Petra Diamonds Regulatory News (PDL)

Petra Diamonds Limited

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

New Debt Facilities of ca. US$244 million

Petra Diamonds Limited announces that it has entered into agreements with FirstRand Bank Limited (acting through its Rand Merchant Bank ("RMB") and First National Bank ("FNB") divisions), Absa Corporate and Investment Banking ("Absa") (a division of Absa Bank Limited and a member of Barclays) and the International Finance Corporation ("IFC") (a member of the World Bank Group) with regards to new Group debt facilities of ca. US$244 million ("the Agreements").

Highlights

·; New debt facilities of ca. US$244 million represent an increase and reorganisation of Petra's existing debt structures, providing greater assurance and flexibility with regards to the Group's project expansion plans

·; Petra has entered into an agreement with RMB/FNB and Absa for ZAR1,600 million of Rand debt facilities comprised of:

o a 64 month amortising term facility ("ATF") of ZAR800 million (approximately US$92 million);

o a 70 month revolving credit facility ("RCF") of ZAR300 million (approximately US$35 million); and

o a working capital facility ("WCF") of ZAR500 million (approximately US$57 million)

·; Petra has also entered into an agreement with IFC for US$60 million of US dollar debt facilities comprised of:

o a 64 month ATF of US$35 million; and

o a 70 month RCF of US$25 million

Johan Dippenaar, Petra's CEO, commented:

"We are pleased to have entered into these financing facility agreements with RMB/FNB, Absa and IFC, which see the Group comfortably funded for the delivery of its various major expansion programmes. This financing is an important and independent validation by the lenders of the quality of Petra's asset base and our strong management team. These facilities further strengthen our balance sheet and lend assurance to the Company's ability to deliver on its core objective of rolling out its stated expansion plans and ramping up production to 5 million carats per annum by 2019."

Background

As previously announced, Petra has undertaken a process to review and restructure its debt facilities in order to provide the Group with the additional scope and finance flexibility to execute its capital expenditure programme and bring the Company's stated production and revenue growth opportunities to account.

It is an opportune time to revisit the Group's previously agreed debt levels, terms and structure, given that the expansion programmes have maximum spend from FY 2013 to FY 2015 and given that Finsch was not part of the Group when the original debt financing was put in place in 2010. In addition, Petra required an increase in its working capital and currency hedging facilities to provide flexibility in line with expected revenue growth, owing to the Group's larger diamond tenders (post the acquisition of the Finsch mine in September 2011), the lead times to these tenders and the volatility experienced over the last 12 months in both the ZAR/US$ exchange rates and rough diamond prices.

The combined facilities will, together with contributions from Petra's own treasury, finance the expansions of the Finsch and Cullinan mines in South Africa, expansions at Petra's other operations and the Group's general working capital needs.

These new facilities replace all of the Group's current bank debt and working capital facilities (provided by RMB/FNB and IFC) and increase the Group's debt and working capital facilities (at an assumed rate of US$1:R8.70) by ca. US$108 million, from ca. US$136 million (ZAR662.5 million and US$60 million) to ca. US$244 million (ZAR1.6 billion and US$60 million).

Current total debt facilities of ca. US$136 million comprise ca. US$53 million (ZAR462.5 million) from RMB, US$60 million from IFC, and working capital facilities of ca. US$23 million (ZAR200 million) from FNB. As at 30 September 2012, Petra had drawn down ca. US$110.2 million against the current facilities.

Details of the ATF

·; The ATF is comprised of ZAR800 million and US$35 million

·; The ATF will be available for Petra's draw-down up to December 2013

·; The ATF is repayable by way of five semi-annual payments commencing in March 2016, with the last payment due in March 2018

·; The ATF interest rates are JIBAR (ZAR facility)/LIBOR (US$ facility) plus 4.0% margin

Details of the RCF

·; The RCF is comprised of ZAR300 million and US$25 million

·; The RCF will be available for Petra's draw-down up to August 2018

·; The RCF is repayable by September 2018; Petra may make repayments and then redraw against the RFC up to August 2018

·; The RCF interest rates are JIBAR (ZAR facility)/LIBOR (US$ facility) plus 5.5% margin

Details of the WCF

·; The WCF is comprised of ZAR500 million, including ZAR150 million of hedging facilities (as required for hedging the US$ proceeds of Petra's tenders)

·; The WCF is subject to annual renewal

·; The WCF interest rate is South African prime less 0.5%

The facilities are secured on Petra's interests in Cullinan, Finsch, Koffiefontein, Kimberley Underground and Williamson. No warrants have been issued in connection with the new debt facilities.

Each of the loan facilities under the Agreements is interdependent and completion of the Agreements, enabling Petra to draw down on the facilities, is conditional upon, inter alia, certain conditions precedent being satisfied or appropriately waived. The principal conditions are administrative in nature, and include consent required from the South African Reserve Bank. Petra expects that all of the conditions precedent will be met in the near future. The Agreements contain standard events of default and warranties for facilities of this size and nature.

Note

Exchange rates of US$1:R8.70 as at 12 November 2012 and US$1:8.30 as at 30 September 2012 have been used for the purposes of this announcement.

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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 interests in eight producing mines: seven in South Africa (Finsch, Cullinan, Koffiefontein, Kimberley Underground, Helam, Sedibeng and Star) and one in Tanzania (Williamson). It also maintains an exploration programme in Botswana.

The Company has recently commenced a disposal process in respect of the Helam, Sedibeng and Star mines (the Fissure Mines), which are no longer core to the Group's portfolio.

Petra offers an exceptional growth profile, with a core objective to steadily increase annual production to 5 million carats by FY 2019. The Group has a major resource base in excess of 300 million carats.

Petra conducts all operations according to the highest ethical standards and will only operate in countries which are members of the Kimberley Process. Petra is quoted with a premium listing on the Main Market of the London Stock Exchange under the ticker 'PDL' and is a member of the FTSE 250. For more information, visit www.petradiamonds.com.

About RMB

RMB, a division of the FirstRand Bank Limited, is a leading diversified financial services brand encompassing investment banking, fund management, private wealth management and advisory services. The bank offers innovative financing solutions to its clients in South Africa and across Africa. For more information, visit www.rmb.co.za.

About Absa

Absa Corporate and Investment Banking, a division of Absa Bank Limited and a member of Barclays, is a leading South African corporate and investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe. For more information, visit www.absacapital.com.

About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. IFC helps developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, IFC investments reached an all-time high of more than US$20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world's most pressing development challenges. For more information, visit www.ifc.org.