London-listed Petra Diamonds has embarked on an immediate cost and capital expenditure (capex) reduction assessment to preserve liquidity across the group and is considering suspending further capex at its Finsch mine in South Africa, owing to cost pressures.

In an operational update to shareholders for the quarter ended March 31 – the third quarter of Petra’s 2026 financial year – the group notes that while sales for the period increased to $68-million, supported by the sale of a 41.82 ct Type IIb blue diamond, pricing remains under pressure especially across the smaller size fractions within the product mixes at both the mines.

Tenders also experienced headwinds as a result of the Middle East conflict, which led to travel disruptions.

The rand also strengthened during the quarter, averaging R16.34 to the dollar, adding further pressure to cash generation. Net debt also increased to $298-million at period-end from $284-million as at December 31, 2025, with the group’s revolving credit facility fully drawn.

Petra is assessing the current financial situation of the Finsch mine and the related implications of its financial situation, with this expected to be finalised during the course of May.

Depending on the outcome of the assessment, Petra will consider all options, including, but not limited to, operational cost cutting and other measures in respect of Finsch.

The completion of the assessment may also take considerably longer than the group currently anticipates, it warns.

Meanwhile, at the group’s Cullinan mine – also in South Africa – Petra has suspended the production guidance for the full-year. Owing to work under way to revise operating plans, Petra does not expect to achieve the previously communicated full-year carat production guidance.

Further to optimising operating expenditure and capex at Cullinan, Petra shifted focus to maximising production from the areas of the orebody – the Eastern areas of the C-Cut – that are known to contain high-value Type-II diamonds.

This decision has been taken to ensure the product mix at Cullinan mine is able to withstand the ongoing weakness in the smaller size fractions through the recovery of high-value Type-II diamonds.

“We are also evaluating the appropriate capital profile for Cullinan mine, recognising the need to balance liquidity protection with future production resilience,” interim joint CEOs Vivek Gadodia and Juan Kemp said.

They highlighted a steady operational performance for the March quarter, with the Finsch mine performing largely to plan while the Cullinan mine focused on recovering from previously announced weather-related disruptions.

Ore processed reduced by 4% quarter-on-quarter to 1.5-million tonnes, with performance at the Cullinan mine impacted by power interruptions owing to adverse weather and the deterioration of underground road conditions owing to water ingress, impacting machine availability and reliability.

Run-of-mine grade performance at Finsch continued to improve.