Jan 29 (Reuters) - South Africa-focused miner Petra Diamonds lowered its full-year production target by about 7 percent, citing volatility of recovered grades, particularly at its Finsch and Cullinan mines.
Petra said it to expects to produce about 2.65 million carats for the year ending June 30, down from its previous forecast of 2.85 million carats.
The company said the management of run-of-mine grades, which is the raw mined material as it is delivered and prior to any treatment, specifically at Finsch and Cullinan remained a challenge due to the mature nature and dilution of current mining areas.
“As a result, volatility in recovered run-of-mine grades at these two operations can be expected until such time as new mining areas have been accessed and deliver undiluted ore to the production profile from (fiscal year) 2015 onwards,” the miner said.
Production rose 31 percent to 1.25 million carats for the six months ended Dec. 31, mainly due to the inclusion of output from the Finsch mine it acquired in 2011.
Petra bought the Finsch mine - South Africa’s second largest diamond operation by production - from De Beers.
Petra said its production target of 5 million carats per annum by fiscal 2019 remained on track.
Shares in the company were down about 5 percent at 114.17 pence in early trading on Tuesday morning on the London Stock Exchange.