Petra Diamonds Regulatory News (PDL)

Petra Diamonds Limited

("Petra", "the Company" or "the Group")

Interim results for the six months to 31 December 2017

Petra Diamonds Limited announces its interim results (unaudited) for the six months to 31 December 2017 ("the Period" or "H1 FY 2018" or "H1").

SUMMARY

Financial

· Financial measures related to operating performance of profit from mining activities and adjusted EBITDA in line with H1 consensus. However these measures were adversely impacted by strike action at certain South African operations in Q1, the inability to sell the blocked Williamson parcel, and the strengthening ZAR against the USD, which had a combined impact of ca. US$18 million.

· Revenue: US$225.2 million (H1 FY 2017: US$228.5 million).

· Adjusted EBITDA3: US$80.1 million (H1 FY 2017: US$87.1 million).

· Adjusted net profit after tax4: US$5.3 million (H1 FY 2017: US$24.1 million).

· Non-cash impairment charges recognised on the carrying value of Koffiefontein and Kimberley Ekapa Mining JV ("KEM JV") of US$118.0 million, due to the effect of the strong Rand on the cost base of these assets, compounded by continuing operational underperformance, and diamond pricing for smaller, low value goods in the case of KEM JV.

· Net loss after tax: US$117.7 million (H1 FY 2017: US$35.2 million profit).

· Cash generated from operations: US$38.9 million (H1 FY 2017: US$86.4 million).

· Basic loss per share: 17.55 US$ cents (H1 FY 2017: basic profit per share of 5.27 US$ cents).

· Net debt10 of US$644.7 million (30 June 2017: US$555.3 million); unrestricted cash and bank facilities of US$104.7 million (30 June 2017: US$190.2 million).

· Post Period end, waiver received from lender group for EBITDA-related bank facility covenants for the December 2017 measurement period, and a re-set received for the June and December 2018 measurement periods, subject to finalisation of the legal documentation.

Operations

· Safety: LTIFR improved to 0.24 (H1 FY 2017: 0.25).

· Production up 10% to 2,208,056 carats (H1 FY 2016: 2,015,087 carats).

· Carats sold down 5% to 1,811,154 (H1 FY 2016: 1,910,113 carats) mainly due to the blocked Williamson parcel not sold.

· Absolute costs generally remain within expectations despite inflationary pressures.

· Capex down 43% to US$77.5 million (H1 FY 2017: US$134.9 million) excluding capitalised borrowing costs of US$16.2 million (H1 FY 2017: US$21.5 million), in accordance with the Group's declining Capex profile.

Corporate and Governance

· Board changes:

o Technical Director Jim Davidson has informed the Board that he will retire from the Company, effective 30 June 2018.

o Chief Financial Officer Jacques Breytenbach to join the Board as Finance Director, effective immediately.

· Independent Non-Executive Director Dr Pat Bartlett has been appointed to the Company's HSSE Committee.

Outlook

· FY 2018 revenue expectations remain in line with current consensus (including the expected sale of the blocked Williamson parcel in H2).

· Delivery of production guidance of 2.4 - 2.5 Mcts in H2 (giving full year production of 4.6 - 4.7 Mcts) is supported by the two key underground development programmes progressing as planned, with increasing mining footprints of the new mining areas at Finsch's Block 5 SLC and Cullinan's C-Cut Phase 1, and undiluted ore from both mines on track to more than double on a full year basis; the new Cullinan plant being at operational capacity (though with optimisation ongoing); and the addition of new ore-handling systems at Finsch, Cullinan and Koffiefontein.

· The diamond market is currently experiencing positive momentum post the healthy Christmas sales period, with pricing up ca. 3 - 4% on a like-for-like basis at the Company's first tender of H2 when compared to average prices achieved in H1.

· While there was a ca. two week period of labour disruption at the Company's South African mines in September 2017 (except for Cullinan), the new three year wage agreement agreed at the end of that month bodes well for a more stable environment throughout this period.

· Initial outcome of Capital Review (as announced in the Trading Update on 29 January 2018): the Company has been reviewing its capital requirements for FY 2018 to FY 2020, with a view to deferring non-essential projects that will not impact on short to medium term production plans. The initial results of this review have identified reductions of ca. US$10 million in FY 2018, ca. US$20 - 25 million in FY 2019 and ca. US$25 - 30 million in FY 2020 (in FY 2018 money terms) - further information is provided in the 'Results of the Capital Review' section.

· The Company's financial position remains highly sensitive to the ZAR:US$ exchange rate; net debt for 30 June 2018 is targeted to fall to ca. US$600 million, assuming an exchange rate of ZAR12:US$1 and the sale of the blocked Williamson parcel in H2.

· The Group's forecasts show that Petra has sufficient banking facilities to meet its working capital and capital development requirements and that the Company maintains headroom against its revised financial covenants going forward, subject to the finalisation of the legal documentation pertaining to the covenant changes, although headroom remains sensitive to diamond prices, foreign exchange rates and production.

Johan Dippenaar, CEO of Petra, commented:

"H1 saw further growth in production to 2.2 million carats. Our focus now is to keep on delivering from the new production blocks, particularly at Finsch and Cullinan where the expansion programmes continue to ramp up, and to further optimise the new Cullinan plant. The challenge of the strong Rand has also sharpened focus on our operating and capital expenses."

SUMMARY OF RESULTS (unaudited)

Notes:

The Group uses several non-GAAP measures above and throughout this report to focus on actual trading activity by removing certain non-cash or non-recurring items. These measures include adjusted mining and processing costs, profit from mining activities, adjusted EBITDA, adjusted net profit after tax, adjusted earnings per share, adjusted US$ loan note and net debt. As these are non-GAAP measures, they should not be considered as replacements for IFRS measures. The Group's definition of these non-GAAP measures may not be comparable to other similarly titled measures reported by other companies. The Board believes that such alternative measures are useful as they exclude one-off items such as the impairment of mines and non-cash items to help portray a clearer understanding of the underlying trading performance of the Group.

1. Adjusted mining and processing costs are mining and processing costs stated before depreciation and share-based expense.

2. Profit from mining activities is revenue less adjusted mining and processing costs plus other direct income.

3. Adjusted EBITDA is stated before depreciation, share-based expense, net finance expense (excluding net unrealised foreign exchange gain), tax expense, KEM JV fair value adjustment, impairment charge, net unrealised foreign exchange gains and losses, taxation charge on reduction of unutilised Capex benefits and bond redemption premium and acceleration of unamortised cost.

