Petra Diamonds Regulatory News (PDL)

20 Sep 2007 10:02

Petra Diamonds Ld20 September 2007 Petra Diamonds Limited Kono project - update Petra Diamonds Limited ("Petra") announces an update concerning the Kono diamondproject in Sierra Leone. Petra's interest in the Kono project is 51%, with itsjoint venture partner Stellar Diamonds Limited ("Stellar"), a 68.5% ownedsubsidiary of Mano River Resources Inc (AIM: MANA, TSX-V: MNO), holding theremaining 49%. Highlights • The development programme makes further solid progress, with test shafts delivering highly encouraging results • Trial mining commenced on three shafts where in-situ grades of between 50 and 80 carats per hundred tonnes ("cpht") have been achieved • Petra believes that the test shafts have a high likelihood of developing into economic production operations • 2,809 diamonds totaling 241.7 carats recovered from trial mining to date (February 2007: 638 diamonds, 58.8 carats) • The increase in diamond recoveries is due to the better quality kimberlite now encountered, more consistent kimberlite fissure and better fissure widths; all very positive signs for the future development of economic operations Adonis Pouroulis, Chairman of Petra, commented; "We are pleased to report thefurther positive progress at the Kono project. The trial mining is going welland whilst further work is required in order to infer a representative grade andvalue, the results to date support our expectations for the Kono project and weprogress with confidence into the next phase of the development. The quality,consistency and width of the kimberlite now encountered are all positive signsfor the future development of economic operations." Stellar's CEO, Karl Smithson, commented: "We are very encouraged by the newsgiven by Petra Diamonds from the Kono operations. We would like to commendPetra, our partners, on their diligent and effective management of the project.Petra is the world leader in underground kimberlite fissure mining and they haveassembled a first class operational team that we are confident can bring successto the Kono project." Test Shaft Development The development programme at Kono has achieved some highly encouraging resultsin recent months with potentially economically viable kimberlite fissures havingbeen opened. Diamond yields, fissure widths and the underground mining andgeological conditions have enabled Petra to concentrate test shaft efforts onthree very promising diamondiferous kimberlite fissure targets. To date five shafts have been sunk, each to a depth of 30 metres. Three of theseshafts are now at the trial mining stage on the 30 metre level and have beenreturning satisfactory in-situ kimberlite grades of between 50 and 80 cpht.These shafts display a consistent, near-vertical dipping fissure line with veryencouraging in-situ shaft sinking grades; fissure widths vary between 40centimetres ("cm") and 200cm with satisfactory mining conditions experienced todate. Two shafts were discontinued because diamond recoveries during the shaftsinking and trial mining phases did not match the potential of the other threeshafts. The test shafts are at advanced levels of development and the processing of thelimited amount of weathered, diluted and mixed diamondiferous kimberliticmaterial extracted during shaft sinking has yielded 2,809 diamonds totaling241.7 carats. The ten largest diamonds ranged in size from 0.65 carats to 7.2carats. Although the diamond yields are highly encouraging from the small amountof material processed, Petra is of the opinion that the scale of the test workconducted is presently too limited to arrive at any representative grade orvalue and accordingly will report on further findings when available. The next phase of the project will excavate approximately 100 metres ofkimberlite along strike of ore body at each shaft, so as to processapproximately 1,000 tonnes of clean kimberlite and obtain acceptable run of minegrades and diamond values to be used in proposed business plans. It isanticipated that this next phase programme will be completed by March 2008. Exploration Development During shaft sinking operations Petra found that, due to the highly saprolitisednature of the rocks in this locality, the silicate and spinel kimberliteindicator minerals have been destroyed, in many cases to depths of up to 20metres. It has further been ascertained that ilmenite-deficient kimberlitesexist in the area. These conditions may mean that kimberlite pipes wereoverlooked during mining and exploration operations carried out by previousoperators in the area. Petra is therefore considering the flying of a low-levelhelicopter borne electro-magnetic survey over the licence areas so as toprospect for these potential deposits. Ends Notes 1. The information in this update that relates to Exploration Results, Mineral Resources 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 South Africa, a 'Recognised Overseas Professional Organisation' ('ROPO'). Jim Davidson is the Qualified Person for the purposes of the AIM Guidance Note on Mining, Oil and Gas Companies dated March 2006. Jim Davidson is a full-time employee of the Company and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify. Jim Davidson has given his written consent to the inclusion in this announcement of the matters based on his information in the form and context in which it appears. 2. It should be noted that the potential quantity in this report is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. For further information, please contact:Justine Howarth / Louise Goodeve Telephone: +44 (0) 20 7851 7480Parkgreen Communications, London Adrian Hadden Telephone: +44 (0) 20 7523 8000Collins Stewart, London This information is provided by RNS The company news service from the London Stock Exchange