris Fund SPC, the Company’s largest shareholder) was also
appointed as a Board Observer.
During the Year and as part of the Group’s organisational restructuring, Vivek
Gadodia was appointed to Exco as the Group’s Planning and Corporate
Development Executive, Juan Kemp was appointed as Operations Executive at
Cullinan Mine and Jaison Rajan was appointed as Operations Executive at Finsch,
with both Juan and Jaison having previously been members of Exco as Chief
Technical Officer and Chief Operating Officer, respectively.
The Committee will continue to consider
candidates to fill Board, Committee and Exco
vacancies, as and when these arise.
To satisfy itself, with regards to
succession planning, that plans
are in place with regards to both
Board and Senior Management
positions.
The Committee continued to focus on succession planning, although this was
disrupted by the organisational restructuring which took place during the Year.
As part of our succession practices, and
particularly following completion of the
organisational restructruing during the Year, the
Nomination Committee will continue to review
programmes in place to assimilate talent into
leadership and specialist positions.
To recommend to the Board the
re-election by shareholders at
the AGM of any Director under
the retirement and re-election
provisions of the Company’s
Bye-Laws.
An annual Board evaluation exercise took place the Year, facilitated by the
Company Secretary.
The overall result of this evaluation was positive, with it being concluded that
Petra continues to have an effective and high performing Board as well as
highlighting certain areas for further improvement. See page 80.
Each Director was considered to remain
effective and will be proposed by the
Committee for re-election to the Board at
the FY 2024 Annual General Meeting. As
stated above, Jacques Breytenabch will cease
to be a Director with effect from the end of
September 2024.
Varda Shine
Nomination Committee Chair
23 September 2024
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Report of the Safety, Health
and Sustainability Committee
Petra has always been committed to upholding strong health and
safety, social and environmental standards. From the start of FY
2024, given the increasing focus on sustainability and the need
to formalise systems and reporting structures that support this
work, the Board determined that it was the right time to establish
the Sustainability Committee. Later in the Year and consistent
with various changes to promote a smaller and more efficient
Board, the Board elected to merge the Health and Safety and
Sustainability Committees to form the Safety, Health and
Sustainability Committee (the Committee).
I am pleased to present the FY 2024 report for the Committee.
The Committee’s role and responsibilities
The Committee is responsible for, amongst other things,
assessing the effectiveness of Petra’s frameworks, policies,
procedures, and systems related to safety, health, social, and
environmental matters and that they comply with legal
requirements. It reviews any material non-compliance with such
frameworks, policies, procedures and systems, considers
technical developments in relevant fields, and provides strategic
guidance on their impact. The core areas of focus for the
Committee include, amongst other items:
• Health and safety: the Committee oversees the
implementation of a recognised safety and health
management system, reviews compliance and performance
audits and monitors the Group’s response to regulatory
instructions. It closely reviews reports on injuries, incidents,
and accidents and ensures that management responds to
these appropriately.
• Social: the Committee monitors the implementation and
performance of community and social investment projects,
evaluates the Group’s organisational culture, oversees
stakeholder engagement and reviews Group initiatives to
promote diversity. It reviews engagements with the workforce,
including trade unions.
• Environmental: the Committee considers the impact of
climate-related risks and opportunities on the Group’s
business and strategy, monitors the implementation of the
Group’s Environmental Management Policy and reviews
periodic environmental reports. It oversees the quality of the
Group’s reporting to stakeholders and evaluates compliance
and performance through the results of audits. It ensures the
Company’s sustainability approach aligns with the United
Nations Sustainable Development Goals (SDGs).
• Performance, risk management and reporting: the Committee
assesses the Group’s performance on decisions affecting
employees, communities and stakeholders and monitors
grievance mechanisms and their effectiveness. It approves
sustainability and ESG objectives and key performance
indicators (KPIs), and reviews performance against such
objectives and KPIs. It ensures subsidiaries have systems
to record and report statistical data for legal and regulatory
purposes, meeting high assurance standards. It reviews
material risks related to safety, health, social and environmental
matters and communicates them to the Audit and Risk
Committee. Finally, the Committee oversees and reviews
the Group’s public disclosures on health, safety and
sustainability matters.
The health and safety of Petra’s
people remains our top priority,
with the safeguarding of the
environment for future generations
and the interests of our
communities and stakeholders
core to Petra’s licence to operate.
The Committee ensures that the
Board is fully apprised of
any issues which may affect
our licence to operate.
Lerato Molebatsi
Chair of the SHS Committee
Members of the SHS Committee
Lerato Molebatsi – Committee Chair and iNED
Varda Shine (Non-Executive Chair)
Bernard Pryor (Senior Independent Director)
Richard Duffy (Chief Executive Officer)
Alexandra Watson (NED)
1
Johannes Bhatt (NED)
2
REPORT OF THE SAFETY, HEALTH AND SUSTAINABILITY COMMITTEE
1. Alexandra Watson was a member of the Sustainability Committee which met twice
in FY 2024, but did not become a member of the Safety, Health and Sustainability
Committee and stepped down from the Board on 17 February 2024.
2. Johannes Bhatt was a member of the Health and Safety Committee which met
twice in FY 2024, but retired from the Board at the conclusion of the Company’s
AGM on 14 November 2024.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
Committee discussions in FY 2024
The Committee has met twice since it was formed on 1 January
2024, with two further meetings of each of the Committee’s
predecessor committees (the Health and Safety and
Sustainability Committees) being held earlier in the Year.
At each meeting, the Committee (or its predecessors)
reviewed, as standing agenda items, the following:
Health and safety
• Group performance in relation to safety, occupational health
and employee wellness, including reviewing the Group’s
performance against safety and health KPIs
• Significant changes in the Group’s Safety risk, with this risk
being a principal risk of the Group
• Summaries of the Group’s LTIs, NLTIs, dangerous occurrences
and HPIs
• Occupational disease and dust monitoring data
• Regulatory instructions issued by the DMRE
• Updates on mudpush occurrences and risks, with associated
progress against action plans to address these
Sustainability
• Group performance in relation to social and environmental
matters, including performance against social and
environmental KPIs
• Movement in principal risks relating to Labour Relations, the
Environment and Climate Change, with these risks being
deemed principal risks of the Company
• Petra’s performance against its SLP projects, including Local
Economic Development spending
• Amendments and updates to key legislation relating to
sustainability, including, for example, South Africa’s
Employment Equity Act and Mining Charter
• Changes in union membership
• Implementation and monitoring of performance in respect of
the Petra Culture Code, including suggested actions
• Updates on Group performance in respect of diversity,
including diversity initiatives conducted by Petra
• Performance of Petra’s multi-stakeholder engagement forums,
including a quantitative and qualitative assessment of Petra’s
stakeholder engagements
• Grievances registered with Petra’s operational grievance
mechanisms
• Training and development and community training spend
• Illegal miner incursions at the Williamson mine, involving
security personnel at the mine and actions to improve security
at the mine
• Implementation of the IGM at Williamson, including, amongst
others, updates on the IGM’s progress in resolving the
grievances lodged and the key findings of the Independent
Monitors’ biannual reviews of the IGM and actions being taken
to address these
• Implementation of the Restorative Justice Projects
at Williamson
In addition to the standing agenda items, the Committee also
reviewed and discussed the following matters during FY 2024:
• Restructuring: the Committee received detailed updates on
the progress of the organisational restructuring that led to
section 189 retrenchment consultation processes being
undertaken at the Finsch Mine (which reduced its throughput
tonnages from c. 2.8 to 2.2 Mtpa) and for Group employees
• Wage negotiations: the Committee oversaw Petra’s progress
in relation to the negotiation of five year wage agreements
with the National Union of Mineworkers covering Petra’s South
African operations for the period 1 July 2024 to 30 June 2029
in respect of employees in the A-C Paterson bands
• Mining Charter Reporting: the Committee reviewed Petra’s
Mining Charter submissions to the DMRE, including Petra’s
scoring against its reporting criteria
• Approval of long-term Power Purchase Agreements: the
Committee considered and recommended to the Board for
approval entry into long-term Power Purchase Agreements for
the procurement of wheeled renewable energy for the Cullinan
and Finsch Mines from Etana Energy, a licenced South African
energy trader, enabling Petra to fulfil its target of reducing
scope 1 and 2 GHG emissions by 35-40% by 2030 (against its
2019 base line) well ahead of time
• GISTM compliance: the Committee regularly reviewed Petra’s
progress in implementing the Global Industry Standard on
Tailings Management (GISTM)
• Revision of policies: the Committee approved revisions to the
Group’s (i) Stakeholder Engagement and Management Policy,
(ii) Diversity and Inclusion Policy and (iii) Human Rights Policy
Statement
• Mental health baseline study: the outcomes of a mental health
baseline assessment conducted at all our South African
operations in partnership with South Africa’s Tshwane
University of Technology to support employees’ mental
wellbeing
• Health and safety campaigns: the Committee received a
number of updates on the dynamic and seasonal health and
safety awareness campaigns conducted at each of the Group’s
mines throughout the year. The content and approach of these
campaigns were targeted to address specific emerging safety
issues or concerns
• Groundwater pollution plume: the Committee reviewed
studies conducted in relation to the groundwater pollution
plume at the Cullinan Mine, noting that there was no cause
for concern.
• Cullinan No 7 Dam: the Committee was updated on elevated
water levels at this tailings facility caused by unusually high
rainfall and the emergency water releases that were required
to be made in accordance with applicable laws and
regulations. The Committee was also updated on short
and long-term mitigation measures levels at the dam
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• Sustainability Report and TCFD Statement: the Committee
reviewed and approved the FY 2023 Sustainability Report and
TCFD disclosures in the FY 2023 Annual Report
• WDL TSF failure: the Committee received updates on the
remediation actions taken in response to the TSF failure at the
Williamson mine in November 2022, with compensation
payments being completed, environmental initiatives near
completion and the construction of replacement housing
ongoing
• Williamson interim TSF: the Committee reviewed the process
followed in designing, constructing and commissioning the
interim tailings storage facility at Williamson
• Contractor management: the Committee discussed with
management ways in which the safety performance of
contractors at the Cullinan and Finsch mines could be
enhanced through improvements to contracts and contractor
management
• ISO certification: the Committee reviewed the ISO certification
of each of the Group’s operations, including the pathway to the
achievement of ISO 45001 certification at the Williamson mine
• Integrated Mine Closure: the Committee received updates on
the Group’s approach to integrating mine closure within LOM
planning
• Critical controls review: the Committee reviewed the Group’s
critical controls in relation to Significant Unwanted Events and
the implementation plan in relation thereto
• Koffiefontein Home Ownership Programme: the Committee
received updates on the sale and transfer of homes to
individuals in the community at Koffiefontein as part of the
Home Ownership Scheme at the mine
• Koffiefontein Social Transition: the Committee reviewed the
social transition and LED projects undertaken at Koffiefontein
as part of Petra’s movement towards responsible closure
• Stakeholder mapping: the Committee received and reviewed
the outcome of a stakeholder mapping exercise completed by
external service providers for Petra
• FY 2024 materiality assessment: the Committee received an
update on the outcome of the Group’s “double materiality”
assessment for the FY 2024 Sustainability Report
• Workplace harassment training: the Committee was updated
on the progress and outcomes of the Group’s workplace
harassment training.
Lerato Molebatsi
Safety, Health and Sustainability Committee Chair
23 September 2024
REPORT OF THE SAFETY, HEALTH AND SUSTAINABILITY COMMITTEE / CONTINUED
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Report of the Investment Committee
I am pleased to present my first report of the Investment
Committee (the Committee) since being appointed Non-
Executive Chair of the Company and Committee Chair.
Monitoring and approving capital allocation and
other investments
As a condition of the capital restructuring which completed in
March 2021, Petra’s Board formed the Committee, to monitor
significant capital and other investments and recommend their
adoption to the Board.
The Committee’s members have been appointed by the Board
and include the Chair of the Board, the Senior Independent
Director, the Audit and Risk Committee Chair, the Chief Executive
Officer and the Chief Financial Officer. The Committee met on
one occasion in FY 2024, noting that all but one of the Directors
(José Manuel Vargas) are members of the Committee and
therefore receive updates and discuss issues at Board meetings
that are relevant to the Committee.
The role and responsibilities of the Committee are to:
• Consider and approve all capital expenditure and investment
proposals from US$7.5 million to US$15.0 million
• Consider and make recommendations to the Board for all
capital expenditure and investment proposals above
US$15.0 million
• Consider and make recommendations to the Board for the
disposal of operating subsidiaries, operating mines and/or
mining rights or assets exceeding US$7.5 million in either
gross book value or reasonably expected market value
• Monitor the progress of major capital investments by way
of the investment progress schedule together with
post-implementation reviews
• Approve internal processes relating to capital expenditure and
investment proposals, including all documentation required to
be completed
• Consider and make recommendations to the Board related to
Group capital expenditure and related policies
In FY 2023, the Committee received updates on the progress of
the major mine plan extension projects at the Cullinan and Finsch
Mines that had been approved by the Board in FY 2022. The
Committee also considered and recommended to the Board for
its approval changes to these projects and also a new C-Cut
extension project involving the development of Tunnels 46 and
50 at the Cullinan Mine.
Capital deferrals
As announced in November 2023 and in response to the
challenging market conditions faced by Petra, the Board took
the decision to immediately defer certain of the Company’s
previously approved capital programmes.
In relation to the Cullinan Mine:
• the C-Cut extension project was deferred until the end of
June 2024; and
• the CC1E project was partially deferred until the end of
June 2024, with approximately half the development crews
continuing to develop the 813 and 833 levels of the CC1E SLC,
so as to ensure higher-grade ore continued to be brought into
production from the end of June 2024 onwards.
The Investment Committee’s
mandate is to monitor the
Company’s capital allocation
decisions taking into account the
interests of the Company and
allitsstakeholders.
Varda Shine
Investment Committee Chair
Members of the Investment Committee
(as at the date of this Report)
Varda Shine – Committee Chair and
Non-Executive Chair
Richard Duffy (Chief Executive Officer)
Jacques Breytenbach (Chief Financial Officer)
Bernard Pryor (Senior Independent Director)
Deborah Gudgeon (iNED)
Lerato Molebatsi (iNED)
Peter Hill (iNED)
1
Johannes Bhatt (NED)
1
Alex Watson (NED)
2
Jon Dudas (iNED)
2
1. Peter Hill and Johannes Bhatt ceased to be members of the Committee when
they retired from the Board at the conclusion of the Company’s AGM on 14
November 2023.
2. Alex Watson and Jon Dudas ceased to be members of the Committee when they
stepped down from the Board 17 February 2024.
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In relation to the Finsch Mine:
• the 3-Level SLC extension project was deferred until the end
of June 2024; and
• the 78-Level Phase II project continued as planned in order
to bring these production areas online during FY 2024 to
supplement production from the existing SLC which is nearing
its end of life.
Recommending life extension projects for revised
LOM plans
Following the capital deferrals outlined above, management
undertook re-planning work which was aimed at minimising the
impact of these deferrals on the Company and its growth profile.
This resulted in management creating revised LOM Plans for
the Cullinan and Finsch Mines which were comprised of new
life extension projects that the Committee reviewed and
recommended to the Board for its approval. The revised LOM
plans are intended to ensure a smoothed capex profile of
c. US$100 million per annum for these mines and are expected
to be self-funded.
No significant changes in respect of capital expenditure were
made to the Williamson Mine LOM plan.
Cullinan Mine
The revised LOM plan for the Cullinan Mine involves the
following life extension projects:
• the redesigned CC1E Phase I project (813, 833 and 855L SLC)
recommencing from FY 2025;
• the redesigned C-Cut Extension 1 project recommencing in
FY 2026;
• the C-Cut Extension 2 project with first capital expenditure
anticipated in FY 2027; and
• the sinking of a new ventilation shaft, with first capital
expenditure anticipated in FY 2026 – 2027. It is expected that
this shaft will be operational by FY 2029 and that it will enable
future life extensions of the Cullinan Mine.
The Committee unanimously recommended to the Board for its
approval the above life extension projects, including the revised
LOM plan for the Cullinan Mine and the indicative capital spend
(in FY 2025 real terms) of c. US$205-225 million relating to these
life extension projects. In doing so, the Committee noted that
capital spent to date in respect of the CC1E Phase I and C-Cut
Extension projects has been c. US$82 million. In determining
whether to make these recommendations, the Committee
considered the long-term impact of these projects for Petra,
noting their robust economics (having an IRR in excess of 20%)
and the critical impact these projects have for Petra’s long-term
viability by extending the LOM at the Cullinan Mine to as far the
early 2040s.
The Committee noted that approval of these projects would not
only have significant positive long-term social and economic
impacts on the surrounding communities and positive long-term
fiscal impacts for the Government, but were also expected to be
self-funded.
The Committee also noted that pursuing the above projects
would give Petra a platform to consider potential further life
extension projects at the Cullinan Mine (including in relation
to CC1E Phase II, the C-Cut Extension 3 and the D-Cut).
Finsch Mine
The revised LOM plan for the Finsch Mine involved the rebasing
of the mine’s production profile from c. 2.8 Mtpa to 2.2 Mtpa and
a life extension project (consisting of 81L (5 tunnels) and 86L
(12 tunnels) and 88-90L SLC).
The Committee unanimously recommended to the Board for its
approval the above life extension projects, including the revised
LOM plan for the Finsch Mine and the indicative capital spend (in
FY 2025 real terms) of c. US$150 – 165 million relating to these
projects, noting that capital spent to date in respect of these
projects has been c. US$54 million. In determining whether to
make these recommendations, the Committee considered the
long-term impact of these projects for Petra, noting their robust
economics (having an IRR in excess of 20%) and the critical
impact these projects have for Petra’s long-term viability by
extending the LOM at the Finsch Mine to 2031 and beyond. The
Committee noted that approval of these projects would not only
have significant positive long-term social and economic impacts
on the surrounding communities and positive long-term fiscal
impacts for the Government, but they were also expected to be
self-funded.
The Committee also noted that pursuing the above projects
would give Petra a platform to consider potential further life
extension projects at the Finsch Mine, including in relation to
92-100L.
Varda Shine
Investment Committee Chair
23 September 2024
CORPORATE GOVERNANCE / CONTINUED
100
Petra Diamonds Limited Annual Report and Financial Statements 2024
Letter from the Remuneration Committee Chair
Key highlights
• The revised Directors’ Remuneration Policy was supported
by 98.03% of shareholders at the 2023 AGM, demonstrating
strong levels of support for our remuneration structures.
• The annual bonus for FY 2024 was cancelled recognising
operational and financial challenges over the Year.
• Performance Share Plan (PSP) awards vested at just above
threshold following the end of the three-year performance
period, reflecting achievement of some of the operational
performance targets over the three years. The value at vesting
was around 15% of the Executive Directors’ salaries.
• Changes were implemented to simplify the Board structure
and NED fees were reduced, resulting in a reduction to Petra’s
Board fees of more than 25% on an annualised basis.
• The performance measures set for the bonus and PSP for
FY 2025 were reviewed to reduce the number of measures so
as to be more focussed, and include a significantly increased
weighting on cashflow generation.
Dear shareholder,
As Chair of the Remuneration Committee (the Committee) I am
pleased to present our Directors’ Remuneration Report for the
financial year ended 30 June 2024. This is my first report since
assuming the role of Chair of the Remuneration Committee and
I would like to thank my predecessor, Varda Shine, for her
leadership in the role.
Context and Company performance
Ongoing macroeconomic challenges and an unprecedented
weaker-for-longer diamond market contributed to another
challenging year for Petra and the entire diamond industry. The
combination of the market downturn and certain operational
challenges resulted in our financial and production performance
for the Year being behind expectations.
However, our employees continue to show resilience in the face
of these difficulties and have adapted to stabilise operations for
the future. By optimising our balance sheet, making adjustments
to our cost base and delivering a smoothed capital programme
self-funded until the early 2030s, Petra is positioned to benefit
from future strengthening of diamond prices. The Board is also
delighted to announce our 7th consecutive year without a fatality.
Safety and the wellness of each employee and the communities
surrounding our operations continue to be at the forefront of
our thinking.
We are committed to a remuneration
framework which supports
delivery of our strategy, aligns to
performance, and incentivises our
highly regarded management team.
FY 2024’s focus was on cost
reduction, with the Committee
supporting management’s decision
to cancel the annual bonus, and
with the Board structure being
simplified to reduce fees. We are
confident that our overall approach
to remuneration remains aligned to
performance and our strategy.
Bernie Pryor, Remuneration Committee Chair
Members of the Remuneration Committee
(as at the date of this Report)
Bernard Pryor – Committee Chair and
Senior Independent Director
Deborah Gudgeon (iNED)
Lerato Molebatsi (iNED)
Varda Shine (Non-Executive Chair)
1
Jon Dudas (iNED)
2
1. Varda Shine ceased to be a member of the Committee when she was
appointed as Non-Executive Chair at the conclusion of the Company’s AGM
on 14 November 2023.
2. Jon Dudas ceased to be a member of the Committee when he stepped down
from the Board on 17 February 2024.
101
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
Remuneration outturns for FY 2024
Although some progress was made against our annual targets
during the Year, Management, with support from the Board,
cancelled the annual bonus in respect of FY 2024 for all
participants. This decision takes into account the ongoing focus
on cost savings as well as the recent shareholder experience.
The FY 2022 PSP awards are due to vest at 22.3% of maximum
in respect of the three-year period ending in FY 2024. This
relatively modest outturn reflects that share price appreciation
targets were not met but that there was some achievement
against the operational performance targets over the three
years. Further details are provided on page 106. Taking into
account the impact of the share price depreciation on the value
of the share awards, the PSP vesting equated to c.15% of salary.
The Committee considered the vesting outcome appropriate and
did not apply further discretion.
The Committee considers that the Remuneration Policy operated
as intended in respect of FY 2024 and that the incentive outturns
align with Petra’s performance.
CFO departure
After eight years as Petra’s Chief Financial Officer, Jacques
Breytenbach will step down from the Board on 30 September
2024 for personal reasons. Jacques has remained in his role to
focus on the delivery of the Company’s full year results and to
ensure an effective transition of responsibilities to his successor.
He will retain only his vested awards, which continue to be
subject to post-vesting holding periods where relevant and he
will maintain a minimum shareholding in Petra for two years.
Unvested awards will lapse. Further details on Jacques’
departure are set out on page 108.
Implementation of the Policy for FY 2025
Taking into account the Group’s focus on cost savings, the
Remuneration Committee decided to freeze salaries for the
Executive Directors and other senior management roles.
However, during the Year we were pleased to conclude five-year
wage agreements with the National Union of Metalworkers
covering South African operations for the period 1 July 2024 to
30 June 2029. The average fixed pay increase for the South
African workforce was c. 5% in local currency for FY 2025.
Annual bonuses for FY 2025 will continue to be based on a
balanced scorecard linked to the financial, operational and
strategic objectives of the Group, and a portion of the Executive
Director’s bonus (30%) will continue to be linked to the
achievement of individual strategic performance measures.
Further details are on page 106.
For FY 2025, the CEO will be granted a PSP award at the normal
level of 150% of salary. The Committee has decided that for FY
2025 the CEO’s PSP award will not include the outperformance
element which was an additional award introduced last year.
The PSP framework is broadly in-line with the framework used
in recent years, however the Committee has increased the
weighting on cashflow generation in recognition of its
importance to Petra.
The Committee continues to recognise the importance of
responsible ESG management, and as such ESG metrics will,
as last year, form part of both the annual bonus and PSP for
FY 2025.
