Petra Diamonds Regulatory News (PDL)

Petra Diamonds Limited

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

Refinancing of BEE partner loans

Petra Diamonds Limited announces that the Company and its Black Economic Empowerment partners in the Finsch and Cullinan mines (the "BEE Partners") have entered into agreements with Absa Corporate and Investment Banking ("Absa") and FirstRand Bank Limited (acting through its Rand Merchant Bank division) ("RMB"), who will directly finance the BEE Partners in respect of the loans due to Petra of R1,078 million (US$98.0 million) relating to the original acquisition of the BEE Partners' interests in Finsch and Cullinan (together "the mines").

Background

· The BEE Partners in Finsch and Cullinan are Senakha Mining Investments (Pty) Limited, Thembinkosi Mining Investments (Pty) Limited and the Petra Diamonds Employee Trust ("PDET").

· When Petra and the BEE Partners acquired the Finsch and Cullinan mines from De Beers, Petra agreed to finance the BEE Partners' 26% share in each mine. These loans to the BEE Partners by Petra were subject to normal commercial interest rates and were due to be repaid to the Company out of the Finsch and Cullinan mine free cashflows.

Refinancing Agreement

· Absa and RMB (together Joint Mandated Lead Arrangers, or "MLAs") have agreed to lend directly to the BEE Partners in order to settle the loans due to Petra of R1,078 million (US$98.0 million).

· The BEE Partners will now repay Absa and RMB from their share of cashflows from Finsch and Cullinan; the loan repayment schedules have been prudently structured to allow for flexibility around on-mine cashflows and loan repayments.

· The refinancing means that:

(i) the loans due by the BEE Partners to Petra are settled some three to four years sooner than previously would have been the case; and

(ii) the employees of Petra's South African operations (the beneficiaries of the PDET) will receive their first trust distribution in December 2014, some three to four years earlier than was previously expected to be the case.

Use of Funds by Petra

· Petra will apply the funds flowing from the refinancing to its Group treasury, further strengthening the balance sheet and confirming the commencement of dividends for the current financial year (the year to 30 June 2015).

Johan Dippenaar, Chief Executive of Petra, commented:

"The re-financing of the BEE Partner loans is a validation by Absa and RMB of the quality of Petra's asset base, cashflows and management team. The repayment of these loans significantly strengthens the Company's balance sheet, enhances flexibility and places Petra in a strong position financially."

Note:

An exchange rate of US$1:R11.00 has 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 five producing mines: four in South Africa (Finsch, Cullinan, Koffiefontein and Kimberley Underground) 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 constituent of the FTSE 250 Index.

For more information, visit the Company's website at www.petradiamonds.com.

About the BEE Partners

The BEE Partners include various commercial BEE entities as well as the PDET. More information on Petra's BEE partners and mine ownership levels can be found here: http://www.petradiamonds.com/about-us/group-structure/summary-of-mine-ownership.

The PDET, of which Petra's South African employees are the beneficiaries, holds a 5% interest in Finsch and a 12% interest in Cullinan.

Senakha Mining Investments (Pty) Limited ("Senakha")is the commercial BEE partner in Finsch, with a 21% interest in the mine. Senakha is a consortium of BEE mining companies, namely Sedibeng Mining (Pty) Limited (17%), Lexshell 844 Investments (Pty) Limited (2%) and Namoise Mining (Pty) Limited (2%).

Thembinkosi Mining Investments (Pty) Limited ("Thembinkosi") is the commercial BEE partner in Cullinan, with a 14% interest in the mine. Thembinkosi is a consortium of BEE mining companies, namely Sedibeng Mining (Pty) Limited (6.16%), Umnotho weSizwe Group (Pty) Limited (5.04%) and Namoise Mining (Pty) Limited (2.8%).

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 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.