Petra Diamonds Regulatory News (PDL)

Petra Diamonds Limited

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

Preliminary Results Announcement for the Year ended 30 June 2013 (unaudited)

Petra Diamonds Limited announces its preliminary results (unaudited) for the year ended 30 June 2013 ("the Year" or "FY 2013").

Financial Highlights

· Revenue up 27% to US$402.7 million (FY 2012: US$316.9 million).

· Profit from mining activity1 up 34% to US$138.6 million (FY 2012: US$103.3 million).

· Adjusted EBITDA2 up 36% to US$122.4 million (FY 2012: US$90.3 million).

· Net profitafter tax of US$27.9 million (FY 2012: US$2.1 million loss).

· Adjusted net profitafter tax3 up 22% to US$48.3 million (FY 2012: US$39.6 million).

· Adjusted operating cashflow6 up 57% to US$132.8 million (FY 2012: US$84.6 million).

· Basic EPS: 6.30 cents per share (FY 2012: 0.48 cents per share loss).

· Adjusted EPS5: 10.31 cents per share (FY 2012: 7.82 cents per share).

· Cash at bank: US$26.2 million (30 June 2012: US$47.3 million).

o Diamond debtors (all settled shortly after Year end) of US$74.8 million (FY 2012: US$25.1 million).

o Diamond inventories of US$31.5 million (FY 2012: US$24.5 million).

· Loans and borrowings: US$147.0 million (FY 2012: US$69.2 million).

o Facilities undrawn (net of US$3.6 million utilised for foreign exchange settlement lines (30 June 2012: US$nil)) and available to the Group of US$71.3 million (30 June 2012: US$66.3 million); net debt in line with management's expectations.

Operations Highlights

· Production up 21% to 2,668,305 carats (FY 2012: 2,208,862 carats).

· Rand (South Africa) and US$ (Tanzania) on-mine unit cash costs (per total tonne treated) well controlled with above inflationary cost increases offset by increased throughput.

· Capex invested (including capitalised finance costs) at operations of US$198.3 million (FY 2012: US$138.0 million), in accordance with the roll-out of the Group's expansion programmes.

2013 Resource Statement

· The Group's 30 June 2013 Resource Statement has been published today and the full statement can be accessed at http://www.petradiamonds.com/operations/reserves-and-resources 

o Gross Resources (inclusive of Reserves) increased 2.5% to 309.6 Mcts (30 June 2012: 302.1 Mcts) due to higher grade for Finsch life of mine; and

o Gross Reserves increased 14.3% to 54.4 Mcts (30 June 2012: 47.6 Mcts) due to new areas brought into production and detailed mine planning at Cullinan.

Corporate Highlights

· Restructure and optimisation of debt facilities undertaken in November 2012 increased the Group's ZAR debt and working capital facilities by R900 million to R1.6 billion, with the US$ portion of the debt facilities (US$60 million) remaining unchanged.

· Board changes: Tony Lowrie appointed as Senior Independent Non-Executive Director in September 2012; Dr Omar Kamal stepped down as a Non-Executive Director in February 2013.

· Further to the termination of the sales process for the Fissure Mines, the Sedibeng and Star mines have been placed onto care and maintenance post Year end, whilst the Helam mine continues to be operated within the Group on a normal commercial basis.

Health and Safety

· Group Lost Time Injury Frequency Rate ("LTIFR") for the Year reduced to 0.67 (FY 2012: 1.13). This is an encouraging trend considering the increase in activities as the capital programmes progress.

Outlook

· Certain of Petra's South African mines were affected by industrial action which commenced on Thursday 29 August 2013. The industrial action has now ended and normal operations are expected to recommence at the affected mines from Monday 16 September.

· Based on the strong production run rate with which Petra commenced FY 2014, and partial production during the industrial action, the Company remains on track for full year production to increase ca. 12% to 3.0 Mcts in FY 2014.

· Expansion plans remain on target to increase production to 5 Mcts by FY 2019.

· Rough diamond market expected to remain steady in FY 2014 due to constrained supply and a firmer US market, the world's major market for polished diamonds, as well as continued growth in China, albeit at a lower rate than over recent years.

Johan Dippenaar, CEO, said:

"FY 2013 marked a further year of solid growth in terms of production, revenue and the underlying profitability of the Group, as well as the acceleration of our major expansion programmes at Finsch and Cullinan, in line with expectations. We have kept our costs and capital expenditure well controlled, maintaining our robust financial position. We continue to deliver on our strategy to build a world-class diamond group, with production of circa 3 million carats expected for FY 2014, rising to 5 million carats by FY 2019."

Results presentation

A presentation for analysts will be held at 9:30am BST on 16 September 2013 at the offices of Buchanan, 107 Cheapside, London EC2V 6DN.

A live webcast of the presentation will be available on Petra's website at www.petradiamonds.com and on: http://www1.axisto.co.uk/webcasting/investis/petra-diamonds/analyst-presentation-2013/ 

A recording will be available from 1:00pm BST on 16 September 2013 on the same links.

SUMMARY OF RESULTS (unaudited)

Notes:

The Group uses several non-GAAP measures above and throughout this report, including adjusted mining and processing costs, profit from mining activities, adjusted EBITDA, adjusted net profit after tax, adjusted earnings per share and adjusted operating cashflow. As these are non-GAAP measures, they should not be considered as replacements for IFRS measures. The Company's definition of these non-GAAP measures may not be comparable to other similarly titled measures reported by other companies.

1. Stated before retrenchment costs, depreciation and share-based expense.

2. Adjusted EBITDA is EBITDA (profit before interest, tax and depreciation) stated before share-based expense, net unrealised foreign exchange losses, retrenchment costs, non-recurring transaction costs and impairment charges.

3. Stated before retrenchment costs, impairment charges, non-recurring transaction costs and net unrealised foreign exchange losses.

4. Retrenchment costs of US$2.6 million and Impairment charges of US$12.6 million (FY 2012: nil in each case) are due to the Group's decision to place the Sedibeng and Star mines on care and maintenance. Refer the Financial Review for further detail.

5. Stated before retrenchment costs, net unrealised foreign exchange movements, non-recurring transaction costs and impairment charges.

6. Adjusted operating cashflow is Operating cashflow stated before the movement in Year end diamond debtors, excluding unrealised foreign exchange translation movements. Refer the Financial Review for further detail.

For further information, please contact:

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 six producing mines: five in South Africa (Finsch, Cullinan, Koffiefontein, Kimberley Underground and Helam) and one in Tanzania (Williamson). It also maintains an exploration programme in Botswana.