Non-Executive Director fees
During the Year, the Group announced a series of changes to the
Board structure to make it smaller and more efficient. The Board
has reduced from ten Directors to seven Directors, and the
Sustainability and Health and Safety Committees have been
merged to form a single Safety, Health and Sustainability
Committee. These changes are a small but important part of the
ongoing cost saving measures that were implemented across
the Group to provide further flexibility should prevailing market
conditions continue.
Following these Board changes the fees for the Chair and the
NEDs were reviewed. The Board and Remuneration Committee
determined that the NEDs’ fees and the Chair fees would
be reduced by 5% with effect from 1 January 2024, with the
exception of the Safety, Health and Sustainability Committee
Chair fee, which was increased to match the Audit and Risk and
Remuneration Committee Chair fees, and to reflect the increased
responsibility of the role. The cumulative impact of these
changes was to reduce Petra’s Board fees by more than 25%.
2024 Annual General Meeting
Last year the Committee was pleased to note that 98.03% of
shareholders voted in favour of both the Directors’ Remuneration
Report and the Directors’ Remuneration Policy. I would like to take
this opportunity to thank shareholders for their continued support.
Bernie Pryor
Remuneration Committee Chair
23 September 2024
LETTER FROM THE REMUNERATION COMMITTEE CHAIR / CONTINUED
102
Petra Diamonds Limited Annual Report and Financial Statements 2024
Directors’ Remuneration Report
This report explains how the Company’s Directors’ Remuneration Policy was implemented during FY 2024 and how the Directors’
Remuneration Policy (as set out on pages 138 to 142 of the 2023 Annual Report) will be applied for FY 2025:
Overview of policy and how it will be applied for FY 2025
Salary
Influenced by role, individual
performance, experience and
market positioning.
Taking into account the Group’s focus on reducing costs the Remuneration Committee determined that
salaries for the Executive Directors would be frozen for FY 2025. Executive Director base annual salaries
therefore remain as follows:
• CEO: Richard Duffy – £479,590 (FY 2024: £479,590)
• Outgoing CFO: Jacques Breytenbach – £319,730 until 30 September 2024 (FY 2024: £319,730)
For reference, the average fixed pay increase for the workforce in South Africa for FY 2025 is around 5% in
local currency.
Benefits
Provision of an appropriate
level of benefits for the relevant
role and local market.
Executive Directors receive:
• A benefits allowance of 10% of salary in lieu of both pension and other benefits and, at the Directors’
election, the option to participate in the Company’s defined contribution pension scheme, up to the
maximum contribution in line with the wider workforce, funded from this allowance
• Group life, disability and critical illness insurance
Annual bonus
Linked to key financial,
operational, ESG and strategic
goals of the Company, which
reflect critical factors of success.
Maximum opportunity for FY 2025 of 150% of salary.
The Committee has reviewed the annual bonus targets for FY 2025 to ensure that they continue to be
aligned to our strategic priorities.
The bonus scorecard for FY 2025, which will have an overall weighting of 70%, will be linked to:
• Free cashflow generation (50%)
• ESG objectives (incorporating health, safety, environmental and social and diversity measures) (30%)
• Progress of the approved life extension projects at both Cullinan Mine and Finsch Mine, measured
according to approved schedule and budgets (20%)
The remaining 30% of the Executive Director’s bonus will be linked to the achievement of individual
strategic targets. Annual bonus will be subject to a clawback provision, which may apply for up to two years
following the end of the performance period.
Performance Share Plan
Aligned with shareholders and
motivating the delivery of long-
term objectives.
For FY 2025 PSP awards of 150% of salary will be granted. Performance will be measured over a three-year
period to 30 June 2027, subject to the following performance measures:
• Cashflow generation and net debt movement (55%)
• Absolute total shareholder return (TSR) performance (30%)
• Sustainability performance (15%)
PSP awards are subject to a two-year holding period post-vesting to further align executive remuneration to
shareholder interests.
The PSP is subject to a clawback provision, which applies for up to two years following the end of the
relevant performance period.
Shareholding guidelines
Aligned with shareholders.
Shareholding guidelines of 200% of salary.
Post-employment shareholding requirements apply.
103
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
The following table provides details of how the Remuneration Policy addresses the factors set out in Provision 40 of the 2018 UK
Corporate Governance Code:
Clarity
Remuneration arrangements should
be transparent and promote effective
engagement with shareholders and the
workforce.
The Committee is mindful of ensuring that our remuneration arrangements are clear and
transparent for both participants and shareholders.
Simplicity
Remuneration structures should avoid
complexity and their rationale and
operation should be easy to understand.
Petra’s remuneration framework is simple, consisting of fixed remuneration, an annual bonus and a
single Long Term Incentive Plan.
Risk
Remuneration arrangements should
ensure reputational and other risks from
excessive rewards, and behavioural
risks that can arise from target-based
incentive plans, are identified and
mitigated.
The Committee takes risk factors into account when setting and assessing remuneration
arrangements. The performance framework includes a balanced range of measures which include
operational, financial and ESG measures.
The remuneration framework provides the Committee with discretion to adjust incentive outturns
or to clawback remuneration in certain circumstances.
Proportionality
The link between individual awards, the
delivery of strategy and the long-term
performance of the Company should be
clear. Outcomes should not reward poor
performance.
In order to align Executive pay with performance, two of the overarching principles of our Policy
are that remuneration packages should be weighted towards performance-related pay and that
performance targets should be suitably demanding.
The Committee has a track record of applying discretion to amend awards where they do not
consider them to be appropriate in the context of performance.
Alignment to culture
Incentive schemes should drive
behaviours consistent with Company
purpose, values and strategy.
The Company’s values, purpose and culture are reflected in remuneration outcomes. Salary
increases for Executives typically take account of the wider workforce. Pension benefits are
aligned to the workforce. Both the annual bonus and PSP include metrics linked to Petra’s ESG
and sustainability strategy, including health, safety, social and environmental performance.
Single figure of total remuneration
The following table gives a breakdown of the remuneration received by the Executive Directors for FY 2024 and FY 2023. Although
the Company’s reporting currency is US Dollars, these figures are stated in Pounds Sterling so as to be aligned with the Directors’
service contracts.
Richard Duffy
Chief Executive Officer
Jacques Breytenbach
Chief Financial Officer
2024
£
2023
£
2024
£
2023
£
Salary 479,590 456,750 319,730 304,500
Benefits
1
59,702 57,456 27,715 26,622
Retirement benefits
1
— — 12,106 11,6 82
Total fixed remuneration 539,292 514,206 359,551 342,804
Annual bonus – paid in cash — 28 4,156 — 187,724
Annual bonus – deferred to shares — 94,718 — 62,575
Long-term incentives
2,3
71,567 103,592 47,711 74,090
Total variable remuneration 71,567 482,466 47,711 324,389
Total 610,859 996,672 407,262 667,19 3
1. Executive Directors are provided with a 10% benefits allowance and may use a portion of such allowance, limited to 7.5% of salary, to contribute to the Company’s outsourced defined
contribution pension plan which is also available to the Group’s South African workforce. No additional retirement benefits are provided. In addition, the Executive Directors are
members of the Group’s management life insurance scheme (which includes disability and critical illness cover).
2. The performance period for the FY 2022 PSP awards granted on 12 January 2022 ended on 30 June 2024. The awards will vest at 22.3% of maximum (see page 106). The values
included in the table above are based on the three-month volume weighted average share price to 30 June 2024 of 42.6 pence. As this is below the share price at grant none of the
amounts in the table above are attributable to share price appreciation.
3. The performance period for the FY 2021 PSP awards granted on 12 January 2022 ended on 30 June 2023. The awards vested at 31.2% of maximum. The values included in the table
above are based on the share price on the date of vesting (19 October 2023) of 52.0 pence. As this is below the share price at grant, none of the amounts in the table above are
attributable to share price appreciation. Note that as the FY 2021 PSP awards vested after the FY 2023 Annual Report was published, the amounts used in the FY 2023 Annual Report
were based on the three-month volume weighted average share price to 30 June 2023 of 73.4 pence, rather than the share price on the day of vesting (19 October 2023) which was
52.0 pence.
DIRECTORS’ REMUNERATION REPORT / CONTINUED
104
Petra Diamonds Limited Annual Report and Financial Statements 2024
Additional notes to the remuneration table
Salary
During the Year, the Remuneration Committee reviewed the salaries of the Executive Directors. Following careful consideration and
taking into account the Group’s focus on cost savings, the Committee decided to freeze the Executive Directors’ salaries for FY 2025.
With effect from 1 July 2024, Executive Director base salaries are as follows:
Base
salary from
1 July 2023
£
Base
salary from
1 July 2024
£
Richard Duffy 479,590 479,590
Jacques Breytenbach (CFO until 30 September 2024) 319,730 319,730
Benefits
In lieu of pension plan participation and other benefits, the Executive Directors receive a benefit cash supplement of 10% of salary.
Other than membership of the Group management life insurance scheme (which includes disability and critical illness), Executive
Directors are not provided with any further benefits and may elect, at their own discretion, to participate in the Company’s defined
contribution pension scheme that applies to the Group’s South African workforce.
Annual bonus
The annual bonus plan is designed to reward and incentivise performance over the financial year. The bonus framework uses a
balanced scorecard approach, linked to the financial, operating and strategic objectives of the Company (with a weighting of 70% of
the Executive Directors’ bonus award), and individual strategic performance measures with a weighting of 30%. The maximum bonus
for the Executive Directors for delivery of exceptional performance is capped at 150% of base salary. Prior to determining the final
bonus outcomes, the Committee considers all-round performance to ensure that actual bonuses are appropriate.
Although some progress was made against our annual targets during the Year, Management, with support from the Board, cancelled
the annual bonus in respect of FY 2024 for all participants. This decision takes into account the ongoing focus on cost savings as well
as the recent shareholder experience. Although there will be no annual bonus payment in respect of FY 2024, in the interests of
transparency, the following table sets out the key scorecard targets and the Group’s performance against those targets. The
Committee and the Board have considered the retrospective disclosure of targets and have disclosed targets where this is not
considered to be commercially sensitive.
Performance metrics Performance and targets
Scorecard
weighting
Operational efficiencies and profitability
(including free cashflow generation, carat
production, capex and cost management)
Threshold Target Maximum
FY 2024
Performance
Free cashflow
(US$m) 42.6 5 0.1 57.6 3.8
Carats (thousands) 2,591 3,049 3,506 2,730
Costs (for tonnes
variance) 6 8 10 8.6
Capex (out of 10) 6 8 10 7.7
65%
Sustainability measures (including
health, safety, social and environmental
performance)
Threshold Target Maximum
FY 2024
Performance
LTIFR
1
0.29 0.24 0 .19 0.18
TIFR
1
0.71 0.59 0.47 0.48
ESG scorecard
2
6 8 10 7.9
1. The outcome of the health and safety measures for FY 2024 was also subject to maintaining zero
fatalities for the Year, which was achieved.
2. The ESG scorecard includes an assessment of performance against environmental, social and
diversity and inclusion targets. The outcome for the environmental measures was also subject to
there being no major environmental incidents.
35%
The overall outcome was 0%, reflecting that the annual bonus in respect of FY 2024 was cancelled.
105
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
Personal performance measures – Executive Directors
Annual bonus for FY 2025
For FY 2025, the Committee will continue to use a scorecard framework to determine annual bonuses, as set out below. In line with
the approach used for FY 2024, 70% of the CEO’s bonus will be linked to the financial, operating and strategic objectives of the
Company and 30% of the CEO’s bonus will be linked to the achievement of individual strategic performance measures.
The financial, operating and strategic objectives of the Company for 70% of the CEO’s bonus award for FY 2025 will have the
following performance measures and weighting:
Performance measure
Scorecard
weighting
Operational performance and profitability (including free cashflow generation and capex) 70%
ESG measures (including environmental efficiencies, social and community, diversity and inclusion, and health and safety performance) 30%
As noted above, the bonus framework includes both measurement against pre-defined targets and the exercise of judgement, within
a scoring framework which uses measurable and defined objectives.
Long-term incentives – Performance Share Plan
Annual long-term share awards are granted under the Performance Share Plan, approved at the 2021 AGM, with vesting conditional
on the achievement of both shareholder return and operational measures.
FY 2022 to FY 2024 award – vesting outcome
The long-term incentive outturn post-period-end relates to the awards granted under the PSP in respect of FY 2022 subject to
performance measures assessed over three years. These awards were linked to absolute share price growth (33.3%), to cashflow
generation and net debt (33%) and to operational performance and efficiencies (33.3%). Following the end of the performance period,
the Committee assessed performance achieved against the pre-determined measures and targets.
Total shareholder return (33.3%)
Performance measure Weighting
25% of
element vests
80% of
element vests
100% of
element vests
Actual
performance
Absolute share price growth 33.3% 50%
1
75% 100%
Below threshold
(0% vested)
Vesting outcome for this element 0.0% out of 33%
1. No portion of an element vests for performance below this threshold level.
Cashflow generation and net debt (33.3%)
Weighting
25% of
element vests
1
80% of
element vests
100% of
element vests
Actual
performance
Operational free cashflow 16.7% US$51.3m US$181.0m US$245.8m US $147.5m
Net debt/(Net cash): EBITDA ratio 16.7% 3.0x 1.3x 0.8x 3.0x
Vesting outcome for this element 15.1% out of 33.3%
1. No portion of an element vests for performance below this threshold level.
Operational performance and efficiencies (33%)
Weighting
25% of
element vests
1
80% of
element vests
100% of
element vests
Actual
performance
Cumulative tonnes treated (million) 11.6% 22.8 25.3 26.5 22.3
Cumulative carats recovered (million) 11.6% 8.9 9.9 10.3 8.4
Opex and capex efficiencies 10% 6 8 10 7.7
Vesting outcome for this element 7.2% out of 33.3%
Overall vesting outcome for FY 2022 to FY 2024 awards 22.3% out of 100%
DIRECTORS’ REMUNERATION REPORT / CONTINUED
106
Petra Diamonds Limited Annual Report and Financial Statements 2024
Opex and capex efficiencies were measured considering an assessment of actual progress of the four life extension projects
currently underway in the Group (being the CC1-East SLC and C-Cut Extension projects at Cullinan Mine, and the 78-Level Phase 2
and 90-Level SLC projects at Finsch) measured against approved project schedules, cost performance considering achieved
progress of these extension projects and operational cost efficiencies against approved budgets over the three year period. The
impact of the FY 2024 decisions to defer capital projects and reduce operating costs were included in the measurements. Further
details of performance at each site are set out in the Operational Review on pages 32 to 33.
The Committee is satisfied that the final vesting of 22.3% of maximum was appropriate. Taking into account the impact of the share
price depreciation on the value of the share awards, the PSP vesting equated to c. 15% of salary. The Committee considered the
vesting outcome appropriate and did not apply further discretion.
FY 2025 awards
For FY 2025, PSP awards of 150% of salary will be granted as normal. Performance will be measured over a three-year period to
30 June 2027, subject to the following performance measures, which are linked to the Company’s long-term strategic priorities.
Summary of performance targets: FY 2025–FY 2027
Performance measures Weighting
Absolute TSR performance 30% This element is based on the following absolute share price growth targets:
25% of
element vests
1
100% of
element vests
Absolute TSR performance
10%
CAGR
25%
CAGR
1. No portion of an element vests for performance below this threshold level. CAGR reflects targeted Compound Annual
Growth Rate over the three-year period.
Cashflow generation and
net debt
55% • This element is linked to the Company’s ability to generate positive operational free
cashflow (after sustaining capex) and the resultant improvement in the net debt:EBITDA
ratio over the three-year measurement period
• The targets were set with reference to the Company’s internal projections
Weighting of
this element
25% of
element vests
1
100% of
element vests
Operational free cashflow 70% US$75m US$135m
Net debt/(Net cash): EBITDA ratio 30% 1.73x 1.13 x
1. No portion of an element vests for performance below this threshold level.
ESG and sustainability 15% This element is linked to achieving absolute reductions in our GHG emissions, with targets set
taking into account the detailed execution roadmap.
25% of
element vests
1
100% of
element vests
Reduction in GHG emissions (relative to a 2019 baseline) 20% 35%
1. No portion of an element vests for performance below this threshold level.
Committee discretion The Remuneration Committee retains discretion to adjust outturns if they are not considered
to be appropriate, taking into account the underlying performance of the Company and
Executive Directors over the performance period
107
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
CFO departure
As announced in March 2024, Jacques Breytenbach resigned
as Chief Financial Officer for personal reasons and will step
down on 30 September 2024 following an effective transition
of his responsibilities to Johan Snyman who will become
Chief Financial Officer with effect from 1 October 2024.
Jacques Breytenbach will retain only share awards which have
vested prior to his departure, including the FY 2022 to FY 2024
PSP Award which is due to vest in September 2024. All awards
will continue to be subject to post-vesting holding periods
where applicable. All other unvested share awards will lapse
on departure. In accordance with the terms of his Service
Agreement, Jacques Breytenbach will receive payment in lieu
of notice of £153,305 which is equivalent to his basic salary
and benefits allowance for the period from 1 October 2024
to 7 March 2025. This payment in lieu of notice reflects his
contractual entitlement based on the 12 months’ written notice
he gave when he resigned on 7 March 2024. The amount shall
be paid in monthly instalments and may be subject to mitigation.
Jacques Breytenbach is not eligible for an annual bonus or PSP
award in respect of FY 2025.
Jacques Breytenbach will be expected to maintain a minimum
shareholding for two years following ceasing to be an
Executive Director.
Non-executive Director remuneration
The Chair receives a fixed fee for all services. The other NEDs
receive a fixed basic fee for their normal services rendered and
fees for other responsibilities such as the chairing of Committees
and the Senior Independent Director. All fees are payable in
cash. Independent NEDs do not participate in the Company’s
bonus arrangements, share schemes or pension plans, and for
FY 2024 (in accordance with the Company’s normal policy), did
not receive any other remuneration from the Company outside
of the fee policy outlined above.
As announced in December 2023, the Group has made a series
of changes resulting in a smaller and more efficient Petra Board.
The number of Directors has been reduced from ten to seven
and will further reduce to six when Jacques Breytenbach steps
down from the Board on 30 September 2024. The Sustainability
and Health and Safety Committees have been merged to form a
single Safety, Health and Sustainability Committee. These
changes are a small but important part of the ongoing cost
saving measures that are being implemented across the
Group and they are also a direct response to feedback form
shareholders.
In addition to these structural changes, the Remuneration
Committee and Board agreed to reduce the Chair’s fee and NED
fees by 5% with effect from 1January 2024. In light of the change
in responsibilities the fee for the Chair of the Sustainability,
Health and Safety Committee was increased slightly to match
the Audit and Risk and Remuneration Committee Chair fees.
Peter Hill stepped down as Chair of the Board at the Group’s
AGM on 14 November 2023. Varda Shine was appointed Chair
with effect from the AGM and initially received an annual fee
of £189,000 (in line with Peter Hill’s fee). Varda Shine’s fee was
reduced by 5% to £179,550 from 1 January 2024 as set out
above, at which point she also stood down as Chair of the
Remuneration Committee being replaced by Bernie Pryor.
The annual fees for the NEDs for FY 2025 are as follows:
Fee from
1 July
2023
£
Fee from
1 January
2024
£
Chair of the Board of Directors 189,000 179,550
Basic NED fee 61,267 58,200
Additional NED fees
Senior Independent Director 12,000 11,40 0
Chair of the Audit and Risk Committee 12,000 11,400
Chair of the Remuneration Committee 12,000 11,400
Chair of the Sustainability Committee 10,500 n/a
Chair of the Health and Safety Committee 10,500 n/a
Chair of the Sustainability, Health and
Safety Committee n/a 11,400
DIRECTORS’ REMUNERATION REPORT / CONTINUED
108
Petra Diamonds Limited Annual Report and Financial Statements 2024
Single figure of total remuneration
The following table gives a breakdown of the remuneration received by the NEDs for FY 2024 and FY 2023. Although the Company’s
reporting currency is US Dollars, these figures are stated in Pounds Sterling so as to be aligned with the Directors’ service contracts.
NED fees were reduced in January 2024 as explained above.
Year
Fees
£
Benefits
£
Total
£
Varda Shine
1
2024 147,840 — 147,8 4 0
Chair of the Board of Directors (from 14 November 2023) 2023 82,350 — 82,350
Bernard Pryor
2
2024 77,984 — 77,984
Senior Independent Director and Remuneration Committee Chair 2023 68,850 — 68,850
Deborah Gudgeon 2024 71,434 — 71,434
iNED and Audit and Risk Committee Chair 2023 70,350 — 70,350
Lerato Molebatsi
3
2024 70,684 — 70,684
iNED and Safety, Health and Sustainability Committee Chair 2023 14,587 — 14,587
José Manuel Vargas
4
2024 29,10 0 — 29,100
NED 2023 — — —
Former NEDs
Peter Hill
5
2024 78,750 — 78,750
Chair of the Board of Directors (until 14 November 2023) 2023 180,000 2,001 182,001
Jon Dudas
6
2024 38,170 — 38,170
iNED (until 17 February 2024) 2023 58,350 — 58,350
Alex Watson
7
2024 38,170 — 38,170
NED (until 14 February 2024) 2023 58,350 — 58,350
Johannes Bhatt
8
2024 25,528 — 25,528
NED (until 14 November 2023) 2023 58,350 — 58,350
1. Varda Shine was initially appointed as the Chair of the Board and Chair of the Nomination and Investment Committees on 14 November 2023.
2. Bernie Pryor was appointed as the Senior Independent Director on 14 November 2023. He was appointed as Chair of the Remuneration Committee with effect from 1 January 2024.
He also served as the Chair of the Health and Safety Committee until 31 December 2023.
3. Lerato Molebatsi was appointed to the Board as an independent NED on 3 April 2023. She was appointed the Chair of the Safety, Health and Sustainability Committee with effect from
1 January 2024. She also served as the Chair of the Sustainability Committee until 31 December 2023.
4. José Manuel Vargas was appointed to the Board as non-independent Non-Executive Director with effect from 1 January 2024.
5. Peter Hill stepped down from the Board on 14 November 2023.
6. Jon Dudas stepped down from the Board with effect from 17 February 2024. He assumed the role of Board Adviser for six months until 17 August 2024.
7. Alexandra Watson stepped down from the Board with effect from 17 February 2024, and assumed the role of Board Observer with effect from this date.
8. Johannes Bhatt retired from the Board with effect from 14 November 2023.
109
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
Directors’ shareholding and share interests
It is the Company’s policy that each of the Executive Directors holds a meaningful number of Petra shares. The guideline is to build
and maintain a minimum of two years’ basic salary for the applicable Director. A number of years from the date of appointment to
reach this shareholding will normally be set. The Committee may review the time horizon over which Executive Directors are
expected to meet their shareholding guideline.
The share interests of the Directors as at 30 June 2024 (or the date of standing down from the Board) are detailed below.
Shareholding
as at 30 June
2024
Shareholding
as at 30 June
2023
Shareholding
guideline
1
Varda Shine
2
Chair 24,755 24,755 n/a
Richard Duffy
3, 7, 8
Chief Executive Officer 879,993 272,792
5
2,251,596
Jacques Breytenbach
4, 9
Chief Financial Officer 419,747 183,742
6
1,501,079
Bernard Pryor Senior iNED 13,000 13,000 n/a
Deborah Gudgeon iNED — — n/a
Lerato Molebatsi iNED — — n/a
José Manuel Vargas NED 17,000,000 n/a n/a
Former NEDs
Peter Hill Chair n/a 140,000 n/a
Jon Dudas iNED — — n/a
Alex Watson NED — — n/a
Johannes Bhatt NED — — n/a
1. Shareholding guideline of 200% of salary based on three-month VWAP to 30 June 2024 of 42.6 pence per share.
2. Post Year End, Varda Shine purchased 32,671 shares.
3. Post Year End, 167,976 awards made in respect of FY 2022 to FY 2024 under the Company’s PSP are expected to vest, adding to Richard Duffy’s shareholding.
