1st Quarter Results

Petra Diamonds Ld
01 November 2006

                             Petra Diamonds Limited



                         QUARTERLY ACTIVITIES REPORT
                        FOR THE THREE MONTH PERIOD ENDED
                                30 September 2006



                           (dateline 31 October 2006)





Petra Diamonds Limited ('Petra' or 'the Company' or 'the Group'), the AIM-quoted
and ASX-listed diamond mining group (AIM and ASX: PDL), announces its quarterly
activities report (unaudited) for the three month period ended 30 September
2006.



Highlights



  • Alto Cuilo - bulk sampling commences; 62 kimberlites now identified;
    analysis of further drill core gives more highly encouraging indicator
    mineral chemistry results, in some cases potentially more prospective than
    results from previous samples
  • Botswana - Kukama project area identified, hosting 24 kimberlites, within
    Petra's licence areas, a very positive and important development for the
    Kalahari exploration programme
  • Kono project - highly encouraging diamond recoveries from mini samples of
    224 diamonds totaling 23.91 carats
  • South Africa - production from the South African mines of 35,602 carats
    for the quarter (quarter to June 2006: 43,378 carats); although production
    for the quarter was affected by unexpected labour and power interruptions
    outside of Petra's control, these factors are not long term in nature and
    action has been  taken to address the issues
  • Corporate - Petra issues a US$20 million unsecured, interest free bond,
    convertible at 130 pence per share; the financing strengthens Petra's
    treasury on an interest free basis, giving Petra the flexibility to act
    quickly on potential growth opportunities
  • Proposed transaction - Petra announces that it is in advanced and
    exclusive discussions with De Beers with regards to the acquisition of the
    Koffiefontein mine and associated assets in South Africa; it is expected
    that a formal sale agreement will be signed in the near future





Angola - Project Alto Cuilo

  • Bulk sampling has commenced with the large diameter drill rig; priority
    targets have been ranked for large diameter drilling according to mineral
    chemistry analysis, surface area and logistical considerations; initial
    results are expected by December 2006
  • 62 kimberlitic occurrences now confirmed (June Quarterly Activities
    Report: 50) out of 70 targets drilled, an exceptional success rate of 89%
  • Laboratory analysis of drill core from an additional 13 kimberlites
    records indicator mineral chemistry results that are, in some cases, even
    more encouraging than results returned on previous core samples; the
    indicator mineral results are comparable to some of the world's leading
    economic kimberlite deposits
  • Approximately 32,000 metres of core drilling has now been completed,
    illustrating the effectiveness of the three drills now working on site; a
    total of 208 holes have been drilled to date



Botswana - Kalahari Diamonds

  • Botswana - the delineation of the Kukama project area hosting 24
    kimberlites (some diamondiferous) is a significant advance in Petra's
    exploration of the Kalahari; the 'known' kimberlite indicator mineral ('KIM
    ') halo cannot be explained by the 24 known kimberlites alone; this
    development means Petra has identified another highly prospective and
    relatively unexplored target area, further illustrating the quality of the
    Kalahari ground
  • Further modelling of Falcon gravity and magnetics over the Mabutsane 306
    ('Mab 306') anomaly suggests an intrusive, pipe-like model; further drilling
    on Mab 306 planned for October 2006



Sierra Leone - Kono project

  • Encouraging diamond recoveries made from mini sample treatment; 224
    diamonds totaling 23.91 carats recovered (June Quarterly Activities Report;
    44 diamonds totaling 5.6 carats), the largest diamonds being stones of 1.6,
    1.4, 1.34, 1.1 and 0.85 carats
  • Shaft sinking at the two bulk sampling shafts proceeding well



