Company Information for Petra Diamonds Ltd

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AIM; PDL

Company Statement

Petra Diamonds is an international diamond mining group with a balanced portfolio combining major producing mines, world class exploration assets and a cutting and polishing business.

With operations in South Africa, Angola, Botswana and Sierra Leone, Petra’s objective is to continue to grow production, developing its stature as a leading diamond producer in all of the countries in which it operates.

In South Africa, Petra has five producing mines: Cullinan, Koffiefontein, Star, Sedibeng and Helam. The Group also recently reached agreement to acquire a further asset from De Beers, Kimberley Underground, which is temporarily under care and maintenance. Petra is on track to increase its annual production from 180,000 carats in the year to June 2007 to around I million carats in the year to June 2009.

Complementing the Group’s production is an exploration and development portfolio spread across some of the world’s most prospective diamond fields. In Angola, Petra is developing the world class Alto Cuilo and neighbouring Luangue projects. In Botswana, Petra has established the largest diamond exploration landholding in the country, where it believes that modern exploration techniques will hold the key to the discovery of new, major kimberlites. In Sierra Leone, Petra is developing a fissure operation with its JV partner Stellar Diamonds and test work to date indicates the potential for economic operations.

The Petra group now employs some 4,000 people and over the last 10 years the Company has developed a range of social initiatives which continue to make a meaningful impact upon the lives of employees and surrounding communities. Petra’s focus remains upon sustainable development, via educational programmes and skills transfer, to ensure a broad based approach with a lasting legacy, and all operations are carried out with the highest regard for the environment according to best practice.

Petra will only commit to working in countries which are members of the Kimberley Process and shareholders can remain assured that Petra’s diamonds will only ever be 100% conflict free.

For further information please visit www.kimberleyprocess.com or www.diamondfacts.org

Current Operations

South Africa
In South Africa, Petra currently operates five producing diamond mines: Cullinan, Koffiefontein, Star, Sedibeng and Helam. Cullinan and Koffiefontein are underground kimberlite pipe mines, with the others being kimberlite fissure operations. Petra completed the acquisitions of the Cullinan and Koffiefontein mines from De Beers Consolidated Mines in July 2008 and July 2007respectfully, following separate competitive tender processes.

Petra has also reached agreement to acquire a further underground kimberlite mine from De Beers in South Africa, the Kimberley Underground Mines. This mine is currently being operated by Petra under care and maintenance until all required mining authorisations are received from the South African authorities.

Cullinan
In July 2008, Petra (as part of a Petra-led consortium) completed the landmark acquisition of the Cullinan diamond mine from De Beers for a total cash consideration of R1 billion. The Cullinan kimberlite pipe is the second largest indicated diamond resource in the world by in-situ value and has transformed Petra into one of the world’s largest diamond groups on a gross resource basis.

Cullinan (known as the Premier Mine until 2003) is renowned for producing many of the world’s largest and most famous diamonds, including the largest ever gem diamond, the Cullinan diamond at 3,106 carats rough, as well as more than a quarter of all diamonds weighing more than 400 carats. It is also the world’s only significant source of truly rare and highly valuable blue diamonds.

The Petra Diamonds Cullinan Consortium (“PDCC”) acquired Cullinan as a going concern and Petra is the technical operator of the mine on behalf of PDCC. Cullinan comprises the current operating levels at a depth of 747 metres (“the B-Cut”), the Centenary-Cut (“the C-Cut”), a world class diamond resource that lies beneath the B-Cut section, and a substantial tailings resource. There are extensive resources in place (58 million carats) at the B-Cut, excluding the potential of the 133 million carat C-Cut resource.

Petra will mine from the B-Cut at a rate of 1.4 to 1.8 million tonnes per annum, which is expected to yield between 600,000 and 750,000 carats in the first financial year to June 2009. This will be augmented by production from the Optical Sorting Plant (“OSP”) tailings of approximately 100,000 carats. Production levels from the B-Cut will be progressively ramped up to around 1 million carats per annum from financial year 2009/10, which has the potential to deliver annual revenues of some US$100 million.

The C-Cut, at 133 million carats, is the world’s second largest diamond resource. This resource has been established by De Beers based on exhaustive tests in terms of tunnel bulk sampling on the 763 level, extensive microdiamond sampling of both narrow diameter and large diameter drilling, and the processing of hundreds of tons of material from large diameter drilling from the 763 level to the 1083 levels. De Beers has also conducted exhaustive studies into development of the C-Cut resource and the documentation put together during these studies was made available to Petra during due diligence of the mine and is now Petra property. Petra will evaluate the development of the C-Cut once the operating parameters of the mine under Petra’s management have been established.

The Petra Diamonds Cullinan Consortium (“PDCC”) comprises Petra Diamonds Limited (37% initial interest), Al Rajhi Holdings W.L.L. (“Al Rajhi”) (37% initial interest) and PDCC’s Black Economic Empowerment partners (26% interest). Petra can increase its interest in PDCC (from Al Rajhi) to 60% based on performance of the mine and pre-agreed option payments.