4. Post Year End, 111,984 awards made in respect of FY 2022 to FY 2024 under the Company’s PSP are expected to vest, adding to Jacques Breytenbach’s shareholding.
5. In the FY 2023 Directors’ Remuneration Report, Richard Duffy’s shareholding as at 30 June 2023 was reflected as 232,463. In accordance with the Investment Association’s Principles
of Remuneration, this has been updated to include shares which had vested as at 30 June 2023, but which at that time were subject to the two year post-vesting holding period
described on page 103.
6. In the FY 2023 Directors’ Remuneration Report, Jacques Breytenbach’s shareholding as at 30 June 2023 was reflected as 159,434. In accordance with the Investment Association’s
Principles of Remuneration, this has been updated to include shares which had vested as at 30 June 2023, but which at that time were subject to the two year post-vesting holding
period described on page 103.
7. During FY 2024, Richard Duffy purchased 266,411 shares, and a further 80,879 shares were purchased by him post Year End.
8. During FY 2024, Richard Duffy was awarded 141,672 shares, representing 25% of his total annual performance bonus for FY 2023 and had 199,118 shares vest in respect of the FY 2021
to FY 2023 PSP award.
9. During FY 2024, Jacques Breytenbach was awarded 93,594 shares, representing 25% of his total annual performance bonus for FY 2023 and had 142,411 shares vest in respect of the
FY 2021 to FY 2023 PSP award.
Post-employment shareholding guidelines
Executive Directors are expected to maintain a shareholding for a period of two years post cessation of employment. The expected
shareholding will be the lower of the Executive Directors’ shareholding guideline of two years’ basic salary or their actual relevant
shareholding at the date of termination if lower. This requirement will only apply to shares delivered from incentives from the date of
the new Policy. The Committee may, in exceptional circumstances, allow an Executive Director to reduce this holding guideline to
50% after at least one year from the date of cessation.
Directors’ interests
As at 30 June 2024, the Directors’ interests in share plans of the Company were as follows:
Shares Options
Breakdown of share plan interests as at 30 June 2024
Unvested and
subject to
performance
1
Vested share
awards subject
to holding
period
2
Unvested and
not subject to
performance
3
Vested but not
exercised
Lapsed in the
Year
Richard Duffy 3,424,416 232,309 261,288 nil nil
Jacques Breytenbach 2,076,840 154,737 253,028 nil nil
1. This comprises awards made in respect of FY 2022, FY 2023 and FY 2024 under the Company’s PSP.
2. This comprises awards made in respect of FY 2022 and FY 2021 under the Company’s PSP.
3. This comprises outstanding deferred share awards in respect of FY 2022 and FY 2023 and, for Jacques Breytenbach, FY 2021 (in order to comply with post-employment shareholding
guidelines following his resignation effective 30 September 2024).
DIRECTORS’ REMUNERATION REPORT / CONTINUED
110
Petra Diamonds Limited Annual Report and Financial Statements 2024
As at 30 June 2024, Executive Directors held the following interests in the PSP:
Date of
award
Outstanding
at 1 July
2023
Awarded
during
the Year
Vested
during
the Year
Lapsed
during
the Year
Outstanding
at 30 June
2024
Performance
period
6
Richard Duffy 12/01/2022
1
638,19 6 — 199,118 439,078 nil FY 2021–FY 2023
12 /01/2022
2
753,255 — — — 753,255 FY 2022–FY 2024
14/12/2022
3
1,236,688 — — — 1,236,688 FY 2023–FY 2025
18/10/2023
4
— 1,075,998 — — 1,075,998 FY 2024–FY 2026
17/01/2024
5
— 358,475 — — 358,475 FY 2024–FY 2026
Total 2,628,139 1,434,473 199,118 439,078 3,424,416
Jacques Breytenbach 12/01/2022
1
456,444 — 142,411 314,033 nil FY 2021–FY 2023
12/01/2022
2,7
502 ,170 — — — 502 ,170 FY 2022–FY 2024
14/12/2022
3,7
618,344 — — — 618,344 FY 2023–FY 2025
18/10/2023
4,7
— 717,34 0 — — 717,340 FY 2024–FY 2026
17/01/2024
5,7
— 238,986 — — 238,986 FY 2024–FY 2026
Total 1,576,958 956,326 142,411 314,033 2,076,840
1. The performance measures applicable to the awards consist of: (a) absolute TSR (one-third); (b) cashflow generation and net debt (one-third); and (c) operational performance and
efficiencies (one-third). The closing share price on 12 January 2022 was 74 pence; the 60-day VWAP used to determine these awards was 86.5 pence. During the Year this award
vested at 31.2%.
2. The performance measures applicable to the awards consist of: (a) absolute TSR (one-third); (b) cashflow generation and net debt (one-third); and (c) operational performance and
efficiencies (one-third). The closing share price on 12 January 2022 was 74 pence; the 60-day VWAP used to determine these awards was 86.5 pence. Post Year-end, these awards
vested at 22.3%.
3. The performance measures applicable to the awards consist of: (a) absolute TSR (15%); (b) relative TSR (15%); (c) cashflow generation and net debt (30%); and (d) operational performance
and efficiencies (25%). The closing share price on 14 December 2022 was 94.5 pence; the 30-day VWAP to 16 November used to determine these awards was 110.8 pence.
4. The performance measures applicable to the awards consist of: (a) absolute TSR (15%); (b) relative TSR (15%); (c) cashflow generation and net debt (30%); (d) operational performance
and efficiencies (25%); and (e) ESG and sustainability (15%). The closing share price on 17 October 2023 was 51.7 pence; the 30-day VWAP to 17 October used to determine these
awards was 66.9 pence.
5. The performance measures applicable to the awards consist of: absolute TSR (100%). The 30-day VWAP to 17 October used to determine these awards was 66.9 pence.
6. Performance periods with respect to operational performance metrics are measured on respective financial years’ results, whilst the relevant TSR measurements are based on
returns from date of award to date of final vesting.
7. Following Jacques Breytenbach’s resignation, effective 30 September 2024, the FY 2022 – FY 2024 awards vested normally during September 2024 at 22.3%, subject to the
two-year post-termination holding period. The balance of unvested awards for FY 2022 – FY 2024 will lapse, as will all outstanding awards for FY 2023 – FY 2025 and FY 2024 –
FY 2026.
External non-executive directorships
Neither of the Company’s Executive Directors hold a directorship at another listed company.
Other disclosures
Performance graph
The graph below shows a comparison between the TSR for Petra shares for the ten-year period to 30 June 2024 and the TSR for the
companies comprising the FTSE 350 Mining Index over the same period. This index has been selected to provide a relevant sector
comparator to Petra. The TSR measure is based on a 30-day trading average. The Company’s share price was impacted by the
Company’s capital restructuring which completed in 2021 and this impact is show in the graph below.
TSR – BASED ON 30 TRADING DAY AVERAGE
0
50
100
150
200
250
June 14
Source: DataStream
June 15 June 16 June 17 June 18 June 19 June 20 June 21 June 22 June 23 Jun 24
Petra Diamonds
FTSE 350 Mining Index
111
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
Table of historical data for the Chief Executive Officer
The table below provides historical comparable remuneration data for the Chief Executive Officer over the last ten financial years.
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
1
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Johan
Dippenaar
Richard
Duffy
Single figure
of total
remuneration (£) 999,034 1,137, 521 545,687 550,801 449,172 145,222 384,256 805,629 1,038,240 996,672 610,859
Annual bonuses
as a % of
maximum 40.0% 55.0% 11.4% 17.6% 23.7% 29.6% 0.0% 58.9% 78.6% 55.3% 0.0%
Long-term
incentives (PSP
vesting) as a % of
maximum 57.0% 55.0% 24.9% 17.5% 16.6% n/a n/a n/a 40.9%
2
31.2% 22.3%
Long-term
incentives (LTSP
vesting) as a % of
maximum 42.5% 42.3% n/a n/a n/a n/a n/a n/a n/a n/a n/a
1. Johan Dippenaar departed effective 31 March 2019 and the table reflects his remuneration (excluding payment in lieu of notice) for the nine-month period to date of his departure.
Richard Duffy joined as Chief Executive Officer effective 1 April 2019 and the above table reflects his remuneration for the three-month period to 30 June 2019.
2. The vesting outcome for FY 2022 reflects the percentage vesting for FY 2020 to FY 2022 PSP awards only. In addition, Richard Duffy was granted a PSP award equivalent to ca. 40%
of salary on appointment. Vesting of this award was subject to the Company achieving a consolidated net debt:consolidated EBITDA ratio of not more than 2.5 times for the Year
ended 30 June 2022. This was achieved and the award vested in full.
Annual percentage change in remuneration of the Directors
The following table sets out the annual percentage change in salary, benefits and bonus in respect of each Director and the average
for the Company’s employees (on a full-time equivalent basis).
FY 2020 Year-on-year
change in pay
FY 2021 Year-on-year
change in pay
FY 2022 Year-on-year
change in pay
FY 2023 Year-on-year
change in pay
FY 2024 Year-on-year
change in pay
Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus
Average
Company
employee 5.0% 13% 10% 2.4% 0% 100% 10.1% 7.0 % 25.7% 17.0 % 15.0% (22%) 5.0% 4.0% (28%)
Executive Directors
Richard Duffy
Chief Executive
Officer
(8.3%)
1
(2.4%) (100%) 0.0%
1
0.6% 100% 17. 3 % 21.2% 31.3% 5.0% 5.0% (26.1%) 5.0% 5.0% (100%)
Jacques
Breytenbach
Chief Financial
Officer
(6.5%)
1
0.9% (100%) 0.0%
1
0.6% 100% 9.4% 13.0% 20.8% 5.0% 5.0% (25.9%) 5.0% 5.0% (100%)
Non-Executive Directors
Vada Shine
Non-Executive
Chair (from
1 January 2024)
(2.0%) n/a n/a 33.0%
3
n/a n/a 3.8% n/a n/a 7.4% n/a n/a 0% n/a n/a
Bernie Pryor
Senior
Independent
Director
(6.3%) n/a n/a 18.4%
4
n/a n/a (15.0%)
5
n/a n/a 7. 3 % n/a n/a 0% n/a n/a
Deborah
Gudgeon
iNED (appointed
1 July 2021)
n/a n/a n/a n/a n/a n/a n/a n/a n/a 5.6% n/a n/a 0% n/a n/a
Lerato
Molebatsi
iNED (appointed
3 April 2023)
n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 0% n/a n/a
José Manuel
Vargas
NED (appointed
1 January 2024)
n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 0% n/a n/a
DIRECTORS’ REMUNERATION REPORT / CONTINUED
112
Petra Diamonds Limited Annual Report and Financial Statements 2024
FY 2020 Year-on-year
change in pay
FY 2021 Year-on-year
change in pay
FY 2022 Year-on-year
change in pay
FY 2023 Year-on-year
change in pay
FY 2024 Year-on-year
change in pay
Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus
Peter Hill
(retired 13
November 2023)
n/a n/a n/a 0.0%
2
n/a n/a 0% (3.2%) n/a 9.1% 3 3 .1% n/a 0.0% n/a n/a
Jon Dudas
iNED (stepped
down 17 February
2024)
n/a n/a n/a n/a n/a n/a n/a n/a n/a 3.0% n/a n/a 0.0% n/a n/a
Johannes
Bhatt
iNED (retired 14
November 2023)
n/a n/a n/a n/a n/a n/a n/a n/a n/a 3.0% n/a n/a 0.0% n/a n/a
Alex Watson,
NED (stepped
down 17 February
2024)
n/a n/a n/a n/a n/a n/a n/a n/a n/a 3.0% n/a n/a
0.0% n/a n/a
1. The base salaries for Richard Duffy and Jacques Breytenbach of £370,800 and £265,200 respectively remained unchanged during FY 2021 and FY 2020.
2. Peter Hill’s base fees as Non-Executive Chair for FY 2022, FY 2021 and FY 2020 (pro rata) was £165,000.
3. Varda Shine assumed the role of Senior Independent Director on 17 November 2020.
4. Bernie Pryor received an additional fee of £10,000 in FY 2021 as Chair of the Tunajali Committee.
5. Bernie Pryor ceased to receive a fee as Chair of the Tunajali Committee when it was disbanded in May 2021 which explains the reduction in his fees for FY 2022 compared to FY 2021.
Relative importance of spend on pay
The following table sets out the percentage change in payments to shareholders and overall expenditure on pay across the Group.
FY 2024
US$m
FY 2023
US$m
Change
%
Payments to shareholders Nil Nil 0%
Group employment costs 123 125 (2%)
Service contracts
Director Role
Date current engagement
commenced
Expiry of
current term
Notice period by
Company or Director
Executive Directors
Mr Duffy Chief Executive Officer 1 April 2019 n/a 12 months
Mr Breytenbach Chief Financial Officer 19 February 2018 30 September 2024 12 months
Non-executive Directors
Varda Shine Non-Executive Chair 14 November 2023 31 December 2024 1 month
Bernie Pryor Senior Independent Director 14 November 2023 31 December 2024 1 month
Deborah Gudgeon Independent Non-executive Director 1 July 2024 30 June 2027 1 month
Lerato Molebatsi Independent Non-executive Director 3 April 2023 2 April 2026 1 month
José Manuel Vargas Non-independent Non-Executive Director 1 January 2024 31 December 2026 1 month
Peter Hill Non-Executive Chair 1 January 2023 14 November 2023
1
n/a
Jon Dudas Independent Non-executive Director 1 March 2022 17 February 2024
2
1 month
Johannes Bhatt Independent Non-executive Director 1 July 2021 14 November 2023
3
n/a
Alex Watson Non-independent Non-Executive Director 1 July 2021 17 February 2024
3
n/a
1. Peter Hill retired from the Board with effect from 14 November 2023.
2. Jon Dudas stepped down from the Board with effect from 17 February 2024 and assumed the role of Board Adviser until 17 August 2024.
3. Johannes Bhatt stepped down from the Board with effect from 14 November 2023.
4. Alex Watson stepped down from the Board with effect from 17 February 2024 and assumed the role of Board Observer with effect from this date.
113
Petra Diamonds Limited Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE
Membership of the Committee
The Committee members for FY 2024 were Bernie Pryor, Deborah Gudgeon, Lerato Molebatsi, Varda Shine (stepped down on
1 January 2024) and Jon Dudas (stepped down on 17 February 2024).
The Committee is responsible for determining on behalf of the Board and shareholders:
• The Company’s general policy on the remuneration of the Executive Directors, the Chair and the Senior Management team
• The total individual remuneration for the Chair, Executive Directors and Senior Management including base salary, benefits,
performance bonuses and share awards
• The design and operation of the Company’s share incentive plans
• Performance conditions attached to variable incentives
• Service contracts for Executive Directors
• Oversight of Group-wide workforce remuneration
The full Terms of Reference for the Remuneration Committee have been approved by the Board and are available on the Company’s
website at https://www.petradiamonds.com/about-us/corporate-governance/board-committees.
Where appropriate, the Chair and Executive Directors attend Committee meetings to provide suitable context regarding the business.
Individuals who attend meetings do not participate in discussions which determine their own remuneration.
External advisers
The Committee engages the services of Deloitte LLP (Deloitte) to provide independent advice to the Committee relating to
remuneration matters. Deloitte is a member of the Remuneration Consultants Group and, as such, voluntarily operates under the
code of conduct in relation to executive remuneration consulting in the UK. The Committee is satisfied that the advice it has received
from Deloitte during the Year has been objective and independent. The fees paid to Deloitte for work carried out in FY 2024 for the
Committee totalled £39,800 (FY 2023: £70,300) and were based on a time and materials basis.
During the Year, Deloitte also provided unrelated tax and general advisory services to the Company. BDO LLP remains the
Group’s auditors.
Statement of shareholder voting
The voting outcomes for the FY 2023 Directors’ Remuneration Report and the FY 2023 Directors’ Remuneration Policy Report were
as follows:
For % for Against % against Total votes cast Withheld
2023 Directors’ Remuneration Report 128,933,692 98.03% 2,586,900 1.97% 131,520,592 1,013
2023 Directors’ Remuneration Policy Report 128,932,971 98.03% 2 , 5 87,621 1.97% 131,520,592 1,013
Bernie Pryor
Remuneration Committee Chair
23 September 2024
DIRECTORS’ REMUNERATION REPORT / CONTINUED
114
Petra Diamonds Limited Annual Report and Financial Statements 2024
Directors’ Responsibilities Statement
Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with the Bermuda
Companies Act 1981 (as amended).
Company law requires the Directors to prepare financial statements for each financial year. The Directors have elected to prepare the
Group Financial Statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.
In preparing the Financial Statements, the Directors are required to:
• Select suitable accounting policies and then apply them consistently
• Make judgements and accounting estimates that are reasonable and prudent
• State whether they have been prepared in accordance with IFRS as adopted by the European Union, subject to any material
departures disclosed and explained in the Financial Statements
• Prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue
in business
The Directors are responsible for keeping proper accounting records that are sufficient to ascertain with reasonable accuracy at any
time the financial position of the Company and to ensure that the Financial Statements comply with the Bermuda Companies Act 1981
(as amended). They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring that the Annual Report and the Financial Statements, taken as a whole, are fair, balanced
and understandable and provide the information necessary for shareholders to assess the Group’s performance, business model
and strategy.
Website publication
The Directors are responsible for ensuring the Annual Report and the Financial Statements are made available on a website. Financial
Statements are published on the Company’s website in accordance with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the
Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the
Financial Statements contained therein.
Directors’ responsibilities pursuant to DTR4
In accordance with Chapter 4 of the Disclosure and Transparency Rules issued by the Financial Conduct Authority in the United
Kingdom the Directors confirm to the best of their knowledge:
• The Group’s Financial Statements, prepared in accordance with IFRS as adopted by the European Union, give a true and fair view
of the assets, liabilities, financial position and profit and loss of the Group
• The Annual Report includes a fair review of the development and performance of the business and the financial position of the
Group, together with a description of the principal risks and uncertainties that it faces
Fair, balanced and understandable
The Directors consider that the Annual Report and the Financial Statements, taken as a whole, is fair, balanced and understandable
and provide the information necessary for shareholders to assess Petra’s position, performance, business model and strategy, as well
as the principal risks and uncertainties which could affect the Group’s performance.
Auditors
As far as each of the Directors are aware at the time this report was approved:
• There is no relevant available information of which the auditors are unaware
• They have taken all steps that ought to have been taken to make themselves aware of any relevant audit information and to
establish that the auditors are aware of that information
In accordance with Section 89 of the Bermuda Companies Act 1981 (as amended), a resolution to confirm the re-appointment of BDO
LLP as auditors of the Company is to be proposed at the 2024 AGM to be held on 13 November 2024.
The Financial Statements were approved by the Board of Directors on 23 September 2024 and are signed on its behalf by:
Richard Duffy
Chief Executive Officer
23 September 2024
115
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
Independent Auditor’s Report
TO THE MEMBERS OF PETRA DIAMONDS LIMITED
Opinion on the financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the Group’s affairs as at
30 June 2024 and of the Group’s loss for the year then ended;
• have been properly prepared in accordance with European
Union adopted international accounting standards (IFRSs); and
• have been prepared in accordance with the requirements of
the Bermuda Companies Act 1981.
We have audited the financial statements of Petra Diamonds
Limited (the ‘Parent Company’) and its subsidiaries (the ‘Group’)
for the year ended 30 June 2024 which comprise the
Consolidated Income Statement, the Consolidated Statement of
Other Comprehensive Income, the Consolidated Statement of
Financial Position, the Consolidated Statement of Cashflows, the
Consolidated Statement of Changes in Equity and notes to the
financial statements, including a summary of significant
accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and European
Union adopted international accounting standards (IFRSs).
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion. Our audit opinion is consistent
with the additional report to the audit committee.
Independence
We remain independent of the Group in accordance with the
ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. The
non-audit services prohibited by that standard were not provided
to the Group.
Material uncertainty related to going concern
We draw attention to Note 1.1 to the financial statements, which
explains that there are risks associated with persisting market
volatility which may lead to lower diamond prices for longer and
that the Group is dependent on refinancing its 2L Notes and
Revolving Credit Facility which is not guaranteed. As stated in
Note 1.1, these events or conditions, along with other matters as
set forth in Note 1.1 indicate that a material uncertainty exists
that may cast significant doubt on the Group’s ability to continue
as a going concern. Our opinion is not modified in respect of
this matter.
Given the material uncertainty noted above and our risk
assessment, going concern was considered to be a key
audit matter.
Our evaluation of the Directors’ assessment of the Group’s ability
to continue to adopt the going concern basis of accounting and
in response to the key audit matter included the following:
• We evaluated the Directors’ base case cashflow and covenant
forecasts, including the Directors’ assumptions in respect of
diamond prices, production, operating costs, foreign exchange
rates and capital expenditure. In doing so, we considered
historic performance, trading to date, external market data,
and the extent to which risks and uncertainties have been
appropriately considered and reflected in the forecasts.
Additionally, we benchmarked the Directors’ base case
cashflow forecast to the life of mine models, given it is used
as the basis of the underlying data in the forecast.
• We obtained and reviewed the Directors’ downside
sensitivities scenarios in respect of strengthening of the South
African Rand exchange rate against the US Dollar, increase
in operating costs, decrease in diamond prices and a
combination of these scenarios, to model the potential
impact of covenant breaches in Note 1.1.
• We made inquiries of the Directors’ on the progress of the
refinancing of the Group’s Revolving Credit Facility and 2L
Notes.
• We considered the adequacy of the going concern disclosures
in Note 1.1 against the requirements of the relevant accounting
standards, and our knowledge and understanding of the
underlying business.
In auditing the financial statements, we have concluded that the
Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
In relation to the Parent Company’s reporting on how it has
applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’
statement in the financial statements about whether the
Directors considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections
of this report.
116
Petra Diamonds Limited Annual Report and Financial Statements 2024
Overview
Coverage
100% (2023: 100%) of Group revenue
98% (2023: 99%) of Group total assets
Key audit matters (“KAM”)
2024 2023
KAM 1 The risk that the life of mine estimates are
inappropriate, and assets require impairment.
The risk that the life of mine estimates are
inappropriate, and assets require impairment.
KAM 2 Not applicable.
1
The risk in relation to the legislative environment
in Tanzania – Sale of the blocked diamond
parcel.
KAM 3 Not applicable.
2
Risk that the environmental rehabilitation and
decommissioning provision estimates are
inappropriate.
KAM 4 Going concern. Going concern.
1. KAM 2 was only considered to be a KAM in 2023 because it came to the Group’s attention that the Government of Tanzania (GoT) had
partially sold the blocked diamond parcel and this was verbally confirmed with GoT officials including the Minister of Mines. This change
resulted in a reassessment of the accounting treatment, which required significant auditor attention. This complex technical accounting
treatment was resolved in 2023, and therefore, in 2024, the subsequent measurement for the blocked diamond parcel receivable was not
considered to be complex.
2. KAM 3 was only considered to be a KAM in 2023 because there was a higher level of complexity applied in determining the environmental
rehabilitation and decommissioning provision which required significant auditors attention as a result of the changes in the methodology of
determining the best estimate of the provision in 2023. In 2024, due to no changes to the methodology or legislative changes, a lower level
of complexity was applied in determining the provision.
Materiality Group financial statements as a whole
$4.5m (2023:$4.0m) based on 1.25% (2023: 1.25%) of Revenue.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of
internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of
management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement needed in order to be able to conclude
whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the Group financial statements as a
whole.