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 the Company's website at www.petradiamonds.com.

CEO'S REVIEW

I am pleased to report that FY 2013 marked a further progression of our strategy to develop a world class diamond mining group. The key successes of the Year were the delivery of further substantial growth in production (+21% to 2.67 Mcts) and revenue (+27% to US$402.7 million), alongside the acceleration of our expansion programmes, all of which were achieved with an improved safety performance, demonstrating our focus on this key area.

However, the Year was not without challenges and our performance was impacted by a delay in the roll-out of the Cullinan tailings project, the volatility of the ROM grade at Cullinan due to the mature nature of the current working areas and the labour relations climate in South Africa. Despite this, the focus that we apply to addressing such challenges meant that in Q4 FY 2013 we recorded very strong production (772,103 carats), which bodes well for further production growth in FY 2014.

Petra's expansion programmes are now progressing apace, as evidenced by the substantial uplift in development metres recorded at both Finsch and Cullinan for the Year. The development will continue to accelerate in FY 2014, with access being established to the Finsch Block 5 Sub Level Cave during FY 2014 and initial production tonnages from FY 2015. Access to the Cullinan C-Cut Phase 1 is on schedule for FY 2015, with initial production tonnages from FY 2016.

As the production profile at both these major mines gradually switches over from diluted to undiluted ore, the diamond content of the ore mined will increase significantly. At the same time as we gain access to these higher grade tonnages, our unit costs will become more manageable due to higher volumes and increased efficiencies, particularly in the ore-handling systems, and we therefore expect to substantially increase our operating margins in the coming years.

Petra's approach is to continually seek opportunities to optimise our mine plans. The most important concepts in mining are access to the orebody and maximum production flexibility; these focus areas will ensure that a mine can withstand foreseen or unforeseen production issues (including grade volatility), as well as take advantage of opportunities, such as the potential for future ramp-ups. This thinking was evident in the refinements we announced in our Market Guidance update on 12 August 2013, with a particular emphasis on optimisation of ore-handling systems, establishing ways to access undiluted ore as early as possible and maximising access to an orebody's footprint, thereby enhancing all-important production flexibility.

Petra continues to demonstrate expertise in the recovery of diamonds through the optimal configuration of our processing plants. No two diamond kimberlites are the same and we always look to ensure recovery of the full value spectrum afforded by a particular orebody. This was demonstrated by our decision to lower the bottom-cut at Finsch to recover more diamonds in the small size ranges, which are of particularly high value at that mine. Our successful recovery of 'specials' also attests to this expertise and it was particularly encouraging to sell the first +US$1 million stones from both Kimberley Underground and Williamson under Petra management during the Year, following the in-house construction/refurbishment and commissioning of the plants at both operations.

Structural changes continue in our industry and we note the recent move of De Beers' marketing operations from London to Gaborone in Botswana as a positive for both the region and for Petra. Southern Africa is becoming a major rough diamond hub and we are well positioned to benefit from the heightened activity, particularly given the ever increasing number of diamond buyers coming to the region.

THE DIAMOND MARKET

The rough diamond market was stable in FY 2013, with less volatility than has been experienced over recent years. Rough diamond prices were essentially flat during H1 of FY 2013, whilst firmer prices were seen during H2.

We expect prices to remain stable for FY 2014, with the potential for pricing upside, due to constrained supply and a firmer US market, the world's major market for polished diamonds, as well as continued growth in China, albeit at a lower rate than over recent years. Recent economic data for the luxury goods sector suggests robust demand in most major markets, as well as some indicators of green shoots in Europe.

The supply side of the rough market remains tight, with only around 30 kimberlite diamond mines of significance in the world today, many of which are now past their peak production. In some cases, these major mines are making the transition from open pit to underground, which further limits the potential volumes available. This highly concentrated market is compounded by there being no 'Tier 1' discoveries over the last 20 years.

On the demand side, growth continues to be driven by urbanisation and the growing middle classes in emerging markets. In particular, Asian consumers show a natural affinity to diamonds and there is exciting potential as new markets (such as China and India) continue to develop. China's leading jewellery retailer, Chow Tai Fook, noted at an industry conference in August 2013 that despite the high growth rates witnessed in recent years, China's average jewellery con-sumption per capita still lags far behind developed countries; China has an estimated jewellery consumption per capita of US$44, compared to Japan with US$91 and the US with US$242 (source: Rapaport 16 August 2013).

Evidence suggests that the Chinese and Indian markets are therefore starting to follow the US trend, with retailers stating that these markets will be driven by 'mass luxury' - i.e. affordable diamond jewellery ranging from US$200 to +US$2,000 per item. This trend ties in with Petra's direct sales experience, as there has been a noticeable outperformance in the second to third quality diamond categories over the last few years, indicating a growing demand for such 'mass market' items.

Prices achieved for FY 2013 were largely in line with Petra's guidance for the Year and the Company's pricing guidance for FY 2014, as published on 12 August 2013, is listed below. The price guidance below excludes revenue from +US$5 million diamonds. Taking into account variation from year to year, on an average annual basis such stones have added in excess of US$16 million per annum over the last five years.

Notes:

1. The weighted average prices are the average of the mix of ROM and tailings production, as Petra tenders production from each mine on a mixed ROM / tailings parcel basis. 

2. The average expected value at Finsch is guided lower due to the increase in recovery of smaller diamonds as noted above.

3. The FY 2013 average value at Cullinan includes the 25.5 carat blue diamond sold for US$16.9 million; the average value for FY 2013 excluding this stone was US$142 per carat.

4. Prior guidance and actual results relate to the 'Fissure Mines' as a combined business unit, whereas FY 2014 relates to the Helam mine only, as Sedibeng and Star are both now on care and maintenance.

Petra's focus on optimising recoveries is evident in the number of high value diamonds sold, with the majority, as usual, coming from Cullinan. The Company sold 13 stones for US$1 million or more each during the Year, for total revenue of US$39.5 million (FY 2012: eight stones valued at US$14.4 million).

FINANCIAL REVIEW

Revenue

Gross mine revenue increased 27% to US$402.7 million (FY 2012: US$316.9 million), primarily due to increased volumes coupled with the sale of the exceptional 25.5 carat blue diamond from Cullinan for US$16.9 million in May 2013.

Mining and processing costs

The mining and processing costs for the Year are, 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 Year 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. Certain technical, support and marketing activities are conducted on a centralised basis; results include Petra's SPV set up to partially fund its mining rehabilitation obligations.

