Petra Sees Swing to FY08 Profit, In-situ Value of $27.3 bln

Petra Diamonds expects to swing to a net profit of $1.9 million for the year ended June 30, 2008, boosted by the acquisition of three mines, the diamond mining company said in a statement on Tuesday.

Petra reported a net loss of $20.9 million for the comparable period ending in June 2007. The company expects a 352 percent surge in revenue to $76.9 million from $17 million the year before and a rise in gross profit to $39.2 million from $1.3 million.

Since July 2007 Petra has purchased the Cullinan mine and is in the process of acquiring Kimberley Underground and Williamson, making it one of the world’s largest independent diamond groups on a resource basis.

Petra’s production base also includes Koffiefontein and the fissure mines, Alto Cuilo and Luangue in Angola, Kalahari Diamonds in Botswana and Kono in Sierra Leone.

In a separate statement the international diamond mining group noted that the addition of the three mines increased the value of company resources present on location to $27.3 billion with an updated carat base of 265 million carats gross. Cullinan, which is the world’s second largest indicated diamond resource by in-situ value at 208 million carats, made up the bulk of that.

Petra also said it sold Calibrated Diamonds Investment Holdings to Gem Diamonds Ltd for $5.9 million. Petra had acquired Calibrated in November 2006 with the objective of growing its revenues by cutting and polishing its own rough diamond production using Calibrated’s proprietary technology processes.

Following the acquisition of Cullinan, Koffiefontein, Kimberley Underground and Williamson, and the resulting change in the Petra’s production and revenue base, however, the company said it would focus on its core skills of diamond production and exploration.