Koffiefontein Mine
In July 2007, Petra completed the acquisition of the Koffiefontein mine and having conducted care and maintenance activities at the mine in the 12 months prior to completion, was able to bring the mine on stream immediately. With modifications made by Petra to the plant and the mining process, the mine performance has been very effectively turned around and the operation is now profitable in Petra’s hands.

Prices achieved from Koffiefontein continue to surpass expectations. The average value per carat realised from the mine for the four months to end April 2008 has risen by 18.6% to US$484, compared to the value for the six months to end December 2007 of US$408 per carat. This increase is due in part to a strong market for diamonds, and particularly for the higher value goods which form a substantial part of Koffiefontein’s production. However, this also reflects the operational changes made under Petra’s management control, which continue to improve the mine’s economic performance.

US$484 per carat is exceptional for a kimberlite mine and places the value of Koffiefontein’s production amongst the world’s top kimberlite mines. Crucially, grade has not been sacrificed to achieve these prices, and the last reported grade of 8.2 carats per hundred tonnes continues to be met.

Kimberley Underground
In September 2007 Petra reached agreement to acquire the Kimberley Underground mines from De Beers. The acquisition is expected to complete in 2008. Based on historical production and sales information, Petra expects annual sales from Kimberley Underground in excess of 100,000 carats at an average of US$160 per carat once full production is recommenced, giving gross annual revenues in excess of US$16 million and a life of mine of at least 12 years.

Petra is currently operating the mine under care and maintenance until all required mining authorisations are received from the South African authorities.

Fissure Mines
The fissure mines (Helam, Sedibeng, Star) were acquired when Petra merged with ASX quoted Crown Diamonds NL in May 2005.

The nature of mining narrow-vein ‘fissure’ orebodies only allows for low-tonnage operations. In order to make such deposits economically viable, the group developed a low cost structure and specialist underground hard rock mining expertise, enabling the mines to stay open continuously throughout fluctuations in the capital markets and the diamond price. Central to this approach was the development of in-house expertise and the reluctance to use outside contractors, which served to significantly reduce capital expenditure costs. The business subsequently developed high quality internal skills set, covering areas including: exploration, manufacturing, engineering, plant design and underground mining.

The average value per carat at Petra’s three fissure mines is running at US$231 per carat for the four months to the end of April 2008 (compared to the value for the six months to the end of December 2007 of US$182 per carat).

Angola - Alto Cuilo
Alto Cuilo has been identified by analysts as one of the most exciting diamond exploration projects in development today worldwide. By air, Alto Cuilo is 700 kilometres south-east of the capital of Luanda, or 850 kilometres by road. It is 120 kilometres by road from Saurimo, the nearest main airport. The entire Alto Cuilo concession area covers 2,670 square kilometres.

Alto Cuilo is a major project with a large footprint (in excess of 1,500 hectares) and results continue to excite as the scope and scale of the project expands. A total of 249 anomalies have been identified across the licence area using Midas gradient array low level helicopter aeromagnetic survey.

To date the drilling programme has tested 99 priority targets of which 77 were confirmed to be kimberlites, an unusually high success rate in terms of kimberlite exploration. In 2007 mini bulk sampling (‘MBS’) of prioritised kimberlite targets at Alto Cuilo commenced and the first results, from kimberlites AC63 and AC98, have been encouraging with the intersection of high grade areas.

The work programme is currently being fast tracked and is focused on specific areas of interest, being the near-surface crater rim resedimented volcaniclasic kimberlite deposits where highly encouraging exploration results have been recorded. Petra believes that the crater rims have the potential to contain substantial deposits of economic diamond-bearing material, as is the case at other diamond mines with similar mineralisation, such as Catoca in Angola and Williamson in Tanzania.

From the entire Alto Cuilo area of 2,670km², Petra’s has identified an area of 276km² (23km by 12km) for the revised work programme. This smaller area hosts 51 kimberlites of which eight (based on Petra’s re-ranking following a review of the exploration data) will be targeted for the accelerated work programme. These kimberlites form a cluster and one or more of these targets could be mined individually or together utilising a central process plant. The eight kimberlites targeted by Petra range from an estimated 30 to 180 hectares in surface area and should the RVK of any of these targets be shown to hold economic grade, it is entirely feasible that a substantial mine could be hosted at Alto Cuilo.

Angola – Luangue
In March 2007 Petra Diamonds acquired Frannor Investments & Finance Ltd ("Frannor") from Xceldiam Limited and thereby acquired an interest in the Luangue project, which shares a common boundary with Alto Cuilo in north eastern Angola. Luangue is another world class exploration project which has the potential to host a diamond deposit of major size and scale.

In December 2007, a low level aero magnetic survey was completed over the Luangue concession. The results of this survey, released in May 2008, were highly encouraging with 138 anomalies identified. The total surface area of the targets is in excess of 8,000 hectares, with certain individual targets are up to 233 hectares in surface area. Five of these targets have already been drill confirmed as kimberlite and Petra now plans to start an initial drilling campaign at Luangue within two months.

