Update from Kono Project

Petra Diamonds Ld
14 July 2005

14 July 2005

                             Petra Diamonds Limited

                                (AIM / ASX: PDL)

                      Kono Project, Sierra Leone - update


Petra Diamonds Limited ('Petra' or 'the Company'), the AIM-quoted and ASX-listed
diamond mining group, announces an update with regards to the Kono Project in
Sierra Leone whereby Petra and Mano River Resources Inc ('Mano') are engaged in
a joint venture (the 'Mano JV') relating to the exploration and production of
diamonds from diamondiferous kimberlite dykes (the 'Lion' dykes) within Mano's
three contiguous licence areas in the Kono diamond district of 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 carats per hundred tonnes ('cpht') from Mano sampling

•         Manufacture of 75 tonne per hour ('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 10 metres and
samples taken. A 200kg sample of kimberlitic material taken from the Lion 5 dyke
returned a gem quality 0.22 carat diamond.



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, as
indicated by the original Mano mini bulk sample of Lion 5 which returned an
average grade of 94 cpht, and the 200kg sample referred to above.



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.



Several exploration shafts will be established. Whilst these are primarily for
exploration of the dykes, diamonds will be produced for quality and price
evaluation. These shafts and facilities have been designed to facilitate a
seamless transition to full scale mining at a later stage. The production plant
facility will be positioned centrally between the Lion dykes in order to reduce
ore transportation time from the exploration/mining sites.



Financial

Under the terms of the Mano JV, by spending a total of US$3 million over the
next 3 years, Petra will acquire a 51% equity interest in the Kono Project.
Petra plans to accelerate expenditure and development of the project in order to
bring production on line and earn the 51% interest well within the 3 year time
period. All costs expended to date are in line with expectations.



Future developments

The next nine months will focus on;

  • commissioning of the plant and associated infrastructure on site
  • establishment and sinking of the exploration shafts
  • extraction of bulk samples and limited diamond production



Adonis Pouroulis, Petra's Chairman, comments, 'We are pleased to announce that
the commissioning of the plant and associated exploration activities are on
track and we expect early stage production to begin in the first quarter of next
year. The working relationships with our JV partner Mano and the Sierra Leone
government and authorities are excellent and we look forward to working with all
parties to expedite production from the Kono project.'



Guy Pas, Mano's Chairman, adds, 'This would be the first time ever in Sierra
Leone's history that kimberlite dykes will be commercially mined and we are
confident that Petra, as a world leading dyke miner, will turn them into a long
term sustainable contribution to this country's recovering economy. While
conflict diamonds reduced official Sierra Leone annual diamond exports to a mere
US$10 million just 5 years ago, today, with much credit to the Kimberley
Process, official exports saw a record June 2005 of US$22 million, for a 1st
half total of US$76 million. Moreover, the right export channels contributed to
an average price per carat for the 1st half of 2005 of just under US$280 per
carat, which demonstrates the exceptional quality of Sierra Leone's diamonds.'





 Ends



For further information, please contact:


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]






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