Petra Diamonds Regulatory News (PDL)

29 May 2007 07:03

Petra Diamonds Ld29 May 2007 29 May 2007 Petra Diamonds Limited Alto Cuilo Project; First Mini Bulk Sample Results Petra Diamonds Limited ("Petra" or "the Company") announces encouraging firstresults from the mini bulk sampling ("MBS") campaign at Project Alto Cuilo ("Alto Cuilo" or "the Project") in Angola. The MBS programme is important as it is the next step in estimating the economic viability of the various kimberlitesat Alto Cuilo and hence their potential to be developed into mines. These firstresults are for kimberlite AC63, the first of the priority kimberlites to besampled; the MBS programme will now continue with the sampling of other prioritykimberlites at Alto Cuilo, namely AC98 and AC60. Highlights • AC63 drilled and sampled as the first priority kimberlite in the MBS campaign • Encouraging results received, with one hole at AC63 (MB1) recording a grade of 22.7 carats per hundred tonnes ("cpht") for an intersection of 90 metres; this drill hole peaked at a grade of 35.5 cpht over an intersection of 30 metres • Other high grade zones at AC63 were identified; these results mean that AC63 will be further investigated by geophysical techniques and is likely to be sampled further during the MBS campaign • Recovery of 222 diamonds (greater than 1mm square mesh screen), yielding 18.49 carats from a cumulative sample weight of 549 tonnes of material*; this sample included crater facies sandstones which will have significantly diluted the overall average grade • Two stones of 1.52 and 1.05 carats were recovered - the sample also included 3 white stones of 0.83, 0.68, and 0.33 carats • The highest grade areas correspond with those that have previously exhibited high potential results from kimberlitic Heavy Mineral Analysis ("HMA"), supporting the exploration model developed by Petra and joint venture partner BHP Billiton • The large diameter drill ("LDD") rig is now drilling at AC98, the next priority kimberlite target • Now that the MBS campaign is underway, it is expected that MBS results will be announced with regards to other priority kimberlites at Alto Cuilo on a regular basis; further, a second LDD rig has been ordered and is expected to be on site by the end of July, which will assist the speed and efficiency of the MBS campaign further Chairman Adonis Pouroulis commented, "The best exploration result for anydiamond mining company is naturally to recover diamonds and these resultsfurther demonstrate the potential of Alto Cuilo. Given the volume, size andcomplex internal morphology of the kimberlites at Alto Cuilo, grade is likely tovary over the priority targeted kimberlites and therefore more work is requiredto establish which areas will offer the best economics for a producing mine ormines. We are delighted with the grades already identified by this initialprogramme and in particular we are heartened that these first results vindicatethe integrity of our exploration strategy. We will now move quickly forward withBHP Billiton into the next stage of our bulk sampling programme." Background Alto Cuilo is located in north eastern Angola, in an area which many expertsbelieve will become a prolific region for the production of diamonds. The Catocamine, which is approximately 90 kilometres from Alto Cuilo, is expected toproduce around 7 million carats in 2007. Petra and BHP Billiton have to datediscovered 73 kimberlites at Alto Cuilo and a prioritisation process has rankedcertain of these kimberlites for mini bulk sampling by large diameter drilling. There are a substantial number of kimberlites at Alto Cuilo that exhibit diamondindicator mineral chemistry and other features conducive to the kimberliteshosting economic quantities of diamonds. The exploration programme is in thefirst instance taking mini bulk samples from a range of the kimberlitescurrently ranked as the most prospective (given the size of the Alto Cuiloproject, it is possible this ranking will change based on further explorationwork); stage two will then involve the taking of larger samples from thekimberlites that return the most prospective mini bulk sample results. Results - Kimberlite AC63 AC63 was selected as the first target for LDD mini bulk sampling. Allkimberlitic material drilled below the Kalahari sand layer has been processed,including crater facies sandstones and sand diluted resedimented volcaniclastickimberlite ("sRVK"). These units are not usually included in resource grades asthey will not host economic concentrations of diamonds; the focus is instead onresedimented volcaniclastic kimberlite ("RVK") and volcaniclastic kimberlite ("VK") layers, which is where the lowest dilution of diamond-bearing kimberlite is expected to be found. As previously announced AC63 has an estimated surface area of 20.8 hectares. Forthe MBS programme, 13 large diameter holes were drilled, 11 of which were sunkin an area of 90 metres by 60 metres (less than 1 hectare), sampling less than5% of the total surface area of the AC63 pipe. The holes were grouped in an areawhich had previously returned good HMA and Microdiamond Analysis ("MiDa")results. One hole (MB1) was