Whilst Petra Diamonds Limited is a London Stock Exchange premium listed company, the Group’s operating mines are located in
South Africa and Tanzania. We assessed there to be three significant components, being the Finsch and Cullinan mines which
operate in South Africa and the Williamson mine in Tanzania.
Group audit performed in accordance
with ISAs (UK) BDO UK
Tanzanian Operations
Non-BDO firm
South African Operations
BDO member firm in South Africa
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Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
An overview of the scope of our audit continued
Full scope audits for Group reporting purposes were performed
on-site on the two significant South African reporting
components by the BDO member firm in South Africa. The BDO
member firm in South Africa also performed specified audit
procedures on the South African non-significant components
for Group reporting purposes. A full scope audit of the one
significant component in Tanzania was performed by a non-BDO
firm in Tanzania. The Group audit team performed specified audit
procedures on Petra Diamonds Limited as a standalone entity,
along with the audit of the head office component, and the
consolidation. The remaining non-significant holding companies
were principally subject to analytical review procedures by the
Group audit team.
As part of our audit strategy, our involvement with component
auditors included the following:
• Issue of detailed Group reporting instructions, which included
the significant areas to be covered by their audit (including all
significant and elevated risks identified by the Group audit
team), materiality levels, and required procedures relating to
irregularities and fraud. The instructions also set out the
information required to be reported to the Group audit team.
• The Group audit team performed procedures independently
over key audit risk areas, as considered necessary, including
the key audit matters below.
• Regular communication with the component auditors
throughout the planning, execution, and completion phases
of the audit.
• The Group audit team was actively involved in the direction of
the audits performed by the component auditors for Group
reporting purposes, along with the consideration of findings
and determination of conclusions drawn.
• Review of the component auditors’ working papers with
additional challenge and specific work requests to ensure
alignment with conclusions drawn.
Climate change
Our work on the assessment of potential impacts on climate-
related risks on the Group’s operations and financial statements
included:
• Enquiries and challenge of management to understand the
actions they have taken to identify climate-related risks and
their potential impacts on the financial statements and
adequately disclose climate-related risks within the annual
report;
• Our own qualitative risk assessment taking into consideration
the sector in which the Group operates and how climate
change affects this particular sector; and
• Review of the minutes of Board and Audit Committee meeting
and other papers related to climate change.
We challenged the extent to which climate-related
considerations, including the expected cash flows from the
initiatives and commitments have been reflected, where
appropriate, in management’s going concern assessment,
viability assessment and impairment assessments.
We also assessed the consistency of managements disclosures
included as ‘Other Information’ on page 52 to 55 with the
financial statements and with our knowledge obtained from
the audit.
Based on our risk assessment procedures, we considered the
following KAM 1 to be impacted by climate-related risks. The
explanation of and our audit response to this climate-related
risk is included in the related key audit matter below.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources
in the audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
In addition to the matter described in the Material uncertainty
related to going concern section of our report, we have
determined the matter below to be the key audit matters
to be communicated in our report.
What we
considered to be a
key audit matter
The risk that the life of mine estimates are
inappropriate, and assets require impairment.
Why it
represented a
key audit matter
Management was required to exercise significant
judgement and estimation in assessing the
recoverable amount of the mining operations.
There was a high level of inherent uncertainty
and critical judgements, and estimates are
applied by Management in the assessment. The
appropriate disclosure of such judgements and
estimates was also a focus for our audit.
Relevant
information
in Financial
Statements and
Report of the
Audit and Risk
Committee
Note 5.
Report of the Audit and Risk Committee page 89.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
Key audit matters continued
1. The risk that the life of mine estimates are
inappropriate, and assets require impairment.
The carrying values of the mining assets at all of the operations
were key focus areas for our audit given the current global rough
diamond market, the current global economic environment, the
variability in product mix and volatility in the ZAR/US Dollar
exchange rate. The appropriate disclosure of such judgements
and estimates was also a focus for our audit.
As detailed in Note 5, as at 30 June 2024, the Group recognised
impairments amounting to US$33 million and US$45 million
relating to Cullinan mine and Finsch mine respectively. No
impairment charge or impairment reversal was considered
appropriate at Williamson mine.
How we addressed the matter:
• We obtained an understanding of the controls operating
in respect of the Group’s impairment reviews, including
confirming that the impairment models utilised the Board
approved life of mine plans.
• We evaluated Management’s impairment models against
approved life of mine plans and our understanding of the
operations, and critically challenged the key estimates and
assumptions used by Management for each of the mining
operations.
• We compared the trading performance against budget/plan
for FY2024 in order to evaluate the quality of Management’s
forecasting and, where over or under performance against
budget/plan was highlighted, evaluated the impact on the
forecasts.
• In respect of short-term pricing assumptions, our testing
included evaluation of Management’s diamond price forecasts
against prices achieved during the Year and post year end,
compared the prices achieved in FY2024 against Management’s
previous forecasts and evaluated the near-term diamond price
forecasts against market analyst commentary.
• In respect of short-term pricing for FY2025, we considered the
appropriateness of the starting price assumptions for FY2025
which are based on prices achieved during FY2024.
• In respect of long-term pricing, we considered the
appropriateness of the real price growth escalator of 1.9%
above a long-term US inflation rate of 2.0% per annum from
FY2026 onwards. In evaluating whether Management’s
estimate was within an acceptable range we compared the
price escalator to market guidance and historical market
pricing trends. In addition, we searched for alternative views
on the long-term outlook and challenged Management’s
forecasts using a variety of information sources, including
market analyst commentary, and demand and supply side
factors that would be expected to impact market pricing.
• We held meetings with mine management (mine managers,
geologists, mining engineers) to understand and challenge the
plans for changes in production, operating cost, and capital
expenditure forecasts. In doing so we critically assessed the
feasibility of assumed changes in production and the basis
for and ability to deliver cost reductions.
• On the other key assumptions, our testing included
comparison of foreign exchange rates to market spot and
forward rates; recalculation of discount rates in conjunction
with our internal experts and evaluation of the appropriateness
of risk premiums therein; and critical review of the forecast
cost, capital expenditure and production profiles against
approved mine plans, reserves and resources reports and
empirical performance.
• We engaged modelling specialists from the BDO member firm
in South Africa to perform a due diligence review which
included model accuracy and integrity review.
• We reviewed Management’s sensitivity analysis for the
impairment models and performed additional sensitivity
analysis where considered necessary. We held discussions
with the Audit and Risk Committee to consider the recoverable
amount under the forecasts, including risks and sensitivity
around pricing, production, foreign exchange rates, and
discount rates.
• We performed a detailed walkthrough of the reserves and
resources process, including gaining an understanding of the
controls in place.
• We have confirmed the consistency of the reserves and
resources in the models through discussion with the Group’s
geologist to understand the basis for the revisions to the
estimates and performed procedures to test the accuracy of
underlying data.
• We reviewed the appropriateness and adequacy of
disclosures in note 5.
Key observations:
In respect of the recoverable amount of the mining assets, we
found the Group’s conclusion to be appropriate and that the
Board’s assessment of the recoverable amount at 30 June 2024
considered both the Group’s plans, recent performance and
continued risks and uncertainties. We found the disclosures in
note 5 to be appropriate.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
Our application of materiality continued
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions
of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality
level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not
necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality
as follows:
Group Financial Statements
2024 2023
Materiality US$4.5 million US$4.0 million
Basis for determining materiality 1.25% of Group Revenue
Rationale for the benchmark applied In both FY2023 and FY2024, We considered revenue to be an appropriate benchmark for
materiality, given the losses incurred by the Group in both FY2023 and FY2024 and the losses
were not as a result of a once off occurrence.
Performance materiality 65% of materiality 75% of materiality
Basis for determining
performance materiality
65% of materiality considering the nature of
activities, historic audit adjustments and control
deficiencies.
The percentage was decreased from 75% in
FY2023 due to the number and high value of
brought forward uncorrected audit adjustments
from FY2023, and a recurring significant control
deficiency which remains relevant for the current
financial year.
75% of materiality considering the nature of
activities and historic audit adjustments and
control deficiencies.
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the Group, based on a percentage
of between 29% and 84% (2023: 30% and 83% ) of Group materiality dependent on the size and our assessment of the risk of material
misstatement of that component. Component materiality ranged from US$1.3 million to US$3.78 million (2023: US$1.2 million to
US$3.3 million). In the audit of each component, we further applied performance materiality levels of 65% (2023: 75%) of the
component materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of US$0.09 million
(2023: US$0.08 million). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative
grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the Annual
Report and Financial Statements for the Year Ended 30 June 2024 other than the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
INDEPENDENT AUDITOR’S REPORT / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
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Petra Diamonds Limited Annual Report and Financial Statements 2024
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the parent company’s compliance with the provisions of the UK Corporate Governance
Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements, or our knowledge obtained during the audit.
Going concern and
longer-term viability
• The Directors’ statement with regards to the appropriateness of adopting the going concern basis
of accounting and any material uncertainties identified (set out on pages 128 to 129); and
• The Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment
covers and why the period is appropriate (set out on pages 64 to 65).
Other Code provisions • Directors’ statement on fair, balanced and understandable (set out on page 92);
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks (set
out on page 56);
• The section of the annual report that describes the review of effectiveness of risk management and
internal control systems (set out on pages 86 to 88); and
• The section describing the work of the audit committee (set out on pages 84 to 91).
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities
statement, the Directors are responsible for the preparation of
the financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken
on the basis of these financial statements.
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which
it operates;
• Discussion with management and those charged with
governance, legal counsel, Audit and Risk Committee; and
• Obtaining and understanding of the Group’s policies and
procedures regarding compliance with laws and regulations.
We considered the significant laws and regulations to be
Bermuda Companies Act 1981, the UK Listing Rules, the
applicable accounting standards, the UK Bribery Act 2010, and
tax legislation.
The Group is also subject to laws and regulations where the
consequence of non-compliance could have a material effect
on the amount or disclosures in the financial statements, for
example through the imposition of fines or litigations. We
identified such laws and regulations to be the Listing Rules
issued by UK Listing Authority, IFRS as adopted in the European
Union, Bermudan Companies Act 1981, South African and
Tanzanian mining and environmental legislation, health and
safety legislation, UK Bribery Act, and taxation and employment
laws in the jurisdictions that the Group operates in.
Our procedures in respect of the above included:
• Review of minutes of meeting of those charged with governance
for any instances of non-compliance with laws and regulations;
• Review of correspondence with regulatory and tax authorities
for any instances of non-compliance with laws and regulations;
• Review of financial statement disclosures and agreeing to
supporting documentation;
• Involvement of tax specialists in the audit; and
• Review of legal expenditure accounts to understand the nature
of expenditure incurred.
121
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
Auditor’s responsibilities for the audit of the
financial statements continued
Fraud
We assessed the susceptibility of the financial statements to
material misstatement, including fraud. Our risk assessment
procedures included:
• Enquiry with management, those charged with governance,
legal counsel, internal audit, and the Audit and Risk Committee
to consider any known or suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and
procedures relating to:
• Detecting and responding to the risks of fraud; and
• Internal controls established to mitigate risks related
to fraud.
• Review of minutes of meeting of those charged with
governance for any known or suspected instances of fraud;
• Discussion amongst the engagement team as to how and
where fraud might occur in the financial statements;
• Performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud; and
• Considering remuneration incentive schemes and
performance targets and the related financial statement
areas impacted by these.
Based on our risk assessment, we considered the areas most
susceptible to fraud to be management override of controls
through inappropriate journal entries, revenue recognition,
and bias in key estimates and judgements.
Our procedures in respect of the above included:
• Engaging BDO Forensics to assist with the fraud risk
assessment, including assisting the audit team to determine
the sufficiency of the audit procedures to address the risk
of fraud;
• Performing a detailed review of the Group’s year end adjusting
entries and investigated any that appear unusual as to nature
or amount and agreeing to supporting documentation;
• For a sample of journals entries throughout the year that met
the defined risk criteria, particularly those occurring at or near
year end, we obtained supporting documentation and
evidence for the business rationale of these transactions and
the sources of financial resources supporting the transactions;
• Assessing whether the judgements made in accounting
estimates were indicative of a potential bias (refer to key audit
matters above);
• Extending inquiries to individuals outside of management and
the accounting department to corroborate Management’s
ability and intent to carry out plans that are relevant to
developing the estimate set out in the key audit matters
section above;
• Testing a sample of revenue entries to supporting
documentation, including testing the cut-off of revenue
transactions in the period before and after year end;
• Reviewing the whistleblowing register and obtained an
understanding of a selection of reports the tip-off matters
disclosed in the report and the status of the investigation,
including assessing the impact of these tip-off matters on
our fraud risk assessment; and
• Agreeing the financial statement disclosures to underlying
supporting documentation, review of correspondence with
regulators, review of correspondence with legal advisers,
enquiries of management, review of significant component
auditors’ working papers and review of internal audit reports
in so far as they related to the financial statements.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members
including component engagement teams who were all deemed
to have appropriate competence and capabilities and remained
alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit. For component engagement
teams, we also reviewed the result of their work performed in
this regard.
Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, recognising
that the risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example,
forgery, misrepresentations or through collusion. There are
inherent limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations is
from the events and transactions reflected in the financial
statements, the less likely we are to become aware of it.
A further description of our responsibilities is available
on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members,
as a body, in accordance with Bermuda Companies Act 1981.
Our audit work has been undertaken so that we might state to
the Parent Company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Parent Company
and the Parent Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Jack Draycott
For and on behalf of BDO LLP, Statutory Auditor
London, UK
23 September 2024
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
INDEPENDENT AUDITOR’S REPORT / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
122
Petra Diamonds Limited Annual Report and Financial Statements 2024
Consolidated Income Statement
FOR THE YEAR ENDED 30 JUNE 2024
US$ million | Notes | 2024 | 2023 |
Revenue | 2 | ||
Mining and processing costs | 3 | ( | ( |
Other direct mining expense | ( | ||
Other direct mining income | |||
Other corporate expenditure | 4 | ( | ( |
Other corporate income | |||
Impairment reversal of non-financial assets | 5 | ||
Impairment charge of non-financial assets | 5 | ( | ( |
| Impairment reversal/(charge) of other receivables | ( | ||
Total net operating costs | ( | ( | |
| Operating (loss)/profit | ( | ||
Financial income | 6 | ||
Financial expense | 6 | ( | ( |
Gain on extinguishment of Notes net of unamortised costs | 6 | ||
Loss before tax | ( | ( | |
Income tax release/(charge) | 7 | ( | |
Loss for the year from continuing operations | ( | ( | |
Loss on discontinued operation (net of tax) | 31 | ( | ( |
Loss for the year | ( | ( | |
| Loss for the year attributable to: | |||
Equity holders of the parent company | ( | ( | |
Non-controlling interest | ( | ||
( | ( | ||
| Loss per share attributable to the equity holders of the parent during the year | |||
| From continuing operations: | |||
Basic loss per share – US$ cents | 9 | ( | ( |
| From continuing and discontinued operations: | |||
Basic loss per share – US$ cents | 9 | ( | ( |
1
1. The comparative period for 30 June 2023 has been restated to add the subtotal “Operating (loss)/profit” to improve disclosure.
123
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
Consolidated Statement of
Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2024
US$ million | 2024 | 2023 |
Loss for the year | ( | ( |
| Other comprehensive profit/(loss) that will be reclassified to the Consolidated Income | ||
| Statement in subsequent periods | ||
Exchange differences on translation of foreign operations | ( | |
Translation differences on non-controlling interest | ( | |
Total comprehensive loss for the year, net of tax | ( | ( |
| Total comprehensive loss for the year attributable to: | ||
Equity holders of the parent company | ( | ( |
Non-controlling interest | ( | |
( | ( |
124
Petra Diamonds Limited Annual Report and Financial Statements 2024
Consolidated Statement of Financial Position
AT 30 JUNE 2024
| Restated | |||
US$ million | Notes | 2024 | 2023 |
| ASSETS | |||
| Non-current assets | |||
Property, plant and equipment | 10 | ||
Right-of-use assets | 11 | ||
Loans receivable | 12 | ||
| Other receivables | 14 | ||
Total non-current assets | |||
| Current assets | |||
| Other financial assets | 16 | ||
Trade and other receivables | 14 | ||
Inventories | 15 | ||
| Cash and cash equivalents | 17 | ||
Total current assets | |||
Total assets | |||
| EQUITY AND LIABILITIES | |||
| Equity | |||
Share capital | 18 | ||
Share premium | |||
Foreign currency translation reserve | ( | ( | |
Share-based payment reserve | |||
Other reserves | ( | ||
Accumulated (losses)/reserves | ( | ||
Attributable to equity holders of the parent company | |||
Non-controlling interests | 13 | ( | ( |
Total equity | |||
| Liabilities | |||
| Non-current liabilities | |||
Loans and borrowings | 19 | ||
Provisions | 21 | ||
Lease liabilities | 11 | ||
Deferred tax liabilities | 22 | ||
Total non-current liabilities | |||
| Current liabilities | |||
Loans and borrowings | 19 | ||
Lease liabilities | 11 | ||
Bank overdraft | 17 | ||
Trade and other payables | 20 | ||
Provisions | 21 | ||
Total current liabilities | |||
Total liabilities | |||
Total equity and liabilities |
1
1
1
1. Historically, the Group has classified funds held by the Group’s insurer for environmental rehabilitation guarantees as cash and cash equivalents within current assets. Following a
review during the year, Management concluded that these assets should not be classified as cash and cash equivalents as, unlike similar funds, they do not form part of the cell
captive and are not directly controlled by the group. Accordingly, they have been reclassified as other receivables within non-current assets on the Statement of Financial Position,
in order to reflect the timing of cash realisation. This correction has been accounted for retrospectively, and accordingly the comparative information for 30 June 2023 has been
restated, which has resulted in a reclassification between cash and cash equivalents and non-current other receivables of $4m. There has been no impact on the income statement,
earnings per share or net assets.
125
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
Consolidated Statement of Cashflows
FOR THE YEAR ENDED 30 JUNE 2024
| Restated | |||
US$ million | Notes | 2024 | 2023 |
Cash generated from operations | 25 | ||
Net realised gains on foreign exchange contracts | |||
Interest paid | ( | ( | |
Income tax received | |||
Net cash generated from operating activities | |||
| Cashflows from investing activities | |||
Acquisition of property, plant and equipment | ( | ( | |
Proceeds from sale of property, plant and equipment | |||
Repayment of loans | |||
Other financial assets | 16 | ( | |
Interest received | |||
Net cash utilised in investing activities | ( | ( | |
| Cashflows from financing activities | |||
Lease instalments paid | ( | ( | |
Repayment of borrowings | ( | ( | |
Repayment of Revolving Credit Facility | ( | ||
Draw-down on Revolving Credit Facility | |||
| Net dividend paid to B-BBEE partners | ( | ( | |
Net cash from/(utilised in) financing activities | ( | ||
| Net decrease in cash and cash equivalents | ( | ( | |
| Cash and cash equivalents at the beginning of the year | |||
Effect of translation on cash held | ( | ||
Cash and cash equivalents (net of bank overdraft) at the end of the year | 17 |
2
1
1
1. Historically, the Group did not include restricted cash balances held within its cell captive as cash and cash equivalents in the consolidated statement of cashflows. Following a review
during the year, Management concluded that these balances should be included in cash and cash equivalents in the consolidated statement of cashflows in accordance with IAS 7.
As a result, the comparatives on the consolidated statement of cash flows for the year ended 30 June 2023 have been restated to correctly include brought forward restricted cash
balances, carried forward restricted cash balances, and movements in restricted cash within cash generated from operations for the 12 months to 30 June 2023.
2. The comparative period for 30 June 2023 has been restated to reclassify the US$4 million net dividend paid to the B-BBEE Partners from net cash utilised in investing activities
(2023: US$1 11 million as previously stated), to net cash utilised in financing activities (2023: US$151 million as previously stated).
126
Petra Diamonds Limited Annual Report and Financial Statements 2024
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2024
| Foreign | Share- | ||||||||
| Share | currency | based | Accumulated | Attributable | Non- | ||||
| Share | premium | translation | payment | Other | (losses)/ | to the | controlling | Total | |
| US$ million | capital | account | reserve | reserve | reserves | reserves | parent | interest | equity |
| At 1 July 2023 | ( | ( | ( | ||||||
Loss for the year | ( | ( | ( | ( | |||||
| Other comprehensive income | |||||||||
Total comprehensive expense | ( | ( | ( | ( | |||||
| Dividend paid to non-controlling | |||||||||
interest shareholders | ( | ( | |||||||
| Equity-settled share-based | |||||||||
payments | |||||||||
Transfer between reserves | ( | ||||||||
At 30 June 2024 | ( | ( | ( | ||||||
| Foreign | Share- | ||||||||
| Share | currency | based | Accumulated | Attributable | Non- | ||||
| Share | premium | translation | payment | Other | reserves/ | to the | controlling | Total | |
| US$ million | capital | account | reserve | reserve | reserves | (losses) | parent | interest | equity |
| At 1 July 2022 | ( | ( | ( | ||||||
Loss for the year | ( | ( | ( | ||||||
| Other comprehensive expense | ( | ( | ( | ( | |||||
Total comprehensive expense | ( | ( | ( | ( | |||||
Conversion of share premium | ( | ||||||||
| Dividend paid to non-controlling | |||||||||
interest shareholders | ( | ( | |||||||
| Equity-settled share-based | |||||||||
payments | |||||||||
Transfer between reserves | ( | ||||||||
At 30 June 2023 | ( | ( | ( |
127
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
Notes to the Annual Financial Statements
FOR THE YEAR ENDED 30 JUNE 2024
1. Material accounting policies
128
Petra Diamonds Limited Annual Report and Financial Statements 2024
1. Material accounting policies continued
1.1 Basis of preparation continued
129
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
1. Material accounting policies continued
1.1 Basis of preparation continued
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
130
Petra Diamonds Limited Annual Report and Financial Statements 2024
1. Material accounting policies continued
Key estimate or judgement | Note |
Going concern | 1.1 |
Net investments in foreign operations judgements | 1.1 |
Life-of-mine and ore reserves and resources estimates and judgements | 5 |
Impairment review estimates and judgements | 5 |
Taxation | 7 and 22 |
Depreciation judgements | 10 |
B-BBEE guarantee and expected credit loss assessment for loans receivable | 12 |
Recoverability of VAT in Tanzania | 14 |
Recoverability of Blocked Diamond Parcel proceeds in Tanzania | 14 |
Inventory and inventory stockpiles | 15 |
Provision for rehabilitation estimates | 21 |
Provision for Koffiefontein mine closure costs estimates | 21 |
Provision for Human rights settlement claims estimates | 21 |
Provision for tailings storage facility costs | 21 |
Pension scheme estimates | 27 |
Post-retirement medical fund estimates | 28 |
Discontinued operations | 31 |
131
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
1. Material accounting policies continued
1.4 Accounting standards that are newly effective in the current year continued
| NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED | ||
FOR THE YEAR ENDED 30 JUNE 2024
132
Petra Diamonds Limited Annual Report and Financial Statements 2024
3. Mining and processing costs
Refer to notes 8, 10, 11 and 15 for the Group’s policies, relevant to the significant cost lines below, on employment costs, depreciation,
inventories, share-based payments and related key judgements and estimates.