South Africa

            Helam, Sedibeng and Star mines

  • Production from the South African mines of 35,602 carats for the quarter
    (quarter to June 2006: 43,378 carats); production was affected by unexpected
    labour and power interruptions outside of Petra's control (refer Review of
    Operations for detail); action has been taken to address the issues and
    production is returning to that of the June 2006 quarter
  • EBITDA on mine of US$490,691 delivered for the quarter, despite these
    external interruptions
  • The current US$/Rand exchange rate provides an underpin for sales revenue
  • Management remain confident that the capacity and engineering improvements
    being put in place at Helam, Sedibeng and Star will, over the medium term,
    lead to improved production and cash flow generation



            Acquisition of Koffiefontein mine

  • The Company is aware of speculation in respect of Petra and the
    Koffiefontein mine and associated assets ('Koffiefontein') currently owned
    by De Beers. Petra confirms that it is, with BEE partners, in advanced and
    exclusive negotiations with De Beers in respect of the acquisition of
    Koffiefontein and expects to be in a position to update shareholders of
    progress in this respect in the near future.



On the successful completion of the proposed transaction, Petra would expect
Koffiefontein to add a significant level of production to the Group.



The proposed acquisition of Koffiefontein will be funded out of Petra's existing
resources and will be subject to the completion of a formal sale agreement,
issue of a new order mining licence to Petra by the South African Department of
Minerals and Energy and approval from the South African Competition Commission.






DIAMOND SALES SUMMARY
Quarter to;                       Carats sold       Price/carat (average) US$         Sales US$M

30 September 2006                 33,916            133.5                             4.5
30 June 2006                      37,387            151.6                             6.0
12 Months to;
30 June 2006                      160,856           130.9                             21.7







DIAMOND PRODUCTION SUMMARY
Quarter to;                                     Tonnes             Carats               Grade CPHT *
                                                Treated            Recovered

30 September 2006: ROM                          70,228             32,147               45.8
30 September 2006: Tailings                     49,757             3,455                6.9
30 June 2006: ROM                               72,295             37,566               51.96
30 June 2006: Tailings                          56,518             5,812                10.28
12 Months to:
30 June 2006: ROM                               288,397            155,614              53.9
30 June 2006: Tailings                          192,086            19,398               10.1

* CPHT - carats per hundred tonnes



CORPORATE



On 19 September 2006 Petra announced the issue of a US$20 million unsecured,
interest free convertible bond ('the Convertible') to Al Rajhi Holdings W.L.L,
and on 5 October 2006 Petra drew down the US$20 million under the terms of the
Convertible.



As stated in the announcement of 19 September 2006, the Company is currently
evaluating opportunities that the board of Petra believe may have the potential
to grow revenue and cash flow, and the Company will provide further information
should any of these opportunities progress to formal agreements. One of the
opportunities is the proposed acquisition of Koffiefontein. In the meantime, the
proceeds of the Convertible will be held by Petra and accrue bank deposit
interest and any acquisitions or other business developments will be subject to
the Company's demanding review criteria.





SUMMARY OF TRADING RESULTS (UNAUDITED)


                                                                    3 months to           3 months to
                                                              30 September 2006          30 June 2006
                                                                            US$                   US$
Revenue                                                               4,528,487             5,975,338
EBITDA on mine - South African operations                               490,691             1,129,600
Exploration expenses *                                                (137,860)             (568,482)
Administration expenses *                                             (853,958)           (1,231,431)
Net finance costs                                                     (104,188)              (28,413)
Loss before depreciation, amortisation and foreign                    (605,315)             (698,726)
exchange movements
Loss for the quarter **                                             (6,434,022)          (12,920,750)
CAPEX                                                                   606,680               984,164

* Expenses before depreciation, amortisation,
interest and foreign exchange movements.
** Loss after non-cash flow items; unrealised
foreign exchange of US$3.5m, depreciation and
amortisation of US$2.3m








CASH AND STOCK SUMMARY
                                               30 September 2006            30 June 2006
                                               US$ million                  US$ million
Cash balance                                   5.3 ***                      7.0
Diamond stock                                  2.3                          1.9
(recorded at production cost)
Total                                          7.6                          8.9



Note; *** on 5 October 2006 Petra drew down the US$20 million Convertible,
taking Group cash balances to US$25 million.





