Petra Diamonds Regulatory News (PDL)

Petra Diamonds Limited

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

Trading Update for the Year ended 30 June 2013

Petra Diamonds Limited announces its Trading Update (unaudited) for the year ended 30 June 2013 (the "Year" or "FY 2013"), ahead of its preliminary results for the Year which will be released in September 2013.

Petra will publish updated analyst guidance for FY 2014 on 12 August 2013, which will include guidance on diamond prices, production, costs and capital expenditure ("Capex").

HIGHLIGHTS

·; Production up 21% to 2,668,305 carats (FY 2012: 2,208,862 carats), slightly above the revised market guidance of 2.65 million carats ("Mcts").

o Further production growth expected for FY 2014 to 2.9 Mcts to 3 Mcts (detailed guidance will follow on 12 August 2013).

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

·; Costs were well controlled; further detail will be given in the full year results announcement.

·; Capex of US$201.2 million (FY 2012: US$138.0 million), in line with expectations and in accordance with the roll-out of the Group's expansion programmes.

·; Cash at bank as at Year end of US$26.2 million (FY 2012: US$37.4 million).

o Diamond debtors (due to increased volumes and the Company's largest tender to date shortly before Year end) of US$75.0 million (FY 2012: US$24.5 million).

o Diamond inventories (due to the increased production) circa US$35.0 million (FY 2012: circa US$24.3 million).

·; Loans and borrowings at Year end of US$147.0 million (FY 2012: US$69.2 million).

o Facilities undrawn and available to the Group of US$71.3 million; net debt in line with management's expectations.

FY 2013 Sales, Production and Capex - Summary

Johan Dippenaar, CEO of Petra Diamonds, commented:

"This is another solid result for Petra, as the Company continues to deliver further significant production increases and revenue growth. Our capital expenditure for the Year reflects the ongoing roll out of our expansion plans. We remain on track to deliver on our growth plans to reach annual production of circa 5 million carats by FY 2019."

CONFERENCE CALL

Petra's CEO, Johan Dippenaar, and Finance Director, David Abery, will host a conference call at 8:00am BST today to discuss the Trading Update with investors and analysts. Participants may join the call by dialling one of the following three numbers shortly before the call:

From the UK (toll free): 0808 237 0040From South Africa (toll free): 0800 222 290From the rest of the world: +44 20 3428 1542Participant passcode: 22146411#

A replay of the conference call will be available on the following numbers from 12:00pm BST on Tuesday 30 July 2013:

From UK (toll free): 0808 237 0026From South Africa and the rest of the world: +44 20 3426 2807Playback passcode: 640358#

COMMENTARY

Production

·; Petra increased production 21% from 2.2 million carats (FY 2012) to 2.67 million carats (FY 2013), 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.

·; Production of 2.9 Mcts to 3 Mcts is expected for FY 2014, with detailed guidance to follow on 12 August 2013.

·; Q4 FY 2013 production was up 22% on Q4 FY 2012 to 772,103 carats (Q4 FY 2012: 632,800 carats) and up 19% on Q3 FY 2013 (648,679 carats), primarily due to increased output at both Cullinan and Finsch. This excellent production result for the quarter bodes well for further production growth in FY 2014.

·; Finsch contributed 1,412,465 carats for the Year (FY 2012: 1,104,618 carats). In line with the Company's strategy to benefit from the increased recovery of the higher quality smaller goods produced by the Finsch orebody, the plant cut-off was reduced towards the latter part of the Year, with a resultant increase in both run-of-mine ("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. For FY 2013, grades of 34.1 carats per hundred tonnes ("cpht") for ROM (FY 2012: 36.8 cpht) and 20.1 cpht for tailings (FY 2012: 17.0 cpht) were recorded. 

·; Cullinan production of 868,975 carats for the Year (FY 2012: 867,780 carats) was impacted by a combination of the delay in the roll-out of the tailings expansion project and the lower ROM grade. It was planned that the tailings project would treat circa 2.7 million tonnes ("Mt") of tailings material during the Year, yet due to various delays during the commissioning phase, mainly due to the labour situation during H1 FY 2013, only 1.5 Mts were treated, at a grade of 5.0 cpht. Increased tailings throughput is planned for FY 2014. 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 previously reported). As part of the Company's ongoing initiatives to manage the lower ROM grade prior to accessing the C-Cut, increased pillar mining from the BA5 production area contributed towards a strengthening ROM grade during Q4 to circa 33.0 cpht.

·; At Koffiefontein, diamond production declined by 13% to 34,800 carats for FY 2013 (FY 2012: 40,117 carats). Underground production continues to be supplemented with production from the Ebenhaezer satellite pipe, where waste stripping activities were progressed in Q4 FY 2013, establishing access to higher grade ore. Koffiefontein is now in a position to deliver improved results for FY 2014.

·; 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.

·; Williamson ROM production delivered 150,342 carats (FY 2012: 42,855 carats), following the successful start-up of the rebuilt treatment plant, while the ROM grade of 5.5 cpht was in line with guidance for the Year.

Diamond market and sales

·; Rough diamond prices were essentially flat during H1 of FY 2013, whilst firmer prices were seen during H2 (as widely reported by other producers), resulting in stronger average value per carat prices realised across the Group, notwithstanding the higher levels of tailings production (tailings carats are lower value than ROM carats).