US$ million | 2024 | 2023 |
Raw materials and consumables used | 138 | 138 |
Employee expenses | 119 | 104 |
Depreciation of mining assets | 89 | 82 |
Amortisation of right-of-use asset | 5 | 3 |
Diamond royalty | 5 | 4 |
Changes in inventory of finished goods and stockpiles | 37 | (34) |
393 | 297 |
4. Other corporate expenditure
US$ million | 2024 | 2023 |
Depreciation of property, plant and equipment | 1 | — |
London Stock Exchange and other regulatory expenses | 1 | 1 |
Transaction costs – redemption of Notes | — | 7 |
Legal fees | 3 | — |
Other | 4 | — |
Costs – human rights claims at Williamson (including IGM remedies) | — | 8 |
Staff costs: | 4 | 7 |
Share-based expense – Directors | 1 | 2 |
Salaries and other staff costs | 3 | 5 |
13 | 23 |
133
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
5. Impairment of operational assets and other assets continued
US$ million | 2024 | 2023 |
Cullinan Mine | 33 | 2 |
Finsch | 45 | (53) |
Williamson | — | 31 |
Total impairment charge/(reversal) of non-financial assets | 78 | (20) |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
134
Petra Diamonds Limited Annual Report and Financial Statements 2024
5. Impairment of operational assets and other assets continued
| 2024 | |||
US$ million | Cullinan Mine | Finsch | Williamson |
Base case: | 33 | 53 | — |
Increase in discount rate by 100 basis points | 45 | 53 | — |
Reduction in pricing by 5% over mine plan | 81 | 76 | — |
Reduction of 10% carat production | 122 | 107 | — |
Increase in operating expenditure by 5% | 57 | 62 | — |
ZAR stronger by 5% through the LOM period | 81 | 76 | n/a |
135
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
US$ million | 2024 | 2023 |
Gross interest on senior secured second lien notes, bank loans and overdrafts | (33) | (28) |
Other debt finance costs, including loan interest, facility fees and charges | (5) | (2) |
Unwinding of rehabilitation obligations | (6) | (6) |
Note redemption premium and acceleration of unamortised bank facility and Notes costs | — | (8) |
Net unrealised foreign exchange losses | — | (27) |
Finance expenses | (44) | (71) |
Interest received on loans and other receivables | 6 | 5 |
Interest received on bank deposits | 3 | 4 |
| Foreign exchange gains realised on settlement of forward exchange contracts | 5 | 2 |
Net unrealised foreign exchange profits | 5 | — |
Finance income | 19 | 11 |
Gain on extinguishment of Notes | 1 | 1 |
Net finance expense | (24) | (59) |
US$ million | 2024 | 2023 |
| Current taxation: | ||
– Current tax charge | 2 | 1 |
| Deferred taxation: | ||
– Current period | (34) | 22 |
(32) | 23 | |
| Reconciliation of tax rate: | ||
– Loss before taxation (including loss on discontinued operation) | (139) | (79) |
Tax at South African corporate rate of 27% (2023: 27%) | (38) | (21) |
| Effects of: | ||
– Tax charge at different rates in foreign jurisdictions | (1) | — |
– Non-deductible expenses | 2 | 5 |
– Tax losses and temporary differences not recognised | 5 | 38 |
– Prior year adjustments to tax | — | 1 |
Total tax (release)/charge | (32) | 23 |
| The tax reconciliation uses the South African corporation tax rate, as the majority of the group’s income and expenses arise in |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
136
Petra Diamonds Limited Annual Report and Financial Statements 2024
8. Director and employee remuneration
Refer to note 23 for the Group’s policy in respect of share-based payments and related key judgements and estimates.
Staff costs during the year were as follows:
US$ million | 2024 | 2023 |
Wages and salaries – mining | 119 | 105 |
Wages and salaries – administration | 4 | 7 |
123 | 112 |
Number | Number | |
Number of employees (excluding the Non-Executive Directors and contractors and discontinued operations) | 2,870 | 3,042 |
US$ million | 2024 | 2023 |
Salary and benefits | 3 | 3 |
Annual bonus – paid in cash | 1 | 1 |
Share-based payment charge | 1 | 3 |
5 | 7 |
| Continuing | Discontinued | Continuing | Discontinued | |||
| operations | operation | Total | operations | operation | Total | |
| 30 June 2024 | 30 June 2024 | 30 June 2024 | 30 June 2023 | 30 June 2023 | 30 June 2023 | |
| Numerator | US$ million | US$ million | US$ million | US$ million | US$ million | US$ million |
Loss for the year | (84) | (2) | (86) | (74) | (31) | (105) |
Denominator | Shares | Shares | Shares | Shares | Shares | Shares |
| Weighted average number of Ordinary | ||||||
| Shares used in basic Loss per Share: | ||||||
As at 30 June | 194,201,785 | 194,201,785 | 194,201,785 | 194,201,785 | 194,201,785 | 194,201,785 |
US$ cents | US$ cents | US$ cents | US$ cents | US$ cents | US$ cents | |
Basic and diluted loss per share | (43) | (1) | (44) | (38) | (16) | (54) |
137
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
| The depreciation rates are as follows: | |
| Mining assets | |
Plant, machinery and equipment | Units-of-production method or 4–33% straight-line basis depending on the nature of the asset |
Mineral properties | Units-of-production method |
| Other assets | |
Plant and machinery | 10–25% straight-line basis |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
138
Petra Diamonds Limited Annual Report and Financial Statements 2024
10. Property, plant and equipment continued
| Plant and | Mineral | Assets under | |||
| US$ million | machinery | properties | construction | Total | |
| Cost | |||||
Balance at 1 July 2022 | 1,226 | 58 | 48 | 1,332 | |
Additions | 2 | — | 115 | 117 | |
Disposals | (143) | — | — | (143) | |
Change in rehabilitation assets | (5) | — | — | (5) | |
Transfer of assets under construction | 67 | — | (67) | — | |
Translation differences | (162) | (8) | (9) | (179) | |
Balance at 30 June 2023 | 985 | 50 | 87 | 1,12 | 2 |
Additions | — | — | 84 | 84 | |
Disposals | (28) | — | — | (28) | |
Transfer of assets under construction | 46 | — | (46) | — | |
Translation differences | 35 | 2 | 4 | 41 | |
Balance at 30 June 2024 | 1,038 | 52 | 129 | 1,219 | |
| Depreciation and impairment | |||||
Balance at 1 July 2022 | 652 | 44 | 2 | 698 | |
Depreciation for the year | 79 | 4 | — | 83 | |
Disposals | (141) | — | — | (141) | |
Impairments | (19) | — | — | (19) | |
Translation differences | (89) | (7) | (1) | (97) | |
Balance at 30 June 2023 | 482 | 41 | 1 | 524 | |
Depreciation for the year | 86 | 4 | — | 90 | |
Disposals | (24) | — | — | (24) | |
Impairments | 78 | — | — | 78 | |
Translation differences | 18 | 1 | — | 19 | |
Balance at 30 June 2024 | 640 | 46 | 1 | 687 | |
| Net book value | |||||
At 30 June 2023 | 503 | 9 | 86 | 598 | |
At 30 June 2024 | 398 | 6 | 128 | 532 |
139
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
11. Leases
Information for leases for which the Group is a lessee is presented below:
| Plant and | |||
US$ million | Buildings | machinery | Total |
| Cost | |||
Balance at 1 July 2022 | 4 | 31 | 35 |
Additions | 2 | 8 | 10 |
Balance at 30 June 2023 | 6 | 39 | 45 |
Balance at 30 June 2024 | 6 | 39 | 45 |
| Amortisation and impairment | |||
Balance at 1 July 2022 | 2 | 10 | 12 |
Amortisation for the year | 1 | 3 | 4 |
Capitalised to property, plant and equipment | — | 2 | 2 |
Balance at 30 June 2023 | 3 | 15 | 18 |
Amortisation for the year | — | 5 | 5 |
Balance at 30 June 2024 | 3 | 20 | 23 |
| Net book value | |||
At 30 June 2023 | 3 | 24 | 27 |
At 30 June 2024 | 3 | 19 | 22 |
Lease liabilities
| Plant and | |||
US$ million | Buildings | machinery | Total |
Balance at 1 July 2022 | 2 | 21 | 23 |
Additions | 2 | 7 | 9 |
Finance charges | — | 1 | 1 |
Capitalised to property, plant and equipment | — | 1 | 1 |
Lease payments | (1) | (4) | (5) |
Balance at 30 June 2023 | 3 | 26 | 29 |
Balance at 1 July 2023 | 3 | 26 | 29 |
Finance charges | — | 2 | 2 |
Lease payments | (1) | (5) | (6) |
Balance at 30 June 2024 | 2 | 23 | 25 |
US$ million | 2024 | 2023 |
Current | 4 | 3 |
Non-current | 21 | 26 |
At 30 June | 25 | 29 |
The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the Group’s
treasury function.
Amounts recognised in profit and loss
US$ million | 2024 | 2023 |
Amortisation on right-of-use assets | (5) | (3) |
Finance expense on lease liabilities | (2) | (2) |
(7) | (5) |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
140
Petra Diamonds Limited Annual Report and Financial Statements 2024
US$ million | 2024 | 2023 |
| Non-current assets | ||
| B-BBEE loans receivable | 42 | 37 |
1
1. Interest on the loans receivable is charged at the prevailing South African JIBAR plus an interest margin of 5.25%. The movement in the year includes advances, repayments, accrued
interest and foreign exchange retranslation. The loans are repayable from future cashflows, attributable to the loan holders, generated from the underlying mining operations.
B-BBEE loans receivable
The non-current B-BBEE loans receivable represents those amounts receivable from the Group’s (Black Economic Empowerment
(B-BBEE) Partners (Kago Diamonds and the IPDET) in respect of advances historically provided to the Group’s B-BBEE Partners to
enable them to discharge interest and capital commitments under the B-BBEE Lender facilities, advances to the B-BBEE Partners to
enable trickle payment distributions to both Kago Diamonds shareholders and to the beneficiaries of the IPDET (Petra Directors and
Senior Managers do not qualify as beneficiaries under the IPDET Trust Deed), and financing of their interests in the Koffiefontein mine.
As a result of historical delays in the Cullinan Mine plant ramp-up and the Finsch SLC ramp-up, the Group has historically elected
to advance the B-BBEE Partners’ funds using Group treasury to enable the B-BBEE Partners to service their interest and capital
commitments under the B-BBEE Lender facilities (refer below). These receivables, including interest raised, will be recoverable
from the B-BBEE Partners’ share of future cashflows from the underlying mining operations.
The Group has applied the expected credit loss impairment model to its financial assets and the loans receivable. In determining
the extent to which expected credit losses may apply, the Group assessed the future free cashflows to be generated by the mining
operations, based on the current LOM plans. In assessing the future cashflows, the Group considered a probability weighted range
of diamond price outlooks. Based on the assessment, no expected credit loss provision has been recognised in the Consolidated
Income Statement for the year (2023: US$nil).
US$ million | 2024 | 2023 |
As at 1 July | 37 | 44 |
Repayment of loan from B-BBEE Partners | — | (6) |
Interest receivable | 6 | 5 |
Expected credit loss provision | (3) | — |
Translation differences | 2 | (6) |
As at 30 June | 42 | 37 |
The IPDET holds a 12% interest in each of the Group’s South African operations, with Petra’s commercial B-BBEE Partners holding the
remaining 14% interest through their respective shareholdings in Kago Diamonds, in which Petra has a 31.46% interest. The effective
interest percentages attributable to the remaining operations for the Group’s shareholders are disclosed in the table below:
| Resultant | |||
| Group’s | |||
| B-BBEE | effective | ||
| interest | interest | ||
Mine | B-BBEE Partner | % | % |
Cullinan Mine | Kago Diamonds and IPDET | 26.0 | 78.4 |
Finsch | Kago Diamonds and IPDET | 26.0 | 78.4 |
Koffiefontein | Kago Diamonds and IPDET | 26.0 | 78.4 |
Further details of the transactions with the B-BBEE Partners are included in note 24.
141
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
13. Non-controlling interests
The non-controlling interests of the Group’s partners in its operations are presented in the table below:
US$ million Cullinan Mine Finsch Koffiefontein Tarorite Williamson
1
Total
Effective interest % | 21.6 | 21.6 | 21.6 | 17.8 | 25.0 | |
Country | South Africa | South Africa | South Africa | South Africa | Tanzania | |
As at 1 July 2023 | 16 | 17 | (37) | — | — | (4) |
Loss for the year | (7) | (13) | (1) | — | — | (21) |
Dividend paid to non-controlling interest shareholders | (2) | — | — | — | — | (2) |
Translation difference | — | 1 | (1) | — | — | — |
At 30 June 2024 | 7 | 5 | (39) | — | — | (27) |
US$ million | Cullinan Mine | Finsch | Koffiefontein | Tarorite | Williamson | Total |
Effective interest % | 21.6 | 21.6 | 21.6 | 17. 8 | 25.0 | |
Country | South Africa | South Africa | South Africa | South Africa | Tanzania | |
As at 1 July 2022 | 13 | 23 | (31) | — | — | 5 |
Profit/(loss) for the year | 4 | 8 | (9) | — | — | 3 |
Dividend paid to non-controlling interest shareholders | — | (10) | — | — | — | (10) |
Translation difference | (1) | (4) | 3 | — | — | (2) |
At 30 June 2023 | 16 | 17 | (37) | — | — | (4) |
1
1. Non-controlling interest at Williamson is not recognised as the Government of Tanzania will not contribute in respect of accumulated losses. The finalisation of the FWA will result in
future non-controlling interest at Williamson being recognised.
During the year, Cullinan Mine declared and paid a dividend out of profits generated in FY 2023 to its non-controlling interests of
US$2 million (Finsch 2023: US$10 million). The B-BBEE Partners repaid US$nil (2023: US$6 million) towards their loans owing to the
Group. For additional information on total assets, total liabilities and segment results for each operation in the table above refer to
note 30.
| Non-current | ||
| Williamson VAT recivable | 5 | 7 |
| Environmental rehabilitation investment | 5 | 4 |
Other receivables | 10 | 11 |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
142
Petra Diamonds Limited Annual Report and Financial Statements 2024
14. Trade and other receivables continued
| Petra Diamonds Limited Annual Report and Financial Statements 2024 | 143 |
FINANCIAL STATEMENTS
US$ million | 2024 | 2023 |
| At fair value | ||
Guardrisk environmental rehabilitation policy | 14 | — |
| Restated | ||
| US$ million | 2024 | 2023 |
Cash and cash equivalents – unrestricted cash | 28 | 44 |
| Cash and cash equivalents – restricted cash | 1 | 14 |
Cash and cash equivalents – Statement of financial position | 29 | 58 |
Bank overdraft | (8) | — |
21 | 58 | |
| 1. The Group’s environmental rehabilitation insurance product, which currently includes the Finsch, Cullinan and Koffiefontein mines, has secured cash assets of US$1 million |
US$ million | Number of shares | 2024 | Number of shares | 2023 | |
Authorised – Ordinary Shares of 0.05 pence (2023: 0.05 pence) each | 10,000,000,000 | 164 | 10, | 000,000,000 | 164 |
| Issued and fully paid | |||||
At 30 June | 194,201,785 | 146 | 194,201,785 | 146 |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
144
Petra Diamonds Limited Annual Report and Financial Statements 2024
18. Equity and reserves continued
Share capital continued
US$ million | 2024 | 2023 |
| Current | ||
Loans and borrowings – senior secured second lien notes (refer note 27) | 25 | 25 |
| Non-current | ||
Loans and borrowings – senior secured lender debt facilities | 25 | — |
Loans and borrowings – senior secured second lien notes | 221 | 222 |
Total non-current borrowings (refer note 27) | 246 | 222 |
Total borrowings | 271 | 247 |
145
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
19. Interest-bearing loans and borrowings continued
(a) US$337 million senior secured second lien notes continued
| Redemption | |
| price | |
Period of 12 months from 9 March 2024 | 102.44% |
Period of 12 months from 9 March 2025 | 100.00% |
FY22 H2 | FY23 H1 | FY23 H2 | FY24 H1 | FY24 H2 | FY25 H1 | FY25 H2 | FY26 H1 | |
Consolidated net debt:EBITDA leverage ratio (maximum) | 4.00 | 4.00 | 4.00 | 3.50 | 3.50 | 3.25 | 3.25 | 3.00 |
Interest cover ratio (minimum) | 1.85 | 1.85 | 1.85 | 2.50 | 2.50 | 2.75 | 2.75 | 3.00 |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
146
Petra Diamonds Limited Annual Report and Financial Statements 2024
US$ million | 2024 | 2023 |
| Current | ||
Trade payables | 48 | 35 |
Accruals and other payables | 30 | 33 |
78 | 68 | |
Income tax payable | 3 | 1 |
81 | 69 |
| Provisions for | |||||||
| unsettled and | |||||||
| disputed tax | |||||||
| Human rights | claims, and | Provision for | Pension and | ||||
| settlement | severance | Provision for | closure of | post-retirement | Decommissioning | ||
| US$ million | claims | payments | TSF costs | Koffiefontein | medical fund | and rehabilitation | Total |
Balance at 1 July 2023 | 8 | 22 | 3 | 12 | 11 | 61 | 117 |
(Utilised)/increased during the year | — | — | (2) | (7) | — | 6 | (3) |
| Decrease in rehabilitation provision – | |||||||
change in estimate | — | — | — | — | — | (6) | (6) |
| Unwinding of present value | |||||||
adjustment of rehabilitation provision | — | — | — | 1 | — | 8 | 9 |
Translation differences | — | — | — | 1 | — | 2 | 3 |
Balance at 30 June 2024 | 8 | 22 | 1 | 7 | 11 | 71 | 120 |
US$ million | 2024 | 2023 |
Current | 8 | 18 |
Non-current | 112 | 99 |
Balance at 30 June 2024 | 120 | 117 |
147
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
21. Provisions continued
Human rights settlement claims
The Independent Grievance Mechanism (IGM) is a non-judicial process that has the capacity to investigate and resolve complaints
alleging severe human rights impacts in connection with security operations at the Williamson diamond mine. It is being overseen
by an Independent Panel of Tanzanian experts taking an approach informed by principles of Tanzanian law, and with complainants
having access to free and independent advice from local lawyers. The overall aim of the IGM is to promote reconciliation between the
Williamson diamond mine, directly affected parties and the broader community by providing remedy to those individuals who have
suffered severe human rights impacts. Petra Diamonds Limited (Petra) has agreed to fund the remedies determined by the IGM.
On 28 November 2022, the IGM became operational with the commencement of the IGM’s pilot phase. The pilot phase, which was
completed in May 2023, has allowed the IGM’s systems and procedures to be further developed and adjusted to take into account
learnings. The Independent Panel (IP) has started making decisions on the merits of the cases considered during the pilot phase and
the associated remedies for successful grievances. Registration of new grievances closed on 31 January 2024 and first remedy
payments to claimants were made on 14 June 2024.
Judgement has been applied by management in assessing the estimated future cost of remedies for successful grievances based on
the outcome of claims investigated during the pilot phase. Management has assessed the results of these investigated claims and
performed its own estimate based on calculations received from consultants. The estimate makes a number of different assumptions,
including, amongst others, the categories of the grievances, the number of non-returning claimants, the success rates of the
grievances and the settlement payment that apply to successful grievances due to, for example, limitation periods, contributory
negligence, the involvement of the Tanzanian police, self-defence and a lack of supporting evidence. These estimates also do not
make any allowance for non-financial remedies that the IP may award. The outcomes of the concluded cases, spread across all
categories, have been extrapolated across the grievance population, based on the average claim settlement per category and
the various categories of the grievances (nature of claims). Management’s assessment resulted in estimated aggregate costs of
US$8 million to be provided at Year End (2023: US$8 million).
Unsettled and disputed tax claims
The Framework Agreement records a US$20 million settlement between the parties concerning long-standing historical disputes
with the Government of Tanzania. The Group raised a provision of US$19 million (2023: US$19 million) (adjusted for the time-value of
money) in respect of the aforementioned settlement. This settlement payment shall be made in instalments, with the first instalment of
US$5 million to be paid when the Framework Agreement becomes effective and upon receipt of proceeds by Williamson from the
sale of the confiscated diamond parcel. The subsequent annual instalments of the settlement amount are to be made annually at
amounts between US$3 million and US$5 million depending on Williamson’s ability to pay, as determined by Williamson’s board of
directors.
Williamson tailings storage facility
In FY 2023, the tailings storage facility at Williamson failed, resulting in flooding away from the pit which extended into certain areas
outside of the mine lease area. A provision for ongoing remediation of US$3 million was raised. During the Year almost all of the
remediation work was completed and a remaining provision of US$1 million remains as at 30 June 2024.
Koffiefontein closure provisions
The Company has been engaged in a process to responsibly exit the Koffiefontein Diamond Mine since April 2022, with the
mine placed on care and maintenance in November 2022. Following the failure to secure a buyer, the mine’s decommissioning,
rehabilitation, and closure were initially planned. However, on 8 April 2024, Petra entered into a definitive transaction agreement
with affiliates of Stargems diamond group for the sale of Koffiefontein.
The completion of the sale is contingent on obtaining consent from the Department of Mineral Resources and Energy (DMRE) under
Section 11 of South Africa’s Mineral and Petroleum Resources Development Act. The sale agreement includes the transfer of Petra’s
stake in Koffiefontein to Stargems for a nominal cash consideration, with Petra retaining liability for certain ongoing social
commitments related to Koffiefontein.
As of 30 June 2024, Koffiefontein remains classified as a discontinued operation. Liabilities associated with environmental
rehabilitation, social commitments, and care and maintenance costs have been accounted for, with the total liabilities recognised at
$24 million (2023: US$26 million). The sale of Koffiefontein does not meet the IFRS 5 criteria for classification as non-current assets
and liabilities held for sale as of the reporting date due to uncertainties regarding the timing of the DMRE’s approval process.