REVIEW OF OPERATIONS



ANGOLA, PROJECT ALTO CUILO



Kimberlite Exploration



Core drilling

Ongoing core drilling of the anomalies identified by the Midas low level
helicopter aeromagnetic survey has now resulted in the discovery of 62
kimberlites, a significant advance on the 50th kimberlite which was a milestone
for the project in July 2006, and again illustrating the solid progress being
made on a regular basis.



The third core rig which arrived on site during the quarter to 30 June has
accelerated the programme significantly; core drilling now totals 32,000 metres
on 208 holes (June Quarterly Activities Report; 26,000 metres on 190 holes). One
core rig is focused on drilling additional holes into the large AC98 kimberlite
close to the main camp at Mussenuige (this kimberlite delivered highly
encouraging indicator mineral chemistry), while the other two rigs continue
drilling in the Luxinga area of north eastern Alto Cuilo, where they have
recorded 12 further kimberlite discoveries since the June Quarterly Activities
Report.



The success rate of this accelerated drilling programme continues to surpass the
norms for global kimberlite exploration with 70 of the 249 magnetic anomalies
now having been drilled, and 62 confirmed as kimberlitic.



Bulk Sampling

The RB40 Prakla Bohrtechnic large diameter drill ('LDD') rig has commenced
operation. The LDD rig will take mini bulk samples of approximately 200 tonnes
from selected anomalies to give an indication of grade and value per carat.
Priority targets have been identified and ranked for LDD drilling according to
mineral chemistry, surface area and logistical considerations. The LDD rig has
the capacity to drill holes with a diameter starting at 17 inches (43cm) and
reducing to 12 inches (30cm) down to depths of 350 metres.



It was decided to start the large diameter drilling programme on AC 16 which,
although ranked at number 5 in the original ranking process, has the least
overburden cover in the top 5 kimberlites. This approach will allow for testing
of the rig and conditioning of the crew under favourable logistical conditions,
resulting in improved performance and substantial cost savings down the line.



The LDD rig is now drilling at full capacity and the initial technical
assessment of the bulk sampling programme is very encouraging. The exploration
team is stockpiling material recovered by the LDD rig for treatment by the 10
tonne per hour dense media separation ('DMS') sample plant. The DMS plant, which
is a custom made closed circuit unit designed specifically for kimberlite bulk
sampling, is currently under construction on site and is expected to be
commissioned in November 2006. It will commence treatment of the samples
immediately and initial results are expected in December 2006.



Indicator Mineral Chemistry

Core from a further 13 kimberlites was analysed during the quarter with regards
to indicator mineral chemistry and the results are again highly encouraging.
Diamond stability field G10 garnets and high-sodium eclogitic garnets were found
in a number of these samples in abundances that are comparable to, and in some
cases surpass, the previous diamond indicator mineral results announced from
Alto Cuilo. Analyses of these latest samples also indicate a mantle geotherm
favourable to the kimberlites having sampled material derived from the earth's
diamond stability field at conditions favourable for the formation of diamonds.



Results from mineral chemistry analysis continue to guide the exploration
programme and particularly assist in the selection and prioritising of the
kimberlites from where mini bulk samples will be taken.  A kimberlite re-ranking
exercise will be undertaken in the near future utilising the ongoing mineral
chemistry results.



Alluvial Exploration

The alluvial exploration programme continues to further evaluate the potential
for economically viable alluvial deposits. All of the project partners,
including Endiama and Moyoweno, have decided to delay the trial mining of the
alluvial block on the Luangue river as it was decided that, at this stage, such
a programme would have incurred significant costs and not produced a
proportional increase in data.



