Petra Diamonds Limited - Q1 FY 2027 Business, Strategic Review and Operating Update

Petra Diamonds Limited - Q1 FY 2027 Business, Strategic Review and Operating Update

PR Newswire

LONDON, United Kingdom, November 04

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

04 November 2026

LSE: PDL

Petra Diamonds Limited

(Petra or the Company)

Q1 FY 2027 Operating Update

Entry into Binding Advance Payment Agreement

Business and Strategic Review Update

Vivek Gadodia, Chief Executive Officer of the Company, commented:

"The first quarter of the Year has been a truly challenging time for the Company, with the market remaining weak, the S189A process at Cullinan Mine and the rest of Group, and the implementation of the Business Rescue process at Finsch, all of which have been managed against a very tight balance sheet. Of note, despitethese headwinds, production from underground areas at Cullinan Mine was down only 3% quarter on quarter, notwithstanding productivity impacted by the S189A process, maintenance related downtime, as well as the broader uncertainty surrounding the Company and the diamond sector. Overall production was down 5% quarter on quarter as a result of tailings processed during Q1 FY 2027 being 14% lower quarter on quarter.

The Company announced the commencement of a Strategic Review at the beginning of October, which is underway. The Strategic Review can be summarised as concurrently progressing three distinct workstreams - short-term liquidity support, a consensual refinancing, and/or a sale of the Company's assets, with a view to maximising the possible outcomes for the Company's stakeholders.

The Company has reached several important milestones in recent weeks The S189A process has concluded, which is expected to result in sustainable annualised savings of c. US$3 million. As part of the first workstream of the Strategic Review, a binding Advance Payment Agreement has been agreed for future run-of-mine production to provide immediate short-term liquidity support as well as a Forbearance Period being agreed with our Senior Secured Lender, which provides the Company with the platform to progress the other workstreams within the Strategic Review process.

Overall, the diamond sector remains at historic low levels, but with robust demand for high value stones. There appeared to be a cautious but uneven bottoming of the overall market towards the end of September, with prices on smaller goods also seeing some improvement against prices from June/July. The Company realised average prices of US$63/ct (compared to US$76/ct for the previous quarter). Management consider this to be largely attributable to a weaker product mix.

The Company will continue to focus on mining areas of the Cullinan Mine that have the maximum potential for high value stones. Management expect improvements to both product mix and grade from November onwards following conclusion of the S189A process, completion of scheduled maintenance during Q1 FY 2027 within the C-Cut as well as sourcing of some critical mining equipment that began to arrive at the Cullinan Mine from October onwards.

The Company also announced on 22 October that due to delays in auditing the Group's financial statements for the financial year ended 30 June 2026, it was unable to publish its results before the 31 October 2026, which has resulted in the suspension of the listing of and trading in the Company's shares. In addition, Euronext Dublin has confirmed by announcement on 2 November 2026 a temporary suspension of listing and trading of the second lien notes due 2030 issued by Petra Diamonds US$ Treasury plc, which is an automatic consequence of such delays. The Company intends to seek restoration of listing and resumption of trading of its shares and second lien notes, following publicationofthe Group's audited financial statements for the financial year ended 30 June 2026.The audit work remains ongoing in order to complete the publication of the financial results as soon as possible, alongside the Company's continuing discussions with potential finance providers.

The Company would like to thank its employees for the tremendous resilience and fortitude displayed during perhaps the most challenging time experienced both by the Company and the diamond sector as a whole, especially in South Africa. In addition, the Company would also like to thank all its stakeholders, including its shareholders and lenders for the on-going support in helping the Company as it seeks to navigate through these challenges."

Q1 FY 2027 Salient Points

• LTIFR increased to 0.69 and LTIs to 3 (Q4 FY 2026: 0.43 and 2 respectively)

• Underground ore processed decreased by 3% at Cullinan Mine compared to Q4 FY 2026, mainly attributed to the S189A process which impacted shift patterns, as well as availability of mining equipment and planned maintenance, which was completed during the quarter. Tailings processed was lower by 14% quarter on quarter, largely due to increased tailings processed during Q4 FY 2026

• Total revenue amounted to US$21 million (Q4 FY 2026: US$30 million) from 329,948 carats sold (Q4 FY 2026: 395,005 carats), with an average price of US$63/ct (Q4 FY 2026: US$76/ct). Average diamond prices for the period decreased c. 18% compared to Q4 FY 2026 due to a weaker product mix and lower occurrence of Type II diamonds

