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Petra Diamonds Ld (PDL)

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Tuesday 26 April, 2005

Petra Diamonds Ld

Proposed merger and placing

Petra Diamonds Ld
26 April 2005




                             Petra Diamonds Limited

                     Proposed Merger with Crown Diamonds NL
      Publication of AIM Admission document and recommencement of trading
              Placing and Notice of Extraordinary General Meeting


Summary

Petra Diamonds Limited ('Petra' or 'the Company') (LSE: PDL), the AIM-quoted
diamond mining group, announces the publication of the AIM Admission document
relating to the proposed merger ('Merger') with ASX-listed Crown Diamonds NL
('Crown') (ASX: CRD) and, accordingly, the recommencement of trading in Petra's
shares on AIM.

Furthermore, the Company is pleased to announce an institutional placing of
£17.1 million, before expenses, at a placing price of 85p per share.

As noted in the announcement of 8 February the Merger with Crown constitutes a
reverse takeover in accordance with the AIM Rules and therefore Petra's shares
were suspended from trading on AIM until such time as the AIM Admission document
was published.

Highlights


   • The Merger is an all share transaction whereby each Crown shareholder
    will receive one Petra share for every eight Crown shares


   • The Merger is subject to Petra Shareholder, Crown shareholder and Crown
    Loan Note holder approval


   • The Placing is for a total of £17.1 million at a placing price of 85p
    per share to primarily UK institutional investors


   • Based on the placing price of 85p per share, the Merger values Crown at
    £32.1 million


   • The Company, as enlarged by the Merger and Placing, will have a market
    capitalisation at the placing price of 85p per share of £111.2 million


   • Two members of the current Crown board, Johan Dippenaar and Jim
    Davidson, will join the Petra board. Johan Dippenaar will be appointed CEO,
    Jim Davidson will be appointed Technical Director and Kevin Dabinett,
    currently Petra's CEO, will become COO of the Enlarged Group

The Merger will be effected in Australia by way of a Scheme of Arrangement and
Scheme Booklets will be dispatched on or around 26 April 2005 by Crown to its
shareholders and Loan Note holders. The directors of Crown will unanimously
recommend to Crown shareholders that they vote in favour of the Merger.

Adonis Pouroulis, Chairman of Petra, commented, 'The merger is a major deal for
Petra and we are delighted that the process is moving forward well. We are
already enjoying working closely with Crown's management team and together we
are excited by the future prospects ahead of us, both in terms of developing
existing projects and also in the assessment of exciting opportunities within
the diamond sector.'

Crown's CEO, Johan Dippenaar, said, 'The directors of Crown believe that that
this merger will deliver real value to the shareholders of both companies. The
enlarged group will have the critical mass as a pure diamond company to offer
shareholders exposure to a complete diamond portfolio from greenfield
exploration to mature producing mines. The bringing together of the two
management teams, with complimentary sets of skills, and the capital structure
of the merged entity will ensure exciting growth prospects for the company in
the future. '

The AIM Admission document is being posted to Petra shareholders today convening
an EGM of Petra to take place on 25 May 2005 at 10.00 a.m. to approve the
Merger. The AIM Admission document is also available at the offices of Williams
de Broe Plc, 6 Broadgate, London EC2M 2RP during normal business hours on any
weekday for a month from today.

The Appendix to this announcement contains definitions of the terms used in this
announcement.

For further information, please contact:
David Abery                               Cathy Malins
Petra Diamonds, South African office      Parkgreen Communications, London
Tel: +27 11 467 6710                      Tel: +44 20 7493 3713
Frank H. Moxon                            Karl Paganin / Michael Soucik
Williams de Broe Plc, London              Euroz Securities, Perth
Tel: +44 20 7588 7511                     Tel: +61 8 9488 1430
                                          Duncan Gordon
                                          Baker Young Stockbrokers, Adelaide
                                          Tel: +61 882 368 888

In South Africa:                     In Australia:
Johan Dippenaar                      Charles Mostert
CEO and Director                     Director
Crown Diamonds NL                    Crown Diamonds NL
Tel: +27 14544 6116                  Tel: +61 8 9381 8888
                                     Kevin Skinner
                                     Field Public Relations
                                     Tel: +61 8 8234 9555
                                     Mobile: +61 414 822 631





                             Petra Diamonds Limited

                     Proposed Merger with Crown Diamonds NL
      Publication of AIM Admission document and recommencement of trading

               Placing and Notice of Extraordinary General Meeting


Introduction

The Company announced on 8 February 2005 that it had entered into a conditional
agreement to merge with Crown Diamonds NL by acquiring the entire issued share
capital of Crown under a scheme of arrangement.