4. Adjusted net profit after tax is net profit after tax stated before the KEM JV fair value adjustment, impairment charge, net unrealised foreign exchange gains and losses, taxation charge on reduction of unutilised Capex benefits and bond redemption and acceleration of unamortised costs.

5. In FY 2017, the US$4.1 million gain recorded on the formation of KEM JV represented Petra's incremental‎ 26% share of the fair value of Ekapa Minerals (Pty) Ltd's (being the entity through which Petra and Ekapa Mining own the Kimberley Mines' assets and liabilities and its 75.9% share of the fair value of Super Stone's assets and liabilities), less the 24.1% of the net book value assets and liabilities of Kimberley Underground mine relinquished as part of the transaction. See notes 2 and 15 for further details.

6. Impairment charge of US$118.0 million is due to the Group's impairment review of the Koffiefontein and KEM JV operations. Refer to note 16 for further details.

7. Adjusted EPS is stated before the KEM JV fair value adjustment, impairment charge, net unrealised foreign exchange gains and losses, taxation charge on reduction of unutilised Capex benefits and bond redemption premium and acceleration of unamortised costs.

8. Bond redemption premium and acceleration of unamortised costs represent those costs incurred as a result of the early redemption of the US$300 million loan notes in April 2017.

9. The US$ loan note represents the gross capital of US$650 million (30 June 2017: US$650 million and 31 December 2016: US$300 million), excluding transaction costs.

10. Net debt is the US$ loan notes and bank loans and borrowings net of cash at bank (including restricted cash).

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

ANALYST PRESENTATION AND WEBCAST

A presentation for analysts will be held at 9:30am GMT on 19 February 2018 at the offices of Buchanan, 107 Cheapside, London EC2V 6DN. A live webcast of the analyst presentation will be available on Petra's website at www.petradiamonds.com and on the following link: http://www.investis-live.com/petra-diamonds/5a7b0813ff54e7170092f759/ybdf.

A conference call line will also be available to allow participants to listen to the webcast by dialling one of the following numbers shortly before 9:30am GMT:

From the UK (toll free): 0800 640 6441

From South Africa (toll free): 080 017 2952

From the rest of the world: +44 20 3936 2999

Participant passcode: 367763

A recording of the webcast will be available from 1:00pm GMT on 19 February 2018 on the website and on the link above.

Due to Monday 19 February 2018 being a public holiday in the US, Petra will hold a conference call for international investors on Tuesday 20 February 2018 instead.

Second Call - 4:00pm GMT / 11:00am EST - Tuesday 20 February

This will be a Q&A call only to cater for international investors. Participants are therefore advised to listen to the replay of the earlier webcast in advance, as the main management commentary will not be repeated.

From the United States (toll free): 1866 928 7517

From the rest of the world: +44 203 428 1542

From the UK (toll free): 0808 237 0040

Participant passcode: 15590421#

For further information, please contact:

Petra Diamonds, London Telephone: +44 20 7494 8203

Cathy Malins cathy.malins@petradiamonds.com 

Buchanan Telephone: +44 20 7466 5000

(PR Adviser)

Bobby Morse bobbym@buchanan.uk.com

Anna Michniewicz annam@buchanan.uk.com

About Petra Diamonds Limited

Petra Diamonds is a leading independent diamond mining group and an increasingly important supplier of rough diamonds to the international market. The Company has a diversified portfolio incorporating interests in five producing operations: three underground mines in South Africa (Finsch, Cullinan and Koffiefontein), the Kimberley Ekapa Mining joint venture (including the Kimberley Underground mine and extensive tailings retreatment operations) and one open pit mine in Tanzania (Williamson). It also maintains an exploration programme in Botswana and South Africa.

Petra's strategy is to focus on value rather than volume production by optimising recoveries from its high quality asset base in order to maximise their efficiency and profitability. The Group has a significant resource base in excess of 300 million carats, which supports the potential for long-life operations.

Petra conducts all operations according to the highest ethical standards and will only operate in countries which are members of the Kimberley Process. The Company aims to generate tangible value for each of its stakeholders, thereby contributing to the socio-economic development of its host countries and supporting long-term sustainable operations to the benefit of its employees, partners and communities.

Petra is quoted with a premium listing on the Main Market of the London Stock Exchange under the ticker 'PDL' and is a constituent of the FTSE4Good Index. For more information, visit www.petradiamonds.com.

CEO'S REVIEW

Petra increased production 10% to 2.2 Mcts. Strong performance from Finsch and Williamson, and an improving performance from Cullinan, was offset by underperformance from both Koffiefontein and KEM JV, as well as a ca. 60,000 ROM carat impact of the industrial action in South Africa in Q1.

The make-up of Petra's production profile is continuing its transformation as the growth was driven by a 34% increase in higher value ROM carats (production from the primary orebodies), offset by a planned 37% decrease in lower value tailings carats (the reprocessing of material that has already been through the plant). ROM carats therefore represented 81% of the carat profile, as opposed to 66% in H1 FY 2017.

The improving production performance is pleasing because it was set against a solid safety performance, with our lost time injury frequency rate decreasing to 0.24. This is very important to us because we see safety as the single most important personal and organisational value and we continue to place great emphasis on this area. However, we will continue to strive to do better, with our aim being a zero harm workplace.

The increased production was also achieved despite the labour disruption experienced in Q1 at our South African operations (with the exception of Cullinan) prior to the signing of a new three-year wage agreement. Fortunately the disruption was contained to a period of less than two weeks due to the concerted effort of Petra's management to engage with all levels of the National Union of Mineworkers in order to find a resolution. I am pleased to say that labour relations are currently stable and the new three-year agreement bodes well for the labour relations environment during this period.

Despite the increased production, Petra's revenue decreased 1% to US$225.2 million, mainly due to Williamson's first parcel (ca. 71,000 carats) remaining blocked for export by the Government of the United Republic of Tanzania ("GoT"); more information can be found at https://www.petradiamonds.com/our-operations/our-mines/williamson/blocked-diamond-parcel/. Subsequent Williamson parcels have been released for export and tender proceeds received.

