USD20m Convertible Loan

Petra Diamonds Ld
01 March 2007


                             Petra Diamonds Limited

                         US$20 Million Convertible Loan

Petra Diamonds Limited ('Petra' or 'the Company') (AIM / ASX: PDL) announces
that it has entered into a US$20 million unsecured, interest bearing convertible
loan agreement ('the Convertible Loan') with BHP Development Finance Proprietary
Limited, a company within the BHP Billiton group ('BHP Billiton').



Highlights

  • The Convertible Loan is unsecured and interest is payable, on an annual
    basis, at LIBOR plus 2% per annum; the Convertible Loan plus interest
    accrued but not paid is convertible by BHP Billiton into Petra shares at a
    price of 180 pence per share - representing a 22.2% premium to the 30 day
    average mid-market Petra share price to 23 February 2007 of 147.26 pence,
    when the conversion price was set; the loan principal of US$20 million is to
    be repaid on 1 March 2010 if not converted or repaid beforehand

  • The Convertible Loan will further strengthen Petra's treasury without
    diluting existing shareholders at the current market price, giving Petra
    greater flexibility to act on potential growth opportunities, with special
    focus on Angola


Adonis Pouroulis, Petra's Chairman, comments: 'Our relationship with BHP
Billiton continues to go from strength to strength. The Convertible Loan adds to
Petra's treasury, giving the Company the ability to consider opportunities that
have the potential to fast-track Petra's development and further entrench the
Company as a true mid-tier diamond group.'


Details of the Convertible Loan

The Convertible Loan is unsecured, bears interest at LIBOR plus 2% and, together
with any interest accrued but not paid, is convertible at the election of BHP
Billiton into Petra ordinary shares at a price of 180 pence per share ('the
Conversion Price'). The number of Petra ordinary shares to be issued will be
calculated by reference to the £/US$ exchange rate on the business day
immediately prior to the date of conversion. If not converted or repaid
beforehand, the principal amount of the Convertible Loan (US$20 million) is to
be repaid on 1 March 2010. The Convertible Loan may only be converted in full.
Of the total loan of US$20 million, US$17.5 million is ring fenced for use in
Angola, with the balance being for use across the Petra group as the Company
sees fit.



Reasons for issuing the Convertible

Petra's stated objective is to become a true mid-tier diamond group and with
that objective in mind the Company continues to scrutinise appropriate business
opportunities in the diamond sector. The Convertible Loan will further
strengthen Petra's treasury, giving the Company greater flexibility to act on
potential growth opportunities (with special focus on Angola), without diluting
existing shareholders at the current market price.



BHP Billiton

BHP Billiton already holds 4,134,366 Petra ordinary shares, representing 2.74%
of Petra's current issued ordinary share capital. Based on this holding and
current £/US$ exchange rates, on conversion of the principal Convertible Loan
BHP Billiton would then hold approximately 9,832,372 million Petra ordinary
shares, representing 6.29% of the Company's enlarged ordinary share capital.



 Ends



For further information, please contact or visit www.petradiamonds.com


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









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