On-mine cash costs increased by 12%, due to:

· inclusion of Finsch for 12 months (FY 2012: nine months) (8% of the increase);

· inflationary increases, including the impact of electricity and labour costs (9% of the increase);

· treatment of higher tonnages across the operations versus FY 2012 (9% of the increase);

· offset by a depreciating ZAR against the US Dollar (less 14%).

Certain cost categories in South Africa have increased in excess of South African inflation (South African CPI stood at 5.5% at 30 June 2013). Petra's cost focus, coupled with higher tonnage throughput, enabled the Group to partially mitigate the direct effect of inflationary pressures. Two key areas where costs escalated at a higher level than South African CPI are electricity and labour.

Electricity prices rose by 16% during the Year and a further increase of ca. 9% has been approved by the South African National Energy Regulator for FY 2014. Petra's electricity usage accounted for approximately 14% of South African cash on-mine costs. Petra endeavours to manage its electricity consumption as the Group's production profile increases and the Company has achieved good success in this area.

In South Africa, labour accounted for approximately 41% of on-mine cash costs at the pipe mines and 68% of on-mine cash costs at the Fissure Mines. As in the past, the Company anticipates that future labour cost increases will continue to be slightly above inflation.

As the bulk of Petra's operating costs are incurred in ZAR, the 14% weakening of the average ZAR exchange rate against the US Dollar (FY 2013 R8.839/US$1 versus FY 2012 R7.768/US$1) negated some of the increased costs in Rand terms as mentioned above.

Unit costs on a mine by mine basis are covered in the operational review below.

With regards to FY 2014, on 12 August 2013 the Company provided operational and corporate guidance, which can be accessed at http://www.petradiamonds.com/investors/analysts/analyst-guidance.

Mining profit

The Company's profit from mining activity increased 34% to US$138.6 million (FY 2012: US$103.3 million), further to the increased production and sales for the Year, combined with a stable environment for diamond pricing. Despite mining being currently limited to mature and diluted areas at most of the operations, profit from mining activity for the Group reflected an overall margin of ca. 34% for the Year (FY 2012: ca. 33%).

Adjusted operating cashflow

Adjusted operating cashflow (IFRS operating cashflow adjusted for the cash effect of the increase in Year end diamond debtors) of US$132.8 million, was considerably higher than FY 2012 (US$84.6 million), due to the growth recorded in revenue and profit from mining activity.

Operating cashflow per the Consolidated Statement of Cashflows was US$73.0 million (FY 2012: US$77.2 million) but management consider the adjusted figure to be a more useful view of the underlying growth in operating cashflow as the increase in diamond debtors (30 June 2013: US$74.8 million, versus 30 June 2012: US$24.5 million) of ca. US$50 million year on year (due to the large tender that closed shortly before Year-end) reduced the underlying increase in operating cashflow. This movement includes non-cash foreign exchange translation and so the cashflow impact exceeds US$50 million.

Exploration

Petra maintains a focused exploration programme in Botswana. Exploration expenditure (before depreciation) for the Year of US$4.8 million (FY 2012: US$3.0 million) increased due to Petra's work programme at the KX36 kimberlite and the surrounding area (refer to the Exploration section of this report for further detail on exploration activities). Petra expects exploration spend to be ca. US$4.5 million in FY 2014.

Corporate overhead - General and Administration

Corporate overhead (before deprecation, share based payments and transaction costs) increased to US$11.4 million for the Year (FY 2012: US$10.0 million), in line with the Group's continued growth and development.

For FY 2014, the corporate G&A overhead is expected to be ca. US$12.0 million; management will continue to keep these central costs well controlled and managed.

Transaction Costs

Transaction costs of US$0.5 million (FY 2012: US$3.1 million), which were of a non-recurring nature, relate to the disposal process for the Fissure Mines, which was carried out during the Year but did not conclude in a sale. The prior year costs relate to the professional fees and expenses associated with the London Stock Exchange Main Market step-up (US$2.7 million) and the Finsch acquisition (US$0.4 million).

Depreciation

Depreciation for the Year increased to US$42.8 million (FY 2012: US$41.0 million), mainly due to a full 12 months of depreciation on the Finsch assets and an overall production increase at the other operations.

Net unrealised foreign exchange loss

Effective 1 July 2012, the Group reorganised its intra-Group funding arrangements and restructured its treasury structure. This has removed significant foreign exchange translation exposure from the Consolidated Income Statement, as the Rand loans are now held between entities with Rand functional currencies. This served to significantly reduce the Group's net unrealised foreign exchange loss for FY 2013 to US$4.7 million (FY 2012: US$38.6 million loss).

Net finance expense

Net finance expense of US$3.4 million (FY 2012: US$1.8 million income) is comprised of interest received on the Group's cash balances of US$0.4 million, net interest receivable from BEE partners' loans of US$1.0 million and net realised foreign exchange gains of US$2.8 million, offset by various finance expenses, being:

· a charge for the unwinding of the present value adjustment for Group rehabilitation costs of US$2.6 million; and

· interest on i) the Group's working capital facility of US$0.1 million, and ii) the Group's Absa/RMB/IFC debt facilities of US$4.9 million (stated after the capitalisation of interest of US$12.3 million associated with the funding of assets under development).

Tax charge

The tax charge of US$24.6 million (FY 2012: charge of US$10.5 million) arises due to deferred tax (net of charges and credits), reflecting the utilisation of certain capital allowances, predominantly at Finsch and Cullinan, during the Year.

Impairment and retrenchment costs

During the Year, the Group decided to put both Sedibeng and Star on care and maintenance subsequent to the disposal process which did not yield an acceptable offer. Management reviewed the carrying value of operational assets at each mine and recognised an overall impairment loss of US$12.6 million (FY 2012: US$ nil), being management's assessment of the higher of fair value less cost to sell and value in use of the mines. Further details are provided in note 6. The Group has also provided U$2.6 million (FY 2012: US$ nil) for retrenchment costs at Sedibeng and Star, as these mines have been put on care and maintenance.

Adjusted net profit

An adjusted net profit after tax of US$52.3 million (refer note 17) was recorded for the Year (FY 2012: US$39.2 million), adjusted for unrealised foreign exchange movements, retrenchment costs, impairment charges and transaction costs. The Company recorded an adjusted profit of 10.31 cents per share (FY 2012: 7.82 cents per share profit). These adjusted profit figures are considered to be more appropriate in comparing results year on year.