With adjusted EBITDA of US$80.1 million, the Company recorded an adjusted EBITDA margin of 36% (H1 FY 2017: 38%), which is lower mainly due to strike action at certain South African operations, the blocked Williamson parcel not being sold and the strengthening of the ZAR against the USD.

The Group recorded a net loss of US$117.7 million for the Period, impacted by a US$118.0 million impairment of the Koffiefontein and KEM JV operations and a US$7.9 million one-off charge related to the settlement with the South African Revenue Service on the right to claim a deduction on unutilised capital allowances.

The impairments at Koffiefontein and KEM JV were deemed necessary due to the high level of sensitivity both mines currently have to the strengthening of the Rand on the US$ operating costs, coupled with execution risk related to their remaining expansion targets. KEM JV is also impacted by diamond pricing for smaller, low value goods.

Petra's main underground expansion projects remain on track, with both Finsch's Block 5 SLC and Cullinan's C-Cut Phase 1 continuing to ramp up during the Period. Finsch's ROM carat production rose 14% to 931,859 carats and Cullinan's ROM carat production rose 68% to 602,594, demonstrating the significant progress made at both assets. Due to the nature of sub level caving and block caving, each month Petra grows the footprint of the existing mining areas and opens up more access to the respective orebodies. These expanding footprints deliver higher production volumes each month, thereby growing access to undiluted ore.

The new Cullinan Plant achieved a milestone with the processing of 1 Mt ROM ore in Q2 and further to test work performed, was assessed to have achieved its nameplate capacity of 6 Mtpa (ROM plus tailings). As announced in our Trading Update on 29 January 2018, based on our experience of operating the new plant to date, we have revised our guidance for Cullinan. As set out more fully in the Cullinan section of the 'Operational Review', we have increased the H2 price guidance at Cullinan from US$113 - 119 (excluding Exceptional Diamonds) to US$140 - 160 per carat (including Exceptional Diamonds), while H2 grade guidance has been lowered from ca. 50 cpht to 37 - 42 cpht.

The impact of these changes on outlook for the Company is that full year FY 2018 revenue guidance remains in line with current consensus, while production guidance of 4.8 - 5.0 Mcts was reduced to 4.6 - 4.7 Mcts. However, we also cautioned in our Trading Update on 29 January 2018 that FY 2018 EBITDA is expected to be negatively affected by ca. 10-15% versus consensus at that date (assuming an average exchange rate of ZAR12:USD1 for H2), primarily due to the recent strengthening of the Rand and its potential impact on Petra's cost base when reported in US Dollar terms; operating costs otherwise remained well controlled. Consensus figures have since been adjusted and we now estimate that EBITDA will be ca. 5% below current consensus. Petra has published public consensus via Vuma on its website at:

https://www.petradiamonds.com/investors/analysts/market-consensus/.

Capex reduced by 43% to US$77.5 million (excluding capitalised borrowing costs and corporate Capex) in line with Petra's declining Capex profile. As announced today, we have further reduced our near term capital requirements, as set out in the 'Results of Capital Review'.

Finally we have also announced some forthcoming changes to the Board today. Our Technical Director, Jim Davidson, has informed the Board that he will retire from the Company at 30 June 2018. I would like to personally thank Jim for his exceptional contribution to Petra - we will continue to build on his legacy. We have also announced that Jacques Breytenbach, our CFO, is joining the Board as Finance Director, effective immediately. I am delighted to welcome Jacques as a new Board member and we look forward to the insight that he will continue to provide, based on the depth of his knowledge of our assets, combined with his commercial and financial expertise.

SAFETY

As result of an intensified focus on safety in an effort to improve the safety record, the Group LTIFR has reduced to 0.24 (H1 FY 2017: 0.25), with zero fatalities incurred during the Period. The health and safety of our employees remains the single most important personal and organisational value.

DIAMOND MARKET

While the diamond market experienced weakness from July to October 2017, which is seasonally the slowest time for the rough diamond market, it started to strengthen before the calendar year end further to positive momentum around the festive selling season. Results relating to Christmas sales are generally positive, further to buoyant sales in the US and continued strong growth in the Chinese and Hong Kong markets. Further to expectations of equilibrium in supply versus demand, Petra expects market conditions to remain stable in H2 FY 2018 (January to June 2018).

The period January to April is always the strongest seasonally for the rough diamond market, as the pipeline commences restocking further to the festive retail sales. The new calendar year has therefore commenced on a strong footing, with robust levels of competition at our first tender of the year and good pricing levels achieved. A further three tenders will be held during the remainder of H2 and Petra expects market conditions to remain stable during this time.

The Diamond Producers Association ("DPA") has announced that its marketing budget will increase to US$70 million in 2018, allowing it to expand upon its US marketing efforts, as well as supporting its first full year of investment in India (where it launched in November 2017), as well as its commencement of marketing in China in April 2018.

Diamond Pricing

Rough diamond prices (on a like-for-like basis, in comparison to H2 FY 2017) fell ca. 5% from July to October 2017, before recovering by ca. 1.5% by December 2017. As noted above, calendar 2018 has commenced well, with pricing up 3-4% at Petra's first tender of H2.

Despite the price falls in H1, higher average values were realised at Finsch and Cullinan further to the improved product mix associated with higher production levels of undiluted ore and lower contribution of tailings carats.

The table below summarises diamond pricing achieved for H1 FY 2018, set against the Company's revised FY 2018 guidance (for Cullinan and KEM JV only) and the last financial year. The full revised diamond price guidance table can be found at:

https://www.petradiamonds.com/investors/analysts/analyst-guidance/.

Notes:

1. Guidance above is based on expected weighted average prices for FY 2018, incorporating all sales of ROM and tailings carats, including Exceptional Diamonds.

2. Price guidance has been revised from US$113 - 119 (excluding Exceptional Diamonds) to US$140 - 160 per carat (including Exceptional Diamonds).

3. Price guidance has been revised from US$120 - 125 per carat to US$105 - 115 per carat due to a lower percentage of ROM in the product mix.

FINANCIAL RESULTS

Revenue

Revenue decreased 1% to US$225.2 million in the Period (H1 FY 2017: US$228.5 million) further to a 5% decrease in carats sold to 1,811,154 carats (H1 FY 2017: 1,910,113), seasonal weakness in the diamond market (with pricing down ca. 3.5%), the blocked Williamson parcel and strike action at certain South African operations.