As at Alto Cuilo, the work programme at Luangue will focus on proving up the potential of enriched near-surface RVK deposits, which have been shown by exploration at Alto Cuilo to be the areas most likely to host economic mineralisation. Preliminary modeling carried out by Xcalibur Geophysics on the high resolution magnetic data for five of the high priority targets indicates cover of less than 50 metres at the shallowest point. This is supported by drilling at known kimberlites on Luangue, which have been intersected within 30 metres of surface.

Botswana - Kalahari
In September 2005, Petra acquired 100% of Kalahari Diamonds Limited and subsequently became the holder of the largest area under diamond prospecting licence in Botswana, all of which is “on craton”. There are 34 known kimberlites in Petra’s licence areas, including two diamondiferous kimberlites in the vicinity of the major Jwaneng diamond mine, and other highly prospective anomalies for further investigation.

In 2008, Petra will be continuing its focused exploration programme. A 57,000 line kilometre low level, gradient array magnetic survey has been commissioned over the Kukama project and a 5,000 metre drilling programme has been commissioned to test anomalies detected in the Orapa North, Gope, Kukama and Mabutsane project areas. Additional drilling will be scheduled to test the kimberlites in the Jwaneng and Kukama areas, as well as the largest kimberlite in the Kikao field, which is 700 metres in diameter.

A 3,000 to 5,000 metre drilling programme will also be carried out in the Gope East, Gope West and Kukama project areas. This programme will target new anomalies, as well as carrying out definition drilling on known kimberlites such as kimberlite 173S in the Kukama area that is now, on new data, interpreted to be 25 hectares in surface area.

Sierra Leone - Kono
Kono is a kimberlite project with several identified fissures and is at an advanced stage of development. Trial mining is currently underway and two shafts are being developed, Pol-K and Bardu, and processing of exploration and development material to date has yielded 12,132 diamonds, weighing a total of 1,049 carats (as at June 2008).

In August 2008 the first sales of diamonds from the Kono project will be made, when a parcel of approximately 800 carats from the Pol-K shaft will be placed on tender. This sale will give an indication of the average carat value. A second tender, comprising diamonds from the first Pol-K trial stope, is scheduled for October 2008.

As diamond production from the trial mining stopes increases over the coming months, revenues from diamond sales are expected to generate regular income to offset against total development expenditure.

CALIBRATED DIAMONDS
In November 2006, Petra made a strategic move into the cutting and polishing of diamonds with the acquisition of Calibrated Diamonds. This acquisition gives Petra the in-house capability to cut and polish its own rough diamond production, which in turn will directly impact Petra’s bottom line given the value uplift in a polished stone compared to the rough form.

Calibrated Diamonds’ proprietary laser cutting process has significant advantages over traditional cutting and polishing methodology, producing stones to a very high and consistent standard. Calibrated Diamonds’ cut and polished stones are a premium product, producing the highly sought after ‘hearts and arrows’ quality which is rarely achieved by conventional means.

Brokers Research and Price Targets

BMO Capital Markets	09/07/2008	180p
Collins Stewart	14/05/2008	220p
Natixis Blochreider	21/02/2008	240p
RBC Capital Markets	15/04/2008	160p

Geographical Spread

Board of Directors and Key Management

The board and management of Petra Diamonds are well qualified and experienced in the technical aspects of diamond mining and exploration as well as corporate affairs.

Adonis Pouroulis, Executive Chairman

Johan Dippenaar, Chief Executive Officer

David Abery, Finance Director

Jim Davidson, Technical Director

Charles Segall, Non-Executive Director

Volker Ruffer, Non-Executive Director

Company Address

Elizabeth House
9 Castle Street
St. Helier, JE4 2QP


Telephone:	+44 1534 700 111
Facsimile:	+44 1534 700 007
Email:	info[at]petradiamonds.com
Website:	http://www.petradiamonds.com

Additional Address/Key Contact

Company Registration Number EC23123, incorporated in Bermuda

Contact:
Cathy Malins, Corporate Communications Manager, Petra Diamonds
Tel: +44 20 7318 0452
cathym@petradiamonds.com

Capital

No. of shares in issue – 183.9m
Fully diluted – 203m

Annual General Meeting

November 2008

Year End

30 June

Nominated Brokers

Collins Stewart
9th Floor
88 Wood Street
EC2V 7QR

BMO Capital Markets
95 Queen Victoria Street
London
EC4V 4HG

Nominated Advisors

Collins Stewart

Major Shareholders

Saad Investments Company Limited	28.70
JP Morgan Asset Management U.K. Limited	11.49
Al Rajhi Holdings W.L.L.	8.02
Photon Global Limited	7.0
Adonis Pouroulis (Chairman)	4.1

Most Recent Statement

17/11/08 - Significant Shareholding
11/11/08 - Cullinan site visit
31/10/08 - REG-Petra Diamonds Ld 39 carat blue diamond sold fo
23/10/08 - REG-Petra Diamonds Ltd Signifficant Shareholding
07/10/08 - RCS-Petra Diamonds Ld 39 carat blue diamond placed
23/09/08 - Final Results

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