Significant estimates and assumptions are made in determining the amount attributable to care and maintenance provisions. These
deal with uncertainties such as the regulatory framework, timing and future costs. In determining the amount attributable to care and
maintenance provisions at Koffiefontein, management used a discount rate of 10.5%, estimated timing to final closure of 11 years and
an inflation rate of 6%. Management’s estimate of costs has taken into account discussions with suppliers, contractors, quotes and
historical on-mine costs. Management’s assessment resulted in additional estimated aggregate costs of US$1 million provided at Year
End (2023: US$12 million). US$7 million of actual expenditure was incurred in the Year. The estimate will be reassessed at each future
reporting date.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
148
Petra Diamonds Limited Annual Report and Financial Statements 2024
US$ million | 2024 | 2023 |
Balance at the beginning of the year | 82 | 71 |
Income statement (credit)/debit | (34) | 22 |
Foreign currency translation difference | 2 | (11) |
Balance at the end of the year | 50 | 82 |
| 2024 | 2024 | ||
US$ million | Total | Recognised | Unrecognised |
| Deferred tax liability | |||
– Property, plant and equipment | 132 | 132 | — |
132 | 132 | — | |
| Deferred tax asset | |||
– Capital allowances | (96) | (61) | (35) |
– Provisions and accruals | (37) | (19) | (18) |
– Tax losses | (73) | (2) | (71) |
(206) | (82) | (124) | |
Net deferred taxation (asset)/liability | (74) | 50 | (124) |
| 2023 | 2023 | ||
US$ million | Total | Recognised | Unrecognised |
| Deferred tax liability | |||
– Property, plant and equipment | 153 | 153 | — |
153 | 153 | — | |
| Deferred tax asset | |||
– Capital allowances | (81) | (51) | (30) |
– Provisions and accruals | (39) | (20) | (19) |
– Tax losses | (83) | — | (83) |
(203) | (71) | (132) | |
Net deferred taxation (asset)/liability | (50) | 82 | (132) |
149
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
PSP – market and non-market-based performance conditions | 2024 (FY 2024–FY 2026) | 2024 (FY 2024–FY 2026) | 2023 (FY 2023–FY 2025) |
Fair value (PSP absolute TSR/PSP relative TSR/PSP non-market) | 1.8p/38.1p/66.9p | 1.8p/38.1p/66.9p | 1.8p/63.2p/110.8p |
Grant date | 18 January 2024 | 19 October 2023 | 14 December 2022 |
Share price at grant date | 60.5 | 51.9p | 110.8 p |
Expected volatility | 85.0% | 85.0% | 85.0% |
Life of award | 3 years | 3 years | 3 years |
Performance period | 3 years | 3 years | 3 years |
Correlation | 19.8% | 19.8% | 19.8% |
Risk-free interest rate (based on national government bonds) | 0.5% | 0.5% | 0.5% |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
150
Petra Diamonds Limited Annual Report and Financial Statements 2024
23. Share-based payments continued
Senior Management LTIP
The LTIP 2016 scheme is a cash-based reward scheme with each LTIP unit equivalent in value to a Petra share award at time of
vesting, linked to the share price performance. Upon vesting, no shares will be issued to Senior Management under the LTIP 2016
scheme. Awards will vest with reference to set performance criteria covering a three-year measurement period. The LTIP scorecard
includes a component measuring Petra’s sustainability performance with a focus on GHG emission reduction efforts in support of the
Group’s FY 2030 GHG emission reduction target, as well as our longer-term commitment to be net zero for Scope 1 and 2 emissions
by 2050 while aspiring to reach this by 2040. Upon vesting, no shares will be issued to Senior Management.
| Partner and respective interest | Partner and respective interest | |
| Mine | as at 30 June 2024 | as at 30 June 2023 |
Cullinan Mine | Kago Diamonds (14%) | Kago Diamonds (14%) |
Finsch | Kago Diamonds (14%) | Kago Diamonds (14%) |
Koffiefontein | Kago Diamonds (14%) | Kago Diamonds (14%) |
US$ million | 2024 | 2023 |
| Non-current receivable | ||
Kago Diamonds | 21 | 21 |
21 | 21 | |
| Finance income | ||
Kago Diamonds | 3 | 2 |
3 | 2 | |
| Dividend paid | ||
Kago Diamonds | 1 | 1 |
1 | 1 |
151
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
25. Notes to the cashflow statement
(a) Cash generated from operations
US$ million | 2024 | 2023 |
Loss before taxation for the year from continuing and discontinued operations | (139) | (79) |
Depreciation of property, plant and equipment | 90 | 83 |
Amortisation of right-of-use asset | 5 | 4 |
Net impairment charge/(reversal) | 75 | (15) |
Gain on extinguishment of Notes | (1) | (1) |
Non-cash items relating to discontinued operations | 3 | 22 |
Movement in provisions | (9) | 7 |
Dividend income from B-BBEE Partners | — | (1) |
Finance income | (19) | (11) |
Finance expense | 44 | 71 |
(Profit)/loss on sale of property, plant and equipment | (1) | 1 |
Share-based payment expense | 1 | 2 |
Operating profit before working capital changes | 49 | 83 |
(Increase)/decrease in trade and other receivables | (19) | 1 |
Increase/(decrease) in trade and other payables | 2 | (10) |
Decrease/(increase) in inventories | 35 | (26) |
Cash generated from operations | 67 | 48 |
(b) Financing activities – change in loans and borrowings (per note 19) and change in lease liability (per note 11)
| Senior secured | Senior secured | Senior secured | Senior secured | ||||||
| second lien | lender debt | Lease | second lien | lender debt | Lease | ||||
| notes | facilities | liability | Total | notes | facilities | liability | Total | ||
| US$ million | 2024 | 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | 2023 | |
| Loans and borrowings | |||||||||
At 1 July | 247 | — | 29 | 276 | 366 | — | 23 | 389 | |
Cash draw-downs | — | 45 | — | 45 | — | — | — | — | |
| Cash repayments | |||||||||
(capital and interest) | (25) | (26) | — | (51) | (8) | — | — | (8) | |
Lease payments | — | — | (6) | (6) | — | — | (5) | (5) | |
| Repurchase of Notes/ | |||||||||
Debt tender offer | (5) | — | — | (5) | (145) | — | — | (145) | |
| Non-cash | |||||||||
– Initial recognition of lease liability | — | — | — | — | — | — | 9 | 9 | |
– Cancellation of $492,000 | Notes | — | — | — | — | (1) | — | — | (1) |
| – Unamortised | |||||||||
transaction costs | — | — | — | — | 7 | — | — | 7 | |
– Interest accruing during the year | 29 | 5 | 2 | 36 | 28 | — | 1 | 29 | |
– Capitalised to property, plant and equipment | — | — | — | — | — | — | 1 | 1 | |
Effect of foreign exchange | — | 1 | — | 1 | — | — | — | — | |
At 30 June | 246 | 25 | 25 | 296 | 247 | — | 29 | 276 |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
152
Petra Diamonds Limited Annual Report and Financial Statements 2024
26. Subsidiaries
At 30 June 2024 the Group held ordinary shares of the following significant subsidiaries:
| Direct | Direct | ||||
| Class | percentage | percentage | |||
| Country of | of share | held | held | ||
| incorporation | capital held | 30 June 2024 | 30 June 2023 | Nature of business | |
| Blue Diamond Mines (Pty) Ltd | South Africa | Ordinary | 74% | 74% | Mining and exploration |
| Cullinan Diamond Mine (Pty) Ltd | South Africa | Ordinary | 74% | 74% | Mining and exploration |
| Ealing Management Services (Pty) Ltd | South Africa | Ordinary | 100% | 100% | Treasury |
| Finsch Diamond Mine (Pty) Ltd | South Africa | Ordinary | 74% | 74% | Mining and exploration |
| Johannesburg Diamond Trading | |||||
Company (Pty) Ltd | South Africa | Ordinary | 100% | 100% | Dormant |
Kalahari Diamonds Ltd | United Kingdom | Ordinary | 100% | 100% | Investment holding |
Mwadui Mining Holdings Ltd | United Kingdom | Ordinary | 100% | 100% | Investment holding |
Petra Diamonds Angola Holdings Ltd | BVI | Ordinary | 100% | 100% | Dormant |
Petra Diamonds Belgium BV | Belgium | Ordinary | 100% | 100% | Services provision |
| Community | |||||
Petra Diamonds Foundation PPC | South Africa | Ordinary | 100% | 100% | development |
| Petra Diamonds Holdings SA (Pty) Ltd | South Africa | Ordinary | 100% | 100% | Investment holding |
Petra Diamonds Jersey Treasury Ltd 2 | Jersey | Ordinary | 100% | 100% | Treasur y |
Petra Diamonds Netherlands Treasury B.V. 1 | Netherlands | Ordinary | 100% | 100% | Treasur y |
| Petra Diamonds Southern Africa (Pty) Ltd | South Africa | Ordinary | 100% | 100% | Services provision |
Petra Diamonds UK Services Ltd | United Kingdom | Ordinary | 100% | 100% | Services provision |
Petra Diamonds UK Treasury Ltd 1 | United Kingdom | Ordinary | 100% | 100% | Treasur y |
| Petra Diamonds US$ Treasury Plc | United Kingdom | Ordinary | 100% | 100% | Treasur y |
| Premier Transvaal Diamond Mining | |||||
Company (Pty) Ltd | South Africa | Ordinary | 100% | 100% | Mining and exploration |
| Tarorite (Pty) Ltd | South Africa | Ordinary | 74% | 74% | Beneficiation |
| Willcroft Company Ltd | Bermuda | Ordinary | 100% | 100% | Investment holding |
Williamson Diamonds Ltd | Tanzania | Ordinary | 75% | 75% | Mining and exploration |
1
1
1
1
1
1
1
1
1
1. The companies are guarantors to the senior secured second lien notes.
2. Petra Diamonds Jersey Treasury Ltd was dissolved on 1 December 2023.
153
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
27. Pension scheme continued
Defined benefit scheme continued
US$ million | 2024 | 2023 |
| Defined benefit scheme | ||
Defined benefit obligations | (8) | (7) |
Plan assets | 8 | 7 |
Net amounts recognised | — | — |
| Plan assets | ||
At 1 July | 7 | 9 |
Translation adjustments | — | (1) |
Return on plan assets – net of actuarial movements | 1 | — |
Benefits paid to members | — | (1) |
At 30 June | 8 | 7 |
| Defined benefit obligations | ||
At 1 July | (7) | (9) |
Translation adjustments | — | 1 |
Benefits paid to members | — | 1 |
Finance expense | (1) | (1) |
Actuarial gain | — | 1 |
At 30 June | (8) | (7) |
Effect of the asset ceiling | 1 | 1 |
US$ million | 2024 | 2023 |
| Estimation of future pension benefit payments (for the next 5 years) | ||
Benefit payments 2024 | — | — |
Benefit payments 2025 | — | 1 |
Benefit payments 2026 | 1 | 1 |
Benefit payments 2027 | 1 | 1 |
Benefit payments 2028 | 1 | 1 |
Benefit payments 2029 | 1 | — |
Liabilities at fair market value at 30 June | 4 | 4 |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
154
Petra Diamonds Limited Annual Report and Financial Statements 2024
US$ million | 2024 | 2023 |
| Unfunded post-retirement medical fund | ||
Present value of post-employment medical liability | 11 | 10 |
Movements in the present value of the post-retirement medical liability recognised in the Consolidated Statement of Financial Position | ||
Net liability for the post-retirement medical fund obligation as at 1 July | 10 | 12 |
Translation adjustment | — | (1) |
Net expense recognised in the income statement | 1 | 1 |
Membership changes | 1 | (1) |
Benefit payments | (1) | (1) |
Net liability for post-employment medical care obligations at 30 June | 11 | 10 |
Finance expense | 1 | 1 |
| Principal actuarial assumptions | ||
Discount rate | 12.4% | 12.9% |
Health care cost inflation | 7.9% | 8.4% |
Net discount rate | 4.1% | 4.1% |
US$ million | 2024 | 2023 |
| Estimated future benefit payments (for the next 5 years) | ||
The following future benefit payments, which reflect the expected future services, as appropriate, are expected to be paid: | ||
2024 | — | — |
2025 | — | 1 |
2026 | 1 | 1 |
2027 | 1 | 1 |
2028 | 1 | 1 |
2029 | 1 | — |
4 | 4 |
155
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
| Total | Total | |
| US$ million | 2024 | 2023 |
Diamond debtors | 30 | 9 |
Trade receivables | 5 | 3 |
Other receivables (excluding taxation, VAT and prepayments) | 15 | 21 |
Non-current receivables (excluding VAT) | 47 | 41 |
97 | 74 |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
156
Petra Diamonds Limited Annual Report and Financial Statements 2024
29. Financial instruments continued
| Total | Total | |
| US$ million | 2024 | 2023 |
Pound Sterling | 1 | 1 |
South African Rand | 55 | 52 |
US Dollar | 42 | 21 |
98 | 74 |
| Total | Total | |
| US$ million | 2024 | 2023 |
Trade payables | 48 | 35 |
Other payables (excluding taxation) | 33 | 32 |
Current lease liability | 4 | 3 |
Bank overdraft | 8 | — |
Non-current lease liability | 21 | 26 |
114 | 96 |
| Total | Total | |
| US$ million | 2024 | 2023 |
Pound Sterling | 14 | 14 |
South African Rand | 30 | 17 |
US Dollar | 70 | 65 |
114 | 96 |
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Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
29. Financial instruments continued
| Total | Total | |
| US$ million | 2024 | 2023 |
| Financial assets | ||
| Held at amortised cost: | ||
– Non-current trade and other receivables (excluding VAT) | 47 | 41 |
– Trade receivables | 35 | 12 |
– Other receivables (excluding taxation, prepayments and VAT) | 15 | 21 |
– Cash and cash equivalents (including restricted cash) | 29 | 58 |
| Held at fair value through profit and loss: | ||
– Other financial asset | 14 | — |
140 | 132 | |
| Financial liabilities | ||
| Held at amortised cost: | ||
– Non-current lease liability | 21 | 26 |
– Non-current loans and borrowings | 246 | 222 |
– Current loans and borrowings | 25 | 25 |
– Bank overdraft | 8 | — |
– Trade and other payables (excluding taxation, VAT and derivatives) | 81 | 67 |
– Current lease liability | 4 | 3 |
385 | 343 |
| Total | Total | |
| US$ million | 2024 | 2023 |
| Financial assets | ||
Pound Sterling | 1 | 8 |
South African Rand | 71 | 79 |
US Dollar | 68 | 45 |
140 | 132 | |
| Financial liabilities | ||
Pound Sterling | 14 | 14 |
South African Rand | 54 | 17 |
US Dollar | 317 | 312 |
385 | 343 |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
158
Petra Diamonds Limited Annual Report and Financial Statements 2024
29. Financial instruments continued
159
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
29. Financial instruments continued
| 30 June 2024 | ||||
| US$ | US$ | |||
| Year-end | Year-end | strengthens | weakens | |
| US$ million | US$ rate | amount | 10% | 10% |
| Financial assets | ||||
Pound Sterling | 0.7910 | 1 | 1 | 1 |
South African Rand | 0.0550 | 71 | 63 | 77 |
US Dollar | 1.0000 | 68 | 69 | 69 |
140 | 133 | 143 | ||
| Financial liabilities | ||||
Pound Sterling | 0.7910 | 14 | 13 | 15 |
South African Rand | 0.0550 | 54 | 48 | 59 |
US Dollar | 1.0000 | 317 | 317 | 317 |
385 | 378 | 391 |
| 30 June 2023 | ||||
| US$ | US$ | |||
| Year-end | Year-end | strengthens | weakens | |
| US$ million | US$ rate | amount | 10% | 10% |
| Financial assets | ||||
Pound Sterling | 0.7872 | 8 | 7 | 9 |
South African Rand | 0.0531 | 79 | 71 | 87 |
US Dollar | 1.0000 | 45 | 45 | 45 |
132 | 123 | 141 | ||
| Financial liabilities | ||||
Pound Sterling | 0.7872 | 14 | 12 | 15 |
South African Rand | 0.0531 | 17 | 15 | 19 |
US Dollar | 1.0000 | 313 | 313 | 313 |
344 | 340 | 347 |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
160
Petra Diamonds Limited Annual Report and Financial Statements 2024
29. Financial instruments continued
| 30 June 2024 | ||||||||
| 3 months | ||||||||
US$ million | Notes | Interest rate | Total | or less | 3-6 months | 6-12 months | 1-2 years | 2–5 years |
| Cash and cash | ||||||||
| equivalents | ||||||||
Cash – unrestricted | 17 | 0.1–5.1% | 28 | 28 | — | — | — | — |
Cash – restricted | 17 | 0.1–5.1% | 1 | 1 | — | — | — | — |
Total cash | 29 | 29 | — | — | — | — | ||
| Loans and borrowings | ||||||||
Bank loan – secured | 19 | 12.38% | 30 | — | 1 | 1 | 28 | — |
Trade payables | 20 | 0.0% | 48 | 48 | — | — | — | — |
Bank overdraft | 17 | 5.0-9.0% | 8 | 8 | — | — | — | — |
| Senior secured second | ||||||||
lien notes | 19 | 9.75% | 294 | — | 12 | 12 | 270 | — |
Lease liabilities | 11 | 5.98% | 31 | 2 | 1 | 3 | 6 | 19 |
Cashflow of loans and borrowings | 411 | 58 | 14 | 16 | 304 | 19 |
| 30 June 2023 | ||||||||
| 3 months | ||||||||
US$ million | Notes | Interest rate | Total | or less | 3-6 months | 6-12 months | 1-2 years | 2–5 years |
| Cash and cash | ||||||||
| equivalents | ||||||||
Cash – unrestricted | 17 | 0.1– 5.1% | 44 | 44 | — | — | — | — |
Cash – restricted | 17 | 0.1– 5.1% | 14 | 14 | — | — | — | — |
Total cash | 58 | 58 | — | — | — | — | ||
| Loans and borrowings | ||||||||
Bank loan – secured | 19 | 12.65% | — | — | — | — | — | — |
Trade payables | 20 | 0.0% | 35 | 35 | — | — | — | — |
| Senior secured second | ||||||||
lien notes | 19 | 9.50% | 326 | — | 13 | 13 | 25 | 275 |
Lease liabilities | 11 | 5.98% | 31 | 2 | 1 | 3 | 6 | 19 |
| Cashflow of loans | ||||||||
and borrowings | 392 | 37 | 14 | 16 | 31 | 294 |
161
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
29. Financial instruments continued
| Total | Total | |
| US$ million | 2024 | 2023 |
Total debt | 271 | 248 |
| Net cash and cash equivalents | (21) | (58) |
Net debt | 250 | 190 |
Diamond debtors | (30) | (9) |
| Environmental rehabilitation investment | (19) | (4) |
Consolidated net debt | 201 | 177 |
Total equity attributable to equity holders of the parent company | 244 | 321 |
Consolidated net debt-to-equity ratio | 0,82:1 | 0.55:1 |
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
162
Petra Diamonds Limited Annual Report and Financial Statements 2024
30. Segment information continued
The Group’s non-current assets located in South Africa are US$548million (2023: US$607 million) and Tanzania are US$53 million
(2023: US$62 million).
Non-current assets include the Group’s property, plant and equipment of which US$493 million (2023: US$567 million) are located in
South Africa and US$38 million (2023: US$31 million) are in Tanzania.
| Tanzania | ||||||||
| – mining | United | |||||||
| South Africa – mining activities | activities | Kingdom | South Africa | |||||
| Corporate and | ||||||||
| Operating segments | Cullinan Mine | Finsch | Koffiefontein | Williamson | treasury | Beneficiation | Inter-segment | Consolidated |
| US$ million | 2024 | 2024 | 2024 | 2024 | 2024 | 2024 | 2024 | 2024 |
Revenue | 190 | 120 | — | 57 | — | — | — | 367 |
| Segment result | 22 | (21) | — | (25) | (14) | — | (1) | (39) |
| Impairment (charge)/ | ||||||||
reversal – property, plant and other receivables | (33) | (45) | — | 7 | (3) | (1) | — | (75) |
Other direct income | 1 | 1 | — | — | — | — | — | 2 |
| Operating profit/(loss) | (10) | (65) | — | (18) | (17) | (1) | (1) | (112) |
Financial income | 19 | |||||||
Financial expense | (44) | |||||||
Gain on extinguishment | ||||||||
of Notes net of unamortised costs | 1 | |||||||
Income tax charge | 32 | |||||||
| Loss on discontinued | ||||||||
| operation including | ||||||||
| associated impairment | ||||||||
charges (net of tax) | (3) | |||||||
| Non-controlling | ||||||||
interest | 21 | |||||||
Loss attributable to equity holders of the parent company | (86) | |||||||
| Segment assets | 395 | 199 | 1 | 87 | 3,159 | 5 | (3,074) | 772 |
| Segment liabilities | 349 | 152 | 57 | 114 | 2,049 | 7 | (2 ,173) | 555 |
Cash flow from operating activities | 68 | 12 | — | (7) | (3) | — | — | 70 |
Capital expenditure | 48 | 25 | — | 10 | 1 | — | — | 84 |
5
4
1
2
3
3
1. Total depreciation of US$90 million included in the segmental result comprises depreciation incurred at the Cullinan Mine of US$45 million, Finsch of US$30 million, Williamson of
US$14 million and Corporate and treasury of US$1 million.
2. Operating profit/(loss) is equivalent to revenue of US$367 million less total costs of US$479 million as disclosed in the Consolidated Income Statement.
3. Segment assets and liabilities include inter-company receivables and payables which are eliminated on consolidation.
4. The beneficiation segment represents Tarorite, a cutting and polishing business in South Africa, which can on occasion cut and polish select rough diamonds.
5. The operating results of Koffiefontein are included under loss on discontinued operation including associated impairment (net of tax) as the operation has been placed on permanent
care and maintenance.
163
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
30. Segment information continued
| Tanzania | ||||||||
| – mining | United | |||||||
| South Africa – mining activities | activities | Kingdom | South Africa | |||||
| Corporate and | ||||||||
| Operating segments | Cullinan Mine | Finsch | Koffiefontein | Williamson | treasury | Beneficiation | Inter-segment | Consolidated |
| US$ million | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 |
Revenue | 183 | 93 | — | 49 | — | — | — | 325 |
| Segment result | 49 | 10 | — | (29) | (23) | — | (2) | 5 |
| Impairment reversal – | ||||||||
operations | (2) | 53 | — | (31) | — | — | — | 20 |
| Impairment (charge)/ | ||||||||
reversal – other receivables | — | — | — | (4) | (1) | — | — | (5) |
Other direct income | — | — | — | (1) | 1 | — | — | — |
| Operating profit/(loss) | 47 | 63 | — | (65) | (23) | — | (2) | 20 |
Financial income | 11 | |||||||
Financial expense | (71) | |||||||
Gain on extinguishment | ||||||||
of Notes net of unamortised costs | 1 | |||||||
Income tax charge | (23) | |||||||
| Loss on discontinued | ||||||||
| operation including | ||||||||
| associated impairment | ||||||||
charges (net of tax) | (40) | |||||||
| Non-controlling | ||||||||
interest | (3) | |||||||
Loss attributable to equity holders of the parent company | (105) | |||||||
| Segment assets | 419 | 249 | — | 85 | 3,019 | 5 | (2,916) | 861 |
| Segment liabilities | 336 | 143 | 50 | 84 | 1,946 | 6 | (2,021) | 544 |
Cash flow from operating activities | 101 | 28 | — | (6) | (75) | — | — | 48 |
Capital expenditure | 53 | 43 | — | 19 | 2 | — | — | 117 |
4
1
2
3
3
1. Total depreciation of US$82 million included in the segmental result comprises depreciation incurred at the Cullinan Mine of US$53 million, Finsch of US$20 million, Williamson of
US$8 million and Corporate and treasury of US$1 million.
2. Operating profit/(loss) is equivalent to revenue of US$325 million less total costs of US$305 million as disclosed in the Consolidated Income Statement.
3. Segment assets and liabilities include inter-company receivables and payables which are eliminated on consolidation.
4. The beneficiation segment represents Tarorite, a cutting and polishing business in South Africa, which can on occasion cut and polish select rough diamonds.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
164
Petra Diamonds Limited Annual Report and Financial Statements 2024
| 1 July 2023 – | 1 July 2022 – | |
| US$ million | 30 June 2024 | 30 June 2023 |
Revenue | — | 4 |
Cost of sales | — | (24) |
Gross loss | — | (20) |
Impairment charge – operations | — | (1) |
Provisions for rehabilitation and closure costs | (1) | (22) |
Financial income | — | 3 |
Financial expense | (2) | — |
Loss before tax | (3) | (40) |
Taxation | — | — |
Net loss for the year | (3) | (40) |
| Attributable to: | ||
Equity holders of the parent | (2) | (31) |
Non-controlling interest | (1) | (9) |
(3) | (40) |
| 1 July 2023 – | 1 July 2022 – | |
| US$ million | 30 June 2024 | 30 June 2023 |
Operating activities | — | (19) |
Financing activities | (3) | — |
Net cash utilised in discontinued operations | (3) | (19) |
165
Petra Diamonds Limited Annual Report and Financial Statements 2024
FINANCIAL STATEMENTS
32. Williamson
Framework Agreement
On 13 December 2021, the Company signed an agreement in principle with the Government of Tanzania (GoT) relating to the
Williamson operations. The Framework Agreement provides for a capital restructuring of Williamson Diamonds Limited (Williamson),
including the 16% free carried interest that the Government of Tanzania is entitled to receive in Williamson and its shareholder loans
under Section 10 of the Tanzanian Mining Act, 2017 and Regulation 10 of the Tanzanian Mining (State Participation) Regulations, 2020.