The Merger will constitute a reverse takeover under the AIM Rules and is
conditional, inter alia, upon the approval of Shareholders at the EGM and the
approval of Crown shareholders and Crown Loan Note holders.

If the Resolutions are duly passed at the EGM and the other necessary approvals
are received, the Merger and the Placing will be implemented, the Company's
existing share quotation on AIM will be cancelled and the Company will apply for
the Enlarged Share Capital to be admitted to trading on AIM and the ASX.


Principal terms of the Merger

The Merger, which is subject to both Petra and Crown shareholder and Loan Note
holder approval, as well as various regulatory approvals in the relevant
jurisdictions, will be an all share transaction. Under the terms of the Merger,
each Crown shareholder will receive one Ordinary Share for every eight Crown
shares held. Petra will issue, in total, approximately 37.8 million new shares
to Crown shareholders, representing 51.9% of Petra's Existing Share Capital.
Based on the closing price of Petra and Crown shares on 7 February 2005 (being
the last trading day prior to the announcement of the Merger and the suspension
from trading on AIM of Petra's Ordinary Shares) of 95 pence and 22 cents
respectively, the Merger values Crown at £35.3 million or 28.66 cents per Crown
share, representing a 30.27% premium to the Crown share price at that time.
Based on the closing price of Crown shares on 22 April 2005 (being the last
trading day prior to publication of this announcement) of 25 cents and the
Placing Price, the Merger values Crown at £32.1 million or 26 cents per share,
representing a 4.7% premium to the Crown share price.

The Merger will be effected in Australia by way of the Scheme of Arrangement
requiring the approval of 75% of Crown shareholders voting and 50% present at
the meetings. A Scheme Booklet will be despatched by Crown to its shareholders
on or around the date of publication of this announcement. The directors of
Crown have confirmed to Petra that they will unanimously recommend to Crown
shareholders that they vote in favour of the Merger, as they themselves will do.

Petra has also reached agreement with the trustee of Crown's Loan Notes.
Approval from the Loan Note holders will also be effected by way of a separate
scheme of arrangement. A further scheme booklet will be despatched by Crown to
its Loan Note holders. If this scheme is approved, the trust deed in respect of
the Loan Notes will be amended so that Petra will assume all the rights and
obligations of Crown in respect of the Loan Notes. On conversion of the Loan
Notes, Petra shares will be issued in substitution for Crown shares, the amended
Loan Notes will be listed on the ASX and will be secured by Petra depositing in
an agreed Petra bank account an amount equalling the outstanding principal and
interest as security to the trustee of the Loan Note holders.

Completion of the Merger is conditional, inter alia, upon the following
principal conditions:

• there having been, immediately prior to completion of the Merger, no
  material adverse change in the financial position of Petra or Crown;


• obtaining all necessary regulatory approvals and other such approvals
  and consents, including:

  (i)   approval by the shareholders of both Petra and Crown and the approval of 
        Crown Loan Note holders

  (ii)  approval by the Australian Foreign Investment Review Board (FIRB)

  (iii) approval by the South African Competition Board

  (iv)  approval of the Scheme of Arrangement and the Loan Note scheme by the 
        Supreme Court of Western Australia

  (v)   readmission of the Enlarged Share Capital of Petra to AIM

  (vi)  approval by the ASX of the admission of Petra to the ASX;


• Crown's directors recommending the Merger to Crown shareholders.

Subject to satisfaction of the conditions, two members of the current Crown
board, Johan Dippenaar and James Davidson, will join the Petra board. Johan
Dippenaar will be appointed Chief Executive Officer and James Davidson will be
appointed Technical Director of the Enlarged Group. Kevin Dabinett, currently
Petra's Chief Executive Officer, will become Chief Operating Officer of the
Enlarged Group.


Background to and reasons for the Merger

The Merger represents a further step in Petra's long-term growth strategy of
becoming a significant player in the diamond industry. The Enlarged Group will:

• create an impressive exploration base coupled with successful income-producing 
  and cash flow positive diamond mines. The Enlarged Group will have a well 
  balanced portfolio of diamond assets in various phases of development, ranging 
  from green field exploration to production;


• create a geographically diversified diamond group with an enhanced
  geographical spread of diamond assets on the African continent (Angola, South 
  Africa and Sierra Leone);


• create a diamond group with a substantial asset base and pro-forma market 
  capitalisation (prior to the Placing, the conversion of any Loan Notes and 
  based on Petra's closing price of 95p per share on 7 February 2005) of 
  approximately £105 million which will become a niche mid-tier producer of 
  rough diamonds;


• be dual listed on AIM and the ASX, enhancing liquidity and aiming to increase 
  the interest of institutional investors due to the asset base and market 
  capitalisation;


• combine the substantial skills and experience of the two management teams and 
  workforces; and


• give rise to cost savings from the rationalisation of the two quoted company 
  structures.

