De Beers Completes Kimberley Sale to Petra JV

Petra Diamonds Limited completed on Wednesday the purchase of the Kimberley Underground diamond mines in Kimberley, South Africa from De Beers Consolidated Mines Limited (DBCM). Petra now holds a 74 percent stake in the mine. Its joint venture partner Sedibeng Mining holds the remaining 26 percent.

The agreement was signed in September 2007, however the transaction has taken longer than originally anticipated to complete due to complexities related to the new order mining right. That has now been resolved.

Petra has been operating Kimberley Underground under care and maintenance since September 2007. During this time, Petra has built up substantial ore stockpiles totaling approximately 500,000 tonnes. They are estimated to contain 90,000 carats. With the conclusion of the agreement, Petra will start processing and recovering diamonds.

Petra paid $2 million for the mine. Another $8.4 million was invested by De Beers as part of its rehabilitation obligations.

Kimberley Underground is expected to produce 100,000 carats in the fiscal 2011, rising to 180,000 carats per year thereafter following commissioning of a second production plant by June 2011.

"The mines produce high value gem diamonds and in particular are noted for fancy yellow diamonds,” said Petra's CEO Johan Dippenaar. “The substantial additional output of high value diamonds will significantly add to group revenues and further assist Petra towards its goal to more than treble group production by 2019."