London, Dec 24, 2006 AEST (ABN Newswire) - Petra Diamonds Limited (ASX: PDL)("Petra" or "the Company"), the AIM-quoted and ASX-listed diamond group, announces that further to the announcement of 18 December 2006, the South African Department of Minerals and Energy ("DME") has now granted the mining right to its wholly owned subsidiary, Blue Diamond Mines (Pty) Limited ("BDM") in respect of the Koffiefontein diamond mine ("Koffiefontein"), South Africa.
BDM has concluded a joint venture agreement ("JV Agreement") with its Koffiefontein Black Economic Empowerment ("BEE") partners, and the joint venture will use the assets acquired from De Beers to operate Koffiefontein. The terms of the JV Agreement are that BDM's interest in the JV is 70%, with the BEE partners holding the remaining 30%.
Adonis Pouroulis, Petra's CEO commented "The acquisition of the Koffiefontein mine is a key addition to Petra's asset base and is in line with our strategy of increasing the group's production profile. Petra would like to thank both the South African Department of Minerals and Energy and De Beers for their support in returning the mine to production - the mine is an important contributor to the local community and recommencing operations at Koffiefontein is a highly positive development for all stakeholders."
Completion of the JV Agreement is conditional upon the following key terms:
(i) the DME issuing a closure certificate to De Beers in respect of Koffiefontein; and
(ii) the DME consenting to the cession, transfer and delegation of the rehabilitation obligations and liabilities in respect of Koffiefontein from De Beers to BDM; and
(iii) the return to De Beers by the DME of all amounts and financial guarantees previously deposited by De Beers with the DME as part of De Beers' rehabilitation obligations in respect of Koffiefontein; and
(iv) the approval by the South African Competition Commission.
When the terms above have all been met, which is expected to be in early 2007, Petra will commence production from Koffiefontein.