Crown brings with it an experienced management team that is highly skilled in
diamond mining production in Southern Africa. The two management teams together
will have the depth and knowledge to develop diamond mining opportunities
anywhere on the African continent. Crown also brings with it in-house
engineering expertise where it is expected considerable savings can be made in
any future diamond mining projects.

The directors of both Petra and Crown believe that Crown's existing business has
a solid base and is capable of further expansion.


Details of the Placing and use of proceeds

The Company is issuing the Placing Shares at the Placing Price pursuant to the
Placing, to raise approximately £17.1 million, before expenses. The Placing
Shares will represent approximately 15.4% of the Enlarged Share Capital. The
Placing is conditional upon, inter alia, Admission becoming effective.

The Placing Shares will when issued rank pari passu with the Existing Ordinary
Shares in all respects including the right to receive all dividends declared or
paid (after the date of allotment of the Placing Shares) on the ordinary share
capital of the Company.

Admission is expected to take place and dealings in the Enlarged Share Capital
are expected to commence on AIM at 8.00 a.m. on 17 June 2005. It is intended
that, where applicable, definitive share certificates in respect of the Placing
will be posted by first class post on 24 June 2005, or as soon thereafter as is
practicable. No temporary documents of title will be issued in connection with
the Placing.

The proceeds of the Placing receivable by Petra of £17.1 million will be used as
follows:

• £2 million on deferred acquisition costs in respect of the Helam mine;
• £2.7 million on developing the Sierra Leone joint venture properties;
• £3.7 million on new business opportunities in Southern Africa and Sierra
  Leone;
• £1.2 million on Angolan business opportunities, further to Alto Cuilo;
• £3.2 million on settlement of term loans;
• £1.4 million on securing the outstanding Crown Loan Notes;
• £1.8 million on costs and placing fees related to the Merger and Admission; 
  and
• £1 million on group working capital.

The minimum funds required to be raised from the placing is £14.0 million.


Information on Petra and its assets

Petra is an AIM-quoted mining group focused on the exploration and mining of
diamonds in Africa. Petra's strategy is to build a portfolio of revenue
producing and exploration assets, achieving the objective of becoming a
successful mid-tier diamond producer and explorer. Petra has operations in
Angola and South Africa with its primary activities in Angola.

Angola

In Angola the primary focus of the company is the Alto Cuilo project area in the
north-east of the country, about 700 km north-east of the capital Luanda. In
1998 Petra began exploration on Alto Cuilo and discovered a major kimberlite
before being forced to withdraw due to the renewal of the civil war which had
started in 1975 and which finally ended in February 2002.

Since that time optimism for Angola's future has increased and it is predicted
by many observers that Angola is gearing up for a post war economic boom.
Angola's rich reserves of oil and diamonds have put the country in the
international spotlight and there is currently significant foreign investment
coming into Angola.

Foreign mining companies are now actively pursuing investments in Angola and
many believe that Angola is currently one of the most exciting diamond
exploration areas in the world. It is widely accepted that Angola may hold some
of the world's best potential kimberlite and alluvial diamond deposits.

The north-east area of the country is rich in kimberlites, with one of the
world's largest, Camafuca, situated north-east of the Alto Cuilo project area.
The Catoca Mine in Angola is the world's fourth largest kimberlite and produced
2.6 million carats in 2004 with a sales revenue of approximately US$215 million.
The kimberlite yields quality diamonds, of which 35% are gem quality, fetching
prices of around US$75 - US$100 per carat. Trans Hex Group Limited ('Trans Hex')
has two alluvial mines in Angola, Luarica and Fucauma, with delineated resources
of 1.7 million carats. Trans Hex concluded the first sales from Laurica in April
2004. 20,000 carats were sold at an average price in excess of US$300 per carat.
The parcel included 25 stones larger than 10 carats, the largest of which was a
76 carat white stone. Pilot production at Fucauma is currently under way and
full-scale mining is expected to commence during 2005.

Analysts predict that Angola's annual diamond production could eventually exceed
six million carats in the coming years as more diamond mines are placed into
commercial production.

Alto Cuilo

By air, Alto Cuilo is 700 kilometres north-east of the capital of Luanda, or 850
kilometres by road. It is 120 kilometres by road from Saurimo, the nearest main
airport.

