Petra focuses on projects with strong cash-generative production

Petra Diamonds has decided to withdraw from the Alto Cuilo project in Angola, and is reviewing its activities at Luangue project, in Botswana, and the Kono project. These strategies are expected to help the company reduce its exploration spend from approximately US$25 million per annum to approximately US$5 million per annum (effective January 2009). Johan Dippenaar, Petra's chief executive officer (CEO), said “The global financial environment requires a change in commercial approach, and that has been recognised and acted upon by the Petra Diamonds’ Board. Our focus now is to continue to build cashpositive production, whilst maintaining rigorous cost control. Although the diamond mining industry faces difficult times, given the current weakness in the financial and diamond markets, we believe we enter 2009 in a strong position.”

The company has posted a gross revenue from rough diamond sales for the six months ending December 2008 atUS$48.1million, witnessing a 52 percent increase over the same period in 2007 which amounted to US$31.7 million.

In the said period, Petra recorded a 422 percent increase in production which amounted to 528,636 carats. Its sales valued 368,296 carats, a 218 percent increase over the same period in 2007. Its group revenue dipped by 2 percent to $31.1 million. The Cullinan mine, Koffiefontein mine, Kimberley Underground and Williamson mines are the potential assets with which the company is hoping for a stronger financial result in 2009. “These strong trading results are as a result of the production and revenue contributions from the Cullinan and Koffiefontein mines. The Company has been transformed by the acquisition of these mines and with the Kimberley Underground and Williamson mines adding further production in the next six months we are comfortable in deciding to relinquish the capital intensive exploration projects that have historically been Petra Diamonds’ focus”, added Dippenaar.