Mining and processing costs

The mining and processing costs for H1 FY 2018 were, as in past periods, comprised of on-mine cash costs as well as other operational expenses. A breakdown of the total mining and processing costs for the Period is set out below.

Notes:

1. Includes all direct cash operating expenditure at operational level, i.e. labour, consumables, utilities and on-mine overheads.

2. Diamond and stockpile inventories increased by US$34.4 million, up from H1 FY 2017 US$13.4 million, due to lower proportion of goods sold relative to production during the Period when compared to H1 FY 2017.

3. Certain technical, support and marketing activities are conducted on a centralised basis.

4. Excludes exploration and corporate / administration.

On-mine cash operating costs in H1 FY 2018 remained in line with expectations, despite the ongoing inflationary pressures. On-mine cash costs increased by 16% compared to H1 FY 2017, mainly due to:

· increased volumes treated, predominantly due to the commissioning of the Cullinan Plant coupled with the ongoing ramp-up of underground production across the operations (5% increase);

· inflationary increases, including the impact of labour costs (7% increase); and

· the effect of translating South African operations' ZAR denominated costs at stronger ZAR/USD exchange rates (4% increase).

Unit costs on a mine by mine basis are covered in the 'Operational Review' below.

Profit from mining activities

Profit from mining activities was down 7% to US$85.6 million (H1 FY 2017: US$92.2 million), due to the decrease in revenue, other direct income and marginal increase in costs.

Exploration

Petra incurred US$0.4 million of exploration expenditure during the Period (H1 FY 2017: US$0.3 million). Refer to the 'Exploration' section for further information.

Corporate overhead - General and Administration

Corporate overhead increased to US$5.1 million for the Period (H1 FY 2017: US$4.8 million). Given that the Group's corporate overheads are predominantly denominated in ZAR, with some expenditure in GBP, the impact of the stronger Rand and Pound for the Period resulted in higher US$ overhead costs.

Adjusted EBITDA

Adjusted EBITDA, being profit from mining activities less exploration and corporate overhead, decreased by 8% to US$80.1 million (H1 FY 2017: US$87.1 million), representing an adjusted EBITDA margin of 36% (H1 FY 2017: 38%), impacted by strike action, the blocked Williamson parcel and the stronger ZAR.

Depreciation

Depreciation for the Period was US$42.7 million (H1 FY 2017: US$28.6 million), mainly due to the commencement of depreciation relating to newly commissioned assets associated with the expansion programmes and the strengthening of the ZAR during the Year.

Impairment charge

As a result of the impairment review carried out at the Koffiefontein and KEM JV operations during the Period, the Board recognised an overall impairment charge of US$118.0 million (H1 FY 2017: US$nil million), with US$66.0 million attributable to Koffiefontein and US$52.0 million attributable to KEM JV. Further details are provided in Note 16.

Net financial expense

Net financial expense of US$14.5 million (H1 FY 2017: US$8.9 million) comprises:

· interest received on bank deposits of US$0.6 million (H1 FY 2017: US$0.3 million);

· net unrealised foreign exchange gains of US$2.9 million (H1 FY 2017: US$6.9 million), representing (i) the unrealised foreign exchange losses on the foreign currency retranslation of cross border loans considered to be repayable in the foreseeable future and (ii) unrealised gains on forward exchange contracts; and

· net realised foreign exchange gains on settlement of forward exchange contracts of US$2.4 million (H1 FY 2017: US$nil million);

offset by:

· net interest payable to the BEE partners' loans of US$7.5 million (H1 FY 2017: US$5.3 million);

· net realised foreign exchange losses of US$nil million (H1 FY 2017: US$5.3 million).

· a charge for the unwinding of the present value adjustment for Group rehabilitation costs of US$4.0 million (H1 FY 2017: US$3.1 million); and

· interest on the Group's debt of US$8.9 million (H1 FY 2017: US$2.4 million) (stated after the capitalisation of interest of US$16.2 million (H1 FY 2017: US$21.5 million) associated with the funding of assets under development).

Tax charge

The tax charge of US$22.5 million (H1 FY 2017: US$16.4 million), including the one-off settlement with the South African Revenue Service ("SARS") on the right to claim a deduction on unutilised capital allowances (US$7.9 million), resulted in an increase of US$4.9 million in the Group's deferred tax liabilities and an additional US$3.0 million in current taxation payable.

The current period effective tax rate is higher than the South Africa tax rate of 28% (the Group's primary tax paying jurisdiction) primarily due to the reversal of the brought forward deferred tax asset at KEM JV, the one-off settlement to SARS as detailed above, permanent difference as a result of the Koffiefontein and KEM JV impairment charges, and loss making companies (within the Group) based in tax jurisdictions with a 0% tax rate which when consolidated reduces the Group's overall net profit resulting in an increased effective tax rate. The tax charge for H1 FY 2018 arises due to deferred tax (net of charges and credits), reflecting principally the utilisation of certain capital allowances predominantly at Cullinan and Finsch during the Period and South African current taxation payable at Finsch.

Net Profit

A net loss after tax of US$117.7 million was recorded for the Period (H1 FY 2017: US$35.2 million profit).

Earnings per share

Basic loss per share was 17.55 US$ cents (H1 FY 2017: profit of 5.27 US$ cents).

Cash generated from operations

Cash generated from operations for the Period decreased to US$38.9 million (H1 FY 2017: US$86.4 million) in line with the decrease in adjusted EBITDA and cash outflow from working capital changes, including increased diamond inventories further to the higher Group production rate, as well as the blocked Williamson parcel.

Cash, diamond inventories, diamond debtors and net debt

Cash

As at 31 December 2017 the Group had cash at bank of US$119.1 million (H1 FY 2017: US$49.0 million) and of these cash balances, US$104.7 million was held as unrestricted cash (H1 FY 2017: US$36.9 million), US$13.4 million was held by Petra's reinsurers as security deposits on the Group's cell captive insurance structure (with regards to the Group's environmental guarantees) (H1 FY 2017: US$11.1 million) and US$1.0 million was held by Petra's bankers as security for other environmental rehabilitation bonds lodged with the Department of Mineral Resources in South Africa (H1 FY 2017: US$1.0 million).

