Acquisition

Petra Diamonds Ld
14 September 2007



                             Petra Diamonds Limited



                   Acquisition of Kimberley Underground Mines





Petra Diamonds Limited ('Petra' or 'the Company') announces that it has entered
into a conditional agreement ('the Agreement') with De Beers Consolidated Mines
Limited ('De Beers') to acquire the mining and associated assets ('Assets')
previously used by De Beers in the operation of the Kimberley Underground
diamond mines ('Kimberley Underground'), which are situated near Kimberley,
South Africa.



Highlights

  • Petra to acquire the mining and associated assets of the Wesselton, Du
    Toitspan and Bultfontein mines (together the Kimberley Underground mines)
    from De Beers for a total consideration of R78.5 million
  • Petra to run the mines on a care and maintenance basis on behalf of De
    Beers until all required mining authorisations are received from the South
    African authorities
  • Based on historical production and sales information , Petra expects
    annual sales from Kimberley Underground in excess of 100 000 carats at an
    average of US$160 per carat once full production is recommenced, giving
    gross annual revenues in excess of US$16 million and a life of mine of at
    least 12 years



Adonis Pouroulis, Petra's Chairman commented 'Alongside Petra's highly
prospective Angolan exploration assets the acquisition of Kimberley Underground
is an important addition to Petra's substantial base of producing assets in
South Africa. Together Kimberley Underground, Koffiefontein and Petra's fissure
mines will contribute annual production in two years time of around 400,000
carats.'



Based on historical production and sales information Petra expects annual sales
from Kimberley Underground in excess of 100,000 carats and gross revenues in
excess of US$16 million, adding approximately US$12 million (74% JV share *) to
the Petra group revenues in the year to June 2009.



The consideration of R78.5 million (US$11 million) is to be settled by Petra
assuming De Beers' rehabilitation obligations with regards to Kimberley
Underground of R63.5 million (US$8.9 million), and the payment in cash by Petra
to De Beers of R15 million (US$2.1 million).



The acquisition is conditional on the required mining rights and associated
approvals from the South African Department of Minerals and Energy ('DME') as
detailed below. Petra is not permitted to commence mining in its own right until
the DME approvals are received. In the meantime, Petra has entered into a care
and maintenance agreement with De Beers in respect of Kimberley Underground in
order to maintain the condition of the caves and, ensure the efficient
commencement of mining activities when the conditions are met.



Completion of the Agreement is conditional upon the following conditions:

(i)       the DME converting the old order mining right in respect
          of Kimberley Underground held by De Beers into a new order mining 
          right; and

(ii)      the amendment of the new order mining right to subdivide
          the Kimberley Underground mines from other rights to be retained by 
          De Beers; and

(iii)     DME consenting to the cession to Petra of the new order
          mining right in respect of Kimberley Underground; and

(iv)      the DME consenting to the cession, transfer and delegation
          of the rehabilitation obligations and liabilities in respect of 
          Kimberley Underground from De Beers to Petra; and

(v)       other related sale assets being sub-divided as required,
          and all regulatory approvals or consents being obtained in that 
          regard; and

(vi)      issue of appropriate guarantees to De Beers; and

(vii)     all other regulatory approvals as may be required.





Petra has concluded a joint venture agreement ('JV Agreement') with Sedibeng
Mining (Pty) Limited, its Kimberley Underground Black Economic Empowerment ('BEE
') partner, and the joint venture will use the assets acquired from De Beers to
operate Kimberley Underground. Under the terms of the JV Agreement, Petra's
interest in the JV will be 74%, with the BEE partners holding the remaining 26%.



Given the nature of the proposed transaction, the Company has provided such
disclosure, as is required, in accordance with Schedule 4 of the AIM Rules as a
Substantial Transaction.  A further announcement will follow in due course which
will include a Kimberley Underground resource statement.



An exchange rate of US$1:R7.15 has been used for the purposes of this
announcement.





* Petra's net interest in Kimberley Underground will be 74%, with its BEE
partner, Sedibeng Mining (Pty) Ltd holding the remaining 26%.





Ends

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'). Jim Davidson
is the Qualified Person for the purposes of the AIM Guidance Note on Mining, Oil
and Gas Companies dated March 2006. 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. 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.



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:
Louise Goodeve / Justine Howarth                 Telephone: [phone]
Parkgreen Communications, London


Adrian Hadden                                    Telephone: [phone]
Collins Stewart, London












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