7th Jul 2005 07:00
Petra Diamonds Ld07 July 2005 7 July 2005 Petra Diamonds Limited Alto Cuilo - update Petra Diamonds Limited ("Petra" or "the Company"), the AIM-quoted and ASX-listeddiamond mining group, announces an update with regards to the Alto Cuilo projectin north eastern Angola. Highlights • BHP Billiton elects to fund all exploration at Alto Cuilo • 59% of the 73 holes drilled to date intersect kimberlite - a very encouraging success rate • Review of geological and geophysical data with BHP Billiton identifies additional targets • Drilling identifies further kimberlite deposits • 115m tonne deposit now confirmed as diamondiferous • Higher kimberlite diamond valuation than previously expected BHP Billiton Joint Venture BHP Billiton has now elected to sole fund all kimberlite and alluvialexploration and related costs on behalf of Petra Diamonds Alto Cuilo Limited ("PDAC", the Petra/BHP Billiton JV vehicle) for the entire Alto Cuilo concession. From 1 January 2005 (the date at which BHP Billiton elected to fund kimberliteexploration within the ML Complex) to the end of June 2005, BHP Billiton hasadvanced funding of approximately US$3.6m to PDAC in respect of exploration atAlto Cuilo. BHP Billiton will start earning a direct interest in PDAC when ithas advanced funding of US$7.5m, which is expected to be the case later thisyear. Drilling Drilling in excess of 8,895 metres on 73 holes has been undertaken to date, with43 of these holes intersecting kimberlite. This equates to a success rate of59%, a very encouraging success ratio for any kimberlite exploration project.Drilling results indicate the presence of kimberlites with preserved craterzones that have undergone very little erosion, thus underscoring the potentialfor large size discoveries. Some holes have intersected kimberlite to verticaldepths of 280 metres, where drilling was stopped due to limitation of drillingcapacity but the kimberlite continued. Re-classification of the geophysical and drilling data by Petra and BHP Billitonhas confirmed that 11 of the aeromagnetic anomalies tested are related tokimberlite pipes, with other targets prioritised for drilling. The current drilling programme will continue on the anomalies in the ML Complexthat have not yet been drilled with the expectation of significantly increasingthe number of kimberlite discoveries. A second multi-purpose, larger diameter drill rig and 5-10 tonne per hour ("tph") mobile sample plant will be sourced to test material from the kimberlitegroupings already defined and from future discoveries. The use of a second drilland small mobile plant will substantially increase the rate of explorationdevelopment. Sample analysis The results from the sample of over one thousand kilogrammes of kimberliticmaterial sent for micro diamond analysis at Lakefield Research Centre in Canadahave now been received. These samples were taken from three of the elevenkimberlite groupings, including the 115 million tonne deposit (announced by theCompany on 7 December 2004) and the kimberlite from which the 40 tonne bulksample was previously taken and which yielded a grade of 47 carats per hundredtonnes ("cpht") as announced by the Company on 8 September 2004. The results indicate that the macro and micro diamond populations do not fit "typical" micro diamond grade estimate curves, in that recoveries are skewedtoward the macro population. All three kimberlites were certified as beingdiamondiferous in nature and a full suite of kimberlite indicator minerals wasrecovered for each kimberlite intersection for mineral chemistry assessments.The presence of high chrome sub-calcic G10s and high sodium eclogitic garnetsindicates that lithologies typically associated with peridotitic and eclogiticdiamond sources have been sampled by these kimberlite pipes. The 65 tph diamond recovery plant (MB100 and DMS) continues to be used mainlyfor the treatment of alluvial samples. A total of 4,987 diamonds totaling 1,255carats at an average stone size of 0.25 carats have been recovered to date. Apitting and trenching programme on the river flats and hillsides has started inorder to further evaluate the potential for economically viable alluvialdeposits within the ML Complex. BHP Billiton has completed a valuation of the diamonds recovered from thekimberlite and alluvial sampling. Based on a preliminary result obtained from310 carats, the diamonds recovered from the kimberlite samples averaged US$295per carat. This is in excess of Petra's previous estimates of US$200 per carat. Aeromagnetic programme A Midas low level helicopter aeromagnetic survey will go ahead in July. It isexpected that, due to the sophistication of this system compared to the 1998fixed wing survey executed by Petra and the use of twin sensors at closer linespacing, additional magnetic anomalies are likely to be detected. Theaeromagnetic survey aims to assist in the discovery of further kimberlitedeposits as well as to accurately define the magnetic signatures of thekimberlites discovered to date and of the untested anomalies identified in the1998 high-level aeromagnetic programme. Future focus The next six months will focus on; • drilling of further anomalies within the ML Complex, with the expectation of significantly increasing the number of kimberlite discoveries; and • a pitting and trenching programme to further evaluate the potential for economic alluvial deposits; and • the low level aeromagnetic survey, to assist in the discovery of further kimberlite deposits and to further define the magnetic signatures of thekimberlites discovered to date and of the untested anomalies identified in 1998. Adonis Pouroulis, Petra's Chairman, comments, "We are delighted with theseresults which further confirm our view of the potential of the Alto Cuiloproject. The excellent drilling success rate and sample results are extremelyencouraging and we are confident that further kimberlite discoveries will followfrom our exploration activities. The technical and financial relationship withBHP Billiton is strong and we look forward to working with them and our Angolanpartners in developing this exciting, world-class project." Ends For further information, please contact: Petra Diamonds, South Africa Parkgreen Communications, LondonAdonis Pouroulis/David Abery Justine Howarth / Annabel LeatherTel +27 11 467 6710 Tel +44 20 7493 3713 John Baillie, Perth Field PR, AdelaideTel +61 8 9381 8888 Kevin Skinner Tel +61 8 8234 9555 Mobile +61 414 822 631 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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