Questor share tip: Petra is a rough diamond that looks set to sparkle Petra's portfolio includes stakes in eight producing diamond mines. The Finsch, Cullinan, Koffiefontein, Kimberley Underground, Helam, Sedibeng and Star mines are located in South Africa, while its Williamson mine is in Tanzania. The company also has exploration assets in the diamond-rich nation of Botswana. Petra produced 622,509 carats in the third quarter, compared with 275,526 carats in the equivalent period of last year. Indeed, the Finsch mine is ahead of expectations and has almost produced its expected output for the full year in the first three quarters. In total, 1,576,061 carats have been mined, compared with its full-year target of 2m carats. The plan is to increase production to 5m carats by 2019. These figures imply that the company will beat its production guidance for the financial year, with Finsch being the driver of this performance. Perhaps the biggest concern at the moment is diamond prices, which slumped during last year's eurozone debt crisis. The latest bout of troubles sweeping Europe has prompted fears that the same thing could happen again this year. "Europe has never been a market that the industry has banked on to provide growth," Johan Dippenaar, Petra's chief executive, told Questor yesterday. But it is a psychological play on people's confidence so people stay out of the market. Indeed, over the past month or so consensus forecasts for Petra's revenue and profit have moved lower because of this. However, Petra noted that prices had seen a "slow and steady" increase during the third quarter after stabilising in December. The company is a growth investment and is not paying a dividend. Its current year earnings multiple is 15.2, falling to just 8 next year as production, grades and prices should increase. Named as a tip of the year in January at 115p, the shares are now up just 11pc compared with a FTSE 100 down 4pc. They were last recommended at 150p on February 29, so they are below this level. Questor thinks the recent pull-back is overdone and the shares look oversold. Looking through current uncertainty, they remain a buy.