Loans and Borrowings

The Group had loans and borrowings (measured under IFRS) at Period end of US$760.3 million (H1 FY 2017: US$504.7 million), comprised of the loan notes plus accrued interest of US$647.1 million (H1 FY 2017: US$294.3 million) and bank loans and borrowings of US$113.2 million (H1 FY 2017: US$210.4 million). Bank debt facilities undrawn and available to the Group at 31 December 2017 were US$7.4 million (H1 FY 2017: US$57.1 million).

Net debt at 31 December 2017 was US$644.7 million (H1 FY 2017: US$463.6 million), which is higher than originally expected due to the labour action and the inability to sell the blocked Williamson parcel in H1. Net debt for 30 June 2018 is expected to fall to ca. US$600 million, assuming an exchange rate of ZAR12:US$1 and the sale of the blocked Williamson parcel in H2.

Covenant Measurements attached to banking facilities

The Group has a number of covenants related to its banking facilities, which can be found on Petra's website at: https://www.petradiamonds.com/investors/fixed-income-investors/banking-covenants/. Covenant ratios are measured bi-annually on a rolling twelve month period to 30 June and 31 December respectively.

As previously highlighted to the market, Petra expects to be in breach of the 31 December 2017 EBITDA related covenant measurement ratios associated with its banking facilities when the Company submits to its lender group on the required reporting date of 31 March 2018.

The Company therefore commenced formal discussions with its lender group in January 2018 and can confirm that it has received a waiver of the measurement of the 31 December 2017 covenants, coupled with a reset of the 30 June 2018 and 31 December 2018 EBITDA related covenants as outlined below:

No upfront fees were payable as a result of the covenant changes, however an increase in the interest rates to both South African debt facilities will apply in the event that the Company's Consolidated Net Debt exceeds 2.5x Consolidated EBITDA and a further additional interest increase will apply should the Company's Consolidated Net Debt exceed 3x Consolidated EBITDA. This will apply from the June 2018 measurement period onwards.

As an additional covenant, a minimum liquidity will now apply for the June and December 2018 measurement periods. Petra will announce the impact on interest rates and the new liquidity covenant as soon as this has been finalised with the lender group.

The above has been approved by the lender group, with the legal documentation to be finalised shortly.

The Group closely monitors and manages its liquidity risk. The Group's forecasts show that Petra has sufficient banking facilities to meet its working capital and capital development requirements and that the Company maintains headroom against its financial covenants going forward, subject to the finalisation of the above covenant changes, although headroom remains sensitive to diamond prices, foreign exchange rates and production.

BEE loans receivable and payable

BEE loans receivable of US$60.8 million (H1 FY 2017: US$34.3 million) relate to the acquisition and financing of the Koffiefontein and Kimberley Underground mines by Petra on behalf of its BEE partners, post the refinancing of the BEE Partner's loans related to Cullinan and Finsch during FY 2015. During H1 FY 2018, Petra advanced US$8.7 million mainly to facilitate servicing of interest on behalf of the BEE Partners and US$3.3 million for distributions to the beneficiaries of the Itumeleng Petra Diamonds Employee Trust.

The BEE loans payable of US$116.3 million (H1 FY 2017: US$96.5 million) relate to the initial acquisition loan funding advanced by the Group's BEE partners to the operations to acquire their investments in the Cullinan, Finsch, Koffiefontein and Kimberley Underground mines. The repayment of these loans by the mines to the BEE partners will be from future free cashflows generated by the mining operations.

Other Liabilities

Other than trade and other payables of US$123.1 million (comprising US$30.3 million trade creditors, US$4.7 million employee related accruals, current taxation payable of US$4.9 million and US$83.2 million other payables) (H1 FY 2017: US$90.1 million), the remaining liabilities on the balance sheet mainly comprise provisions for rehabilitation liabilities, post retirement employee related provisions and deferred tax.

Capex

H1 FY 2018 Capex for the Period was US$93.7 million (H1 FY 2017: US$156.4 million), with H2 FY 2018 Capex expected to remain in line with H1 in Dollar terms, due to the impact of the stronger Rand. The total Capex figure comprised of:

· US$66.5 million on expansion Capex (H1 FY 2017: US$124.7 million);

· US$11.0 million on sustaining Capex (H1 FY 2017: US$10.2 million);

· US$16.2 million on capitalised borrowing costs with regards to the expansion Capex (H1 FY 2017: US$21.5 million); and

· corporate / exploration Capex of US$0.6 million net of other corporate Capex invoiced to operations (H1 FY 2017: US$1.3 million).

Notes:

1. Capex for the Period includes US$16.2 million (H1 FY 2017: US$21.5 million) of capitalised borrowing costs, which is also included in the applicable mine by mine tables above.

2. Petra's annual Capex guidance is cash based and excludes capitalised borrowing costs. Given that the majority of Petra's debt funding is in relation to its expansion and development programmes, Petra's guidance is to assume that the majority of interest and financing fees will be capitalised for the duration of the project phase and not expensed through the income statement. As the Capex projects are commissioned the interest and finance fees will be expensed through the income statement. 

3. The Group (Petra internal projects and Other Corporate) incurs capital spend on behalf of the operations and although this spend is reported in the Group's total Capex, it is policy not to account for it on a specific mine's Capex until the work completed is invoiced to the relevant operation. Group Capex includes US$0.1 million for the Period (H1 FY 2017: US$0.4 million), which was incurred and invoiced by the Group's internal projects facility and Corporate division. Therefore, the mine by mine tables plus the internal projects and other corporate Capex will add together to make the Capex total in the relevant sections above.

INITIAL RESULTS OF CAPITAL REVIEW

The Company has been reviewing its capital requirements for FY 2018 to FY 2020, with a view to deferring non-essential projects that will not impact on short to medium term production plans. The initial results of this review have identified reductions of ca. US$10 million in FY 2018, ca. US$20 - 25 million in FY 2019 and ca. US$25 - 30 million in FY 2020 (in FY 2018 money terms). Revised Capex guidance for FY 2018 - FY 2020 on a mine by mine basis can be accessed at:

https://www.petradiamonds.com/investors/analysts/analyst-guidance/.

This initiative aims to optimise cashflow without impacting the economics of the longer term business plan.

OPERATIONAL REVIEW

H1 FY 2018 Sales, Production and Capex - Summary

Notes:

1. Production and sales data are stated on an attributable basis, including 75.9% of KEM JV effective from 1 July 2016.

2. 'Other' includes alluvial diamond mining at Williamson.

