Quarterly Update

Petra Diamonds Ld
01 August 2005


1st August 2005

                             Petra Diamonds Limited


                         QUARTERLY ACTIVITIES REPORT

                        FOR THE THREE MONTH PERIOD ENDED
                                  30 JUNE 2005


Petra Diamonds Limited ('Petra' or 'the Company'), the AIM-quoted and ASX-listed
diamond mining group, announces its quarterly activities report as required by
the ASX for the three month period ended 30 June 2005.

As this is a quarterly report and, to assist with full disclosure, this report
includes the operational performance of the Helam, Star and Messina/Dancarl
mines for the full three month period, notwithstanding that Petra's effective
date of control of the mines was 1 June 2005. The consolidated financial report
reflects the cash flow for Petra Diamonds Limited for the three and twelve month
periods to 30 June 2005 and the consolidated Crown Diamonds NL cash flow for the
one month period commencing on 1 June 2005.


CORPORATE


Highlights


   • Merger with Crown Diamonds NL completed
   • Placing undertaken for a total of £17.1 million at a placing price of
     85p per share to primarily UK institutional investors
   • Enlarged Petra reports positive Net Operating Cash Flow for the quarter

The merger with Crown Diamonds NL was completed effective from the 31 May 2005
with the issue of 37,962,256 Petra shares for 303,695,868 Crown Diamonds NL
shares pursuant to an order of the Supreme Court of Western Australia.
Concurrent with the merger, a total of 20,084,352 shares were placed with
institutional investors at 85 pence raising £17,071,699 (before costs).

The cash flow movement for the quarter is set out in the attached Appendix 5B.

REVIEW OF OPERATIONS


Alto Cuilo, Angola

Highlights

   • BHP Billiton elects to fund all exploration at Alto Cuilo
   • 59% of the 73 holes drilled to date intersect kimberlite - a very
     encouraging success rate
   • Review of geological and geophysical data with BHP Billiton identifies
     additional targets
   • Drilling identifies further kimberlite deposits
   • 115m tonne deposit now confirmed as diamondiferous
   • Higher kimberlite diamond valuation than previously expected

BHP Billiton Joint Venture
BHP Billiton has now elected to sole fund all kimberlite and alluvial
exploration and related costs on behalf of Petra Diamonds Alto Cuilo Limited
('PDAC', the Petra/BHP Billiton JV vehicle) for the entire Alto Cuilo
concession.

From 1 January 2005 (the date at which BHP Billiton elected to fund kimberlite
exploration within the ML Complex) to the end of June 2005, BHP Billiton has
advanced funding of approximately US$3.6m to PDAC in respect of exploration at
Alto Cuilo. BHP Billiton will start earning a direct interest in PDAC when it
has advanced funding of US$7.5m, which is expected to be the case later this
year.

Drilling
Drilling in excess of 8,895m on 73 holes has been undertaken to date, with 43 of
these holes intersecting kimberlite - a success rate of 59%. Drilling results
indicate the presence of kimberlites with preserved crater zones that have
undergone very little erosion, thus underscoring the potential for large size
discoveries. Some holes have intersected kimberlite to vertical depths of 280m,
where drilling was stopped due to limitation of drilling capacity but the
kimberlite continued.

Re-classification of the geophysical and drilling data by Petra and BHP Billiton
has confirmed that 11 of the aeromagnetic anomalies tested are related to
kimberlite pipes, with other targets prioritised for drilling.

The current drilling programme will continue on the anomalies in the ML Complex
that have not yet been drilled with the expectation of significantly increasing
the number of kimberlite discoveries.

Sample analysis
The results from the sample of over 1,000kg of kimberlitic material sent for
micro diamond analysis at Lakefield Research Centre in Canada have now been
received. These samples were taken from three of the eleven kimberlite
groupings, including the 115m tonne deposit (announced by the Company on 7/12/
04) and the kimberlite from which the 40 tonne bulk sample was previously taken
and which yielded a grade of 47 carats per hundred tones ('cpht') (as announced
by the Company on 8/9/04).