• The South African Rand strengthened during the quarter, averaging ZAR16.20:US$1 (Q4 FY 2026: ZAR16.47:US$1)

• Bank loans and borrowings, including accrued interest and deferred transaction costs, represent the Company's ZAR1.75 billion (US$107 million) revolving credit facility (RCF). As at 30 September 2026, the RCF had been fully drawn

• In July 2026, the Group secured an additional R300 million (approximately US$18 million) working capital facility from Absa Bank under its existing banking arrangements. The facility has an 18-month term, maturing in January 2028. This additional facility of R300 million is currently fully drawn

• Consolidated net debt increased to US$348 million as at 30 September 2026 (30 June 2026: US$322 million). Unrestricted cash on hand of US$7 million as at 30 September 2026 (30 June 2026: US$9 million)

• The Business Rescue practitioners continue to implement the Business Rescue Plan at Finsch

• Litigation against the Company's former Head of Sales & Marketing is ongoing, with a first instance decision in Dubai finding in favour of the Company's claim of breach of contract and making an award of c. US$2.1 million. The Company intends to take steps to obtain final judgement, enforce this award and pursue available claims

Post Period

• A strategic review commenced on 1 October to address liquidity needs of the business: binding Advance Payment Agreement executed and Senior Secured Lender Forbearance Period agreed

• Following a hearing on 14 October, a UK court made a winding-up order in respect of Petra Diamonds UK Treasury Limited, a wholly owned, indirect subsidiary of the Company regarding £5,647,811.32 for FY2025 due to HMRC in relation to corporation tax. Further updates will be provided as and when appropriate

Amre Youness, who had the right to attend meetings of the Board of the Company, has informed the Chair that he will not attend any future meetings. The Board wishes to express its gratitude to Amre for his longstanding and continued support for the Company.

Updates on Strategic Review

A strategic review was announced on 1 October 2026 which includes the consideration of all potential paths to address liquidity needs of the business, continue discussions for a refinancing of the Company, while also assessing any potential sale of the Company's assets with a view to maximising the possible outcomes for the Company's stakeholders.

This process continues to progress, with the immediate objective being injection of further working capital liquidity in order to continue operations at the Cullinan Mine which has been secured as detailed below.

Advance Payment Agreement and Senior Secured Lender Forbearance

The Company announces that its subsidiary, Cullinan Diamond Mine Proprietary Limited ("Cullinan Mine"), has entered a binding Advance Payment Agreement with a mid-stream diamantaire group ("Offtaker"). The Offtaker will make available at least US$20 million through revolving advance payments for all future run-of-mine production. The conditions and commercials attached with this facility are in line with other agreements of this type. Cullinan Mine may terminate this agreement at any time without penalty, provided that any outstanding amounts are settled in full.

Concurrently, and as a condition to the Advance Payment Agreement, Petra has also agreed a forbearance and consent letter with its Senior Secured Lender ("Forbearance"), pursuant to which the Senior Secured Lender will not take enforcement action on specified defaults until the earlier of 12 months from the date of the letter or full repayment of any outstanding amounts under the Advance Payment Agreement, subject to certain ongoing conditions being met.

Together, the Advance Payment Agreement and the Forbearance provide near-term liquidity and stability for Petra and Cullinan Mine whilst it continues to progress its strategic review to find a long-term financing solution.

S189A at Cullinan Mine and rest of Group

As previously announced, on 28 July 2026, the Company launched a Section 189A labour restructuring process during Q4 FY 2026. This process resulted in extensive engagements over the past 3-4 months, resulting in a conclusion achieved during October 2026. As a result of the process, regrettably, 25 positions have been made redundant and certain variable cost reductions have been implemented. The outcome of the S189A process is expected to result in c. US$3m in annualised sustainable savings.

The Company is now focused on moving on from the challenges of the S189A process, and re-orientating the workforce towards improving production and safety performance achieved during Q1 FY 2027.

Litigation against the Company's former Head of Sales & Marketing

Earlier this year, the Company commenced claims, including in South Africa and Dubai, against its former Head of Sales & Marketing on the basis that, while employed, he was believed to have established and operated a competing business using knowledge, contacts and opportunities acquired through his employment within the Company's group.

In September of this year, in Dubai, a Court of first instance found in favour of the Company, against its former Head of Sales & Marketing ("the First Defendant") and a company established by him, Noble Star DMCC ("the Second Defendant", and together "the Defendants"), finding that the Defendants committed acts of unlawful competition through the First Defendant's establishment of the Second Defendant, which carried on similar business activity and operated in a similar market during the period of his employment within the Company's group.