Group profit

A net profit after tax of US$27.9 million was recorded for the Year (FY 2012: US$2.1 million loss), reflecting the impact of the Group's solid trading for the Year. The prior year's results were substantially impacted by the non-cash, unrealised loss on foreign exchange of US$38.6 million, which was significantly lower for FY 2013 due to the restructuring of the Group's treasury structure (as noted in 'Net unrealised foreign exchange loss' above).

Cash and Diamond Debtors

As at 30 June 2013, Petra had cash in hand of US$26.2 million (30 June 2012: US$47.3 million) and diamond debtors of US$74.8 million (FY 2012: US$25.1 million), which were settled in the normal course of business shortly after Year end.  Of the cash balances, US$14.1 million was held as unrestricted cash, US$10.3 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) and US$1.8 million was held by Petra's bankers as security for other environmental rehabilitation bonds lodged with the Department of Mineral Resources in South Africa.

Diamond debtors of US$74.8 million related to the June 2013 tender and were significantly higher than FY 2012 levels, due to the June tender being the largest held by Petra to date, again due to the strong production levels of Q4 FY 2013.

Diamond Inventories

As at 30 June 2013, the Company had diamond inventories of ca. US$31.5 million (ca. 348,403 carats) (30 June 2012: US$24.5 million (ca. 221,748 carats)), due to the increased production levels in Q4 FY 2013 compared to the comparative period.

BEE Loans receivable

The BEE loans of US$85.2 million (FY 2012: US$89.4 million) due to Petra arise from:

· Petra having financed the BEE partners' share of the purchase consideration of the Finsch, Cullinan, Koffiefontein and Kimberley Underground acquisitions; and

· Petra having financed the BEE partners' share of the working and development capital that has been required for certain of the mines.

The decrease in the BEE loans over FY 2012 is due to the retranslation of the Rand based loans into US Dollars (FY 2013: R9.88/US$1 versus FY 2012: R8.16/US$1), partially offset by interest accrued. The BEE loans are included in 'Loans and other receivables' under 'Non-current assets' on the face of the Balance Sheet.

Loans and Borrowings

The Group had loans and borrowings at Year end of US$147.0 million (FY 2012: US$69.2 million).

In November 2012, Petra completed an increase and reorganisation of its existing debt structure by agreeing revised debt facilities 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). This served to increase the Group's ZAR debt and working capital facilities by R900 million to R1.6 billion, with the US$ portion of the debt facilities (US$60 million) remaining unchanged.

The revised facilities comprise of an amortising term facility ("ATF") of R800 million (US$81.0 million) and US$35 million, a revolving credit facility ("RCF") of R300 million (US$30.4 million) and US$25 million and a working capital facility ("WCF") of R500 million (US$50.6 million).

At 30 June 2013 the Group had undrawn borrowing facilities of US$71.3 million (30 June 2012: US$66.3 million), net of US$3.6 million utilised for foreign exchange settlement lines (30 June 2012: US$ nil).

Other Liabilities

Other than trade and other payables of US$64.7 million (comprising US$23.8 million trade creditors, US$17.4 million employee related accruals and US$23.5 million other payables), the remaining liabilities on the balance sheet mainly comprise provisions for rehabilitation liabilities, amounts owing due to the financing of the minorities, post retirement employee related provisions and deferred tax.

Capex

Operations Capex for the Year was US$198.3 million (FY 2012: US$138.0 million), split as to US$138.8 million on expansion Capex (FY 2012: US$102.5 million) (included in the applicable mine by mine results tables), US$12.3 million on capitalised borrowing costs with regards to the expansion Capex (FY 2012: US$6.3 million) and US$47.2 million on sustaining Capex (FY 2012: US$29.2 million). Refer note 4 'Segmental Information' for a breakdown of Capex for the Year and a reconciliation of corporate and Helam Projects timing eliminations to the US$191.2 million 'Property, Plant and Equipment' note.

Expansion Capex increased in line with the roll-out of the Group's expansion programmes, mainly at Finsch and Cullinan; refer to mine by mine sections below for more detail.

The increased level of sustaining Capex was largely due to Finsch being included for a full 12 month period, coupled with planned major equipment replacements. Sustaining Capex was also allocated for new trackless equipment purchased in relation to the project to open up access to additional ore on the 645 Level at Cullinan from FY 2014 onwards (one of the initiatives to manage the ROM grade at Cullinan until the new block cave is in place in the C-Cut).

Group Capex includes US$4.4 million for the Year (FY 2012: US$11.1 million), which was incurred by the Group's internal projects facility in terms of projects/equipment under construction and which will be reflected as "on-mine" Capex once these projects are finalised and invoiced to the respective operation.

PRODUCTION

Combined operations:

FY 2013 diamond production increased 21% to 2.67 Mcts, slightly above the previously revised market guidance of 2.65 Mcts. The year on year increase was mainly due to Finsch's contribution for a full 12 month period (FY 2012 included circa nine months production from the date of acquisition) and Williamson successfully achieving the planned levels of production following the commissioning of its rebuilt plant at the end of FY 2012.

Revenue increased 27% to US$402.7 million (FY 2012: US$316.9 million), primarily due to increased volumes coupled with the sale of the 25.5 carat blue diamond from Cullinan for US$16.9 million in May 2013. Carats sold increased 22% to 2,539,844 (FY 2012: 2,084,429), in line with the increasing trend of production.

Finsch

Note:

1. The acquisition of the Finsch mine completed on 14 September 2011; therefore results for FY 2012 only represent ca. 9 months.

Finsch performed strongly for the Year, contributing 1,412,465 carats (FY 2012: 1,104,618 carats) and revenue of US$160.6 million (FY 2012: US$136.9 million).

In line with Petra's strategy to optimise recoveries from each asset, the plant cut-off was reduced at Finsch towards the latter part of the Year to increase recovery of the high quality smaller goods produced by the Finsch orebody, with a resultant increase in both ROM and tailings grades in Q4 over the previous quarter. Although this plant change resulted in a reduced average value per carat, due to the increased volumes of the smaller diamonds, it served to increase gross revenues and contained value per tonne.

ROM grades for FY 2013 declined to 34.1 cpht (FY 2012: 36.8 cpht) due to the increasing dilution of the current mature Block 4 working areas, however the plant changes noted above are expected to provide some positive effect on ROM grade before the development plan provides first access to undiluted ore (from FY 2015 onwards).