The results indicate that the macro and micro diamond populations do not fit
'typical' micro diamond grade estimate curves, in that recoveries are skewed
toward the macro population. All three kimberlites were certified as being
diamondiferous in nature and a full suite of kimberlite indicator minerals was
recovered for each kimberlite intersection for mineral chemistry assessments.
The presence of high chrome sub-calcic G10s and high sodium eclogitic garnets
indicates that lithologies typically associated with peridotitic and eclogitic
diamond sources have been sampled by these kimberlite pipes.

The 65 tonnes per hour ('tph') diamond recovery plant (MB100 and DMS) continues
to be used mainly for the treatment of alluvial samples. A total of 4,987
diamonds totaling 1,255 carats at an average stone size of 0.25 carats have been
recovered to date. A pitting and trenching programme on the river flats and
hillsides has started in order to further evaluate the potential for
economically viable alluvial deposits within the ML Complex.

BHP Billiton has completed a valuation of the diamonds recovered from the
kimberlite and alluvial sampling. Based on a preliminary result obtained from
310 carats, the diamonds recovered from the kimberlite samples averaged US$295
per carat. This is in excess of Petra's previous estimates of US$200 per carat.

Aeromagnetic programme
A Midas low-level helicopter aeromagnetic survey is underway. It is expected
that, due to the sophistication of this system compared to the 1998 fixed wing
survey executed by Petra and the use of twin sensors at closer line spacing,
additional magnetic anomalies are likely to be detected. The aeromagnetic survey
aims to assist in the discovery of further kimberlite deposits as well as to
accurately define the magnetic signatures of the kimberlites discovered to date
and of the untested anomalies identified in the 1998 high-level aeromagnetic
programme.



Kono Project, Sierra Leone

Highlights

   • A 200kg sample taken by Petra returned a gem quality 0.22 carat diamond,
     supporting the previously indicated average grade of 94 cpht from Mano River
     Resources's sampling
   • Manufacture of 75 tph production plant to be completed by September
     2005, to be commissioned on site during Q1 2006
   • Diamond production from treatment of bulk samples expected Q1 2006
   • Petra plans to accelerate expenditure and development of the project so
     as to bring production on line as early as possible

Exploration developments
Petra personnel visited the Kono site in April 2005 to plan for the
establishment of the 75 tph production plant as well as to undertake further
geological work on the dykes. Dykes were opened up to depths of 10m and samples
taken.

The strike length of the Kono kimberlite dykes exceeds the total strike length
of Petra's South African kimberlite dyke operations and Petra believes the Kono
project has the potential to yield high grades of approximately 100 cpht.

Site establishment
The necessary equipment to establish initial facilities on site will be shipped
from South Africa and is on track to be commissioned on site by Q4 2005. Petra's
site establishment team will transfer to Sierra Leone in August and the site
facilities should be fully established by November.

Exploration/Production plans
Petra is currently manufacturing the 75 tph production plant (DMS and crushing
circuit) at its facility in South Africa. Petra plans to ship the plant in
October and it should be commissioned on site in Q1 2006.

South African Operations

Highlights


   • All mines achieve record US$ diamond prices
   • Strong carat sales and revenue for the 6 months to June 2005
   • Operations on track to achieve production and revenue targets


Star Mine, Theunissen District, Free State Province

A total of 8,256 ROM fissure tons was delivered to the plant and returned 5,723
carats at a grade of 69 cpht for the quarter. In the June 2004 quarter the ROM
delivered to the plant was 9,698 tons, from which 4,314 carats were recovered to
yield a grade of 45 cpht.

During the quarter, 5,641 carats were sold for an average price of $US240 per
carat. June 2005 sales of 2,126 carats averaged selling prices of $US287 per
carat. In calendar year 2004, the average price achieved was $US182 per carat.

A 15th level at both Wynandsfontein and Burns has been established and both are
in good ground conditions. At Burns the raise to the west has holed and stoping
has commenced whilst the raise to the east should hole during the first month of
the next quarter. At Wynandsfontein the zero cross-cut has intersected fissure
and raising in both directions has begun. Stope production of fissure should
commence during the next quarter. The establishment of these two levels has
greatly enhanced our ability to achieve our production targets.

The Burns 13E return ventilation airway holing to the 10 level has been
established through the bad ground conditions. This holing suffered temporary
collapse due to wet and poor ground during the quarter. It has however been
reopened, dried and robustly supported and should not suffer any further
collapse.

