Petra / Mano Proposed Merger

Petra Diamonds Ld
03 October 2005






3 October 2005





                             Petra Diamonds Limited



                   Proposed Merger of Petra Diamonds Limited

                         and Mano River Resources Inc.





Petra Diamonds Limited ('Petra') (AIM/ASX: PDL) and Mano River Resources Inc. 
('Mano') (AIM: MANA; TSX-V: MNO) today signed a preliminary agreement (the 
'Agreement') whereby the businesses of Petra and Mano will be combined (the 
'Transaction') to create an enlarged diamond exploration and mining group (the 
'Enlarged Petra'). The Transaction remains subject to the satisfaction of 
certain conditions precedent including the completion of mutual technical, 
financial and legal due diligence, execution of the required legal and 
regulatory documentation and obtaining all the required regulatory and 
shareholder approvals.



It is anticipated that the Transaction will be effected by an offer of new Petra
ordinary shares to Mano shareholders in a share for share transaction, on the
basis of one new Petra ordinary share for each 5.5 Mano common shares.



Both Petra and Mano agree that it is the intention of the Enlarged Petra to
remain primarily a diamond exploration and mining group and therefore the Board
of the Enlarged Petra will endeavour to divest or demerge the existing Mano gold
assets in the near term, subject to realising full value and maximising
shareholder value for the assets.



Rationale for the Transaction

The Transaction represents another major step in Petra's long-term growth
strategy of becoming a significant player in the diamond industry for the
following reasons:



  • Mano has established a solid exploration base in West Africa, containing
    assets which could be fast tracked to production, including the Kono project
    in Sierra Leone where it is expected that Petra, through its current joint
    venture with Mano, will commence production in the first half of next year;


  • the countries of Guinea, Liberia and Sierra Leone in which Mano operates
    offer highly prospective opportunities for economic diamond operations;


  • based on the analysis of the technical data on the discoveries made to
    date, the start up of several medium sized producing mines may be possible
    within the Mano portfolio in the near to medium term;


  • Petra has gained on the ground experience in Sierra Leone due to its Kono
    joint venture with Mano and experience to date suggests that Sierra Leone
    offers a commercial environment that is conducive to diamond exploration and
    mining activities;


  • Mano has joint venture relationships with other parties that the Petra
    Board believes will augment the business opportunities for the Enlarged
    Petra,  including BHP Billiton, with which Petra has a JV agreement on Alto
    Cuilo, Angola and a relationship in Botswana, including the rights to deploy
    the proprietary Falcon technology;


  • the Transaction will increase the pro-forma market capitalisation of the
    Enlarged Petra (based on the closing price of Petra on 30 September 2005) to
    approximately £145 million;


  • the Transaction will increase the asset base of Petra, creating a true
    niche mid-tier explorer and producer of rough gem quality diamonds;


  • the Transaction will combine the substantial skills and experience of the
    two Boards and management teams. Mano brings with it an experienced
    management team, headed by Dr Tom Elder, which is highly skilled in diamond
    and gold exploration in West Africa. Mano's diamond programme is led by
    diamond geologist Karl Smithson, who will join the Enlarged Petra. The team,
    in combination with Petra's proven track record and operational expertise in
    establishing and successfully mining diamond deposits, creates a group that
    is well positioned to develop the assets held by Mano; and


  • the Transaction should give rise to cost savings from the rationalisation
    of the two quoted company structures.



Growth opportunities for the Enlarged Petra

Petra has identified the untapped potential for kimberlites in the West African
Craton.  The joint venture with Mano, which was concluded in late 2004, has
progressed well with initial production targeted for the first half of 2006.



Petra has the proven ability to successfully assess and mine hard-rock
(kimberlite) deposits and is establishing a base in the Koidu mining area of
Sierra Leone. Key personnel and other categories of staff are drawn as required
from the workforce of approximately 1,700 that operate the South African mines
without effecting the South African production or operations.



The Transaction would place Petra in a position to fast-track the development of
the Bouro kimberlite dyke deposit in Guinea (discovered by De Beers). This dyke
is reported by Mano to have an in-situ grade of 500 carats per hundred tonnes
and is in good host rock conditions. Production from this source has the
potential to be ramped up to 250,000 carats per annum within 3 years.



Mano has a joint venture agreement with BHP Billiton in Sierra Leone where
indicator mineral discoveries have been announced by Mano far removed from any
known kimberlites. This has the potential to lead to new kimberlite discoveries.



In addition, Mano has announced the discovery of seven kimberlites in the Weasua
area of Liberia. The property is subject to a 50/50 joint venture with Trans Hex
Group and Mano can elect to be the operator. Petra intends to fast track the
investigation and potential development of these deposits with its in-house
expertise.



Mano has also announced the discovery of a kimberlite in the Camp Alpha area
where the Liberian government has a 30% contributory joint venture interest.



Some of the above mentioned discoveries have displayed excellent kimberlite
indicator mineral chemistry and could be potentially diamondiferous.



Furthermore, Mano holds exploration rights to wholly-owned gold licences in
Liberia, where an indicated and inferred resource of over 800,000 ounces of gold
has been independently estimated. Additional gold licences in Sierra Leone and
Guinea are under joint venture agreements.