The alluvial trenching and pitting programme will now be extended to other areas
in order to obtain additional data. The programme is focused on the Mussunuige
river to the west of the Luangue river and has already started yielding results
that will be used to further assess the characteristics of the nearby
kimberlitic bodies as well as the feasibility of alluvial deposits.



BHP Billiton Joint Venture

As at 30 September 2006, BHP Billiton had advanced funding of US$28.2 million
(30 June 2006: US$22.8 million) in respect of exploration at Alto Cuilo. The
advances for the quarter were largely for capital and operating costs associated
with the commencement of the bulk sampling programme.





BOTSWANA, KALAHARI DIAMONDS 



Kukama kimberlite field

Petra has identified a further 24 kimberlites, all located within Kalahari
Diamond's licence areas, known as the Kukama project area.



The kimberlites lie beneath approximately 50 metres of Kalahari sand cover,
which previously hampered exploration to the extent that assessment of their
diamond potential was limited to indicator mineral chemistry and micro diamond
sampling, with no significant bulk sampling having been carried out to date.
Kimberlites were first discovered in this area by Falconbridge during the late
1970's and subsequent discoveries were made by De Beers and other companies in
the early 1990's.



The Kukama project area is comprised of the Kikau pipes, the Khutse pipes and 4
other pipes discovered in close proximity to the village of Kukama (there is
little further information available on Khutse kimberlites at this stage).



Historical exploration drilling by other exploration companies of Kikau 1
kimberlite (diameter approx. 800 metres) intersected crater facies kimberlite to
a depth of 180 metres before the hole was stopped without intersecting
tufficitic kimberlite. Micro-diamond sampling produced 6 micro-, and 1 macro-
diamonds from 839 kilogrammes of material. Historical micro-diamond sampling of
the smaller Kikau 5 kimberlite produced 13 micro-diamonds from 717 kilogrammes
of material.



Historical micro-diamond sampling of Go211 (near Kukuma) recovered 8 micro- and
1 macro-diamonds from 601 kilogrammes of material, with a reported grade of 3.8
cpht. Similarly, Go173N (also near Kukuma) produced 36 micro- and 3
macro-diamonds from 628 kilogrammes of material with a reported grade of 5.8
cpht, which is a significant result at the prospecting phase.



The presence of these diamondiferous kimberlites is very significant in that it
indicates that fractures exist in this area that tapped the mantle within the
diamond stability field. The area lies within very magnetically noisy Karoo
basalts under 50 metres of Kalahari sand cover. The extent of the KIM halo
cannot be explained by the location of the 24 known kimberlites alone; this is
an excellent, relatively unprospected target area for which an exploration
programme will be drawn up in the coming months.



Mabutsane anomaly

Further modelling and processing of Falcon geophysical data over Mab 306, the
very prominent circular gravity anomaly of 70 Eos (a measure of gradient
gravity) and with a diameter of 1.5 kilometres that was drilled during the
quarter to December 2005, has detected a subtle magnetic anomaly co-incident
with the gravity anomaly.



Further modelling of the magnetic data will allow the accurate positioning of 1
borehole to intersect this body where it lies closest to surface (about 200
metres), to test the possibility of a pre-Karoo kimberlite situated at depth.



Gope

78 magnetic anomalies have been identified from the Xcalibur aeromagnetic survey
in the Gope area to date. In addition to this a further 14 magnetic anomalies
have been identified from the Gope West Falcon block A, and a further 3 from the
Gope Falcon Test Block, bringing the total number of magnetic anomalies
identified in the Gope area to 95.  Of the anomalies selected in the Gope area,
a total of 60 have been investigated by ground geophysical follow-up.



A drilling programme is due to commence in the Gope and Mabutsane  areas by
November 2006. 15 anomalies have been selected for drilling at Gope, all of
which lie within or adjacent to historical KIM halos.



With recent developments in Falcon technology, a high-resolution
helicopter-borne Falcon gravity survey is being considered over the unexplained
historical KIM halo to the south and west of the Gope kimberlite cluster. The
system will first be tested over Gope kimberlites with a known gravity response.
If the system proves successful it will remove the need for ground follow-up
geophysical surveys in this area, accelerating significantly the exploration
programme.



