Petra Diamonds Regulatory News (PDL)

31 Jul 2006 09:17

Petra Diamonds Ld31 July 2006 31 July 2006 Petra Diamonds Limited Exploration Update - Alto Cuilo Petra Diamonds Limited ("Petra" or "the Company"), the AIM-quoted and ASX-listeddiamond mining group, announces an important update with regards to the AltoCuilo project (the "Project" or "Alto Cuilo") in north-eastern Angola. Core drilling exploration Since the last update on 20 June 2006, the core drilling exploration programmehas noted a further major success, with the discovery of the 50th kimberlite atAlto Cuilo. • The total number of kimberlite occurrences now stands at 50 (20 June; 39) out of 60 targets drilled, a success rate of 83%, which is considered exceptional when compared with other global diamond exploration projects. • Approximately 26,000 metres of core drilling has now been completed, illustrating the effectiveness of the three drills now working on site. A total of 190 holes have been drilled to date. • Drilling of anomalies in the north-east of the Project area has commenced, with 4 of the 50 kimberlites identified being situated in the north-east area. Bulk Sampling The Company announced on 20 June 2006 that due to supply problems in the miningequipment supply industry, delivery of the large diameter drill rig hadunfortunately been delayed by up to 10 weeks, with the large diameter drillingcampaign expected to commence in September 2006. Petra is now pleased to advisethat the drill rig has arrived in Luanda, cleared customs and will betransported to site shortly. This is some 4 weeks earlier than expected andtherefore will allow the bulk sampling to commence earlier than previouslyanticipated. The large diameter drill rig will take bulk samples from the kimberlitesprioritised for bulk sampling and a 10 tonne per hour mobile dense mediaseparation ("DMS") plant will then treat the bulk samples. The DMS will arriveat port in Angola shortly and after clearing customs is expected to arrive onsite at Alto Cuilo within 4 weeks. Due to the time required for the drill rig toextract the first bulk samples, the arrival of the DMS on site after the drillwill not delay the commencement of the bulk sampling campaign. Xceldiam - Strategic Cooperation Xceldiam Limited announced on 25 July 2006 that core drilling at Project Luanguehad returned excellent first results, with drilling on the first targetintersecting kimberlite. When the Strategic Cooperation Agreement was announcedon 30 May 2006, both Petra and Xceldiam stated that they believed that ProjectLuangue may host kimberlite geology similar to that of Project Alto Cuilo. Thisnews supports our belief and Petra looks forward to further developments atProject Luangue. Adonis Pouroulis, Petra's Chairman, comments: "The discovery of the 50thkimberlite at Alto Cuilo is yet another milestone in the development at AltoCuilo and demonstrates just how far Alto Cuilo has come. The exploration resultsat Alto Cuilo have surpassed our expectations, particularly given the number ofkimberlites now discovered and the exciting indicator mineral chemistry recentlyannounced. "With regard to the news from Xceldiam, we note with interest the very earlysuccess at Luangue. The cooperation between Petra and Xceldiam is alreadyleading to significant benefits with regards to exploration at Luangue and themanagement of both companies look forward to continuing to work together for thebenefit of both Projects Luangue and Alto Cuilo." Ends Notes 1. The information in this update that relates to Exploration Results, MineralResources or Ore Reserves is based on information compiled by Jim Davidson, Pr.Sci Nat (reg No 400031/06), who is a Member of the Geological Society of SouthAfrica, a 'Recognised Overseas Professional Organisation' ('ROPO'), included ina list promulgated by the ASX from time to time. Jim Davidson is a full-timeemployee of the Company and has sufficient experience which is relevant to thestyle of mineralisation and type of deposit under consideration and to theactivity which he is undertaking to qualify as a Competent Person as defined inthe 2004 Edition of the 'Australasian Code for Reporting of Exploration Results,Mineral Resources and Ore Reserves'. Jim Davidson has given his written consentto the inclusion in this announcement of the matters based on his information inthe form and context in which it appears. 2. It should be noted that the potential quantity in this report is conceptualin nature, there has been insufficient exploration to define a Mineral Resourceand it is uncertain if further exploration will result in the determination of aMineral Resource. For further information, please contact: Justine Howarth / Cathy Malins Telephone: +44 (0) 20 7493 3713Parkgreen Communications, London Notes to Editors: Overview of Petra's Operations > Petra is focused on the exploration and mining of diamonds in Africa.Petra's strategy is to continue to build its portfolio of revenue producing andexploration assets, achieving the objective of becoming a 'mid-tier' diamondgroup. > Petra has operations in Angola, South Africa, Botswana and Sierra Leone.Petra is well placed to achieve high yielding results from the increasinglyrobust market for diamonds. > Petra's exploration activities at Alto Cuilo in Angola continue todeliver ever more exciting results and the joint venture with BHP Billiton hasexpedited exploration with the identification to date of 50 kimberliticoccurrences together with diamond indicator mineral results comparable with someof the world's economic diamond deposits . > In May 2006 Petra announced that it has entered into a strategiccooperation agreement with AIM quoted Xceldiam Limited, with regards to theneighbouring Luangue and Alto Cuilo diamond projects > The South African operations are expected to deliver a significantincrease in production for the year to June 2006, giving the group healthyproduction revenues. Two large stones have been reported in the last year, one76 carat stone which sold for US$465,000 and also a 67 carat stone which wassold for US$704,265. > In Botswana, exploration is currently focused on the Gope area wherePetra holds diamond prospecting licences covering ground that is known to hostseveral diamondiferous kimberlites. A 700km(2) low-level Xcalibur horizontalgradient magnetic survey has been completed in the immediate vicinity of theGope kimberlites. > In Sierra Leone, Petra has earned a 51% interest in the Kono Project,following the expenditure of $3million on the project. This JV with AIM andTSX-listed Mano River Resources Inc is progressing well and explorationproduction from the Lion fissures commenced in June 2006. For further information on Petra Diamonds, please visit www.petradiamonds.com This information is provided by RNS The company news service from the London Stock Exchange