H1 production increased 10% to 2,208,056 carats (H1 FY 2017: 2,015,087 carats) in line with earlier H1 guidance of 2.2 - 2.3 Mcts, due to increases in ROM production across all mines (ROM production rose 34% to 1.8 Mcts, versus 1.3 Mcts in H1 FY 2017), as expansion projects yielded more undiluted ore. The increase in production was impacted by the labour disruption in Q1 (ca. 60,000 ROM carats), as well as a lower average grade achieved at Cullinan versus guidance, and underperformance at Koffiefontein and KEM JV.

Finsch - South Africa

Note:

1. The Company is not able to precisely measure the ROM / tailings grade split because ore from both sources is processed through the same plant; the Company therefore back-calculates the grade with reference to resource grades.

Production:

Finsch's ROM carat production increased 14% to 931,859 carats (H1 FY 2017: 816,001 carats), driven by improved ROM grades of 59.8 cpht (H1 FY 2017 54.5 cpht) in line with the increase in undiluted tonnes from Block 5 SLC, partially offset by the ca. 55,000 carat adverse effect of the labour disruptions in Q1. Overall production of 1,036,596 carats was flat compared to H1 FY 2017 (1,031,560 carats), due to the planned reduction in tailings production.

Sales:

Sales increased 2% to US$100.8 million (H1 FY 2017: US$99.3 million), further to the higher average value per carat recorded, despite the weaker diamond market. This increased value is due to the improvement in the product mix expected as Finsch continues to grow production from the new, undiluted mining areas, and as tailings becomes a lower contribution of the overall production mix.

Costs:

The on-mine unit cash cost per total tonne treated was ZAR325, an increase of 42% from H1 FY 2017 (ZAR229), mainly due to the planned reduction in lower cost tailings tonnes being treated during the Period, in line with guidance.

Capex:

Capex of US$34.5 million for the Period (H1 FY 2017: US$38.9 million) was in line with guidance and the progression of the expansion project and associated underground development.

Development Programme:

Mining is currently ramping up in the new Block 5 SLC over four levels from 700 mL to 780 mL. The first two levels are currently in production and are on track to deliver ca. 1.9 Mt in FY 2018.

Cullinan - South Africa

Production:

Cullinan's ROM diamond production increased 68% to 602,594 carats (H1 FY 2017: 358,821 carats), due to the ramp up of both the new C-Cut Phase 1 block cave and the new Cullinan Plant, which achieved planned annualised ROM capacity of 4 Mtpa. Plant optimisation is ongoing.

Cullinan's average value per carat of US$140 was 17% higher than that achieved in FY 2017 (US$120), and this strong performance was achieved despite the weakness in the market during H1.

This improved value largely mitigated the lower ROM grade of 33.8 cpht, which was below previous guidance of ca. 43 cpht in H1 mainly due to the lower recovery of fine diamonds. A ROM grade for H2 FY 2018 of 37 - 42 cpht (versus previous guidance of ca. 50 cpht) and a tailings grade for H2 FY 2018 of 5 - 6 cpht (versus previous guidance of 7 - 8 cpht) are expected. Higher grade expectations for H2 are based on volumes mined from undiluted ore (C-Cut Phase 1 and CC1E) increasing from ca. 60% of underground production to over 80%, combined with the treatment of the lower grade ROM stockpile reducing from ca. 250 Kt to ca. 100 Kt during H2.

It is Petra's current assessment that it would not be commercially sensible to make changes to the processing route to extract the smallest diamonds as the resultant increased recirculating load could impact the plant's capacity to receive ROM or tailings ore (which have an estimated contained revenue per tonne of ca. US$58 and ca. US$5 respectively, in comparison to that of the recirculating load of small diamonds, which is estimated to be ca. US$2), and would not be in line with the Company's strategic focus on value rather than volume production.

Diamond price guidance for Cullinan has therefore been raised from US$113 - 119 (excluding Exceptional Diamonds) to US$140 - 160 per carat (including Exceptional Diamonds), supported by the lower recovery of the fine diamonds and the higher expected frequency of larger and high value single stones associated with the Western side of the orebody (C-Cut Phase 1).

During the Period, the Company recovered five stones larger than 100 carats (including a 574 carat stone of poor quality, being the largest stone recovered by Petra at Cullinan to date), and a number of other higher value stones, in line with the expected increase in special stones as indicated by historical records as mining from the Western side of the orebody increases.

Further information on the Company's assessment can be found in the two documents relating to 'Cullinan - grade versus value analysis' at:

https://www.petradiamonds.com/investors/analysts/analyst-guidance/.

Sales:

Cullinan's revenue increased by 33% to US$61.4 million (H1 FY 2017: US$46.0 million), as a result of increased sales volumes, as well as an increase in the average prices realised. This was achieved despite the weaker market for the Period, demonstrating the continued improvement in Cullinan's product mix.

Costs:

The on-mine unit cash cost per total tonne treated was down 20% to ZAR256 (H1 FY 2017: ZAR319), mainly due to the increase in total tonnes treated following the commissioning of the new plant.

Capex:

Capex of US$40.5 million (H1 FY 2017: US$80.2 million) was in line with guidance.

Development Programme:

The C-Cut Phase 1 Block Cave production continues to ramp up and undiluted ore from the new blocks (including the CC1E) is expected to double output of undiluted ore to more than 2 Mt during FY 2018.

Koffiefontein - South Africa

Production:

Koffiefontein's ROM production increased 2% to 25,292 (H1 FY 2017: 24,770 carats), but was below planned performance and negatively impacted by the labour disruptions (ca. 3,000 carats). Commissioning of the new ground handling system in Q3 is expected to yield improvements to production volumes.

Sales:

Koffiefontein's revenue decreased 26% to US$11.0 million (H1 FY 2017: US$14.8 million), further to the 28% decrease in diamonds sold. However, the average value per carat increased 3% to US$511 despite the weaker market, due to the improvement in product mix.

Costs:

Unit cash cost per total tonne treated at Koffiefontein was ZAR634 (H1 FY 2017: ZAR534), above guidance due to lower than expected tonnes treated, associated with the downtime and resultant costs required to resolve issues encountered in the SLC ore handling system.

Capex:

Capex decreased 5% to US$7.8 million (H1 FY 2017: US$8.2 million) and remained primarily focused on underground development associated with the new SLC.

