Good morning, everybody, and thank you for joining us today for a discussion of our H1 FY 2022 trading update, where we will take you through our production and sales for the six months ending 31 December 2021. I'm Richard Duffy, the CEO, and joining me on the call today is Jacques Breytenbach, our CFO, who will cover the key points on our balance sheet. After taking you through our announcement, we'll open up for Q&A, and you will automatically be placed on mute unless you wish to ask a question during this Q&A session, in which case we would ask you to click the Raise Hand icon, and we will then be able to unmute you and allow you to ask your question. Please note that we are recording the webcast, which will be available on our website later today.
Before I start, I just wanted to point out that all the figures stated now include Williamson Mine, which is no longer classified as an asset held for sale following our announcement of the MoU we have entered into with Caspian Limited. I'd also like to flag that we will be holding an inaugural Investor Day on the same day that we release our interim results, being Tuesday, 22 February, starting at 9:30 A.M. U.K. time. We will release further information on the venue and format closer to the time, but please do save this date in your diaries as we will be looking to provide the market with some insight into the company's strategy and longer-term outlook. To get back to today's news and turning first to our most important performance metric being safety.
I'm very pleased with the substantial improvement seen in our lost time injury frequency rate to 0.18, which is down by 64% from the 0.50 recorded in the first half of the corresponding period last year, and the 21% decrease in the total number of injuries recorded. This reflects the high level of focus we have had on turning around the deterioration in safety performance that we witnessed during the pandemic, which was mirrored elsewhere in South Africa. We will, of course, continue to strive to improve in this area in line with our target of a zero harm working environment. In terms of the impact of coronavirus on our workforce, we have obviously experienced the Omicron variant firsthand here in South Africa, though this latest wave is now thankfully receding.
Due to the robust operating procedures we have put in place, we have continued to manage the pandemic with minimal disruption to the operations, and our focus is on protecting our workforce by making vaccinations easily available and by encouraging their uptake. Turning to production, we saw a 2% uplift on a comparative half to 1.78ct million , largely attributable to Williamson having resumed production after being on care and maintenance since April 2020. While steps to address both the waste ingress at Finsch as well as the tunnel convergence at Cullinan continue to yield positive results. As previously announced during September 2021, convergence was experienced at the southern end of Tunnel 41 on the eastern side of the C-Cut block cave, which impacted 18 of a total of 187 draw points.
Remedial action was focused on arresting the convergence by stabilizing the affected pillars, thereby protecting the tunnel so that access could be reestablished once the area had been stabilized, and this was quickly achieved. Initial estimates on the impact on production indicated a potential loss of some 30,000 tonnes per month for a period of 12-14 months. This has been successfully mitigated to a large extent by increasing the rate of draw from the draw points surrounding the affected Tunnel 41, which assisted in de-stressing the affected pillars. The impact on production is now estimated to be a loss of only some 11,000t per month, compared with our business plan to the end of November 2022. Cullinan is therefore expected to deliver on its annual guidance for this financial year of 1.7ct million -1.9ct million .
The business reengineering projects initiated at Finsch and Koffiefontein in July 2021 to comprehensively review and improve the mine's cost basis and enhance operating margins remain in progress. We will be in position to provide more information on these projects at the time of our interim results and investor day. The production ramp up at Williamson commenced in this H1 of FY 2022 with 1.4t million run-of-mine processed, yielding around 82,900ct . As previously announced, Petra recently entered into a framework agreement with the Government of Tanzania regarding Williamson and the execution of a non-binding MoU to sell 50% less one share of the entity that holds Petra's shareholding in Williamson Diamonds to Caspian Limited.
Upon completion of the transactions contemplated by the MoU and the capital restructuring and the framework agreement becoming effective, which is expected in the second half of this financial year, Petra and Caspian will each indirectly hold a 31.5% stake in WDL, but with Petra retaining a controlling interest and the Government of Tanzania holding the remaining 37%. As mentioned in my introduction, Williamson Mine is no longer classified as an asset held for sale, and we will therefore be consolidating Williamson numbers going forward. I would like to refer you to the details we have provided in our trading update on the independent grievance mechanism or IGEM and other remedial initiatives that have been put in place to address the allegations of human rights abuses at the Williamson Mine in Tanzania.