drilled in the eastern area of AC63 and intersected a 90metre section containing an average grade of 22.7 cpht, having a peak of 35.5cpht over a 30 metre zone. This intersection coincides with the previouslyreported encouraging HMA analysis results, lending confidence to theprioritisation and exploration model developed by Petra and BHP Billiton toidentify kimberlites with the best diamond potential in this part of theLunda-Kasai Craton. For schematics of AC63 illustrating the relative positioning of the drill holesand related information, please go to the following link: http://www.rns-pdf.londonstockexchange.com/rns/3183x_1-2007-5-29.pdf The grouping of holes in the north of the kimberlite (MB3 to MB13), drilled inresponse to previous HMA and MiDa results, resulted in sporadic higher gradezones with a peak grade of 19 cpht in a 37 metre intersection at a depth of 390metres. Two stones of 1.52 (irregular shape) and 1.05 carats (dodecahedron) wererecovered. The sample also included three larger white stones of 0.83, 0.68, and0.33 carats. A total of 18.49 carats was recovered, a parcel size that is notlarge enough to estimate diamond value. Given the high grade recovered from certain of the RVK samples processed, thepotential for similar results at other locations in AC63 is considered likely.Both Petra and BHP Billiton are confident that substantial intersections ofrelatively high-grade RVK and VK remain to be drilled at AC63. Summary results for the AC63 RVK kimberlite intersections are listed in thetable below. To view a table showing full detailed results for all AC63 drillholes, please go to the following link: http://www.rns-pdf.londonstockexchange.com/rns/3183x_2-2007-5-29.pdf AC63 BEST MINI-BULK SAMPLE INTERSECTIONS Hole ID Sample From To Final Total Total Sample Average tonnes stones to carats to grade stone size metres metres sieve sieve (cpht) (carats)AC63-MB1 S4 170 200 4.56 3 0.51 11.18 0.17AC63-MB1 S5 200 230 4.56 3 1.62 35.51 0.54AC63-MB1 S6 230 260 4.56 8 0.98 21.48 0.12Total over sample interval: 13.69 14 3.11 22.72 0.22AC63-MB12 S10 360 390 4.56 9 0.82 17.97 0.09AC63-MB12 S11 390 397 1.06 3 0.25 23.48 0.08Total over sample interval: 5.63 12 1.07 19.02 0.09 Information pertaining to the Drilling Method and Plant The Reverse Circulation Flood Drilling method is employed, which uses drillingmuds to assist in sidewall stability and material lift. A selection of three 31centimetre drill bits is used, depending on formation. The drilled sample ispassed through a cyclone, de-gritted on a 1mm slotted screen, then collected inbags and transported to the DMS plant where it is stored and presented fortreatment. Initially samples were treated in 10 metre batches but the samplinginterval was subsequently increased to 30 metres for convenience of treatment.This may need to be modified in the future as the processes become more refined.The drill rig is operating very satisfactorily and has reached depths of 586metres. The mini-bulk DMS plant is a stationary, self contained unit that is designed totreat 10 tonnes per hour. Samples that are received from the large diameter RB40drill rig are washed and screened to a bottom size cut of 1.0mm square mesh,which is then discarded. Thereafter, there is a closed circuit comprising a 2stage crushing system with tailings being discarded at 4mm. Concentrate feedsinto a 219 Flowsort X-ray diamond recovery machine that has a grease tablebackup. Diamonds are hand-picked from these concentrates, weighed, acidized andthen sized. The plant is thoroughly cleaned between processing of each 30 metresample. BHP Billiton Joint Venture The costs of exploration and associated activities at Alto Cuilo continue to befunded by BHP Billiton in accordance with the Alto Cuilo JV agreement. Asreported on 14 May 2007, BHP Billiton's cumulative spend with regards to AltoCuilo as at 30 April 2007 amounted to US$40.33 million. * estimated tonnage from uncalipered borehole dimensions Ends Notes 1. The information in this update that relates to Exploration Results, MineralResources 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 SouthAfrica, a 'Recognised Overseas Professional Organisation' ('ROPO'). Jim Davidsonis the Qualified Person for the purposes of the AIM Guidance Note on Mining, Oiland Gas Companies dated March 2006. Jim Davidson is a full-time employee of theCompany and has sufficient experience which is relevant to the style ofmineralisation and type of deposit under consideration and to the activity whichhe is undertaking to qualify. Jim Davidson has given his written consent to theinclusion in this announcement of the matters based on his information in theform and context in which it appears. 2. It should be noted that the potential quantity in this report is conceptualin nature, there has been insufficient exploration to define a Mineral Resourceand it is uncertain if further exploration will result in the determination of aMineral Resource. For further information, please contact:Parkgreen Communications, LondonCathy Malins / Annabel LeatherTel +44 20 7851 7480 This information is provided by RNS The company news service from the London Stock Exchange