That’s the performance of Petra Diamonds over the past year.
The Aim-listed company, which has operations in South African and Tanzania, is now valued at almost $1bn and is looking to take advantage of its strong run by issuing at least $300m of new shares.
The proceeds will be used to acquire further assets from De Beers and finance the company’s ambitious expansion plans.
In December 2009, Petra raised $120m through a share issue in order to take full ownership of Cullinan, a former De Beers mine outside Johannesburg, which accounts for the bulk of the company’s production and sales.
Canaccord Genuity is said to be organising the latest fund raising.
Petra’s chief executive Johan Dippenaar is aiming to double production to more than 2.5m carats by 2014, and in the process make Petra the world’s biggest independent diamond producer by carats.
By 2019, Dippenaar wants to further increase output to well over 3m carats. Petra has a resource base of 261m carats.
Last week, Petra reported a 5.3 per cent decline in output for the six months to December but said demand had remained robust and that it was on track to met guidance of 1.3m carats:
The fundamentals of the rough diamond market remain robust and we anticipate continued strength in rough prices for at least the first six months of 2011. This trend will be enhanced should 2011 mark a return to global inflation and growth, given that diamonds are characterised as a late-cycle commodity play.
Rough diamond prices have risen sharply in the past couple of years. The WWW Diamond Forecasts Rough Diamond Index ended 2010 at 230:
And in a recent note, Canaccord said prices could remain high into 2012:
We are increasing our diamond price forecasts for Petra Diamonds, as we increase our rough diamond index forecasts globally. Our changes to index prices are shown in Figure 4. Generally, we expect to see higher peak prices (circa 245 index level) that may persist into 2012, prior to a moderation from what will be, by then, three years of price increases. We have increased our long-term index levels to 200 from 190, but continue to warn that these prices may settle materially higher.
It would appear investors agree because the demand for the placing is said to be strong.
A spokesman for Petra refused to comment.
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