Orapa South

Fieldwork has continued in the Orapa south area. Ground follow-up has produced
some interesting co-incident magnetic and gravity anomalies, 8 of which are
currently being tested by anomaly-specific heavy mineral and geochemical soil
sampling. One anomaly has so-far been earmarked for drilling as a continuation
to the Gope drilling campaign.



BHP Billiton's Orion Geophysical Unit has just completed a neo-neural networking
geophysical processing exercise over the entire Orapa South Falcon survey, which
was designed to enhance kimberlite-style anomalies not immediately obvious on
the airborne gravity and magnetic Falcon data. If this exercise proves
successful in finding previously unidentified anomalies, this processing
technique may be applied to all historical Falcon data.





SIERRA LEONE, KONO PROJECT 



Sample Treatment

To date, 224 diamonds totaling 23.91 carats have been recovered (June Report; 44
diamonds totaling 5.6 carats), the largest diamonds being stones of 1.6, 1.4,
1.34, 1.1 and 0.85 carats. The samples processed to date comprise mixed material
from the various exploration activities and the results, whilst very
encouraging, are not large enough to arrive at a representative grade.



Exploration Development

Since the implementation of a rolling exploration trenching method in December
2005, 28 rolling exploration trenches have been excavated with a combined length
of 336 metres. In order to reach the fissure at depths of between 8 and 12
metres, a total of 5,241 tonnes of overburden has been stripped manually,
samples extracted and the trench area rehabilitated. The combined length of
known diamondiferous fissure strikes now exceeds 17 kilometres.


According to Petra's knowledge no other company has conducted such comprehensive
analysis of the multiplicity of fissures in the Koidu, Simbakaoro, Yengema,
Bumpe and Yendema areas up to date. The integrated result of the exploration
programme is providing Petra with a sound understanding of the diamondiferous
fissures available, their potential and the project strategy ahead.  While many
other companies operating in the area ceased activities during the monsoon rain
period, Petra continued with exploration work indicating its commitment to
achieving results and moving to full production.



Bulk shafts and test trenches

Shaft sinking at the two bulk sampling shafts, both of which are on kimberlite
fissure, are on track in reaching the applicable stoping depth, whereafter
stopes will be prepared to access production test tons of fissure. At a depth of
over 24 metres and on both shafts the width of the fissure remains narrower than
the normal mining width. The situation will be reviewed once the mini stoping
depth of 30 metres has been reached by November 2006 and the results of the core
drilling programme known.


At Yendema, the 'Lion 2 Original' fissure was intersected with two exploration
trenches. A 7 tonne mini sample returned 22 transparent diamonds totaling 2.42
carats, the largest being a transparent diamond of 1.34 carats. The width of the
fissure at the point it was intersected was 1 metre. A test shaft was
established and shaft sinking is well underway at a depth of over 7 metres.  The
first 11 tonne (ROM) mini sample extracted from the test shaft delivered 37
transparent diamonds totaling 5.35 carats, the largest being stones of 1.6,
0.85, 0.75, 0.6 and 0.55  carats. Sample extraction and processing is ongoing as
the shaft sinking progresses.





SOUTH AFRICA- HELAM, SEDIBENG & STAR 



The combined operations produced a total of 35,602 carats for the quarter
(Quarter to June; 43,378 carats).



Production was lower than projected due to:

(i) a shortage of skilled labour, due to contract staffing operators in the
Helam area recruiting a substantial number of the skilled workers from the mine.
Whilst this practice is not encouraged, it is a result of the shortage and
competition for skilled labour in the South African mining environment. Suitable
replacement labour has now been hired at Helam and training to the required
standards is progressing well:

(ii) the national electricity provider providing an irregular power supply to
the Helam mine, affecting the operation and efficiency of plant and machinery.
This problem is of a seasonal nature due to higher demand on the power supply
during the winter and is not expected to adversely impact operations now that
winter demand has passed: and

(iii) ventilation complications at Star mine.