Adonis Pouroulis, Chairman of Petra, commented, 'Through our joint venture with
Mano on the Kono project in Sierra Leone it has become apparent that West Africa
has the potential to become a large producer of diamonds. It is a part of the
world that has stabilized over the last few years and has become investor
friendly. Many of the assets in the Mano portfolio, we believe, can be fast
tracked to production. Initial geological interpretation and studies of these
prospects are very promising. Mano also brings with it a highly experienced
exploration and management team well versed with the West African environment.
This, combined with Petra's ability to bring assets to fruition, will benefit
both shareholder bases as real value has the potential to be realised in the
medium term.'



Mano's Chairman, Guy Pas, commented, 'The business combination with Petra makes
eminent sense. Our high regard for Petra's technical, operating and marketing
expertise was already reflected in the Kono joint venture. As stated when
announcing Mano's reorganisation, Mano has for almost ten years focused entirely
 on the three countries of the Mano River Union ('MRU'), namely Guinea, Liberia
and Sierra Leone. In the process Mano has now built up an attractive portfolio
of both gold and diamond properties and, more recently, iron ore.



While substantial internal growth is expected from the exploration and
development potential of its existing assets, expansion outside of the MRU will
best be accomplished through external growth. While Mano was well advanced in
its internal separation into distinct diamond and gold divisions, the business
combination with the fast expanding Petra will ultimately provide greater value
for our shareholders than dedicating additional resources to reorganising via a
split into two separately listed though initially small diamond and gold
companies.'



Details of the Transaction

Based on Mano's current issued share capital of approximately 253.4 million
shares, Petra will issue up to approximately 46.1 million shares (the '
Consideration Shares') to Mano shareholders on completion of the Transaction.
Based on the current issued share capital of both Petra and Mano, existing
shareholders of Petra and Mano will own approximately 76% and 24% respectively
(excluding the effect of options and warrants) of the Enlarged Petra.



The terms of the Transaction imply a price of 13.7 pence per Mano share (based
on the closing price of Petra on 30 September 2005 on AIM of 75.5 pence) which
represents a premium of 5% to Mano's closing price on 30 September 2005 on AIM
of 13.0 pence and a 22% premium to the 30 day average closing price of 11.2
pence.



The Agreement is subject to Mano paying to Petra a break fee in certain
circumstances.



The Transaction is expected to complete by 28 February 2006.



Board

On completion of the Transaction, Guy Pas, currently Chairman of Mano, will join
the Enlarged Petra Board as a non executive Director, and Dr. Tom Elder, Mano's
President and CEO, will join the Enlarged Petra Board as an executive Director,
responsible for the operations of the Enlarged Petra in Sierra Leone,  Liberia
and Guinea.



Adonis Pouroulis will remain Chairman of the Enlarged Petra, Johan Dippenaar
will remain Chief Executive Officer and there will no other changes to the
Executive Directors of the Enlarged Petra as a result of the Transaction.



Information on Petra

Petra is an AIM and ASX listed mining group focused on the exploration and
mining of diamonds in Africa. Petra's strategy is to build a portfolio of
exploration and producing assets, with the objective of becoming a mid-tier
diamond explorer and producer. Petra has operations in Angola, Botswana and
South Africa. Following the recent acquisition of Kalahari Diamonds Limited,
Petra has a large area of exploration ground in Botswana and the use of cutting
edge Falcon technology.



For the year to 30 June 2005, Petra's loss before tax was £11.3 million which
included a goodwill write off of £4.8m and exploration expenditure of £3.5m on
the Alto Cuilo concession before BHP Billiton elected to sole fund. During the
first month post the Crown merger, the South African operations reported a
profit for June 2005 of £413,732 before depreciation,and, as at 30 June 2005,
Petra had net assets of £37.3 million.



Information on Mano

Mano is an AIM and TSX listed exploration group focused on the discovery and
development of diamond, gold and iron ore deposits in the Archaean terrain of
the highly prospective, under-explored, West African countries of Sierra Leone,
Liberia and Guinea.



Mano considers the region to have the potential to develop into a world-class
diamond, gold and iron ore mining province. The company has over 25,000km2 under
licence, close to one million ounces of gold in resource, a cluster of
diamondiferous kimberlite pipes and the Kono dykes. Joint ventures are in place
with Petra Diamonds, Trans Hex Group, BHP Billiton, Golden Star Resources (gold)
and Navasota Resources (gold) and which, if they are all fully exercised, will
involve a total of over US$16m in third party expenditure.



With increasing market recognition of the recent positive evolution in the
regional politics, Mano is starting to capitalise on its position as a leading
diamond and gold explorer in the sub-region.



For the year to 31 January 2005, Mano's loss before tax was US$0.9 million and
as at 31 January 2005 had net assets of US$15.9 million. For the 6 months to 31
July 2005, Mano's loss before tax was US$0.7 million and net assets as at 31
July 2005 stood at US$22.7 million including US$5.5 million in cash.





Ends



For further information, please visit on Petra Diamonds or Mano River Resources
please visit www.petradiamonds.com  or www.manoriver.com or contact;






Petra Diamonds, South Africa

David Abery

Tel [phone]



Petra Diamonds, Australia

John Baillie, Perth

Tel [phone]



Parkgreen Communications, London

Justine Howarth / Annabel Leather

Tel [phone]





Field PR, Adelaide

Kevin Skinner

Tel [phone], Mobile [phone]








Mano River, London

Tom Elder
President and CEO
UK [phone]

Bell Lawrie

Jamie Cumming
UK [phone]

Controller, Canada

Raz Hussein
[phone]


St Swithins PR Ltd

Gary Middleton
UK [phone]








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