Costs:

The weighted average unit operating cost of R139/t (FY 2012: R134/t) at Finsch is in line with management's expectations. Above-inflationary cost pressures associated with labour and electricity were partially offset by increased levels of throughput resulting in a 4% unit cash cost increase compared to SA CPI of 5.5%.

Development plan:

Petra's expansion plan at Finsch will take production from ca. 1.4 Mctpa to 1.8 Mctpa by FY 2016 and then increasing to ca. 2 Mctpa by FY 2019. With gross resources of 50.9 million carats, Petra's initial mine plan has a life of 17 years, but resources in residual Block 6 and the Precursor kimberlite are expected to prolong the actual life of mine ("LOM") for considerably longer.

Production is currently entirely from Block 4, which is a mature block that has mostly been mined out, meaning that the ore is by this point heavily diluted with waste rock. In order to provide earlier access to undiluted ore before the main Block 5 Cave is put in place, Petra will use the sub level cave ("SLC") mining method over four levels from the 710 metre level ("mL") to 780 mL at a rate of 3.2 Mtpa. Once the transition is then made from mining the SLC to the main Block 5 Cave, which is currently planned at the 900 mL, tonnages will increase to 3.5 Mtpa from FY 2021.

On 12 August 2013, Petra announced enhancements to the expansion plan at Finsch, which focus on revisions to the ore-handling system (including the implementation of a conveyor system which can transfer 710 - 780 mL SLC material to the existing loading and hoisting infrastructure on 650 mL), a further enlarged footprint of the Block 5 SLC and the doubling up of crusher capacity to complement the enhanced ore-handling and engineering infrastructure planned at the SLC and the Block 5 Cave (originally planned on the Block 5 Cave elevation only).

These measures will serve to improve production flexibility, give the ability to more efficiently manage grades and enable the earlier decommissioning of the Block 4 automated ore-handling infrastructure, resulting in long term savings in operating costs, as well as the added benefit of production efficiencies.

ROM throughput is guided at 2.83 Mt for FY 2014 at a grade of ca. 32 - 33 cpht. As the mine's production profile gradually changes from diluted to undiluted ore, the ROM grade is expected to increase to ca. 36 cpht by FY 2015, to ca. 43 cpht by FY 2016 and to ca. 56 cpht by FY 2017 (up from previous guidance of 47 cpht, assisted by the aforementioned plant changes), when full production is sourced from undiluted ore.

The development of the declines and access tunnels, which are key deliverables at this stage of the project, are progressing in line with expectations and the development and drilling contractor services have been put in place. The successful progression of the programme is demonstrated by the significant increase in development metres achieved for the Year (2,311 metres in FY 2013 versus 169 metres in FY 2012). Raiseboring activities also commenced during Q4 FY 2013 and yielded 165 metres.

Treatment of the 'Pre 79 Tailings' is planned at 2.65 Mt for FY 2014 and expected to be mined for a further two to three years (including FY 2014) at a grade of ca. 21 - 22 cpht (increased from prior guidance as a result of the abovementioned plant changes). Once the 'Pre 79 Tailings' have been depleted, treatment of the 'Post 79 Tailings' will continue until FY 2020, at a lower estimated grade of approximately 10 cpht.

Capex:

Capex of US$48.6 million for the Year (FY 2012: US$12.0 million) reflects a full 12 month period of sustaining Capex for operating Finsch, as well as the progression of the expansion project and associated underground development in FY 2013, as mentioned above. The majority of sustaining Capex was spent on the replacement of equipment reaching the end of its useful life.

Cullinan

Note:

1. The FY 2013 average value at Cullinan includes the 25.5 carat blue diamond sold for US$16.9 million; the average value for FY 2013 excluding this stone was US$142 per carat.

Cullinan's revenue increased to US$133.0 million (FY 2012: US$112.0 million) despite flat production, due to a higher contribution from 'specials'. Cullinan is renowned as an important source of large top-quality white diamonds (Type IIa) and very rare top-quality blue diamonds (Type IIb), and in FY 2013 nine diamonds (including the exceptional 25.5 carat blue diamond) were each sold for more than US$1 million.

FY 2013 production of 868,975 carats (FY 2012: 867,780 carats) was impacted by a combination of the lower ROM grade and the delay in the roll-out of the tailings expansion project. The lower ROM grade of 30.7 cpht (FY 2012: 33.3 cpht) was due to the increased dilution of the current mining areas.

As part of the Company's ongoing initiatives to manage the lower ROM grade prior to accessing the C-Cut, Petra has been working to open up access to tonnages in the BA5 production area on the 645 mL, which had formerly been closed down. This part of the orebody has a historically proven higher frequency of high value stones, and increased pillar mining from this area in Q4 contributed towards both a strengthening ROM grade (to ca. 33.0 cpht) and an increased number of special stone recoveries (H2 FY 2013 revenue of US$84.4 million versus H1 FY 2013 revenue of US$48.6 million).

Petra will continue to support ROM grade in FY 2014 by mining Block B pillar tonnes and accessing higher grade undiluted tonnes on the BA5 645 mL. Given this approach, Petra is guiding ROM production of ca. 2.75 Mt for FY 2014, at a grade of ca. 31 - 32 cpht.

Tailings production disappointed in FY 2013, as only 1.5 Mt were treated (at a grade of 5.0 cpht) versus expectations of ca. 2.7 Mt. This lower throughput was caused by various delays during the commissioning phase. 

During the Year, Petra revised its plans for the tailings operation at Cullinan due to early production results and grades achieved being below expectations. Further investment in tailings treatment facilities has been put on hold whilst further analysis is undertaken. Tailings production is currently planned to increase to ca. 2.7 Mtpa for FY 2014 at a grade of ca. 5 - 6 cpht and to remain at this level, rather than ramping up to the previous forecast of 4 Mtpa. However, the grade is expected to increase to ca. 7.5 cpht from FY 2015, due to continuous plant improvements, including re-crush facilities.

Costs:

Unit cash operating costs at Cullinan decreased by 11% to R158/t (FY 2012: R177/t) mainly due to the increased volumes of tailings throughput. Longer-term, once the development plan has significantly progressed in the years to come, unit cost efficiencies are expected to be driven by initiatives such as a simplified ore-handling system underground and further streamlining of the plant.

