14th Jul 2005 11:11
Petra Diamonds Ld14 July 2005 14 July 2005 Petra Diamonds Limited (AIM / ASX: PDL) Kono Project, Sierra Leone - update Petra Diamonds Limited ("Petra" or "the Company"), the AIM-quoted and ASX-listeddiamond mining group, announces an update with regards to the Kono Project inSierra Leone whereby Petra and Mano River Resources Inc ("Mano") are engaged ina joint venture (the "Mano JV") relating to the exploration and production ofdiamonds from diamondiferous kimberlite dykes (the "Lion" dykes) within Mano'sthree contiguous licence areas in the Kono diamond district of Sierra Leone. Highlights • A 200kg sample taken by Petra returned a gem quality 0.22 carat diamond, supporting the previously indicated average grade of 94 carats per hundred tonnes ("cpht") from Mano sampling • Manufacture of 75 tonne per hour ("tph") production plant to be completed by September 2005, to be commissioned on site during Q1 2006 • Diamond production from treatment of bulk samples expected Q1 2006 • Petra plans to accelerate expenditure and development of the project so as to bring production on line as early as possible Exploration developments Petra personnel visited the Kono site in April 2005 to plan for theestablishment of the 75 tph production plant as well as to undertake furthergeological work on the dykes. Dykes were opened up to depths of 10 metres andsamples taken. A 200kg sample of kimberlitic material taken from the Lion 5 dykereturned a gem quality 0.22 carat diamond. The strike length of the Kono kimberlite dykes exceeds the total strike lengthof Petra's South African kimberlite dyke operations and Petra believes the Konoproject has the potential to yield high grades of approximately 100 cpht, asindicated by the original Mano mini bulk sample of Lion 5 which returned anaverage grade of 94 cpht, and the 200kg sample referred to above. Site establishment The necessary equipment to establish initial facilities on site will be shippedfrom South Africa and is on track to be commissioned on site by Q4 2005.Petra's site establishment team will transfer to Sierra Leone in August and thesite facilities should be fully established by November. Exploration/Production plans Petra is currently manufacturing the 75 tph production plant (DMS and crushingcircuit) at its facility in South Africa. Petra plans to ship the plant inOctober and it should be commissioned on site in Q1 2006. Several exploration shafts will be established. Whilst these are primarily forexploration of the dykes, diamonds will be produced for quality and priceevaluation. These shafts and facilities have been designed to facilitate aseamless transition to full scale mining at a later stage. The production plantfacility will be positioned centrally between the Lion dykes in order to reduceore transportation time from the exploration/mining sites. Financial Under the terms of the Mano JV, by spending a total of US$3 million over thenext 3 years, Petra will acquire a 51% equity interest in the Kono Project.Petra plans to accelerate expenditure and development of the project in order tobring production on line and earn the 51% interest well within the 3 year timeperiod. All costs expended to date are in line with expectations. Future developments The next nine months will focus on; • commissioning of the plant and associated infrastructure on site • establishment and sinking of the exploration shafts • extraction of bulk samples and limited diamond production Adonis Pouroulis, Petra's Chairman, comments, "We are pleased to announce thatthe commissioning of the plant and associated exploration activities are ontrack and we expect early stage production to begin in the first quarter of nextyear. The working relationships with our JV partner Mano and the Sierra Leonegovernment and authorities are excellent and we look forward to working with allparties to expedite production from the Kono project." Guy Pas, Mano's Chairman, adds, "This would be the first time ever in SierraLeone's history that kimberlite dykes will be commercially mined and we areconfident that Petra, as a world leading dyke miner, will turn them into a longterm sustainable contribution to this country's recovering economy. Whileconflict diamonds reduced official Sierra Leone annual diamond exports to a mereUS$10 million just 5 years ago, today, with much credit to the KimberleyProcess, official exports saw a record June 2005 of US$22 million, for a 1sthalf total of US$76 million. Moreover, the right export channels contributed toan average price per carat for the 1st half of 2005 of just under US$280 percarat, which demonstrates the exceptional quality of Sierra Leone's diamonds." Ends For further information, please contact: Petra Diamonds, South Africa Parkgreen Communications, London Johan Dippenaar/David Abery Justine Howarth / Annabel Leather Tel +27 11 467 6710 Tel +44 20 7493 3713 John Baillie, Perth Field PR, Adelaide Tel +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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