We are targeting the launch of the pilot phase of the IGEM by the end of June 2022 this year, with the IGEM expected to become fully operational by the end of the first quarter of our financial year 2023. Williamson is continuing its extensive engagement with communities around the mine to highlight the dangers of illegal mining and seeking to reduce illegal incursions onto the Williamson mine lease area. In terms of sales and turning to the diamond market, Petra experienced a very strong half with revenue up 49% to $264.7 million versus $178.1 million in the first half of financial year 2021.
This revenue result was already in the market further to our decision to announce sales on a tender-by-tender basis, which brings us in line with various other listed diamond producers. Revenue for the half was bolstered by the sale of exceptional stones totaling $77.9 million versus $40.4 million in the comparable half year. We have listed these sales on page four of our announcement. These sales comprise one exceptional blue diamond, two very large and high-quality white diamonds, and one exceptional pink diamond from Williamson, which provides an excellent overview of the breadth of our production profile and very high-value diamonds recovered at our mines. Revenues were further supported by the strong diamond market, with rough diamond prices on a like-for-like basis up 16% compared to the preceding six-month period to the 30th of June 2021.
The diamond market ended calendar year 2021 strongly, with some industry commentators predicting record jewelry sales for the year. Demand at our most recent tender spanned across the entire spectrum of rough assortments and sizes, and reflected the shortages of goods further to the recent contraction of global rough supply. On Project 2022, we are now in the final stretch of this project, which has been our three-year business improvement program. The primary objective of this project was to deliver significant free cash flow, predominantly by improving throughput of the operations as well as embedding a culture of operational and capital efficiency within our businesses.
As set out in our announcement, Project 2022 remains on track to deliver annualized operating cash flow benefits of some $70 million, with the end result that we will meet our target of $100 million-$150 million of net free cash flow by the end of June 2022. I will now hand over to Jacques to cover the financial highlights.
Thank you, Richard, and good morning, everyone. As noted in the announcement, our balance sheet continued its improving trend, with consolidated net debt reducing further to $153.6 million as at the end of December, down from just over $201 million as at the end of September. The company currently has unrestricted cash of some $256.7 million and Diamond inventories of $79.6 million. The bulk of the inventory held at period end is available for sale in our upcoming first tender of calendar year 2022, barring the previously blocked parcel at Williamson, which has a carrying value of some $10.6 million. As previously stated, this parcel will be handled in line with the provisions of the framework agreement reached with the Government of Tanzania.
With regards to CapEx, we have flagged that guidance for the full year is expected to come in at the lower end of our previous guidance range of $78 million-$92 million, partially attributable to the weaker rand during the period. We will provide more detail on the actual as well as our forecast CapEx profiles at our interim results and investor presentation next month. We have also noted that discussions with our South African lender group around the possible refinancing of the company's first lien debt are continuing, and this is expected to be concluded during quarter three of this year, 2022. That concludes the overview of the trading update. We would now like to open up for questions. As a reminder, please raise your hand icon if you would like to ask a question and then turn off mute.
Alternatively, you can also type your questions using your chat function, and we will read them out. Over to Q&A.
I note a question, a hand raised from Oliver. Oliver, you should be able to unmute on your end. If you can unmute, you can pose your question. You have to do it from us, I think. Oliver, I see the mic is operational. Let's try and do it. If you can just unmute on your end, you should be able to pose the question.
We seem to be struggling to get Oliver on. Johan, can I just ask you that from our IT side to assist Oliver in unmuting? In the meantime, I see Stella posted the questions in the comment section. Just give me one second.
Stella's question is, please could you outline the rationale for the bank refinancing and what you would like to achieve? Thank you. Stella, as a reminder, our existing facilities with our banks, both the term loan and the revolving credit facilities, both have amortizing profiles and reduces effectively on a quarterly basis. One of the items that we want to put in place is a revolving credit facility of appropriate size, which has a tenure throughout our. Well, at least, aligned to the bond maturity date. That's one of the items is a certainty of tenure and a straight line facility as opposed or fixed facility as opposed to a declining amortizing profile.
On top of that, improved interest charges. Given our recent performance, we are looking forward to having a more appropriate interest charges assigned with our facilities. Thirdly, and also importantly, is an improved covenant profile with our covenant packages, more suited to where the business is now as opposed to where we were a year ago just prior to the restructuring when all of this were agreed. More appropriate leverage-based covenant packages.
Thanks. I see Oliver. Thank you. You've typed your question. Johan, in the interim, can you please see if you can help us unmute the individuals who raised their hands? It seems that they can't do that from their side. But Oliver, we see your question.
