27th Feb 2006 13:31
Petra Diamonds Ld27 February 2006 Petra Diamonds Limited Kono Project, Sierra Leone - Nearing First Diamond Production Petra Diamonds Limited ("Petra" or "the Company"), the AIM-quoted and ASX-listeddiamond mining group, announces an update with regards to the Kono Project ("theProject") which is situated in the Kono diamond district of Sierra Leone. Petra and Mano River Resources Inc ("Mano") are engaged in a joint venture ("theMano JV") relating to the production of diamonds from the Lion fissures whichare within the joint venture's licence areas. Highlights: • Mano JV nearing first production from the Lion fissures, with site facilities to be established by the end of March 2006 and diamond recovery from first bulk samples expected by June 2006 • Petra has incurred US$3 million of expenditure on the Project and has earned a 51% interest in the joint venture and in Basama Diamonds Limited, which holds the Project licences Pre-production update Petra confirms that the Project is on track for the first diamond recovery fromtreatment of the initial bulk samples by June 2006. The establishment of site facilities remains on track and is expected to becompleted by the end of March 2006. The manufacture in South Africa of thediamond recovery plant was completed on schedule and it has been shipped. Pitting and trenching prior to final selection of intrusion points revealed veryencouraging results, with fissure widths of 1.7, 1.2 and 0.4 metres having beenexposed on the Lion fissures 1, 2 and 3 respectively. During the course of the past year numerous geological samples were taken fromvarious kimberlite fissures in the area, with mineral probing returning somevery encouraging results which have been used in prioritising the location ofintrusion points. Further geological exploration work is also being undertaken for the manykimberlite dykes known to exist on the joint venture's licences in the Konoregion. High-resolution satellite imagery images are awaited to assist in thisaspect. Financial Under the terms of the Mano JV, by spending a total of US$3 million on theProject, Petra would acquire a 51% equity interest in the Project. Petrapreviously announced that it would accelerate expenditure and therefore thedevelopment of the Project in order to bring production on line as soon aspossible. Petra confirms that this expenditure has fast-tracked development ofthe Project and means that first production is now expected by June 2006. Petra announces that it has now incurred US$3 million of expenditure on theProject and has therefore earned a 51% interest in the Mano JV, including BasamaDiamonds Limited (previously a 100% owned subsidiary of Mano), the joint venturecompany which is the holder of the Project licences. Johan Dippenaar, Petra's CEO, commented, "We have successfully accelerateddevelopment of the Kono Project, sending a clear message to the market that wedeliver on our objectives. We have already earned our 51% equity interest inthis exciting project and look forward to first production beginning later thisyear. We enjoy an excellent relationship with Mano River Resources and the solidco-operation received from them has assisted a great deal in the efficientdevelopment of the Project. ". Mano's President and CEO, Dr Tom Elder, commented: "We are very pleased with the rapid progress Petra has made in moving the firstof Mano's kimberlite dykes in Kono towards diamond production. Petra's abilityto call on a substantial pool of highly experienced exploration and miningpersonnel from their three South African dyke-mining operations has undoubtedlybeen a key factor. "Mano also applauds the fact that, in parallel with the technical programme,Petra has expended considerable effort in establishing harmonious relations withKono area Chiefs and Elders and the local populace in general. "The acceleration of the programme is excellent news, especially since at theimmediately adjacent Energem dyke/pipe mining operation the diamonds beingproduced are currently reported to be selling for well in excess of US$200 percarat." Ends For further information, please contact: Petra Diamonds, South Africa Parkgreen Communications, LondonJohan Dippenaar/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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