Development Plan

Cullinan contains a world-class diamond resource of 200.8 Mcts (including 17.0 Mcts in tailings), and the Company is capitalising on this by undertaking an expansion programme at the mine to take annual production to 2.2 Mcts by FY 2019 (comprising 2.0 Mcts ROM and 0.2 Mcts tailings). This expansion plan, known as C-Cut Phase 1, will establish a new block cave on the western side of the orebody in the upper portion of the major C-Cut resource (estimated to contain some 133 Mcts in total) and will also involve a large tailings operation. Petra's current mine plan has a life of 17 years, but the major residual resources at the mine indicate that the actual LOM could be in excess of 50 years.

As at Finsch, the development plan will enable the tonnage profile to gradually switch from diluted to undiluted ore. Petra therefore expects the ROM grade to increase in future years to ca. 35 cpht by FY 2015, ca. 37 cpht by FY 2016 and to in excess of 50 cpht by FY 2019, when the C-Cut Phase 1 block cave is in full production.

C-Cut Phase 1 is on track, with the development of the declines, access tunnels and shaft deepening all progressing in line with expectations. Tunnel development activity ramped up significantly for the Year, yielding a total of 4,147 metres for FY 2013 (FY 2012: 771 metres), while raiseboring, which commenced during the Year, delivered 626 metres (FY 2012: nil).

During FY 2013, a number of refinements were approved to allow for increased flexibility in delivery of Cullinan's expansion project and to equip the mine's infrastructure to handle tonnages from across the whole footprint of the orebody (16 hectares versus the 5 hectare block which will be accessed for C-Cut Phase 1), should there be a future decision to ramp up the underground operation above the current planned 4 Mtpa rate.

These refinements followed progress with detailed planning, design and costing work, which resulted in additional capital requirements to cater for enhanced engineering requirements, specifically:

· the upgrading of support specifications to cater for the anticipated longer life of the block cave;

· the inclusion of a permanent batching plant to deliver concrete to shaft and production infrastructure, freeing up shaft time and reducing potential production disruptions; and

· the optimisation of the 880 mL ore-handling systems (including crushers, conveyors and the shaft barrel from 581 mL to 930 mL), allowing for potential future production ramp-ups utilising the entire C-Cut footprint.

Capex:

Capex of US$89.0 million for the Year (FY 2012: US$54.4 million) was in line with the progression of Cullinan's development programme. The majority of the capital was spent on underground development and infrastructure, the commencement of the shaft deepening project and the continued construction of the tailings treatment facility. Sustaining Capex included new trackless equipment purchased in relation to the BA5 project to open up access to ore on the 645 mL.

Koffiefontein

Koffiefontein is one of the world's top kimberlite mines by average value per carat, achieving US$471 for FY 2013, despite the fact that the overall average has to some extent been reduced by the higher proportion of lower value Ebenhaezer production in the total sales mix.

Diamond production for FY 2013 declined by 13% to 34,800 carats (FY 2012: 40,117 carats). Underground production continues to be supplemented with production from the Ebenhaezer satellite pipe, where mining of initial lower grade areas progressed in Q4 FY 2013, with the Company now establishing access to higher grade ore. Koffiefontein is now in a position to deliver improved results for FY 2014.

Costs:

Due to the high contribution from the lower-cost Ebenhaezer open pit, the on-mine cash operating unit cost of R136/t remained relatively low (FY 2012: R125/t), despite production constraints and cost pressures associated with electricity and labour increases.

Development Plan

Petra's expansion plan at Koffiefontein is expected to increase production from 34,800 ctpa in FY 2013 to ca. 105,000 ctpa by FY 2017. Petra will therefore be ramping up ROM production to 1.1 Mtpa by FY 2017. The current mine plan has a life of 12 years, but the orebody remains open at depth so the actual LOM could be considerably longer.

ROM throughput of 0.33 Mt is planned for FY 2014, consistent with H2 FY 2013 ROM production. ROM grade is guided at ca. 9 - 10 cpht, due to an increased contribution of tonnages from higher grade areas.

Surface mining of the Ebenhaezer satellite pit will continue in FY 2014, with ca. 1.2 Mt planned to be treated at a grade of ca. 2.7 cpht, and it is expected to continue for two to three years (including FY 2014), whilst mining of underground ROM tonnes is ramped up.

Petra's mine plan involves the installation of a SLC between 560 mL and 580 mL, before installing a new block cave at 690mL. The revised mining lay-out for the SLC (which will accelerate access to fresh kimberlite ore) was finalised in FY 2013 and detailed design work commenced. Development work on the underground tunnel infrastructure is underway, while ore-handling conveyor installations servicing the SLC are in the final stages of commissioning.

In FY 2013, a revision to the mine design has led to ca. 450 kt more tonnes being accessible from the Koffiefontein SLC, as well as an expected increase in the average grade from 8.7 cpht to 9 - 10 cpht (due to the focus on higher grade areas). The new targeted areas are expected to produce a significant number of Type IIa diamonds (for which Koffiefontein is well known), which should have a positive impact on the average US$/carat values.

Capex:

Capex for the Year of US$20.4 million was primarily focused on underground development and purchasing of plant, mining and surface equipment.

Kimberley Underground

Note:

1. On-mine cash costs exclude costs assigned to ROM stockpiles.

The Kimberley Underground operation comprises three kimberlite pipe mines: Bultfontein and Dutoitspan (serviced by the Joint Shaft and the Joint Shaft plant) and Wesselton (serviced by the Wesselton Shaft and the Wesselton plant) - both plant facilities were constructed and commissioned by Petra's in-house team, following takeover of the operation. A substantial stockpile of ore at each plant was built up while the Joint Shaft and Wesselton treatment plants were being constructed (estimated to be ca. 500 Kt at Year end).

At Kimberley Underground, the ramp up of plant throughput continued throughout the Year, with total carats produced increasing by 69% to 115,400 carats (FY 2012: 68,422 carats). The ROM grade of 14.3 cpht was in line with guidance. Petra continues to be encouraged by the quality of the Kimberley Underground production and during the Year a 95.0 carat white diamond sold for US$1.1 million, being the first +US$1 million stone from the operation under Petra management.

Costs:

Unit costs of R265 /t (FY 2012: R295/t) improved as expected due to an increase in tonnages treated.

Development plan:

Petra's mine plan at Kimberley Underground is to take production to an annual average steady state of ca. 130,000 ctpa by FY 2016.

Planned ROM tonnes mined for FY 2014 and FY 2015 are 800 Kt and 900 Kt respectively, whereas planned plant throughput for FY 2014 and FY 2015 is 1.1 Mt (augmented by material from the stockpiles at surface). Underground ROM tonnes are planned to ramp-up to in excess of 1 Mtpa by FY 2016, by which point the stockpiles will have been depleted.