To Oliver's question, are there any other reasons in addition to the rand for CapEx coming at the lower end of guidance range? Oliver, again, I think, well, at the time of guidance, certain of our larger CapEx programs have not yet been voted by the board at that point in time. We did start slightly later than originally anticipated. For instance, the CC1 East project and the SLC project at Finsch. Both of those have been, or one of them has been approved and the other one is being taken to the board shortly. We would unpack that in more detail in the upcoming investor presentation later next month.
It's pretty much in line with our expectations still, albeit at the slightly lower end.
Can we see if there are any other hands raised, and we will see if we can unmute you. Anybody else have a question they would like to ask? Not seeing any raised hands at this stage. We'll pause for a while just to see if there are any other questions. Nope. Looks like we're done. I won't prolong the call then, but other than to say thank you very much. Hold on. We've got one. Ian Rossouw from Barclays. Can we unmute Ian, please? Ian, you should be able to unmute the mic now on your side. We have enabled you from this end. Yeah. Similar issue.
We do apologize for this. We'll look into it for future calls. Ian, if you don't mind typing your question in the meantime. This is deliberate on our part to keep your questions short. I'm only kidding. We'll sort this out for the next call. Apologies. In the meantime, Peter Mallin-Jones has posted a question. Thank you, Pete. Can you talk through the cost pressures that the mines are facing, please? Obviously our trading update doesn't cover our cost in any detail. All of that will be unpacked in, again, more detail with the upcoming interim results.
However, as per normal, there is the normal inflationary pressures on things like electricity, which accounts for some 15 odd% of our total on-mine cash cost, which is in the market and should be known well. Then our labor increases we got through towards the—I think it was in September, if I'm not mistaken, when we reached those agreements with the trade unions. Both the trade union agreements and the Eskom increases is well known and in line with our cost guidance. At this point in time, there's no need to alter our cost guidance.
Again, as stated, we will unpack it in a bit more detail in our interims. In the meantime, Ian, thank you. I see your question has been typed. Just to follow up on Finsch's waste ingress, can you please update us on the longer-term implications regarding throughput and grade at Finsch?
Again, Ian, I think on this one, we will provide detail on the 22nd of February. I think
It's probably best to do it comprehensively there. What's important is if you have a look at Finsch's performance in the first half, they certainly have delivered, you know, to plan and slightly ahead through the remediation. It's really all about ensuring that we mine very accurately to plan, that we manage any waste ingress, that we stay ahead in terms of our drill and blast. You know, it's I think if you look at the current performance, we would certainly expect to see that continue, and then we will talk to some longer term outlook, you know, for Finsch and indeed Cullinan and other ops on our investor day on the twenty-second.
If you wouldn't mind, we'll provide a more comprehensive response on the 22nd. Right. Unfortunately, I'm gonna have to ask you to please type your questions. We're not gonna be able to take verbal questions. Apologies for that. I see Ian had another question follow-up, I think on Koffiefontein. Jacques, if you could just get to that.
Yeah. Koffiefontein has, you know, had a difficult end to H1. You know, it is a near end-of-life operation, and it does have limited flexibility in terms of areas to mine.
We did have some issues certainly towards the end of the year with again very heavy rainfall, which had an impact on the operations itself. Things are looking better at the start of this half of the year. Again, you know, when we get to 2022, we'll provide a little more detail around the plan for Koffiefontein going forward. We used the opportunity towards the end of this first half to do a lot of maintenance and planned maintenance, which we brought forward, and so we're in a better position to get back on track at Koffiefontein in the second half of 2022.
John has posted a question. He's asking if Moody's is still rating the company Caa1, which seems harsh given the strong financial performance and deal they're reaching today. Have you had discussions with them around your current rating. John, yes. I can confirm we've had discussions with both Moody's and S&P. Ratings reviews have been scheduled and in the coming weeks or month and a bit, we should have some results evident from their ratings review. Yes, we are actively engaging with the ratings agencies.
They're much quicker to downgrade than to rerate.
Again, just apologies for the functionality or lack thereof in the system today for posting verbal questions. If there's any other questions from the forum, happy to take them. Happy for you to raise your hand before you type. Yeah. We know you have a question.
Yeah. I think that looks like it for today. Thanks again. Thanks for bearing with us in terms of having to type your questions. We'll address it for the next call. We look forward to announcing our interims on the 22nd of February and hosting an investor day and hope that you know many of you are able to attend. Thanks very much for your time, and we'll talk to you again soon. Thank you.
Thank you, everyone.