Development Programme:

Koffiefontein's SLC is planned to ramp up during H2 FY 2018, assisted by the new ground handling system currently being commissioned, and is now expected to reach tonnage output for FY 2018 of 0.8 - 0.85 Mt (versus guidance of ca. 1 Mt).

Impairment:

As a result of the impairment review carried out at Koffiefontein during the Period, the Board has recognised an impairment charge of US$66.0 million. Further details are provided in Note 16.

Kimberley Ekapa Mining JV - South Africa (all figures reflect Petra's 75.9% attributable share)

Note:

1. Data in the table above represent Petra's 75.9% attributable share (including both ROM production from Kimberley Underground and Tailings production).

Production:

Kimberley Ekapa Mining JV's ("KEM JV") attributable production decreased 16% to 364,099 carats (H1 FY 2017: 432,174 carats), mainly due to the impact of the strike action upon ROM production, though offset to a certain extent by the processing of higher grade tailings. The ROM grade of 11.5 cpht was below expectations due to the tonnage mix from the underground operations being weighted to the lower grade areas.

Sales:

Sales decreased 12% to US$33.5 million (H1 FY 2017: US$38.0 million) further to the decrease in sales volume, but offset by a higher value per carat due to the increased proportion of ROM versus tailings.

As noted in the 'Diamond Market' section, Petra is guiding for a lower average value per carat at KEM JV going forward, due to revised expectations of the proportion of ROM versus tailings for H2.

Costs:

The on-mine unit cash cost per total tonne treated of ZAR146 was above guidance and impacted by additional security and other costs associated with illegal mining activities which effect certain of KEM JV's surface operations. Unit costs increased compared to H1 FY 2017 (ZAR115) due to increased volumes of higher cost ROM tonnes treated during the Period, although overall volumes for the Period were below plan.

Capex:

Capex for the Period of US$8.1 million was in line with guidance.

Impairment:

As a result of the impairment review carried out at KEM JV during the Period, the Board recognised an impairment charge of US$52.0 million. Further details are provided in note 16.

Williamson - Tanzania

Production:

Williamson's diamond production increased 64% to 174,834 carats (H1 FY 2017: 106,831 carats), mainly due to the increase in ROM tonnes treated and a 40% increase in the grade to 7.0 cpht (H1 FY 2017: 5.0 cpht), further to the mill plant being now fully operational and set to deliver full year production guidance.

Two diamonds of record size were recovered at Williamson during the Period: a poor quality stone of 461.5 carats and a near-gem stone of 396.1 carats. The largest diamond previously recovered at the mine was 260 carats in 1959.

Sales:

Williamson's revenue decreased 40% to US$18.5 million (H1 FY 2017 US$31.0 million), due to its first parcel (ca. 71,000 carats) remaining blocked for export by the GoT. Petra management remains in talks with the GoT to release this parcel. Subsequently, three diamond parcels have been released for export and tendered in Belgium, proceeds of which have been received. Further information on the background and the current status of the blocked parcel can be found here: https://www.petradiamonds.com/our-operations/our-mines/williamson/blocked-diamond-parcel.

Costs:

The on-mine unit cash cost per total tonne treated was US$10 (H1 FY 2017: US$11), which remains in line with guidance.

Capex:

Capex decreased 83% to US$2.2 million further to the completion of the mill plant project.

Development Plan:

Williamson is on track to deliver tonnage throughput of ca. 4.6 Mtpa in FY 2018, rising to steady state ca. 5 Mtpa in FY 2019.

EXPLORATION

Botswana

In Botswana, Petra's focus has been on the evaluation of the KX36 deposit, which was discovered by the Company and where a Resource of 8.7 Mct (contained in 24.6 Mt at an average grade of 35 cpht) has been identified, with an estimated average diamond value of US$65 per carat. As announced in Petra's preliminary results in September 2017, KX36 is not deemed to be economic under present market conditions and under current project parameters, though the Company remains of the opinion that the current KX36 grade and value may be underestimated due to diamond breakage or loss.

As a result of this, Petra is continuing to investigate the potential for a joint venture partner to take this kimberlite deposit forward.

Petra also holds four contiguous prospecting licences that constitute the Orapa South West Project Area, located to the South West of the Orapa kimberlite field. Low-key ground geophysical follow up on several large anomalies and heavy mineral ("HM") sampling on the best geophysical anomalies were completed during Q2 FY 2018. Integrated interpretation of geophysical and HM data led to the selection of six high interest drill targets that were drilled in Q2 FY 2018. None of the drilled holes intersected kimberlite and as such the Company will be relinquishing the Orapa Southwest group of licences.

South Africa

In South Africa, Petra's focus remains the investigation of the Reivilo project, which is situated approximately 110 kilometres north-east of the Finsch mine and where the Company has delineated a cluster of three kimberlite bodies within a 250m radius with estimated sizes of 3.1 Ha, 1.7 Ha and 0.9 Ha respectively. Microdiamond sampling of core obtained during the FY2017 drilling programme for preliminary grade estimation is still outstanding due to delays in obtaining the necessary permits for shipment of samples out of South Africa.

A prospecting right adjacent to the Sedibeng mine (one of the "Fissure Mines" formerly operated by Petra) in the Northern Cape was awarded to Petra in June 2017. An airborne geophysical survey will be the next step to evaluate this property.

Ongoing brownfields exploration at Finsch has identified a possible palaeo-alluvial channel that drained an area of the Finsch pipe. The potential for alluvial trapsites, particularly in the in areas of "soft" hostrock geology, is currently being investigated as possible extra feed for the bulk sample plant.

CORPORATE AND GOVERNANCE

Petra has today announced the following Board changes:

1. Jim Davidson, Technical Director, has informed the Board that he will retire from the Company, effective 30 June 2018.

2. Chief Financial Officer, Jacques Breytenbach, is appointed to the Board as executive Finance Director, effective immediately.

Refer to the separate announcement 'Directorate Change' released today with further information.

Following these changes, Petra's Nomination Committee is continuing to evaluate the Company's optimal Board and Senior Management structures in line with the Company's transition from a capital intensive expansion phase to steady state production and cash generation, and improving its diversity is a strategic imperative. Further developments can be expected in calendar year 2018.

