Disposal of Interest in Kimberley Ekapa Mining JV

Petra Diamonds Limited

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

Completion of Disposal of Interest in Kimberley Ekapa Mining Joint Venture ("KEM JV")

Petra Diamonds Limited announces that the disposal of the Company's and its black economic empowerment ("BEE") partners' 75.9% interest in the KEM JV to the Company's joint venture partner Ekapa Mining (Pty) Ltd ("Ekapa Mining") for a cash consideration of ca. ZAR300 million (the "Disposal"), as previously announced on 5 July 2018, completed today following all conditions precedent in the terms of the agreement having been met.

KEM JV was a joint venture between Petra and its partner Ekapa Mining and incorporates the Kimberley Underground mine, extensive tailings retreatment programmes and the high volume Central Treatment Plant - all located in or around the historic diamond mining centre of Kimberley in South Africa. The Disposal is on a going concern basis, with Ekapa Mining taking on all of the Company's financial, employee, environmental, health, safety and social obligations with regards to the KEM JV operation.

The terms of repayment of the R300 million purchase consideration, originally to be payable in 24 monthly instalments starting in January 2019, have been amended to allow Ekapa Mining to maximise the prospects of the financial viability of the operation. According to the terms, the purchase consideration will be settled as follows:

- A fixed portion of R60 million payable in 24 monthly instalments starting on 1 April 2019;

- The balance of the purchase consideration will be repayable from a 50% share of future operating cash flows including proceeds from the sale of assets, potential proceeds from a pending insurance claim that is subject to ongoing discussions, in relation to the mud-rush incident at Bultfontein, and adjusted for sustaining capital of between R110 million and R130 million per annum, for a period of five years to 30 June 2024.

Johannes Dippenaar, CEO commented

"The completion of the disposal is in line with the Company's strategic priorities which include the ongoing review of the asset portfolio in order to maximise return on capital and ensure that all assets are in a position to contribute positive cash flow to the business."

The Company recorded an attributable loss on discontinued operations of US$104.3 million relating to the reclassification of KEM JV as a discontinued operation in the Company's results for the year ended 30 June 2018.

This Disposal constitutes a Class 2 transaction for the purposes of the UK Listing Rules and further required disclosures are below:

Notes:

1. All numbers stated above are on a 100% basis and therefore do not only represent Petra's existing 75.9% effective interest in the KEM JV.

2. Including the gross impairment charge of US$122.1 million (30 June 2017: US$nil and 31 December 2017: US$68.5 million).

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

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For further information, please contact:

Petra Diamonds, London Telephone: +44 20 7494 8203

Marianna Bowes investorrelations@petradiamonds.com  

Salisha Ilyas

Buchanan Telephone: +44 20 7466 5000

(PR Adviser) pdl@buchanan.uk.com 

Bobby Morse

About Petra Diamonds Limited 

Petra Diamonds is a leading independent diamond mining group and a consistent supplier of gem quality rough diamonds to the international market. The Company has a diversified portfolio incorporating interests in three underground producing mines in South Africa (Finsch, Cullinan and Koffiefontein) and one open pit producing mine in Tanzania (Williamson). It also maintains an exploration programme in Botswana and South Africa, which is currently under review.

Petra's strategy is to focus on value rather than volume production by optimising recoveries from its high quality asset base in order to maximise their efficiency and profitability. The Group has a significant resource base of ca. 290 million carats, which supports the potential for long-life operations.

Petra conducts all operations according to the highest ethical standards and will only operate in countries which are members of the Kimberley Process. The Company aims to generate tangible value for each of its stakeholders, thereby contributing to the socio-economic development of its host countries and supporting long-term sustainable operations to the benefit of its employees, partners and communities. 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.