The capital restructuring will include:
• A Williamson share issue with the effect of reducing Petra’s indirect shareholding from 75% to 63% and consequently increasing the
Government of Tanzania’s shareholding from 25% to 37%
• A contribution to the Government of Tanzania of 16% of the principal outstanding value of the Group’s shareholder loans payable by
Williamson, with the remaining 84% of such principal outstanding loans continuing to be owed to the Group
• The transfer of the Williamson shares held by the Group to another member of the Petra Group (either Petra itself or a special purpose
subsidiary). Petra has registered Mwadui Mining Holdings Ltd, a subsidiary registered in the United Kingdom, for this purpose
With respect to the reorganisation of the parties’ legal interests in Williamson, the Framework Agreement also provides for an overall
55:45 economic benefit-sharing ratio between the Government of Tanzania and Petra in relation to future economic benefits from
Williamson. This arrangement is intended to capture the parties’ entitlements as shareholders as well as, with respect to the
Government of Tanzania, the revenue it collects from Williamson arising from taxes, royalties, duties, fees and other fiscal levies
(Government Imposed Charges). The Framework Agreement also provides that Williamson shall be entitled to offset its undisputed
unpaid and overdue VAT receivables against future Government Imposed Charges, whereby such Government Imposed Charges will
be offset and treated as paid for the purposes of the economic benefit-sharing ratio.
The Framework Agreement provides that Petra and the Government of Tanzania will provide financial assistance for the restart of
operations at Williamson. The Government of Tanzania had agreed to allocate the sales proceeds of the 71,654.45 carat diamond
parcel from Williamson that was previously confiscated and blocked for export. Based on the recent confirmation that the parcel was
sold in whole or part, the full carrying value of US$13 million (2023: US$13 million) is classified as a trade and other receivable.
The Framework Agreement records an important US$20 million settlement between the parties concerning long-standing historic
disputes with the Government of Tanzania. The Group raised a provision of US$19 million (2023: US$19 million) (adjusted for the
time-value of money) in respect of the aforementioned settlement. This settlement payment shall be made in instalments, with the
first instalment of US$5 million to be paid when the Framework Agreement becomes effective and upon receipt of proceeds by
Williamson from the sale of the confiscated diamond parcel. The subsequent annual instalments of the settlement amount are to be
made annually at amounts between US$3 million and US$5 million depending on Williamson’s ability to pay, as determined by
Williamson’s board of directors.
The Framework Agreement is subject to a number of conditions, including Tanzanian regulatory approvals and is therefore not yet
effective as at 30 June 2024. Certain conditions precedent remain outstanding awaiting resolution from the GoT.
Memorandum of Understanding with Caspian Limited (MOU)
On 31 May 2023, the Company announced that it entered into definitive transaction documents which give effect to the MOU entered
into in December 2022 relating to the sale by the Company of 50% less one, share of the entity which holds Petra’s shareholding in
Williamson Diamonds Limited (Williamson) and a prorated portion of shareholder loans owed by Williamson for a total consideration of
US$15 million. The Company has entered into these transaction documents with Pink Diamonds Investments Limited (Pink Diamonds),
a company nominated by and affiliated with Taifa. Taifa remains the long-term technical services contractor at Williamson.
Upon completion of the transactions contemplated by the MOU and the capital restructuring in the aforementioned Framework
Agreement becoming effective, Petra and Taifa will each indirectly hold a 31.5% stake in Williamson but with Petra retaining a
controlling interest in Williamson.
Completion of the Transaction with Taifa is subject to the parties obtaining all necessary governmental, regulatory and lender
approvals, including the Tanzanian Fair Competition Commission, the Bank of Tanzania, and a binding ruling from the Tanzania
Revenue Authority on the tax treatment of the transaction.
33. Events after the reporting period
Revolving Credit Facility draw-down
In August and September 2024, as a result of the deferral of South African goods from the first diamond tender for FY 2025, the
Group drew down, in total, an additional amount of ZAR855 million (US$47 million) from the RCF.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS / CONTINUED
FOR THE YEAR ENDED 30 JUNE 2024
166
Petra Diamonds Limited Annual Report and Financial Statements 2024
In addition to GAAP figures reported under International Financial Reporting Standards (IFRS), Petra provides certain Alternative
Performance Measures (APMs). These APMs are used internally in the management, planning, budgeting and forecasting of the
business and are also considered to be helpful in terms of the external understanding of the Group’s underlying performance.
As these are non-GAAP measures, they should not be considered as replacements for IFRS measures. The Company’s definition
of these non-GAAP measures may not be comparable to other similarly titled measures reported by other companies.
The use of APMs by listed companies to better explain performance and provide additional transparency and comparability is
common. However, APMs should always be considered in conjunction with IFRS reported numbers and not used in isolation.
Commentary within the Annual Report, including the Financial Review, as well as the Consolidated Financial Statements and the
accompanying notes, should be referred to in order to fully appreciate all the factors that affect our business. We strongly encourage
readers not to rely on any single financial measure, but to carefully review our reporting in its entirety.
APM Method of calculation Relevance
Adjusted EBITDA Adjusted EBITDA is stated before depreciation,
amortisation of right-of-use assets, costs and fees
relating to investigation and settlement of human rights
abuse claims, share-based expense, net finance
expense, tax expense, impairment charges, expected
credit loss release/(charge), gain on extinguishment of
Notes net of unamortised costs, profit on disposal of
subsidiary and net unrealised foreign exchange gains
and losses.
Adjusted EBITDA excludes the impact of certain non-cash
items and one-off items (ie loss/profit on discontinued
operations) and is used to provide further clarity on the
ongoing, underlying financial performance of the Group.
Adjusted loss per share (LPS)
from continuing operations
Adjusted LPS from continuing operations is stated before
impairment charge, expected credit release/ (loss)
provision, gain on extinguishment of Notes net of
unamortised costs, profit on disposal of subsidiary, costs
and fees relating to investigation and settlement of
human rights abuse claims and net unrealised foreign
exchange gains and losses, and excluding taxation
(charge)/credit on net unrealised foreign exchange gains
and losses and excluding taxation credit on impairment
charge.
This is used to assess the Group’s operational performance
from continuing operations per Ordinary Share. It removes
the effect of items that are not directly related to
operational performance.
Adjusted mining and
processing costs
Mining and processing costs stated before depreciation
and share-based expense.
This removes the impact of non-cash items from the actual
operational cost.
Adjusted net profit/(loss)
after tax
Adjusted net profit/(loss) after tax is net profit/(loss) after
tax stated before impairment charge, expected credit
release/(loss) provision, gain on extinguishment of Notes
net of unamortised costs, profit on disposal of subsidiary
and net unrealised foreign exchange gains and losses,
and excluding taxation (charge)/credit on net unrealised
foreign exchange gains and losses and excluding
taxation credit on impairment charge.
By removing the impact of items that are not directly
related to operational performance, as well as the effect of
any discontinued operations, this is one of the indicators
used to assess the underlying performance of the
business.
Consolidated net debt:
EBITDA
Consolidated net debt:EBITDA is consolidated net debt
divided by adjusted EBITDA.
This ratio is used by creditors, credit rating agencies and
other stakeholders.
Consolidated net debt Bank loans and borrowings plus US$ Loan Notes, less
cash, environmental rehabilitation investment and
diamond debtors.
This consolidated figure is used by the lender group,
analysts, rating agencies and other stakeholders.
Operational free cashflow Cash generated from operations less capital expenditure
for the year as per the Consolidated Cashflow Statement.
Free cashflow reflects the cash generated from operations
after capital expenditure requirements have been met. This
measure reflects the Company’s ability to generate cash
from profit, reflecting strong working capital management
and capital expenditure discipline.
Net debt The US$ Loan Notes (gross), bank loans and borrowings,
net of cash at bank (including restricted cash).
Net debt combines the various funding sources that are
included in the Consolidated Statement of Financial
Position and the accompanying notes. It provides an
overview of the Group’s net indebtedness, providing
transparency on the overall strength of the balance sheet.
Profit from mining activities Revenue less adjusted mining and processing costs plus
other direct income.
Provided to demonstrate the Group’s ability to achieve
profit from its core operating activities.
Alternative Performance Measures – Unaudited
167
Petra Diamonds Limited Annual Report and Financial Statements 2024
SUPPLEMENTARY INFORMATION
US$ million 2024 2023 2022 2021 2020
Income statement
Revenue (gross)
1
367 325 564 402 243
Adjusted mining and processing costs
2
(296) (202) (273) (261) (169)
Profit from mining activity
3
73 123 291 141 74
Adjusted EBITDA
3
66 113 278 135 67
Adjusted net (loss)/profit after tax
3
(46) (2) 115 (16) (55)
Net (loss)/profit after tax – Group (107) (102) 88 197 (223)
Statement of financial position
Current assets 166 188 409 274 191
Non-current assets 606 673 702 745 851
Total assets 772 861 1,111 1,079 1,042
Borrowings (short and long term) 271 247 366 430 769
Current liabilities (excluding borrowings) 89 69 75 49 53
Total equity 217 317 479 440 12
Movement in cash
Net cash generated from operating activities 42 43 284 140 27
Net cash utilised in investing activities (93) (107) (53) (25) (51)
Net cash (utilised in)/generated from financing activities 12 (155) (101) (8) 52
Net (decrease)/increase in cash and cash equivalents (39) (219) 128 94 (7)
Ratios and other key information
Basic (loss)/earnings per share attributable to the equity holders of
the Company – US$ cents (44) (54) 35 261 (22)
Adjusted basic (loss)/earnings per share from continuing operations
attributable to the equity holders of the Company – US$ cents
3
(21) (3) 48 (36) (5)
Capital expenditure 84 117 52 24 36
Cash at bank (including restricted cash and bank overdraft) 21 58 288 164 68
The Group uses several non-GAAP measures above and, as these are non-GAAP measures, they should not be considered as
replacements for IFRS measures. The Company’s definition of these non-GAAP measures may not be comparable to other similarly
titled measures reported by other companies.
1. Revenue (gross) excludes revenues for Koffiefontein Mine for FY 2023 and FY 2022, and Williamson for FY 2021 and FY 2020. Under IFRS, these revenues were classified in the
Consolidated Income Statement as part of the loss from discontinued operations.
2. Adjusted mining and processing costs are mining and processing costs (excluding Koffiefontein Mine for FY 2023 and FY 2022, and Williamson for FY 2021 and FY 2020) stated
before depreciation and share-based expense. Under IFRS, the adjusted mining and processing costs were classified in the Consolidated Income Statement as part of the loss from
discontinued operations.
3. For definitions of these non-GAAP measures refer to page 169.
Five-year Summary of Consolidated Figures
FOR THE YEAR ENDED 30 JUNE 2024
168
Petra Diamonds Limited Annual Report and Financial Statements 2024
US$ million 2024 2023
Revenue 367 325
Adjusted mining and processing costs
1
(296) (202)
Other direct income 2 —
Profit from mining activities
2
73 123
Other corporate income — 1
Adjusted corporate overhead
3
(7) (11)
Adjusted EBITDA
4
66 113
Depreciation and amortisation of right-of-use asset (95) (81)
Share-based expense (1) (2)
Net finance expense (29) (22)
Adjusted net (loss)/profit before tax
5
(59) 8
Tax expense (excluding taxation credit/(charge) on impairment charge and unrealised foreign exchange gain/(loss))
5
13 (10)
Adjusted net loss after tax
6
(46) (2)
Impairment reversal – operations and other receivables
7
6 53
Impairment charge – operations and non-financial receivables
7
(78) (38)
Impairment charge – BEE receivables
7
(3) —
S189 retrenchment costs (5) —
Transaction costs and acceleration of unamortised costs on partial redemption of Notes
8
— (9)
Gain on extinguishment of Notes net of unamortised costs 1 1
Williamson tailings facility – remediation costs — (11)
Williamson tailings facility – accelerated depreciation — (5)
Williamson Blocked Parcel inventory write-down
9
— (12)
Williamson receivable recognition
9
— 12
Costs and fees relating to investigation and settlement of human rights abuse claims (2) (9)
Net unrealised foreign exchange gain/(loss) 4 (29)
Taxation (charge)/credit on unrealised foreign exchange movements
5
(2) 1
Taxation credit/(charge) on impairment charge/reversal 21 (14)
Loss from continuing operations (104) (62)
Loss on discontinued operations, net of tax
10
(3) (40)
Net loss after tax (107) (102)
Loss per share attributable to equity holders of the Company – US$ cents
Basic loss per share – from continuing operations (43) (38)
Adjusted loss per share – from continuing operations
11
(21) (3)
The Group uses several non-GAAP measures above and throughout this Report to focus on actual trading activity by removing non-cash or non-recurring items.
These measures include adjusted mining and processing costs, profit from mining activities, adjusted EBITDA, adjusted net profit after tax, adjusted earnings
per share, adjusted US$ Loan Notes and net debt. As these are non-GAAP measures, they should not be considered as replacements for IFRS measures.
The Company’s definition of these non-GAAP measures may not be comparable to other similarly titled measures reported by other companies.
1.
Adjusted mining and processing costs are mining and processing costs
stated before depreciation and share-based expense.
2. Profit from mining activities is revenue less adjusted mining and processing
costs plus other direct income.
3. Adjusted corporate overhead is corporate overhead expenditure less
corporate depreciation, share-based expenses and non-recurring costs
related to the tender offer transaction and the IGM claims.
4. Adjusted EBITDA is stated before depreciation, amortisation of right-of-use
asset, share-based expense, net finance expense, tax credit/(charge), expected
credit loss release/(charge), S189 retrenchment costs, recovery of fees relating
to investigation and settlement of human rights abuse claims, Williamson
tailings facility remediation costs and accelerated depreciation, unrealised
foreign exchange gains and losses and discontinued operations.
5. Tax credit/(expense) is the tax credit/(expense) for the year excluding
taxation credit/(charge) on impairment charge/reversals to property, plant
and equipment and unrealised foreign exchange movements for the year;
such exclusion more accurately reflects resultant adjusted net loss after tax.
6. Adjusted net loss after tax is net loss after tax stated before any impairment
(charges)/reversals, S189 retrenchment costs, gain on extinguishment of
Notes net of unamortised costs, Williamson tailings facility remediation
costs and accelerated depreciation, recovery of fees relating to investigation
and settlement of human rights abuse claims, net unrealised foreign
exchange movements for the year and related tax adjustments.
7. Impairment charges of US$75m (2023: US$15m reversal) were due to the
Group’s impairment review of its operations and other receivables. Refer to
note 5 for further details.
8. Transaction costs and acceleration of unamortised costs on partial
redemption of Notes comprise transaction costs of US$nil (2023: US$1m)
included within corporate expenditure (refer to note 4) and US$nil (2023:
US$8m) in respect of the redemption premium and acceleration of
unamortised costs included within finance expense (refer to note 6).
9. Diamond inventories for periods prior to 30 June 2023 included the
71,654.45 carat Williamson parcel of diamonds blocked for export during
August 2017, with a carrying value of US$12.5m. In prior discussions, the
GoT confirmed that the Blocked Parcel was partially sold during the FY
2023, and so this parcel has been excluded from diamond inventories and
expensed to other direct mining expense with the calculated fair value
proceeds of US$12.4m for the Blocked Parcel recognised as other direct
mining income and trade and other receivables in the Group’s FY 2023
Financial Statements. Under the Framework Agreement entered into with
the Government of Tanzania (GoT) in December 2022, it is stated that the
proceeds from the sale of this parcel are to be applied to Williamson to assist
with the restart of operations and that, in the event such proceeds are not
received by Williamson, Williamson is not required to pay a US$20m liability
relating to the settlement of past tax disputes.
10. The loss on discontinued operations reflects the results of the Koffiefontein
Mine operation (net of tax), including impairment, of US$3m (FY 2023:
US$40m) as per the requirements of IFRS 5 for an abandoned operation;
refer to note 31.
11. Adjusted LPS is stated before impairment charge, movement in the expected
credit loss provision, gain on extinguishment of Notes net of unamortised costs,
acceleration of unamortised costs on restructured loans and borrowings, costs
and fees relating to investigation and settlement of human rights abuse claims,
provision for unsettled and disputed tax claims and net unrealised foreign
exchange movements, S189 retrenchment costs, and the impact on taxation
on impairment reversal/charge to property, plant and equipment and
unrealised foreign exchange movements for the year (refer Annexure 1).
FY 2024 Summary of Results and
Non-GAAP Disclosures
169
Petra Diamonds Limited Annual Report and Financial Statements 2024
SUPPLEMENTARY INFORMATION
Adjusted loss per share (non-GAAP measure)
In order to show loss per share from operating activities on a consistent basis, an adjusted loss per share is presented which
excludes certain items as set out below. It is emphasised that the adjusted loss per share is a non-GAAP measure. The Petra Board
considers the adjusted loss per share to better reflect the underlying performance of the Group. The Company’s definition of
adjusted loss per share may not be comparable to other similarly titled measures reported by other companies.
Continuing
operations
30 June
2024
US$ millions
Discontinued
operation
30 June
2024
US$ millions
Total
30 June
2024
US$ millions
Continuing
operations
30 June
2023
US$ millions
Discontinued
operation
30 June
2023
US$ millions
Total
30 June
2023
US$ millions
Loss for the year (84) (2) (86) (74) (31) (105)
Adjustments:
Net unrealised foreign exchange (gains)/ losses
1
(4) — (4) 29 — 29
Present value discount – Williamson VAT receivable (6) — (6) 4 — 4
Impairment charge/(reversal) – operations 61 — 61 (9) 1 (8)
Impairment charge – other receivables 4 — 4 1 — 1
Taxation charge/(credit) on unrealised foreign
exchange loss
1
1 — 1 (1) — (1)
Taxation (charge)/credit on impairment charge
1
(17) — (17) 11 — 11
Williamson tailings facility – remediation costs — — — 11 — 11
Williamson tailings facility – accelerated depreciation — — — 5 — 5
Retrenchment costs S189 4 — 4 — — —
Transaction costs – acceleration of unamortised costs
on restructured loans and borrowings — — — 9 — 9
Gain on extinguishment of Notes net of
unamortised costs (1) — (1) — — —
Transaction costs – human rights settlement agreement
and provisions for unsettled and disputed tax claims 2 — 2 8 — 8
Adjusted loss for the year attributable to parent (40) (2) (42) (6) (30) (36)
1. Portion attributable to equity shareholders of the Company.
Continuing
operations
30 June
2024
US $
Discontinued
operation
30 June
2024
US $
Total
30 June
2024
US $
Continuing
operations
30 June
2023
US $
Discontinued
operation
30 June
2023
US $
Total
30 June
2023
US $
Weighted average number of Ordinary
Shares used in basic loss per share
As at 30 June 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785
US$ cents US$ cents US$ cents US$ cents US$ cents US$ cents
Adjusted basic loss per share (21) (1) (22) (3) (16) (19)
The number of potentially dilutive Ordinary Shares, in respect of employee share options and Executive Director and Senior
Management share award schemes, is nil (2023: nil).
Annexure 1
170
Petra Diamonds Limited Annual Report and Financial Statements 2024
Shareholder and Corporate Information
Petra Diamonds Limited
Registered office
Clarendon House
2 Church Street
Hamilton HM11
Bermuda
Group management office
One Heddon Street
London W1B 4BD
Tel: +44 (0)784 192 0021
info@petradiamonds.com
www.petradiamonds.com
Corporate communications team
Tel: +44 (0)784 192 0021
Email: investorrelations@petradiamonds.com
Company registration number
EC 23123
Company Secretary
Rupert Rowland-Clark
One Heddon Street
London W1B 4BD
Email: companysecretary@petradiamonds.com
Solicitors
Bermuda: Conyers Dill & Pearman Limited
Clarendon House
2 Church Street
Hamilton HM11
Bermuda
Tel: +1 441 295 1422
United Kingdom: Ashurst LLP
London Fruit & Wool Exchange
1 Duval Square
London E1 6PW
Tel: +44 20 7638 1111
Corporate brokers
BMO Capital Markets
100 Liverpool Street
London EC2M 2AT
Tel: +44 20 7236 1010
www.bmocm.com
Peel Hunt
100 Liverpool Street
London EC2M 2AT
Tel: +44 20 7418 8900
www.peelhunt.com
Registrar
Link Market Services (Jersey) Limited
IFC5
St. Helier
Jersey JE1 1ST
Tel: UK: 0371 664 0300 (calls are charged at the standard
geographic rate and will vary by provider. Calls outside the
United Kingdom will be charged at the applicable international rate;
lines are open 9.00am–5.30pm GMT Mon–Fri)
International: +44 371 664 0300
Website: www.linkgroup.co.uk
Email: shareholderenquiries@linkgroup.co.uk
Transfer agent
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
Tel: UK: 0371 664 0300 (calls are charged at the standard
geographic rate and will vary by provider. Calls outside the
United Kingdom will be charged at the applicable international
rate; lines are open 9.00am–5.30pm GMT Mon–Fri)
International: +44 (0) 371 664 0300
Website: www.linkgroup.co.uk
Email: shareholderenquiries@linkgroup.co.uk
Auditors
BDO LLP
55 Baker Street
London W1U 7EU
Tel: +44 207 486 5888
171
Petra Diamonds Limited Annual Report and Financial Statements 2024
SUPPLEMENTARY INFORMATION
SHAREHOLDER AND CORPORATE INFORMATION / CONTINUED
Stock exchange listing
The Company’s shares are admitted to the Main Market of the
London Stock Exchange, in the Commercial Companies (Equity
Shares) category. The Ordinary Shares (as defined below)
themselves are not admitted to CREST, but dematerialised
depositary interests representing the underlying Ordinary Shares
issued by Link Market Services Trustees Limited can be held and
transferred through the CREST system. The rights attached to
the Ordinary Shares are governed by the Companies Act 1981
(Bermuda) (as amended) (the Act) and the Company’s Bye-Laws
as adopted on 28 November 2011 (the Bye-Laws).
Dividend
The Company has not resolved to declare any dividend for
FY 2024.
Substantial shareholdings
The interests in the table below are based on shareholder
disclosures and share register analysis conducted by Orient
Capital, the following shareholders have holdings of more than
3% in Petra’s issued share capital.
Shareholder
Percentage
of voting
rights held
The Terris Fund Ltd., SAC 29.49%
Azvalor Asset Management SGIIC SA 18.72%
José Manuel Vargas 8.75%
Vontobel Holding AG 6.11%
Franklin Templeton Investment Management Limited 5.03%
Shares in issue
There were a total of 194,201,785 Ordinary Shares in issue at
30 June 2024.
Company Bye-Laws
The Company is incorporated in Bermuda and the UK City Code
on Takeovers and Mergers (the City Code) therefore does not
apply to the Company. However, the Company’s Bye-Laws
incorporate material City Code protections appropriate for
a company to which the City Code does not apply.
The Bye-Laws also require that all Directors stand for re-election
annually at the Company’s Annual General Meeting.
The Bye-Laws of the Company may only be amended by a
resolution of the Board and by a resolution of the shareholders.
The Bye-Laws of the Company can be accessed here:
www.petradiamonds.com/ about-us/corporate-governance.
Share capital
The Company has one class of shares of 0.05 pence each
(the Ordinary Shares). Details of the Company’s authorised
and issued Ordinary Share capital together with any changes
to the share capital during the Year are set out in note 18 to
the Financial Statements.
Power to issue shares
At the AGM held on 14 November 2023 (the 2023 AGM),
authority was given to the Directors to allot Relevant Securities
(as defined in the Bye-Laws) up to a maximum aggregate nominal
amount of £32,366.96 (being 64,733,928 Ordinary Shares). The
Directors did not seek authority to allot any Relevant Securities
on a non-pre-emptive basis.