·; Overall price performance for full FY 2014 is expected to remain steady 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.

·; 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 a 25.5 carat blue diamond from Cullinan for US$16.9 million (or US$663,114 per carat) in May 2013.

·; Carats sold increased 22% to 2,539,844 (FY 2012: 2,084,429), in line with the increasing trend of production.

·; Petra sold 13 stones exceeding US$1 million each during the Year, for total revenue of US$39.5 million, including the US$16.9 million blue stone sold in May 2013 (FY 2012: eight stones valued at US$14.4 million). It is also positive to note that a 35.8 carat Williamson stone sold for US$1.3 million during the June 2013 tender, which was the first +US$1 million stone from Williamson under Petra's stewardship.

·; Prices achieved for FY 2013 were largely in line with Petra's guidance for FY 2013, as demonstrated in the table below:

Notes:

1. All sales (ROM and tailings/alluvials/Ebenhaezer) including specials (stones above US$1 million in value) were used to calculate the above average values.

2. The average value at Finsch was affected by the increase in recovery of smaller diamonds, further to the plant changes mentioned above.

3. The 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 is US$142 per carat.

Expansion projects

·; The Group's expansion projects at Finsch, Cullinan and Koffiefontein are progressing well. At Finsch and Cullinan, development of the declines and access tunnels (as well as the shaft deepening at Cullinan), which are key deliverables at this stage of the projects, are progressing in line with expectations. A detailed update will be included in Petra's preliminary results statement in September and further detail on project Capex will be provided in the 12 August guidance announcement.

·; At Finsch, development and drilling contractor services have been put in place. A total of 2,311 development metres were achieved during the Year (FY 2012: 169 metres). Raiseboring activities commenced during Q4 FY 2013 and yielded 165 metres. Planning around the potential incorporation of the Rail-Veyor® ore-handling system into the project is ongoing and an update will be provided when appropriate.

·; At Cullinan, the C-Cut Phase 1 tunnel development yielded 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).

·; At Koffiefontein, the revised mining lay-out of the planned new production areas (which will accelerate access to fresh kimberlite ore) has been finalised and detailed design commenced. Development work on the underground tunnel infrastructure is underway, while ore-handling conveyor installations servicing the 56 to 58 Level sub level caves are in the final stages of commissioning.

Capex

·; Capex (excluding financing costs, as per guidance) for the Year was US$185.9 million (FY 2012: US$131.7 million), split as to US$138.7 million on expansion Capex (FY 2012: US$102.5 million) and US$47.2 million on sustaining Capex (FY 2012: US$29.2 million).

·; The increased level of sustaining Capex is 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$4.6 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. Therefore the mine by mine tables in the appendix, plus the US$4.6 million internal projects Capex, will add together to make the Capex total in the 'Highlights' at the beginning of this announcement.

·; US$15.3 million (FY 2012: US$6.3 million) of capitalised borrowing costs in respect of Capex is included in the applicable mine by mine tables below.

Health and Safety

·; Group 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.

·; 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.

Financial

·; As at 30 June 2013, Petra had cash at bank of US$26.2 million (30 June 2012: US$37.4 million).

·; Diamond debtors (relating to the June tender, and which were settled in the normal course of business shortly after Year end) at 30 June 2013 were circa US$75.0 million (30 June 2012: US$24.5 million). The increased debtors were due to the June tender being the largest held by Petra to date, again due to the strong production levels of Q4 FY 2103.

·; Diamond inventory at 30 June 2013 was circa US$35.0 million, 348,403 carats (30 June 2012: circa US$24.3 million, 221,748 carats). The higher inventory is due to increased production in Q4 FY 2013; Petra continues to sell all goods in line with prior periods.

·; Loans and borrowings at 30 June 2013 were US$147.0 million (30 June 2012: US$69.2 million); undrawn debt facilities at 30 June 2013, net of US$3.6 million utilised for foreign exchange settlement lines (30 June 2012: US$nil), were US$71.3 million (30 June 2012: US$54.0 million). The debt and undrawn facilities are in line with management's plans and expectations.

Corporate

·; As previously announced, Petra is currently putting its Sedibeng and Star operations onto care and maintenance, further to the termination of the sales process for the Fissure Mines. Although the formal sales process did not result in any acceptable offers for these mines, the Company continues to engage with new interested parties on an informal basis. As previously announced, the Helam mine will continue to be operated within the Petra Group on a normal commercial basis.

Notes

1. The following exchange rates have been used for this announcement: average for the Year US$1: R8.84; 30 June 2013 US$1: R9.88.

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 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.

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

APPENDIX - MINE BY MINE PRODUCTION TABLES

Finsch - South Africa

Cullinan - South Africa

Koffiefontein - South Africa

Kimberley Underground - South Africa

Note: Petra only produces from ROM (underground) operations at Kimberley Underground.

Fissure mines - South Africa

Note: During FY 2012, Petra and its black economic empowerment partners undertook a sales process with regards to the Fissure Mines (Helam, Sedibeng and Star). The lower production is due to the impacts of the sales process and the labour disruptions in H1 FY 2013.

Williamson - Tanzania