Despite these interruptions, EBITDA on mine of US$490,691 for the combined
operations was recorded for the quarter. Management remain confident that the
capacity and engineering improvements being put in place at Helam, Sedibeng and
Star will, over the medium term, lead to improved production and cash flow
generation



Helam Mine

A total of 27,766 ROM fissure tonnes were delivered to the plant for 21,187
carats, yielding a grade of 76 cpht for the quarter.  In addition 1,078 carats
were produced from the tailings operation.  This resulted in a total of 22,265
carats for the combined operation.



The slyping and equipping of John main shaft to 21 Level and the pilot raising
of the main shaft between 22 and 21 Level will commence during the quarter to
December 2006. The break-away from the west-sub shaft to the 22 Level main shaft
station position is now 8 metres short of being vertically beneath John main
shaft.  The sinking of John main shaft to 23 Level will commence during the
quarter to December 2006 once the main shaft position is reached.



The Second Lease incline project has progressed well and the production build up
from this shaft system has commenced.  The focus during the next quarter will be
directed to the establishment of multiple stopes and the continuous deepening of
the shaft to 18 Level which is already 16 metres below the bank elevation of 17
Level.



The development projects at Second Lease, John main shaft and to 25 Level at
Edward shaft will open-up the required resources to maintain the production.



Sedibeng Mine

A total of 33,585 ROM fissure tonnes were delivered from the mining operation,
which yielded 8,014 carats at a ROM grade of 24 cpht.  In addition 1,638 carats
were produced from the Dancarl tailings operation at a grade of 5 cpht.  This
resulted in a total of 9,652 carats for the Sedibeng operation.



At Sedibeng production is going well and the difficult ground conditions that
delayed proper stope development on 23 Level have been successfully rectified.
The continuous stope establishment will assist in increasing production from
underground operations as planned. The deepening of the west sub shaft
progressed well and is on 24 Level.



The 20 South drive into the Dancarl section is now vertically beneath Dancarl
main shaft.  The planning to initiate a raise-bore holing to the bottom of
Dancarl main shaft is progressing as scheduled and development will commence
during the quarter to March 2007.



The construction of the new DMS diamond recovery plant is progressing well and
is on schedule to be commissioned during the quarter to March 2007. This plant
will cater for all production (present and future) from the Sedibeng mining and
tailings. It is anticipated that when this plant is commissioned it will result
in a significant reduction in operating cost and a significant improvement in
diamond security.



Star Mine

A total of 8,877 ROM fissure tonnes were delivered to the plant for 2,946
carats, yielding a grade of 33 cpht for the quarter.  In addition 7,200 tonnes
of tailings were processed for 739 carats.  This resulted in a total of 3,685
carats for the Star operations.



Although the sealing and support of the 1.4 metre diameter raise-bore
ventilation shaft was completed during the previous quarter, problems were
experienced in the area where the shaft intersects the shale formations.  This
delayed the establishment of the ventilation districts in the Burns operational
sections, which resulted in the persistence of the poor underground ventilation
conditions.  Mechanical support will now be installed during the next quarter
improving ventilation to assist in increasing production from underground
operations.



The Wynandsfontein section is producing well, with an anticipated production
increase once the replacement 14 Level haulage development is complete. The
development of the 14 Level haulage is on schedule and will be fast-tracked as
soon as the ventilation condition has improved.



The deepening of the main shaft between 12 and 14 Levels has reached 8 metres
below 13 level and is planned to extend below 15 Level to cater for future
production.