Capex:

Capex of US$21.6 million for the Year (FY 2012: US$21.0 million) mainly related to the Wesselton plant and additional mining and engineering infrastructure.

Fissure Mines (Sedibeng, Star, Helam)

On 31 July 2012, the Company announced that it had, in conjunction with its BEE partners, decided to undertake a sales process in respect of the Fissure Mines (Helam, Sedibeng and Star). This sales process did not result in any acceptable offers being submitted and therefore the Sedibeng and Star operations were placed onto care and maintenance post Year end; Helam continues to operate within the Group on a normal commercial basis.

The Fissure Mines FY 2013 results were impacted by the sales process and therefore do not represent steady state production results.

Petra's plan for Helam is to take production to 112,500 tpa by FY 2017, which at a grade of ca. 70 cpht is expected to deliver ca. 79,000 carats.

Williamson

Notes:

1. On-mine cash costs exclude costs assigned to ROM stockpiles.

2. Further to the development programme underway at Williamson for the last few years, ROM production operations recommenced in Q4 FY 2012.

Williamson is an open pit operation, based upon the mining of the 146 hectare Mwadui kimberlite. Since taking over the mine in early 2009, Petra has implemented the Phase 1 development programme, which involved a substantial rebuild of the existing plant and major pit reshaping work, with production successfully recommencing in Q4 FY 2012.

Williamson delivered 150,342 carats of ROM production in FY 2013 (FY 2012: 42,855 carats), supplemented by 14,035 carats of alluvial production (which is carried out by contractors). Petra continues to be encouraged by the high quality of the Williamson production and it is positive to note that a 35.8 carat Williamson stone sold for US$1.3 million during the June 2013 tender, being the first +US$1 million stone from Williamson under Petra's stewardship.

Costs:

The on-mine cash cost per total tonnes treated reduced to US$12/t (FY 2012: US$18/t) as the mine moved out of the start-up phase.

Development Plan:

On 12 August 2013, Petra announced plans to increase ROM production to ca. 3.6 Mt in FY 2014, before steadily ramping up to ca. 5 Mtpa by FY 2017, which at a grade of ca. 6.0 cpht will deliver 300,000 carats. This is an increase from previous guidance of 3.6 Mtpa, due to a focus on the plant design to deliver energy efficiency and water recovery circuit improvements, resulting in the ability to increase throughput.

Petra will continue to consider approaches to increase production beyond 5 Mtpa, but an expansion plan above this level is dependent upon security of appropriate electricity and water supplies. The Company will provide an update on this when appropriate.

Petra's current mine plan for Williamson has a life of 20 years, but given that the Mwadui kimberlite hosts a major resource of 39.4 Mcts, there is potential to extend the LOM considerably.

Capex:

Capex reduced to US$11.7 million for the Year (FY 2012: US$22.2 million) and was predominantly spent on finalising the rebuilt plant and on other production related activities, including pit shaping/shale removal, haul road construction and slimes/tailings handling facilities.

EXPLORATION

Petra's exploration programme is focused in Botswana, which offers an exceptional basis for diamond exploration in that it ranks highly with regards to prospectivity, has a low risk profile and an attractive fiscal regime. The Company has diamond prospecting licences in country covering approximately 21,520 km2, all of which is "on craton".

Petra's focus at present remains the evaluation of the KX36 kimberlite discovery and an intensified search for other kimberlites in the surrounding area.

Following the completion of the final processing of the KX36 mini bulk sample material in mid February 2013, with a total of ca. 285 carats recovered (including three stones of approximately 5 carats, two of which were of gem quality), detailed analysis of all micro/macrodiamond results and the petrographic and mineral chemistry data obtained from the +800 tonnes of kimberlite and calcrete processed was completed.

In analysing possible reasons for the realised diamond grade to be lower than previously predicted, two main factors were identified: diamond breakage and the relatively fine diamond size frequency distribution ("SFD") obtained. A diamond damage study undertaken by Dr Paddy Lawless indicated significant breakage for stones larger than the 3 DTC diamond sieve size. Diamond breakage would have occurred during the drilling process, with diamond fragments smaller than 1mm being lost to the undersize material. The quantified diamond breakage translates into a potential 'up-grade' factor of 1.36 for all large diameter drill ("LDD") holes, in terms of total carats recovered.

The fine diamond SFD is possibly related to diamond breakage, or the fact that LDD samples are not large enough to recover a representative quantity of larger diamonds. Both these issues will be addressed through an additional underground bulk sampling programme of between 10,000 and 15,000 tonnes, currently being planned for FY 2014.

A third phase of a narrow diameter drilling ("NDD") programme, involving eight inclined HQ core boreholes of between 250 m and 400 m, is nearing completion. The objective of this programme is to improve delineation of the KX36 pipe and to provide additional geological and geotechnical information. It is anticipated that all information available to date will be integrated in H1 FY 2014 to establish an initial resource model and classification for KX36.

In late FY 2012, a detailed deflation (soil) sampling programme was commenced to investigate the immediate surrounds of KX36 for other kimberlites that, together with KX36, may form a kimberlite cluster. To date, ca. 6,000 deflation samples have been collected and despatched for analysis. This programme is now nearing completion. Initial results indicate a zone of anomalous kimberlite indicator minerals ("KIM") extending south west from KX36.

In addition to the sampling campaign, Petra has carried out a ca. 3,900 line km airborne electromagnetic survey over the KX36 region and the final processed data was received in H2 FY 2013. The geo-electrical signature of KX36 is clearly identifiable in the survey data and some additional high interest targets with similar signatures in the immediate area had been identified by Year end. All geophysical and soil sampling data will be used to select a final set of priority drill targets in the vicinity of KX36. The first exploration drilling is planned to commence in H1 FY 2014.

On a more regional scale, geophysical, geological, soil sampling and drilling data are being compiled into one new comprehensive regional geographic information system ("GIS") database for regional target generation. The Company continues to review its exploration holdings in Botswana and further desktop studies led to the identification of three new prospecting licences covering 1,140km2 of prospective ground contiguous to the Kokong kimberlite field. An application for these licences was submitted in late FY 2013.

CORPORATE AND GOVERNANCE

Board changes

On 12 September 2012, Tony Lowrie joined the Petra Board as Senior Independent Non-Executive Director. Mr Lowrie has brought a wealth of relevant expertise to the Company, having an association of over 35 years with the equities markets and more recently through his role as a non-executive director of Kenmare Resources plc, also a FTSE 250 mining company.

