Petra Diamonds stock took another plunge following its announcement that the Williamson mine in Tanzania would stay closed for longer than the initial three months it predicted.
Shares in the company fell 4% in early trading and were down 17% since Petra revealed earlier this month that a broken tailings storage wall had caused a flood that would shut down production.
After a review by a team of technical specialists, the miner now believes output at the deposit will not resume until the middle of next year. The cause of the wall breach has not been determined and will require further investigation. Petra will not know the full cost of repair, nor the necessary closure time, until that process is complete. However, it revealed that initial indications were between six and 12 months. The company is now weighing whether to continue building a new storage facility or to repair the broken one.
“It is now expected that this new tailings storage facility will take longer than initially anticipated to become operable,” Petra said. “As a result of the additional work required to progress these long-term solutions, interim deposition options are being developed that may enable the Williamson mine to resume production around the middle of 2023.”
The company is considering additional sources of financial support during the closure, including discussions with the government of Tanzania regarding the sale of a parcel of rough diamonds that had originally been seized but was returned in December 2021, it said.
Image: A truck transporting ore at the Williamson mine. (Petra Diamonds)
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