Petra Diamonds said it had secured new credit to help it cover the volatile price of gems and the South African Rand.
The firm said the $25m credit facility agreement with IFC, a member of the World Bank Group, was secured against its Finsch diamond mine in South Africa.
The new facility is in addition to the R300m debt - around $36.9m - it already has with Rand Merchant Bank.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"Given the lead times between the group's now larger diamond tenders (post the acquisition of the Finsch mine) and the volatility experienced over the last 12 months of both the Rand and diamond prices, these new revolving credit facilities provide Petra with additional scope and flexibility to execute its capital expenditure programme and bring the company's stated production and revenue growth opportunities to account," it said.
The firm said the combined credit would strengthen Petra's financial position and its ability to roll out expansion plans and ramp up production to over 5m carats per annum by 2019.
The company has already announced it is in discussions with its bankers with regards to a longer term restructure of the group's debt.
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