JOHAN DIPPENAAR
CHIEF EXECUTIVE OFFICER



Notes

1. The information in this update that relates to Exploration Results, Mineral
Resources or Ore Reserves is based on information compiled by Jim Davidson, Pr.
Sci Nat (reg No 400031/06), who is a Member of the Geological Society of South
Africa, a 'Recognised Overseas Professional Organisation' ('ROPO'), included in
a list promulgated by the ASX from time to time. Jim Davidson is a full-time
employee of the Company and has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person as defined in
the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves'. Jim Davidson has given his written consent
to the inclusion in this announcement of the matters based on his information in
the form and context in which it appears. Jim Davidson is the Qualified Person
for the purposes of the AIM Guidance Note on Mining, Oil and Gas Companies dated
March 2006



2. It should be noted that the potential quantity in this report is conceptual
in nature, there has been insufficient exploration to define a Mineral Resource
and it is uncertain if further exploration will result in the determination of a
Mineral Resource.





For further information, please contact:


Cathy Malins / Annabel Leather                                    Telephone: [phone]
Parkgreen Communications, London

Kevin Skinner                                                     Telephone: [phone]
Field PR, Adelaide                                                Mobile:       [phone]








                                    Rule 5.3

                                   Appendix 5B

                  Mining exploration entity quarterly report*

  Introduced 1/7/96.  Origin:  Appendix 8.  Amended 1/7/97, 1/7/98,30/9/2001.


Name of entity
Petra Diamonds Limited
               ACN or ARBN                                         Quarter ended ('current quarter')
                114474574                                                  30 September 2006



Consolidated statement of cash flows*


                                                                    Current quarter    Year to date
Cash flows related to operating activities                              US$'000           US$'000
                                                                                         3 Months
1.1    Net loss before taxation                                              (4,724)           (4,724)
1.2    Adjustments for:
        - Depreciation and amortisation                                        1,326             1,326
        - Foreign exchange loss/(gain)                                         2,949             2,949
        - Other non cash items                                                   127               127
1.3    Operating (loss)/profit before working capital changes                  (322)             (322)
1.4    (Increase)/Decrease in trade and other receivables                       (61)              (61)
1.5    (Decrease)/Increase in trade payables                                   (701)             (701)
1.6    (Increase)/Decrease in inventories                                      (774)             (774)
       Cash (utilised)/generated in operations                               (1,858)           (1,858)
1.7    Interest paid                                                           (170)             (170)

       Net Operating Cash Flows                                              (2,028)           (2,028)

       


Cash flows related to investing activities


1.8     Payment for    a)   development expenditure                          (1,259)           (1,259)
                       b)   property plant and equipment                       (607)             (607)
1.9     Proceeds from sale of:     (a) prospects                                   
                                   (b) equity investments
                                   (c) other fixed assets                          -                 -
1.10    Interest received                                                         73                73
1.11    Other                                                                   (60)              (60)

        Net investing cash flows                                             (1,853)           (1,853)

        
1.12    Total operating and investing cash flows (carried forward)           (3,881)           (3,881)






1.12     Total operating and investing cash flows (brought                   (3,881)          (3,881)
         forward)






Cash flows related to financing activities


1.13     Proceeds from issue of shares  - net of costs                         1,745            1,745
1.14     Proceeds from Joint Venture partner                                     783              783
1.15     Proceeds from borrowings                                                  -                -
1.16     Repayment of borrowings                                               (501)            (501)
1.17     Dividends paid
1.18     Transaction deal costs
         Net financing cash flows                                              2,027            2,027
Net (decrease) increase in cash held                                         (1,854)          (1,854)
1.19     Cash at beginning of quarter/year to date                             7,020            7,020
1.20     Exchange rate adjustments to item 1.20                                  137              137
1.21     Cash at end of quarter                                                5,303            5,303

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related
entities

                                                                               Current quarter
                                                                                   US$'000 

1.22   Aggregate amount of payments to the parties included in item 1.1              N/A
                                                                                     

1.23   Aggregate amount of loans to the parties included in item 1.17                N/A


1.24   Explanation necessary for an understanding of the transactions

                                                   N/A

Non-cash financing and investing activities

2.1    Details of financing and investing transactions which have had a material effect on consolidated
       assets and liabilities but did not involve cash flows

       N/A

2.2    Details of outlays made by other entities to establish or increase their share in projects in
       which the reporting entity has an interest

       N/A




Financing facilities available

Add notes as necessary for an understanding of the position.