Share rights
In accordance with the Company’s Bye-Laws, shareholders have
the right to receive notice of and attend any general meeting of
the Company. Each shareholder who is present in person (or,
being a corporation, by representative) or by proxy at a general
meeting on a show of hands has one vote and, on a poll, every
such holder present in person (or, being a corporation, by
representative) or by proxy shall have one vote in respect of
every Ordinary Share held by them.
There are no shareholders who carry any special rights with
regard to the control of the Company.
The Company’s 2024 AGM will be held at 09.00am (GMT) on
Wednesday, 13 November 2024 at One Heddon Street, London
W1B 4BD. Details of the AGM are included in the accompanying
Notice of AGM.
Shareholder voting
The Company utilises a digital approach to voting and therefore
requests that all shareholders vote electronically. The Company
will not be sending paper proxy forms and, instead, shareholders
should vote either via the Shareholder Portal (www.signalshares.
com) or, for CREST holders, via the CREST network. You will
require your username and password in order to log in and vote
using the Shareholder Portal.
If you have forgotten your username or password, you can
request a reminder via the Shareholder Portal. If you have not
previously registered to use the Shareholder Portal, you will
require your investor code (IVC) which can be found on your
share certificate. Voting in this way is cost effective and efficient
and mitigates the risk of lost items via postal systems thus
ensuring your vote is received and recorded.
Standard financial calendar
Accounting period end 30 June
Annual Report published October
Annual General Meeting November
Interim accounting period end 31 December
Interim results announced February
172
Petra Diamonds Limited Annual Report and Financial Statements 2024
Restriction on transfer of shares
There are no restrictions on the transfer of Ordinary Shares
other than:
• The Board may at its absolute discretion refuse to register any
transfer of Ordinary Shares over which the Company has a lien
or which are not fully paid up provided it does not prevent
dealings in the Ordinary Shares on an open and proper basis
During the Year, the Board did not place a lien on any shares nor
did it refuse to transfer any Ordinary Shares.
The Board shall refuse to register a transfer if:
• It is not satisfied that all the applicable consents, authorisations
and permissions of any governmental body or agency in
Bermuda have been obtained
• Certain restrictions on transfer from time to time are imposed
by laws and regulations
• So required by the Company’s share dealing code pursuant to
which the Directors and employees of the Company require
approval to deal in the Company’s Ordinary Shares
• Where a person who holds default shares (as defined in the
Bye-Laws) which represent at least 0.25% of the issued shares
of the Company has been served with a disclosure notice and
has failed to provide the Company with the requested
information in connection with the shares
Repurchase of shares
The Company may purchase its own shares for cancellation or to
acquire them as Treasury Shares (as defined in the Bye-Laws) in
accordance with the Companies Act 1981 (Bermuda) on such
terms as the Board shall think fit. The Board may exercise all the
powers of the Company to purchase or acquire all or any part of
its own shares in accordance with the Companies Act 1981
(Bermuda), provided, however, that such purchase may not be
made if the Board determines in its sole discretion that it may
result in a non de minimis adverse tax, legal or regulatory
consequence to the Company, any of its subsidiaries or any
direct or indirect holder of shares or its affiliates.
Appointment and replacement of Directors
The Directors shall have power at any time to appoint any person
as a Director to fill a vacancy on the Board occurring as a result
of the death, disability, removal, disqualification or resignation of
any Director or to fill any deemed vacancy arising as a result of
the number of Directors on the Board being less than the
minimum number of Directors that may be appointed to the
Board from time to time.
The Company may by resolution at any special general meeting
remove any Director before the expiry of their period of office.
Notice of such meeting convened for the purpose of removing a
Director shall contain a statement of the intention to do so and
be served on such Director not less than 14 clear days before the
meeting and at such meeting the Director shall be entitled to be
heard on the motion for such Director’s removal.
A Director may be removed (with or without cause) by notice in
writing by all of their co-Directors, provided such notice is
delivered to the Secretary and such Director.
Financial instruments
The Group makes use of financial instruments in its operations as
described in note 29 of the Financial Statements.
Creditors’ payment policy
It is the Group’s policy that payments to suppliers are made in
accordance with those terms and conditions agreed between the
Group and its suppliers, provided that all terms and conditions
have been complied with.
Website publication
The Directors are responsible for ensuring the Annual Report
and the Financial Statements are made available on a website.
Financial Statements are published on the Company’s website in
accordance with legislation in the United Kingdom governing the
preparation and dissemination of Financial Statements, which
may vary from legislation in other jurisdictions.
The Company operates a website which can be found at
www.petradiamonds.com. This site is regularly updated to
provide relevant information about the Group. In particular all
of the Company’s regulatory announcements and public
presentations are made available and there is a dedicated
Investors section at www.petradiamonds.com/investors.
The maintenance and integrity of the Company’s website (as well
as the integrity of the Financial Statements contained therein) is
the responsibility of the Directors.
Shareholder enquiries
Any enquiries concerning your shareholding should be
addressed to the Company’s registrar. The registrar should be
notified promptly of any change in a shareholder’s address or
other details.
The Company also has a Frequently Asked Questions
section to assist shareholders available on its website at:
www.petradiamonds.com/ investors/shareholders/faqs.
Shareholder Portal
The Company has set up an online Shareholder Portal,
www.signalshares.com, which offers a host of shareholder
services online.
Investor relations
Requests for further copies of the Annual Report and
Accounts, or other investor relations enquiries, should be
addressed to the investor relations team in the London office
on +44 (0)784 192 0021 or investorrelations@petradiamonds.com.
eCommunications
Shareholders have the flexibility to receive communications from
Petra electronically, should they so choose, and can update their
preferences at any time either by contacting Link Group or by
logging in to the Shareholder Portal.
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Petra Diamonds Limited Annual Report and Financial Statements 2024
SUPPLEMENTARY INFORMATION
Share price information
The latest information on the Ordinary Share price is
available in the Investors section of the corporate website at
www.petradiamonds.com/investors/share-price. Closing share
prices for the previous business day are quoted in most daily
newspapers and, throughout the working day, time delayed
share prices are broadcast on the text pages of the principal
UK television channels.
Share dealing services
The sale or purchase of shares must be done through a
stockbroker or share dealing service provider. The London Stock
Exchange provides a ‘Locate a broker’ facility on its website
which gives details of a number of companies offering share
dealing services. For more information, please visit the Private
Investors section at www.londonstockexchange.com.
Please note that the Directors of the Company are not seeking
to encourage shareholders to either buy or sell shares.
Shareholders in any doubt about what action to take are
recommended to seek financial advice from an independent
financial adviser authorised pursuant to the Financial Services
and Markets Act 2000.
Shareholder security
Shareholders are advised to be wary of any unsolicited advice,
offers to buy shares at a discount, or offers of free reports about
the Company. Details of any share dealing facilities that the
Company endorses will be included in Company mailings or
on our website. More detailed information can be found at
www.fca.org.uk/consumers/scams/investment-scam.
SHAREHOLDER AND CORPORATE INFORMATION / CONTINUED
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Petra Diamonds Limited Annual Report and Financial Statements 2024
Glossary
“2023 AGM”
the Company’s Annual General Meeting for FY 2023, held on 14 November 2023
“2L Notes”
the Company’s senior secured second lien loan notes due in March 2026, of which a principal amount of
US$206 million remain outstanding
“Act”
the Bermuda Companies Act, 1981
“ADI”
Agribusiness Development Initiative, one of the RJPs being undertaken by Petra in the Mwadui community
“AGM”
Annual General Meeting
“alluvial”
deposits of diamonds which have been removed from the primary source by natural erosive action over
millions of years and eventually deposited in a new environment such as a river bed, an ocean floor or a
shoreline
“APM”
Alternative Performance Measure
“ARC”
the Audit and Risk Committee of the Company
“ASM”
artisanal small-scale mining
“BEE”
black economic empowerment, a policy of the South African Government to redress past economic
imbalances
“BEE Partners”
the Group’s black economic empowerment partners, who hold minority interests in the Group’s South
African operations, as set out in ‘BEE Structure’ at https://www.petradiamonds.com/about-us/who-we-are/
group-structure/
“beneficiation”
the refining of a commodity; in the case of diamonds, refers to the cutting and polishing of a
rough stone
“block cave”
a method of mining in which large blocks of ore are undercut so that the ore breaks and caves under its own
weight. The undercut zone is initially drilled and blasted and some broken ore is drawn down to create a
void into which initial caving of the overlying ore can take place. As more broken ore is drawn progressively
following cave initiation, the cave propagates upwards through the orebody or block until the overlying rock
also caves and surface subsidence occurs. The broken ore is removed through the production or extraction
level developed below the undercut level. Once the caves have been propagated, it is a low cost mining
method which is capable of automation to produce an underground ‘rock factory’
“Blocked Parcel” or
“Blocked Diamond
Parcel”
the parcel of diamonds (71,654.45 carats) blocked for export to Petra’s marketing office in Antwerp by the
Government of Tanzania, as announced by Petra on 11 September 2017
“bottom cut-off”
refers to the smallest size of recoverable diamond in a resource or reserve estimate that is considered
economic to extract. It is generally defined by the bottom screen aperture size of the diamond sample plant
used in a resource estimate, or the production plant considered in a reserve estimate
“BSI”
British Standards Institute
“BRICS”
grouping of Brazil, Russia, India, China and South Africa
“Bye-Laws”
the Company’s Bye-Laws, as adopted on 28 November 2011
“c.”
circa
“C-Cut”
the C-Cut area of the Cullinan Mine orebody
“C-Cut Extension”
Tunnels 46 and 50 plus the C-Cut Centre areas of the Cullinan Mine orebody
“CAGR”
compound annual growth rate
“Capex”
capital expenditure
“carat” or “ct”
a measure of weight used for diamonds, equivalent to 0.2 grams
“CC1-E”
the CC1 East area of the Cullinan Mine orebody
“CDM”
Cullinan Diamond Mine
“CDP”
Carbon Disclosure Project, a global disclosure system that enables companies, cities, states and regions to
measure and manage their environmental impacts
“CEO”
Chief Executive Officer
“CFO”
Chief Financial Officer
“City Code”
the UK City Code on Takeovers and Mergers
“Code”
the UK Corporate Governance Code 2018
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Petra Diamonds Limited Annual Report and Financial Statements 2024
SUPPLEMENTARY INFORMATION
GLOSSARY / CONTINUED
“conflict free”
ie not ‘conflict diamonds’, which are defined by the Kimberley Process as ‘rough diamonds used to finance
wars against Governments’
“COO”
Chief Operating Officer
“COVID-19”
COVID-19 is an infectious disease caused by the coronavirus
“Cpht”
carats per hundred metric tonnes
“Culture Code”
Petra’s Culture Code, consisting of icons representing enabling and disabling behaviours
“CY”
calendar year
“DMRE”
the South African Department of Minerals Resources and Energy
“double materiality”
a reporting term referring to how a business is affected by sustainability issues (outside-in) and how its
activities impact society and the environment (inside-out)
“drawpoint”
an opening through which ore from a higher level can fall and subsequently be loaded
“EBITDA”
earnings before interest, tax, depreciation and amortisation
“effluent”
mine effluent is a regulated discharge from a point source like a treatment plant or dam spillway
“EPS”
earnings per share
“ERM”
enterprise risk management
“ESD”
Enterprise and Supplier Development
“ESG”
environmental, social and governance
“Exceptional
Stones”
rough diamonds that sell for US$15 million or more each. This definition was updated for FY 2023 from US$5
million used historically
“Exco”
Executive Committee
“FDM”
Finsch Diamond Mine
“FRC”
the UK’s Financial Reporting Council
“FWA”
the Framework Agreement Petra entered into in December 2022 with the Government of Tanzania
“FY”
Petra’s financial year (1 July to 30 June)
“G7”
the intergovernmental political forum consisting of Canda, France, Germany, Italy, Japan, the United
Kingdom and the United States
“G&A”
general and administrative expenditure
“GAAP”
Generally Accepted Accounting Principles, issued by the Financial Accounting Standards Board
“GDP”
gross domestic product
“Genovia”
a software package designed specifically for the planning and scheduling of block cave mines
“GHG”
greenhouse gases
“GISTM”
Global International Standard on Tailings Management
“GoT”
Government of the United Republic of Tanzania
“Group”
Petra and its subsidiaries, jointly controlled operations and associates
“grade”
the content of diamonds, measured in carats, within a volume or mass of rock
“H1” or “H2”
first half, or second half, of the financial year
“Ha”
hectares
“HDSA”
historically disadvantaged South Africans
“hard rock”
hard rock diamond mining is based on kimberlite or lamproite primary orebodies, as opposed to alluvial
mining (ie deposits of diamonds which have been removed from the primary kimberlite source)
“HIV/AIDS”
human immunodeficiency virus infection and acquired immune deficiency syndrome
“HSE”
health, safety and environment
“IASB”
International Accounting Standards Board
“ICR”
interest cover ratio
“IFRIC”
International Financial Reporting Interpretations Committee
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Petra Diamonds Limited Annual Report and Financial Statements 2024
“IFRS”
International Financial Reporting Standards
“IGM”
the non-judicial independent grievance mechanism which will have the capacity to investigate and resolve
allegations of severe human rights violations in connection with security operations at Williamson in
Tanzania through an independent panel of Tanzanian experts applying Tanzanian law and with complainants
having access to free and independent advice from local lawyers
“IMF”
International Monetary Fund
“iNED”
independent Non-Executive Director
“Indicated
Resource”
that part of a resource for which quantity, grade or value, density, shape and physical characteristics of the
deposit are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient
detail to support mine planning and evaluation of the economic viability of the deposit
“Inferred Resource”
that part of a diamond resource for which quantity, grade and average diamond value are estimated on the
basis of limited geological evidence and sampling. Geological evidence is sufficient to imply, but not verify,
geological and grade continuity
“inventory”
diamonds held with the ultimate goal of resale
“IPDET”
Itumeleng Petra Diamonds Employee Trust, which is a registered trust holding a 12% interest in each of
Petra’s South African operations, through which the current and certain former employees (with some
exceptions in both cases) of Petra’s South African operations participate
“IRR”
internal rate of return
“ISO”
International Standards Organisation
“ISO 14001”
an international standard on environmental management administered by the ISO; it specifies a framework
of control for an Environmental Management System against which an organisation can be certified by a
third party
“KEM JV”
former joint venture; Petra disposed of its interest in KEM JV during FY 2019
“Kimberley Process”
the Kimberley Process is a joint government, industry and civil society initiative to remove conflict diamonds
from the global supply chain
“KPCS”
Kimberley Process Certification Scheme
“kimberlite”
an ultramafic igneous rock consisting mainly of olivine, often with phlogopite mica and pyroxenes. Kimberlite
is generated at great depth in the Earth’s mantle, and may or may not contain diamonds
“KDM”
Koffiefontein Diamond Mine
“KPI”
key performance indicator
“LED”
local economic development
“LGD”
laboratory/lab-grown diamond
“like-for-like”
refers to the change in realised diamond prices between tenders and excludes revenue from all single
stones and Exceptional Stones, while normalising the product mix impact
“Loan Notes”
the Company’s senior secured second lien loan notes due in March 2026, of which a principal amount of
US$206 million remain outstanding
“LOM”
life-of-mine
“LTI”
lost time injury; a work-related injury resulting in the employee/contractor being unable to attend work on
the day following the injury
“LTIFR”
lost time injury frequency rate; the number of LTIs multiplied by 200,000 and divided by the number of hours
worked
“Mcts”
million carats
“Measured
Resource”
that part of a resource for which quantity, grade or value, density, shape and physical characteristics of the
deposit are estimated with sufficient confidence to allow the application of Modifying Factors to support
detailed mine planning and final evaluation of the economic viability of the deposit
“midstream”
refers to the segment of the diamond industry involved in cutting, polishing and manufacturing activities
“Minerals Council
SA”
the Minerals Council of South Africa
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Petra Diamonds Limited Annual Report and Financial Statements 2024
SUPPLEMENTARY INFORMATION
“Mining Charter”
the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry in South
Africa, commonly known as the Mining Charter, has a core objective to facilitate meaningful participation of
HDSAs in the mining industry, by deracialising the ownership of the industry, expanding business
opportunities for HDSAs, and enhancing the social and economic welfare of employees and mine
communities
“Modifying Factors”
considerations used to convert mineral resources to mineral reserves. These include, but are not restricted
to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and
governmental factors
“MOU”
the Memorandum of Understanding entered into by Petra in December 2021 with Caspian Limited
“MPRDA”
the Mineral and Petroleum Resources Development Act, 28 of 2002 of the Republic of South Africa
“Mt”
million tonnes
“Mtpa”
million tonnes per annum
“NDC”
Natural Diamond Council
“NED”
Non-Executive Director
“NGO”
non-governmental organisation
“NPV”
net present value
“NUM”
National Union of Mine Workers in South Africa
“NEMA”
the National Environmental Management Act of the Republic of South Africa
“NEMC”
the National Environmental Management Council, Tanzania
“OECD”
Organisation for Economic Co-operation and Development
“OFCF”
operational free cashflow
“open pit”
mining in which ore that occurs close to the Earth’s surface is extracted from a pit or quarry
“Opex”
operating costs
“Ordinary shares”
ordinary shares of 0.05 pence each in Petra’s share capital
“orebody”
a continuous well-defined mass of material of sufficient ore content to make extraction feasible
“pa”
per annum
“Paterson A, B and
C-Low Bands”
the Paterson grading system is an analytical method of job evaluation, used predominantly in South Africa,
and is comprised of grades A to F, with A being the lowest skilled and F being the highest
“Period”
1 July 2023 to 30 June 2024
“PIK”
payment in kind. In relation to a bond, loan note or debt instrument, if an instrument is PIK, it means that its
interest is satisfied by issuing further bonds rather than being settled in cash. Until 30 June 2023, the
interest payable on Petra’s Loan Notes is PIK
“PRF”
Plant Recovery Factor
“Probable
Reserves”
the economically mineable part of an indicated, and in some circumstances, a measured diamond resource
“Proved Reserves”
the economically mineable part of a measured resource
“PSP”
Performance Share Plan
“Q”
quarter of the financial year
“RCF”
Revolving Credit Facility
“rehabilitation”
the process of restoring mined land to a condition approximating to a greater or lesser degree its
original state
“Restructuring”
the capital restructuring carried out by the Group and completed in FY 2021
“RJC”
Responsible Jewellery Council
“RJPs”
Restorative Justice Projects
“ROM”
run-of-mine, relating to production from the primary orebody
“Rough Diamond
Price Index”
the Zimnisky Global Rough Diamond Price Index was created to consolidate reliable natural rough diamond
price information and publish the current price change of natural rough diamonds on a weekly basis in the
form of an index
GLOSSARY / CONTINUED
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Petra Diamonds Limited Annual Report and Financial Statements 2024
“SAMREC”
South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves
“SDGs”
the United Nations Sustainable Development Goals
“SED”
social, ethics and diversity
“SEP”
stakeholder engagement plan
“Severity Rate”
indicates the severity of work-related injuries (number of days lost due to injuries) where individuals were
booked off from work impacting on workforce effectiveness. The rate calculus is as follows: number of days
off from work due to injury x 200 000 ÷ total man-hours worked
“shaft”
a vertical or inclined excavation in rock for the purpose of providing access to an orebody. Usually equipped
with a hoist at the top, which lowers and raises a conveyance for handling workers and materials
“SIA”
Social Impact Assessment
“SIB capex”
staying-in-business capex
“SID”
Senior Independent Director
“SLC”
sub-level cave
“SLP”
social and labour plans
“slimes dam”
an embankment dam, usually created from waste material, used to store sand-like fines residue (less than
1mm) waste products from mining operations
“SMMEs”
small, medium and micro enterprises
“SRM”
stakeholder relationship management
“stockpile”
a store of unprocessed ore
“stripping”
the removal of waste overburden at an open pit mine
“sub-level cave”
follows the same basic principles as the block caving mining method; however, work is carried out on
intermediate levels and the caves are smaller in size and not as long lasting. This method of mining is quicker
to bring into production than block caving, as the related infrastructure does not require the level of
permanence needed for a long-term block cave. This method is used to supplement block caving in order to
provide production flexibility
“TAMICO”
the Tanzania Mines, Energy, Construction and Allied Workers Union
“tailings”
material left over after processing ore
“TB”
tuberculosis
“TCFD”
Task Force on Climate-related Financial Disclosures
“tCO
2
-e/ct”
tonnes of CO
2
equivalent per carat produced
“tender”
Petra sells all its rough diamond production by method of open tender
“TIFR”
total injury frequency rate
“tonnage”
quantities where the tonne is an appropriate unit of measure, typically used to measure reserves of target
commodity bearing material or quantities of ore and waste material mined, transported or milled
“TPF”
Tanzanian Police Force
“TSF”
tailings storage facility
“TSR”
total shareholder return
“Tunajali
Committee”
a sub-committee of the Board comprised of independent NEDs which was established for the purpose of
carrying out the independent investigation into the allegations of human rights abuses at Williamson in
Tanzania and disbanded in May 2021 upon the conclusion of the investigation
“Tunnel Availability”
Availability of a tunnel to be blasted in a sub-level cave. Tunnels become available once they have been
cleared of ore and waste, made safe and drilled in preparation for blasting
“Type II diamonds”
Type II diamonds have no measurable nitrogen impurities, meaning they are often of top quality in terms of
colour and clarity. Type IIa diamonds make up 1–2% of all natural diamonds. These diamonds are almost or
entirely devoid of impurities, and consequently are usually colourless. Many large famous diamonds, such as
the Cullinan and the Koh-i-Noor, are Type IIa. Type IIb diamonds make up about 0.1% of all natural diamonds.
In addition to having very low levels of nitrogen impurities comparable to Type IIa diamonds, Type IIb
diamonds contain significant boron impurities which is what imparts their blue/grey colour. All blue diamonds
are Type IIb, making them one of the rarest natural diamonds and very valuable.
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SUPPLEMENTARY INFORMATION
GLOSSARY / CONTINUED
“underground pipe
mines”
Petra’s underground kimberlite pipe mines, being Cullinan Mine, Finsch and Koffiefontein
“US$”
US Dollar
“UK Companies
Act”
the United Kingdom Companies Act, 2006
“VPSHR”
the Voluntary Principles on Security and Human Rights
“waste ingress”
waste and fines (fine grained kimberlite waste which has the tendency to flow uncontrollably) that are channelled
from highly depleted areas of the previous mining levels prematurely into new lower loading points
“ W DL”
Williamson Diamonds Limited, the owner and operator of Williamson in Tanzania
“Wheeling”
the process of transporting electricity from a generator to a consumer in a difference location using an
existing transmission or distribution system
“ W iL”
Women in Leadership
“Year”
1 July 2023 to 30 June 2024
“ZAR”
South African Rand
180
Petra Diamonds Limited Annual Report and Financial Statements 2024
Group Management Office
ONE HEDDON STREET
LONDON W1B4BD
UNITED KINGDOM
TEL: +44 (0)784 192 0021
EMAIL: INVESTORRELATIONS@PETRADIAMONDS.COM
WWW.PETRADIAMONDS.COM
Company Secretary
RUPERT ROWLAND-CLARK
EMAIL: COMPANYSECRETARY@PETRADIAMONDS.COM
South African Office
Physical Address
SILVER POINT OFFICE PARK, BLOCK 3,
22 EALING CRESCENT, BRYANSTON, 2021,
JOHANNESBURG, SOUTH AFRICA
Postal Address
P.O. BOX 71007
BRYANSTON
2021
SOUTH AFRICA
Contact Details
TELEPHONE: +27 11 702 6900
FAX: +27 11 706 3071
EMAIL: INFO@PETRADIAMONDS.COM
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PETRA DIAMONDS LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2024