Petra Diamonds Regulatory News (PDL)

This announcement contains inside information

Petra Diamonds Limited

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

Proposed US$600 Million Notes Issue and

Restructuring of Debt Facilities

Petra Diamonds Limited announces the launch of a US$600 million notes issue and restructuring of its debt facilities.

HIGHLIGHTS

Proposed US$ Notes Issuance and Restructuring of Debt Facilities

· The Company today announces an intention to offer US$600 million in aggregate principal amount of senior secured second lien notes due 2022 (the "2022 Notes"). The 2022 Notes will be issued by Petra Diamonds US$ Treasury Plc, a wholly owned subsidiary of Petra Diamonds Limited.

· Proceeds from the 2022 Notes will be used to refinance the Company's existing US$300m 8.25% senior secured second lien notes due 2020 (the "2020 Notes"), to repay all drawn bank facilities, and for general corporate purposes.

· Concurrently, the Company announces its intention to enter into new bank facilities (see detail below) to provide additional liquidity to the Company; the facilities will remain undrawn upon closing of the offering of the 2022 Notes.

· The new capital structure will provide the Group with additional financial flexibility as a result of an extended debt maturity profile and increased liquidity position.

· The terms of the 2022 Notes will be determined at the time of pricing of the offering, subject to market conditions.

Johan Dippenaar, Chief Executive Officer, commented:

"The Group's new capital structure provides Petra with financial flexibility, with no drawn debt maturities until 2022; this represents a further step forward in the next phase of the Company's development as the eight year capital expenditure programme at the Group's flagship Finsch and Cullinan mines nears completion."

COMMENTARY

Restructuring of Debt Facilities

· Following and conditional upon the issue of the 2022 Notes, the Company's bank facilities will be simplified, with an outline of the current facilities versus the amended facilities as follows:

* Assuming a ZAR/USD exchange rate of R13.00/US$1.00

· The ratios under the restated maintenance covenants for the amended facilities, which will replace all existing financial covenants in the Company's bank facilities, will be as follows:

** Consolidated Net Senior Debt means at any time the Consolidated Gross Debt (excluding any second lien and other subordinated debt)

· Covenant ratios will be measured semi-annually on a rolling twelve month period at 30 June and 31 December, respectively.

The Company maintains its latest communicated operational guidance including commissioning of the new Cullinan plant in Q4 FY 2017 and confirms that it continues to see the recently disclosed signs of stabilisation in the diamond market.

Petra will release its Q3 FY 2017 Trading Update for the period from 1 January 2017 to 31 March 2017 on 24 April 2017.

~ Ends ~

For further information, please contact:

Petra Diamonds, London Telephone: +44 20 7494 8203

Cornelia Grant cornelia.grant@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 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.

Petra has a core objective to steadily increase annual production to ca. 5.3 million carats by FY 2019. The Group has a significant 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 constituent of the FTSE4Good Index. For more information, visit www.petradiamonds.com.

This announcement and the information contained herein are for information purposes only and do not constitute a prospectus or an offer to sell or a solicitation of an offer to buy or subscribe for any securities in the United States of America ("U.S.") or in any jurisdiction to persons to whom or in which jurisdiction such offer or solicitation is unlawful. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the laws of any state of the U.S., and may not be offered, sold or otherwise transferred in the U.S. absent registration or pursuant to an available exemption from registration under the Securities Act. Neither Petra Diamonds Limited nor its shareholder intends to register any securities referred to herein in the U.S.

Within the United Kingdom, this announcement is directed only at persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 ("relevant persons"). The investment or investment activity to which this announcement relates is only available to and will only be engaged in with relevant persons and person who receive this announcement who are not relevant persons should not rely or act upon it.

This announcement contains or incorporates by reference "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "projects", "expects", "intends", "aims", "plans", "predicts", "may", "will", "seeks", "could", "would", "shall" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts and include statements regarding the intentions, beliefs or current expectations of the Group concerning, among other things, the Group's results of operations, financial condition, prospects, growth, strategies and the industries in which the Group operates.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future or are beyond the Group's control. Forward-looking statements are not guarantees of future performance and are based on one or more assumptions. The Group's actual results of operations and financial condition and the development of the industries in which the Group operates may differ materially from those suggested by the forward-looking statements contained in this announcement. In addition, even if the Group's actual results of operations, financial condition and the development of the industries in which the Group operates are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods.