Re Agreement

Petra Diamonds Ld
12 June 2002



12 June 2002



Petra Diamonds Limited Announces Substantial Funding Agreement


Petra Diamonds is pleased to announce that it has reached agreement with an
equity investor expected to provide funding of up to £4.5 million (approximately
US$6.5 million) which will allow it to concentrate on bringing its current
projects to production free from external financing pressures.

The innovative deal is an Equity Line of Credit Agreement and it has been
concluded with Cornell Capital Partners Offshore LP ('Cornell') (an exempted
limited partnership registered in the Cayman Islands).

The Cornell group has a rapidly growing reputation in the United States
financial markets for structuring equity participation agreements and it has to
date made available in excess of $265 million in this manner to 26 publicly
quoted corporations. This is the first deal involving its off-shore fund with a
London-listed corporation.

The background and details of the new funding arrangement are that:

An Equity Line of Credit Agreement is a relatively new financing structure in
the United Kingdom but has been gaining increasing acceptance in the United
States financial markets.  It enables a company to draw down cash as it requires
by the issue of new ordinary shares and its flexibility makes it particularly
attractive to companies.

The company is able to control the amount and timing of the cash inflow that it
requires and it has no commitment to subscribe for cash upfront and dilute
shareholders unnecessarily; nor does it have any obligation to use the facility
at all.  New equity is issued to the investor upon each draw-down and the
investor has an unfettered right to trade in the shares.

The salient features of the transaction between Petra and Cornell are the
following:


1   The maximum aggregate amount of the equity placement is £4,500,000 and Petra 
    is entitled to draw down the equity credit line in tranches of £55,000 at 
    its option but not more frequently than every nine trading days.

2   Petra will use the funds for its general corporate purposes and it can use 
    mechanisms within the deal structure for acquisition and development.

3   Cornell has entered into the transaction after completing a due diligence 
    into the affairs of Petra.

4   Cornell will subscribe for new ordinary shares (at a discount of five per 
    cent) based on the market price prevailing in the five days following 
    Petra's notice to Cornell for Cornell to subscribe for new ordinary shares 
    of Petra.  Cornell has an unfettered right to trade in the shares.

5   The facility is for 36 months and is exercisable at any time other than 
    during a closed period i.e. when Petra has given notice that it will put 
    ordinary shares to Cornell.

6   There is a fee of five percent of the amount of the subscription on each 
    subscription.

7   There is no commitment fee on the facility and Petra is free to use it at 
    its discretion.  Petra will pay Cornell an Implementation Fee of £115,000 
    (which can be satisfied in two tranches in ordinary shares) for the credit 
    line.

8   There are no warrants or any other attached instruments to the issue of the 
    shares arising from each put by Petra.

9   Cornell may not refuse a notice by Petra to subscribe for new ordinary 
    shares provided that each time notice is given the pre-conditions have been 
    met, which includes a requirement that warranties given the company have not 
    been materially breached.

10  There are no restrictions placed on Petra's access to other funding during 
    the term of the agreement.


In accordance with the Equity Line of Credit Agreement, as referred to in 7
above, 250,000 new ordinary shares will be issued to Cornell to satisfy the
first tranche of the Implementation Fee. This is equivalent to 23p per share
based on the closing price as published by the London Stock Exchange for the
Company's ordinary shares as at 10 June 2002.


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