The Court found that this constituted a contractual breach by the First Defendant and a tortious wrongful act by the Second Defendant and made an award of AED 7,764,544 in favour of the Company, being worth approximately US$2.1 million as at today's date. The Company intends to take steps to obtain final judgement, enforce this award and pursue available claims. Further updates will be shared, as appropriate.

Updates on the Business Rescue Process at Finsch

As previously announced, on 7 August 2026, the Business Plan presented by the Business Rescue Practitioners was adopted. Progress has been made since then, with the following main elements to note:

1. Recovery of underground movable assets nearly complete, with a view to completing all underground operations as soon as possible.

2. Asset sales have commenced, with over 3000 lots catalogued for disposal largely through the auction route, with these auctions underway with the speed of auctions governed by the applicable Mine Health and Safety Act.

3. A skeleton crew continues to work under the custodianship of the Business Rescue Practitioners to implement the Business Plan.

4. A S189A process was initiated and completed, with a retrenchment agreement signed on 14 of October 2026, which resulted in the retrenchment of all employees at Finsch, with the skeleton crew continuing to help implement the approved Business Plan, and who will also exit once the work is completed.

The Business Rescue Practitioners continue to progress the Business Plan, with the immediate focus on completing the underground activities and progressing the asset sales. Further updates will be provided on material developments going forward.

Operating Summary

	Unit	FY 2027	FY 20261
		Q1	Q4	Var.	Q1	Var.	12 months
Safety
LTIFR	Rate	0.69	0.43	+60%	0.23	+200%	0.35
LTIs	Number	3	2	+50%	1	+200%	6
Sales
Diamonds sold	Carats	329,948	396,398	-16%	278,968	+18%	1,399,474
Revenue2	US$m	21	30	-31%	36	-43%	149
Production
ROM tonnes	Mt	866,978	894,762	-3%	959,257	-10%	3,814,819
Tailings and other tonnes	Mt	195,135	227,535	-14%	154,756	+26%	778,455
Total tonnes treated	Mt	1,062,133	1,122,297	-5%	1,114,013	-5%	4,539,274
ROM diamonds	Carats	230,680	271,628	-15%	286,897	-20%	1,174,433
Tailings and other diamonds	Carats	60,837	67,622	-10%	43,586	+40%	224,171
Total diamonds	Carats	291,517	339,250	-9%	330,483	-12%	1,398,604

1 FY26 numbers exclude Finsch

2Revenue reflects proceeds from the sale of rough diamonds and excludes revenue from profit share arrangements

LTIFR and LTIs increased to 0.69 and 3 respectively, from 0.43 and 2 in Q4 FY 2026. The increase is associated with recent organisational restructuring initiatives, with approximately 66% of LTIs linked to behavioural factors, specifically inadequate risk awareness and hazard recognition. This highlights the need for strengthened safety leadership, engagement, and risk awareness interventions during periods of organisational change.

Production at Cullinan Mine during the quarter was down compared to the previous quarter. This was largely as a result of scheduled maintenance and a breakdown, which resulted in non-availability of two crushers servicing the C-Cut during September and into October, which impacted both the product mix as well as the grade. Availability of critical mining equipment also played a role in delaying planned ramp-up production from the CC1E. The delays in procuring critical mining equipment were as a direct result of cash management steps, which resulted in deferring procurement of critical mining equipment. Despite these challenges, as well as the morale and productivity dips related to the S189A process for the entirety of the quarter, underground ROM production was down only 3% quarter on quarter. Tailings production was down by 14% quarter on quarter, largely because Q4 FY2026 saw enhanced tailings processing.

We expect improvements in both product mix and grade, which should improve the carats produced from underground from November onwards, with critical mining equipment arriving at Cullinan Mine from October, with continued deliveries in November, as well as the completion and re-operationalisation of the C-Cut crushers.

Q1 FY 2027 sales results

Diamond sales for Q1 FY 2027 was US$21 million from 329,948 carats. Average prices decreased c. 18% compared to Q4 FY 2026. Rough diamond sales results for the respective periods are shown below.