                                                           Amount available            Amount used
                                                                US$'000                  US$'000
3.1    Loan facilities                                           1,375                     699
3.2    Credit standby arrangements                                Nil                      Nil



Estimated cash outflows for next quarter


                                                                                   US$'000


4.1   Exploration and evaluation                                                     780
4.2   Development                                                                    580


      Total                                                                         1,360



Reconciliation of cash

Reconciliation of cash at the end of the quarter (as     
shown in the consolidated statement of cash flows)       Current quarter          Previous quarter
to the related items in the accounts is as follows.          US$'000                   US$'000

5.1   Cash on hand and at bank                                            852                       62
5.2   Deposits at call                                                  5,150                    7,226
5.3   Bank overdraft                                                    (699)                    (268)
5.4   Other (provide details)
      Total: cash at end of quarter (item 1.22)                         5,303                    7,020



Changes in interests in mining tenements


                                   Tenement      Nature of interest            Interest at  Interest at
                                   reference     (note (2))                    beginning of end of
                                                                               quarter      quarter

6.1    Interests in mining
       tenements relinquished,
       reduced or lapsed                                      N/A


6.2    Interests in mining
       tenements acquired or
       increased                                              N/A





Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights
together with prices and dates.


                                 Total number     Number quoted    Issue price per  Amount paid up per security
                                                                      security         (see note 3) (pence)
                                                                    (see note 3)
                                                                       (pence)
7.1    Preference +securities
         (description)
7.3    +Ordinary securities      150,491,764       150,491,764            -                      -
7.4    Changes during quarter     1,666,666         1,666,666
       (a) Increases through
       new issue                                                          -                      -
       (b) Decreases through
       returns of capital,
       buy-backs                                                          -                      -

7.5    +Convertible debt              -                 -                 -                      -
       securities                     


                                                                          
7.6    Changes during quarter
       (a) Increases through
       issues
       (b) Decreases through
       conversion and
       repayment                      -                 -                 -                      -
                                      

                                                                          
7.7    Options  (description
       and conversion factor
       - see details below)       6,646,375             -             See below

                                  
7.8    Issued during quarter          -                 -              Various

                                                                       
7.9    Exercised during               -                 -              Various
       quarter
                                                                       
7.10   Expired during quarter         -                 -              Various

                                                                       


                    Options

            238,875 Employee Incentive Options expiring various dates, exercisable at $A1.12 each

             72,500 Employee Incentive Options expiring various dates, exercisable at $A1.36 each

            400,000 Director incentive Options expiring 11 April 2007 with exercise prices from 30p to 45p each

          1,500,000 Director incentive Options expiring 5 September 2013 with exercise price of 44p each

          2,000,000 Director incentive Options expiring 16 June 2015 with exercise price of 85p each

            385,000 Employee incentive Options expiring 5 September 2013 with exercise price of 44p each

             50,000 Employee incentive Options expiring 13 September 2014 with exercise price of 56.75p each

            500,000 Employee incentive Options expiring 27 November 2015 with an exercise price of 65.75p

          1,000,000 Director incentive Options expiring 31 May 2016 with an exercise price of 79.5p

            500,000 Employee incentive Options expiring 31 May 2016 with an exercise price of 79.5p

                    Warrants over ordinary shares

                    Exercise                 Expiry
                       Price

          1,500,000       30p       31 December 2007

          1,000,000      100p       31 December 2007

            200,843       85p       17 June 2008




                      This information is provided by RNS
            The company news service from the London Stock Exchange           BDGCBXGGLB