HSSE Committee

The Company has appointed independent Non-Executive Director Dr Pat Bartlett to the HSSE Committee, thereby bringing independent oversight to this committee, which is chaired by CEO Johan Dippenaar and otherwise comprises members of Petra's Senior Management team. Dr Bartlett's extensive experience in diamond mining and block caving will also prove highly valuable to the committee.

PRINCIPAL BUSINESS RISKS

The Group is exposed to a number of risks and uncertainties which could have a material impact on its long-term development, and performance and management of these risks is an integral part of the management of the Group.

An overview of the key risks which could affect the Group's operational and financial performance was included in the Company's 2017 Annual Report, which can be accessed at www.petradiamonds.com. These may impact the Group over the medium to long term; however the following key risks have been identified which may impact the Group over the next six months.

Short term demand and prices

The stability of financial markets and the corresponding effect on consumer demand impacts the Group and the diamond industry as a whole. Whilst the medium to long term fundamentals of the diamond market remain intact, with demand forecast to significantly outpace supply, in the short term the prevailing climate of global economic uncertainty may cause some volatility in rough diamond pricing.

Although diamond prices are influenced by numerous factors beyond the Company's control, the Group's management closely monitors developments in the international diamond market (across the pipeline from the rough market to the retail consumer market) to be in a position to react in a timely manner to changes in rough diamond prices and demand.

Financing and liquidity

Further to the initial review of its capital profile, Petra is targeting reductions of ca. US$10 million in FY 2018, ca. US$20 - 25 million in FY 2019 and ca. US$25 - 30 million in FY 2020 (in FY 2018 money terms). The Company plans to continue to finance its revised Capex requirements from treasury, operating cashflows and debt finance.

The Group closely monitors and manages its liquidity risk. Cash forecasts are regularly produced and sensitivities run for different scenarios including, but not limited to, changes in rough diamond prices and foreign exchange rates, different production rates from the Group's producing assets and delays to development projects.

The Group's forecast, taking into account the risks described above and the covenants as discussed in the 'Covenant measurements attached to banking facilities' section of the Financial Review, show that the Group will be able to operate within its current debt facilities and have sufficient liquidity headroom for the remainder of the Group's Capex programme to FY 2020, although headroom remains sensitive to diamond prices, foreign exchange rates and production. There remains a risk, given these factors and the impact on operating cashflows, that the Group's liquidity position could deteriorate and the resulting lack of adequate available cashflows, potential breach of covenants and restricted access to its debt facilities could impact development work and impact the operations.

ROM grade volatility

The management of ROM grades, specifically at Cullinan, remains a challenge while the new block cave continues ramping up and the optimisation of the new plant continues. Higher grade expectations at Cullinan for H2 are based on volumes mined from undiluted ore (C-Cut Phase 1 and CC1E) increasing from ca. 60% of underground production to over 80%, the treatment of the lower grade ROM stockpile reducing from ca. 250 Kt to ca. 100 Kt during this Period, and ongoing optimisation of the new plant.

Exchange rates

With Petra's operations mainly in South Africa, but diamond sales based in US Dollars, the volatility and movement in the Rand is a significant factor to the Group. Also, the Group undertakes transactions in a number of different currencies, including Tanzanian Shillings, GBP and Euro. Fluctuations in these currencies can have an impact on the Group's performance, albeit less significant than the impact of fluctuations in the ZAR/USD exchange rate.

In order to mitigate currency risk, the Group continually monitors the movement of the Rand against the US Dollar, the maturity dates and the level of the hedge book and takes expert advice from its bankers in this regard. It is the Group's policy to hedge, on a short term basis, linked to the tender calendar, a portion of US Dollar sales revenue when weakness in the Rand deems it appropriate.

Country and political risk

Petra's operations are predominantly based in South Africa, with lesser exposure to Tanzania and Botswana. Emerging market economies could be subject to greater risks, including legal, regulatory, taxation, economic, and political risks, and are potentially subject to rapid change.

Tanzania has introduced a number of legislative changes to the framework governing the natural resources sector, which have increased regulatory uncertainty. These changes are set out in the Company's 2017 Annual Report.

In addition, there is no certainty with regards to the outcome for the blocked Williamson parcel, which remains in the custody of the Government of the United Republic of Tanzania.

Labour unrest in South Africa

The Group's production, and to a lesser extent its project development activities, are dependent on a stable and productive labour workforce. In September 2017, Petra experienced ca. two weeks of labour unrest at its South African operations (with the exception of Cullinan) prior to the signing of a new three year wage negotiation agreement with the National Union of Mineworkers, which is effective to June 2020. Petra remains highly focused on managing labour relations and on maintaining open and effective communication channels with its employees and the appropriate union representatives at its operations.

Johan Dippenaar

Chief Executive Officer

19 February 2018

Notes:

1. The following exchange rates have been used for this announcement:

a. closing rate as at 31 December 2017 US$1:ZAR12.38 (31 December 2016 US$1:ZAR13.73)

b. average rate H1 FY 2018 US$1:ZAR13.40 (H1 FY2017 US$1:ZAR13.98)

2. The following definitions have been used in this announcement:

a. ct: carat

b. cpht: carats per hundred tonnes

c. Exceptional Diamonds: stones that sell for more than US$5 million each

d. LTIFR: lost time injury frequency rate

e. Kt: thousand tonnes

f. Mcts: million carats

g. mL: metre level

h. Mt: million tonnes

i. ROM: run-of-mine, i.e. relating to production from the primary orebody

j. SLC: sub-level cave, a variation of block caving

3. Diamond inventory carrying values are stated at the lower of cost of production on the weighted average basis or estimated net realisable value.

PETRA DIAMONDS LIMITED

CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2017

PETRA DIAMONDS LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2017

¹ These items will be reclassified to the consolidated income statement if specific future conditions are met.

PETRA DIAMONDS LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2017

PETRA DIAMONDS LIMITED

CONSOLIDATED STATEMENT OF CASHFLOWS

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2017

¹ Cash and cash equivalents in the Consolidated Statement of Financial Position includes restricted cash of US$14.4 million (30 June 2017: US$13.5 million and 31 December 2016: US$12.1 million) and unrestricted cash of US$104.7 million (30 June 2017: US$190.2 million and 31 December 2016: US$36.9 million).

PETRA DIAMONDS LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2017

PETRA DIAMONDS LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2017