Petra Diamonds share price sparkles as fears over refinancing plan recede
Petra Diamonds enjoyed a double-digit surge in its share price today, as the troubled mining group eased investor jitters over its cash strategy.
Fears of a new equity financing plan sent the firm’s stock value to new lows last week, falling below 10p on London’s Stock Exchange.
Read more: Petra Diamonds aims to be cash flow positive despite falling production
Yet the precious metals and mining group’s announcement today that it will not be considering raising equity drove a 20 per cent spike in its share price.
Richard Duffy, chief executive of Petra Diamonds, said: “We are executing our plans and delivering to budget as we launch Project 2022. We expect that this will deliver significant incremental cashflow over the next three years, further improve our net debt position and provide us with future growth options.”
Waning demand and increasingly difficult access to credit has hit the South African-focused group in recent months.
Over the last 12 months Petra’s share price has crashed by almost 80 per cent.
Earlier this month the firm posted lower-than-expected revenue and warned that next year’s production would be slightly lower.
Read more: Ultra-clear carat cut diamond sets new record in London
Fellow diamond maker De Beers also underlined the industry’s current troubles last week when it posted a 27 per cent fall in diamond earnings during the first half of the year, blaming trade tensions between the US and China.