Additional ventilation is being planned in the form of raisebore holings so as
to further secure the ventilation of the mine. The raiseboring operation should
commence during the next quarter. The ventilation holing from 10 to 9 level
suffered continual collapse and has been abandoned.

On 14 level the horizontal distance remaining between Burns east drive and
Wynandsfontein west drive is 645 metres (distance between the two shafts is
1,400m). This represents approximately another 18 months before these two
tunnels meet and we can abandon the high maintenance 10 level drive in the
shales.

Helam Mine, Swartruggens District, North West Province

A total of 29,662 ROM fissure tons was delivered to the plant and returned
26,907 carats at a grade of 90 cpht. An additional 797 tons of tailings was
treated, delivering 104 carats giving a total of 27,011 carats for the quarter.

During the quarter, 27,148 carats were sold for an average price of $US88 per
carat. June 2005 sales of 10,162 carats averaged selling prices of $US92.90 per
carat. In 2004, the average price achieved since July 2004 was $US74 per carat.

The mechanisation programme is progressing well, with the John main shaft now
equipped to the 18th level. The pilot raise from 20 to 19 level has been
completed and slyping has commenced. The pilot raise from 21 to 20 level is now
70% completed. All other aspects of this capital program are on schedule.

The re-establishment of Second Lease as a separate mining entity is also
progressing well and on schedule. It is expected to see the first production
from this program during the last quarter of this year.

At the Edward shaft the mechanisation process is progressing well, with all
previously planned ore passes having been completed and commissioned. In
addition to the originally planned programme, two ore passes have been
established between 13 and 14 level on the main shaft. This increases our
hoisting flexibility and ability to produce increased tonnes. Modifications to
the single-drum sub-shaft are being investigated so as to fill up the capacity
created by establishment of the abovementioned ore passes.

The plant upgrades are complete and no further changes are envisaged in the near
future.


Messina and Dancarl Mines, Warrenton District, Northern Cape Province

Mining at Sedibeng Joint Venture has progressed well with the delivery of 31,081
ROM fissure tonnes from the combined operation, which were treated through the
Messina plant, delivering 5,685 carats at a ROM grade of 18 cpht. Messina's
share of the delivered carats was 4,235.

The decreased production and grade at Sedibeng has been due to a number of
unforseen circumstances:

 1. the redevelopment of 20 level necessitated the drawdown of large amounts of
    waste in the stop to re-establish ventilation


 2. the re-establishment of 14 level on Dancarl also necessitated the drawdown of
    large amounts of waste-bearing material so as to re-establish ventilation,
    and


 3. 14 level north on Dancarl only produced stringers for the first 30m of
    mining.

These problems have now all been overcome and production is returning to the
projected levels.

In the June 2004 quarter the ROM delivered was 26,114 tons, from which 6,018
carats were recovered at a grade of 23 cpht.

During the quarter, 6,324 carats were sold from the combined operation for an
average price of $US271 per carat. June 2005 sales of 1,994 carats averaged
selling prices of US$330 per carat. In calendar year 2004, the average price
achieved was $US259 per carat.

At the Messina section, 23 level has been established and stope production has
commenced. Sinking of the shaft to 24 level has commenced and should be complete
by year-end. On 20 level, development into the Dancarl section has progressed
well with seven cross-cuts now on fissure. Now that ventilation has been
re-established, production from this stope can commence.

At the Dancarl section, progress has been good with the main and sub-shafts
having been cleared to 15 level. Fissure raising to 14 level has begun and
production should commence during the third quarter. The Dancarl tailings plant
is now running at a comfortable 10,000tpm and yields a grade of approximately
6cpht. A new 928G Caterpillar FEL has been purchased and is now operation in
feeding this tailings plant. The throughput of this plant will now be gradually
increased.

Plans are being put in place to upgrade the Messina plant so as to take the
total combined increased production from both Messina and Dancarl.

