Update on Kono Project

Petra Diamonds Ld
03 July 2006


3 July 2006

                             Petra Diamonds Limited

                        Kono Project - Operations Update


Petra Diamonds Limited ('Petra'), the AIM-quoted and ASX-listed diamond mining
group, announces an update with regards to the Kono Project where Petra and Mano
River Resources Inc are engaged in a joint venture relating to the production of
diamonds from the Lion kimberlite fissures in the Kono diamond district of
Sierra Leone.

First diamonds recovered
Petra is pleased to announce that commissioning of the 75 tonne per hour Dense
Media Separation ('DMS') production plant was completed on schedule in June 2006
and that diamond recovery commenced towards the end of the month with the plant
starting to treat the bulk samples recovered from exploration operations.

To date, 44 diamonds totaling 5.6 carats have been recovered, the largest being
a stone of 1.4 carats. The samples processed to date comprise mixed and diluted
material from exploration operations and, whilst very encouraging, are not large
enough to arrive at a representative grade.

Mining development
Shaft sinking operations are proceeding well and a sound infrastructure is in
place alongside the DMS plant. Two shafts, both of which are on kimberlite
fissure, are in progress with the deepest (Black Rock) being at a depth of 13.5
metres and the second (Lost Shaft) at a depth of 9 metres. The shafts will be
sunk to a depth of around 30 metres before stopes are prepared to access
production test tons of fissure. Numerous 'rolling' exploration trenches and
shafts continue to be sunk so as to identify the best fissure targets out of the
multiplicity of fissures available for development.

Chairman's comment
Adonis Pouroulis, Petra's Chairman, commented, 'We are pleased to announce that
the plant was commissioned and the first diamonds were recovered from the Kono
project on schedule in June 2006. The recovery of 5.6 carats of diamonds,
including a 1.4 carat stone, from the small amount of material processed to date
is highly encouraging. Sinking of the production shafts is on track and we look
forward to further developments at Kono over the coming months.'


                                   -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'), 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 'Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves'. 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:

 Cathy Malins / Annabel Leather                  Telephone: [phone]
 Parkgreen Communications, London




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