Cullinan Mine?	Unit?	FY 2027	FY 2026	Var?	FY 2026		FY 2026
?		Q1	Q4		Q1	Var?
Revenue,?US$m?	US$m?	21	30	(31.4%)	36	(42.6%)	149
Diamonds Sold?	cts?	329,948	396,398	(16.8%)	278,968	18.3%	1,399,474
Average $/ct?	US$/ct?	63	76	(17.7%)	130	(51.6%)	106

Overall, the markets showed some signs of bottoming out in August and September, with good demand for the coarser higher valued goods. The Cullinan Mine, experienced a period of depressed product mix through the quarter, largely due to the challenges noted above, where Cullinan Mine was not able to maximise production from the intended production areas as a result of unavailability of two crushers and a delay in delivery of critical mining equipment.

FURTHER INFORMATION

There is no certainty as to the outcome of the Strategic Review. The Board will make further announcements in due course.

The person responsible for releasing this announcement is Tumi Dakada, General Counsel and Company Secretary of the Company.

For further information please contact:

Investor Relations, London

Julia Stone Telephone: [phone]

Kelsey Traynor

[e-mail]

Notes:

The following definitions have been used in this announcement:

1. cpht: carats per hundred tonnes
2. LTIs: lost time injuries
3. LTIFR: lost time injury frequency rate, calculated as the number of LTIs multiplied by 200,000 and divided by the number of hours worked
4. FY: financial year ending 30 June
5. CY: calendar year ending 31 December
6. Q: quarter of the financial year
7. ROM: run-of-mine (i.e. production from the primary orebody)
8. m: million
9. Mt: million tonnes
10. Mcts: million carats
11. period: the first quarter of FY 2026
12. Preceding Period: Q4 FY 2025
13. Prior Period: Q1 FY 2025

About Petra Diamonds Limited

Petra Diamonds is a leading independent diamond mining group and a supplier of gem quality rough diamonds to the international market. The Company's portfolio incorporates interests in two underground mines in South Africa (Cullinan Mine and Finsch). The Group's principal operating asset is Cullinan Mine. Finsch entered business rescue on 29 May 2026.

Petra strives to conduct all operations according to the highest ethical standards and only operates in countries which are members of the Kimberley Process. The Company aims to generate tangible value for each of its stakeholders, thereby contributing to the socio-economic development of its host countries and supporting long-term sustainable operations to the benefit of its employees, partners and communities.

Petra is quoted on the Main Market of the London Stock Exchange under the ticker 'PDL'. The Company's loan notes, due in 2030, are listed on EuroNext Dublin (Irish Stock Exchange). For more information, visit www.petradiamonds.com.

Corporate and financial summary as at 30 September 2026

	Unit	As at 30 Sept 2026	As at 30 June 2026	As at 31 March 2026	As at 31 Dec 2025	As at 30 Sept 2025
Total cash at bank1,2	US$m	26	?28	34	55		46
Diamond debtors	US$m	1	3	21	-		2
Diamond inventories3	US$m Carats	9 160,110	14 207,646	29 434,182	46 608,217		44 468,733
2030 Loan Notes4	US$m	249	243	251	246		n/a
2026 Loan Notes4	US$m	n/a	n/a?	n/a	n/a		233
Bank loans and borrowings5	US$m	126	109	102	92		102
Consolidated Net Debt6	US$m	348	322	298	284		287
Bank facilities undrawn and available5	US$m	-	-?	-	11		-

Notes:

1. The following exchange rates have been used for this announcement: average for Q1 FY 2027 US$1: ZAR16.20 (FY 2026: US$1: ZAR18.15); closing rate as at 30 September 2026 US$1: ZAR16.42.
2. The Group's cash balances comprise unrestricted balances of US$7 million, and restricted balances of US$19 million.
3. Recorded at the lower of cost and net realisable value.
4. The 2030 Loan Notes have a carrying value of US$249?million which?represents?the nominal value of US$228 million, plus fair value adjustments at modification date in terms of IFRS 9 and net of any unamortised transaction costs capitalised which were incurred during the Refinancing completed during November 2025.??The 2026 Loan Notes?represent?the gross capital of US$228 million (including PIK), plus?accrued?and unpaid interest for the relevant periods, up to the refinancing date.
5. Bank loans and borrowings represent the Group's ZAR1.75 billion (US$107 million) revolving credit facility and ZAR300 million (US$18 million) additional facility granted in July 2026, including accrued interest of US$6 million, less repayments of US$5 million. As at 30 September 2026, both the revolving credit facility and the additional facility were fully drawn.
6. Consolidated Net Debt is bank loans and borrowings plus loan notes, less cash and diamond debtors.