DIAMOND PRODUCTION

The combined diamond production for the fourth quarter to 30 June 2005 and the
six months to the 31 December 2004 is as follows:-

Three month period                     Tonnes     Total Diamonds   Carats per
        to           Total Tonnes      Treated       Recovered     100 tonnes
                        Hoisted                      (carats)

31 Mar 05 - mined*      92,709             67,127          39,004      58
    31 Mar 05 -            -               10,517           1,054      -
     tailings
30 June 05 - mined*     96,778             68,999          38,315      55
30 June - tailings         -                  797             157      -
    Total 2005          189,487           147,440          78,530
     30 Dec 04          87,014             60,812          33,221      55
     30 Sep 04          86,887             62,032          31,922      51
    Total 2004          173,901           122,844          65,143

*This includes all the production at the Messina/Dancarl Mines.



JOHAN DIPPENAAR
CHIEF EXECUTIVE OFFICER

The information in this quarterly report that relates to Mineral Resources or
Ore Reserves is based on information compiled by Jim Davidson who is a Member of
the Geological Society of South Africa (Registered Natural Scientist), 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 'Australian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves'. Jim Davidson consents to the inclusion in the
report of the matters based on his information in the form and context in which
it appears.

FURTHER INFORMATION

Queries may be directed to Johan Dippenaar, the Company's Chief Executive
Officer, or David Abery, the Company's Finance Director, during business hours.

Petra Diamonds, South Africa        Parkgreen Communications, London
Johan Dippenaar /David Abery        Justine Howarth / Annabel Leather
Tel [phone]                 Tel [phone]

John Baillie, Perth                 Field PR, Adelaide
Tel [phone]                 Kevin Skinner
                                    Tel [phone]
                                    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 June 2005

Consolidated statement of cash flows*

                                                       Current      Year to
Cash flows related to operating activities             quarter        date
                                                        £'000         £'000
                                                                   12 Months
1.1   Receipts from product sales and related               846         846
      debtors
1.2   Payments for 
      a) exploration and evaluation                          63      (3,061)
      b) development                                          -           -
      c) production                                        (155)       (155)
      d) administration                                    (614)     (2,612)
1.3   Dividends received                                      -           -
1.4   Interest and other items of a similar nature           36          43
      received
1.5   Interest and other costs of finance paid             (104)       (198)
1.6   Income taxes paid                                       -           -
1.7   Other (provide details if material)                     -           -
                                                              
      Net Operating Cash Flows                               72      (5,137)

Cash flows related to investing activities

1.8     Payment for 
        a) prospects                                          -           -
        b) equity investments                                 -           -
        c) other fixed assets                              (268)     (1,333)
1.9     Proceeds from sale of: (a) prospects                  -           -
        (b) equity investments                                -           -
        (c) other fixed assets                              168         168
1.10    Loans to other entities                             (12)        (12)
1.11    Loans repaid by other entities                        -           -
1.12    Other                                                 -           -
        Net investing cash flows                           (112)     (1,177)
1.13    Total operating and investing cash flows            (40)     (6,314)
        (carried forward)

* This consolidated financial report reflects the cash flow for Petra Diamonds
Limited for the 3 and 12 month periods to 30 June 2005 and the consolidated
Crown Diamonds NL cash flow for the 1 month period commencing on 1 June 2005.

1.13   Total operating and investing cash flows             (40)     (6,314)
       (brought forward)



Cash flows related to financing activities

1.14   Subscription for shares and notes - net of        15,164      18,108
       costs
1.14   Proceeds from capital raisings                         -           -
1.15   Proceeds from sale of forfeited shares                 -           -
1.16   Proceeds from long term borrowings                   179         179
1.17   Repayment of borrowing                              (414)       (414)
1.18   Dividends paid                                         -           -
1.19   Other (provide details if material - see               -           -
       attached)
       Net financing cash flows                          14,929      17,873
Net increase (decrease) in cash held                     14,889      11,559
1.20   Cash at beginning of quarter/year to date            492       3,822
1.21   Exchange rate adjustments to item 1.20                 -           -
1.22   Cash at end of quarter                            15,381      15,381

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
                                                               £'000
                                                                 
1.23  Aggregate amount of payments to the parties                131
      included in item 1.2
                                                                 
1.24  Aggregate amount of loans to the parties included          Nil
      in item 1.17

1.25  Explanation necessary for an understanding of the transactions

      Included in payments for administration is £62,000 for expenses paid
      during the quarter by Crown Diamonds NL for the proposed merger with
      Petra Diamonds Limited via a Scheme of Arrangement.

