Sydney, July 18, 2007 AEST (ABN Newswire) - Petra Diamonds Limited ('Petra' or 'the Group') (ASX: PDL) announces the completion of the acquisition of the Koffiefontein mine and associated assets ('Koffiefontein') from De Beers Consolidated Mines Limited ('De Beers').
Highlights
- Acquisition of Koffiefontein from De Beers completed - Petra can now commence sales of Koffiefontein diamonds
- 16,700 carats recovered to date during plant testing, including one exceptional high quality stone of 60.25 carats and a further 35 stones larger than 10 carats each; these diamonds will be put on tender shortly and, based on historical prices received for Koffiefontein diamonds, Petra expects significant interest in the tenders
- Petra has accumulated a substantial stockpile of ore since it commenced care and maintenance activities of the cave at Koffiefontein in July last year - Petra estimates that this stockpile includes at least a further 30,000 carats of production
- Petra expects annual sales from Koffiefontein of around 95,000 carats and revenues of approximately US$20 million
Adonis Pouroulis, Chairman of Petra, commented; 'Shareholders' patience with regards to the acquisition of Koffiefontein will now be rewarded. Petra has historically only focused on production from fissure mines, but over the last 2 years or so we have built up the management capability to successfully run underground mines such as Koffiefontein. Our first diamond recoveries are very positive, and Petra is confident that Koffiefontein will deliver substantial production and revenue growth to the Petra group.'
Petra has, over recent weeks, been running the Koffiefontein plant to test plant modifications. Petra has to date recovered 16,700 carats from this test phase including one exceptional stone of 60.25 carats, as well as a further 35 stones larger than 10 carats each, many of which are of very high quality. Whilst these are only test results and cannot be replied upon as a run of mine production profile, should these recoveries continue then the assumptions applied by Petra in its modeling in respect of both grade and value per carat at Koffiefontein will be exceeded.
Petra will put the first parcels of Koffiefontein production on tender shortly and a further announcement will follow on the values achieved. The quality of Koffiefontein production is well known in the rough diamond buying market, and Petra expects there to be substantial interest in the tenders, bearing in mind the special stones recovered together with there having not been a sale of Koffiefontein production since early last year when De Beers ceased operations.
The preparatory work that Petra has undertaken at Koffiefontein means that the substantial ore stockpile accumulated by Petra since it commenced care and maintenance activities of the cave at Koffiefontein in July last year can now be processed through the plant. Petra estimates that this stockpile includes at least a further 30,000 carats of production.
Petra expects annual sales from Koffiefontein of approximately 95,000 carats and gross revenues of US$20 million, adding approximately US$14 million (70% JV share *) to Group revenue in the year to June 2008, significantly increasing Group production and revenues.
As previously announced, the consideration for Koffiefontein was R81.9 million (£5.77 million); this consideration was settled by BDM assuming De Beers' rehabilitation obligations at Koffiefontein, which amount to R80 million (£5.63 million), plus the payment in cash by BDM to De Beers of R1.9 million (£0.14 million).
Petra's net interest in Koffiefontein is 70%, with its BEE partners holding the remaining 30%.
Contact
Louise Goodeve / Justine Howarth
TEL: +44 (0) 20 7851 7480
Parkgreen Communications, London
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