On 4 February 2013, Dr Omar Kamal stepped down as a Non-Executive Director. Dr Kamal is a senior executive with the Al Rajhi Group of companies ("Al Rajhi"), Petra's largest shareholder, and had served on the Petra Board since February 2010 as Al Rajhi's representative.

Increase in effective interests in South African operations

Effective 1 January 2013, the Group increased its effective interest in each of its South African operations, by acquiring a 49.24% interest in Nelesco 651 (Pty) Limited, which in turn provided a 49.24% effective interest in Sedibeng Mining (Pty) Ltd ("Sedibeng Mining"), one of Petra's South African empowerment partners.

SAFETY

The health and safety of all employees is of the utmost importance to the Company and Petra has a wide range of initiatives, training and awareness programmes in place to foster a zero harm workplace.

The Group's LTIFR for the Year reduced to 0.67 (FY 2012: 1.13), which is an encouraging trend considering the increase in activities as the capital programmes progress.

Petra's annual Sustainability Report provides further information on its sustainable development policies and practices, covering areas such as Health and Safety, Environment, Community and Employment. It is available on the Petra website at www.petradiamonds.com/sustainability.

GROSS RESERVES & RESOURCES

Petra manages one of the world's largest diamond resources. This major resource suggests that the potential mine lives of Petra's assets could be considerably longer than the current mine plans in place at each operation, or could support significantly higher production rates.

Gross Reserves and Resources

As at 30 June 2013, the Group's gross Diamond Resources (inclusive of Reserves) had increased by 2.5% to 309.6 Mcts, from 302.1 Mcts as at 30 June 2012. This is mainly due to an increase in gross Resources at Finsch as a result of decreasing the bottom cut off used in the Resource estimation from 1.5mm to 1mm. This is in line with the decrease to the bottom cut off at the Finsch production plant, effected by Petra during FY 2013, thereby serving to increase the grade and recoverable carats over the life of mine.

The Group's gross Diamond Reserves increased 14.3% to 54.4 Mcts (30 June 2012: 47.6 Mcts), mainly due to an increase in gross Reserves at Cullinan. This has resulted from the increased number of new tunnels that have been brought into production and the detailed mine plans being run through the PCBC block cave scheduling and simulation software, thereby allowing for a more representative Reserves figure to be calculated. PCBC is a highly sophisticated software package commonly used by companies involved in block caving for mine planning purposes.

The following table summarises the gross Reserves and Resources status of the combined Petra Group operations as at 30 June 2013. The full 2013 Resource Statement can be accessed at http://www.petradiamonds.com/operations/reserves-and-resources.

General notes on reporting criteria

1. Resources are reported inclusive of Reserves.

2. Tonnes are reported as millions; contained diamonds are reported as per million carats.

3. Tonnes are metric tonnes, and are rounded to the nearest 100,000 tonnes; carats are rounded to the nearest 10,000 carats; rounding off of numbers may result in minor computational discrepancies.

4. Resource tonnages and grades are reported exclusive of internal waste, unless where otherwise stated.

5. Reserve tonnages and grades are reported inclusive of external waste, mining and geological losses and plant modifying factors; reserve carats will generally be less than resource carats on conversion and this has been taken into account in the applicable statements.

6. Reserves and Resources have been reported in accordance with the South African code for the reporting of mineral reserves and mineral resources (SAMREC 2007).

7. The Petra 2013 annual Resource Statement as shown above is based on information compiled internally within the Group under the guidance and supervision of Jim Davidson, Pr. Sci. Nat. (reg. No.400031/06). Jim Davidson has over 30 years' relevant experience in the diamond industry and is a full-time employee of Petra.

8. All Reserves and Resources have been independently reviewed and verified by John Kilham, Pr. Sci. Nat. (reg. No. 400018/07), a competent person with 33 years' relevant experience in the diamond mining industry, who was appointed as an independent consultant by the Company for this purpose.

OUTLOOK

Whilst economic conditions continue to remain challenging, we believe that the long-term outlook for the Group is positive. Petra has compiled a high quality portfolio of producing assets and will continue to significantly increase production in the years to come, supplying into what is expected to be a buoyant diamond market. True sustainability remains central to the way we structure all projects, ensuring that all our stakeholders benefit from our future success.

None of this would be possible without the hard work and motivation of our team, as well as our valued partnerships with our Government and BEE partners. I would like to thank you all for your individual contribution to realising our strategy.

Johan Dippenaar

CEO

16 September 2013

Notes

1. The following exchange rates have been used for this announcement: US$: ZAR9.88 (FY 2012: US$: ZAR8.16); average for the Year: US$: ZAR8.84 (FY 2012: US$: ZAR7.76)

2. The following definitions were used in this announcement:

a. cpht: carats per hundred tonnes

b. ctpa: carats per annum

c. Kt: thousand tonnes

d. Mctpa: million carats per annum

e. Mcts: million carats

f. Mt: million tonnes

g. ROM: run-of-mine

h. /t: per tonne

PETRA DIAMONDS LIMITED - PRELIMINARY ANNOUNCEMENT

UNAUDITED CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2013

PETRA DIAMONDS LIMITED - PRELIMINARY ANNOUNCEMENT

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2013

PETRA DIAMONDS LIMITED - PRELIMINARY ANNOUNCEMENT 

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2013

PETRA DIAMONDS LIMITED - PRELIMINARY ANNOUNCEMENT 

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2013

PETRA DIAMONDS LIMITED - PRELIMINARY ANNOUNCEMENT

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 30 JUNE 2013

PETRA DIAMONDS LIMITED - PRELIMINARY ANNOUNCEMENT

UNAUDITED CONSOLIDATED STATEMENT OF CASHFLOWS

FOR THE YEAR ENDED 30 JUNE 2013

PETRA DIAMONDS LIMITED - PRELIMINARY ANNOUNCEMENT

UNAUDITED CONSOLIDATED STATEMENT OF CASHFLOWS

FOR THE YEAR ENDED 30 JUNE 2013

¹The prior year US$2.7 million transaction costs of admission to the Main Market of the London Stock Exchange have been reallocated from 'Cashflows from financing activities' to 'Cash generated from operations' as this is considered a more appropriate classification.

PETRA DIAMONDS LIMITED - PRELIMINARY ANNOUNCEMENT

NOTES TO THE CONSOLIDATED PRELIMINARY FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2013