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

      During the quarter 85,000 Crown Diamonds NL November 2005 Convertible
      Notes ($A15,300) were converted to 12,883 ordinary Petra Diamonds
      Limited shares.

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
                                              £'000             £'000
3.1   Loan facilities                          900               395
3.2   Credit standby arrangements              Nil               Nil

Estimated cash outflows for next quarter

                                                           £'000

4.1  Exploration and evaluation                             380
4.2  Development                                            Nil
                                                            
     Total                                                  380

Reconciliation of cash

Reconciliation of cash at the end of the     Current quarter  Previous quarter
quarter (as shown in the consolidated               £'000              £'000
statement of cash flows) to the related
items in the accounts is as follows.
5.1  Cash on hand and at bank                        3,776               492
5.2  Deposits at call                               12,000                 -
5.3  Bank overdraft                                  (395)                 -
5.4  Other (provide details)                             -                 -
     Total: cash at end of quarter (item            15,381               492
     1.22)

Changes in interests in mining tenements

                          Tenement   Nature of interest    Interest  Interest
                          reference  (note (2))            at        at end of
                                                           beginning quarter
                                                           of
                                                           quarter
6.1  Interests in mining     N/A                                        N/A
     tenements
     relinquished,
     reduced or lapsed

6.2  Interests in mining     N/A                                        N/A
     tenements acquired
     or increased



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    Issue price  Amount paid up per
                                        quoted    per security security (see note
                                                  (see note 3)     3) (pence)
                                                    (pence)
7.1   Preference +
      securities
      (description)
7.3   +Ordinary
      securities         130,949,455  130,949,455           -                   -
7.4   Changes during
      quarter
      (a) Increases       37,962,565   37,962,565  61.2 pence  Scheme of
      through issues      20,084,352   20,084,352  85.0 pence  Arrangement
      and conversions         12,883       12,883  50.6 pence  Placement
      for which quoted                                         Conversion of Con
      (b) Decreases                                            Note
      through returns
      of capital,
      buy-backs

7.5   +Convertible debt   16,078,191   16,078,191 $A0.18
      securities
      11% pa Nov 2005                             
7.6   Changes during
      quarter
      (a) Increases              Nil
      through issues
      (b) Decreases           85,000
      through
      conversion
7.7   Options
      (description and
      conversion factor    6,397,625          Nil    See below
      - see details
      below)

7.8   Issued during        2,250,000          Nil   85 pence
      quarter                                       
7.9   Exercised during           Nil          Nil   Nil
      quarter                                         
7.10  Expired during             Nil          N/A
      quarter                    

           Options
   200,000 Options exercisable in 50,000 tranches at 30p, 35p, 40p and 45p by
           22 July 2005
   276,375 Employee Incentive Options expiring various dates, exercisable at
           $A1.12 each
    86,250 Employee Incentive Options expiring various dates, exercisable at
           $A1.36 each
   400,000 Director incentive Options expiring 11 April 2007 with exercise
           price of 30p, 35p, 40p and 45p for each 100,000 tranche.
 1,500,000 Director incentive Options expiring 5 September 2013 with exercise
           price of 44p.
   750,000 Director incentive Options expiring 28 June 2014 with exercise
           price of 54.5p.
 2,250,000 Director incentive Options expiring 16 June 2015 with exercise
           price of 85p.
   385,000 Employee incentive Options expiring 5 September 2013 with exercise
           price of 44p
   500,000 Employee incentive Options expiring 28 June 2014 with exercise
           price of 54.5p
    50,000 Employee incentive Options expiring 13 September 2014 with exercise
           price of 56.75p

           Warrants over ordinary shares

           Exercise Expiry
           Price
 1,500,000 30p    31 December 2007
 1,000,000 100p   31 December 2007
 1,666,666 55.85p 14 August 2006

           Petra and Societe Diamantaire Finkelstein Ch & CO NV have granted
           each other a mutual put and call option for Finkelstein to
           subscribe for $US1.75 million of Ordinary shares. The options are
           exercisable once the market value of Petra exceeds 75 p for 15
           consecutive days. The subscription price will be equal to a 5%
           discount to that market price. The option is renewable at the
           Company's choice on an annual basis.




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