The entire Alto Cuilo concession area covers 2,670 square kilometres. Of this,
the ML Complex (the current area of focus) covers approximately 200 square
kilometres. In the ML Complex area, twelve kimberlites have been located thus
far, following over 6,400 metres of drilling on 43 sites with depths of up to
280 metres. The kimberlites which are close to surface under sand cover of 20 to
150 metres are not eroded as in South Africa or at the Catoca kimberlite mine to
the north-east of Alto Cuilo.

Petra's interest in the Alto Cuilo project is held through its wholly owned
subsidiary, Petra Diamonds Alto Cuilo Limited ('PDAC'). PDAC has two Angolan
partners in the Alto Cuilo project, Empresa Nacional De Diamantes De Angola,
Endiama, EP ('Endiama'), which represents the Angolan government, and
Organizacoes Moyoweno Limitada ('Moyoweno'), an Angolan commercial company. PDAC
has a 36% interest in the Alto Cuilo kimberlite concession agreement and a 38%
interest in the Alto Cuilo alluvial concession agreement.

On 14 September 2004 Petra announced that it had agreed the terms for a joint
venture ('Joint Venture') with BHP Billiton World Exploration Inc ('BHP
Billiton') regarding the Alto Cuilo diamond project in northeastern Angola.
Under the terms of the Joint Venture, BHP Billiton can, by investing up to US$60
million in PDAC acquire shares of up to 75% of PDAC. Petra had at that date
focused its work on the area around the ML Complex in which Petra, along with
its Angolan partners Endiama and Moyoweno, has already established the presence
of a substantial diamondiferous kimberlite and alluvial complex. Under the terms
of the Joint Venture, BHP Billiton will undertake regional exploration on the
balance of the concession and may work with Petra to develop the ML Complex
further, if they so wish.

On 30 November 2004 BHP Billiton subscribed for 901,060 shares in Petra at a
price of 88.2 pence per share for a total subscription of US$1.5 million. The
price was based on the average of the closing mid-market prices of Petra's
Shares for the ten dealing days to 26 November 2004.

On 1 December 2004 Petra announced the implementation of the formal Joint
Venture Agreement with BHP Billiton regarding the Alto Cuilo diamond project.

BHP Billiton will acquire its first interest in PDAC once it has invested US$7.5
million in PDAC and from that point will acquire further shares in PDAC as its
investment increases.

Should BHP Billiton acquire 75% of PDAC, it may elect to buy a further 5% of
PDAC from Petra. The value of that 5% would be determined based on accepted
mining valuation principles applied by independent mining consultants appointed
by agreement between Petra and BHP Billiton.

Once Petra's total project expenditure on the ML Complex reached US$20 million
and certain conditions precedent are met, BHP Billiton had the right to take up
the sole funding, as part of the US$60 million investment, of kimberlite
exploration and development on the ML Complex. With effect from 1 January 2005
BHP Billiton have exercised their right and are now sole funding as per the
Joint Venture Agreement. This is in addition to their sole funding of regional
kimberlite and alluvial exploration on the rest of the concession.

Once BHP Billiton has invested US$60 million in PDAC, the parties will fund any
further development and mine construction in proportion to their shareholdings
in PDAC. If requested by Petra, BHP Billiton will arrange debt financing for
Petra's share of the funding requirements of PDAC.

Ultimately development of a mine on the project will depend on the results of a
feasibility study and approval of a mining licence by the Angolan authorities.

Petra has also undertaken some bulk sampling on the exposed deposits within the
current work area. A small sample (forty tonnes) taken from anomaly (AC2/3)
revealed 23 macro diamonds greater than 1mm, weighing a total of 18.7 carats.
This included a white gem quality octahedron weighing 9.61 carats. The grade,
including this large stone, was 47 cpht with an average stone size of 0.81
carats. Excluding this stone, the grade was 23 cpht with an average stone size
of 0.40 carats. The diamonds, are mainly white in colour and of high quality.
The average carat value of this sample was estimated at around US$1,600 per
carat including the big stone (US$200 excluding the large diamond).

Further to the alluvial material being processed through the plant, an active
alluvial work programme has been formulated. This work programme uses diversions
in active river systems to establish the presence of diamonds. The first such
operation has as its focus the centre channel of the Cuilo River on the western
side of the concession. The diving and associated equipment is currently on
site, and divers are currently being recruited. Should results from this
endeavour prove to be successful, the targets identified will be followed up
with pit and drill sampling of the river flats and terraces adjacent to these
diving activities. This work is aimed at identifying the size and grade of any
alluvial deposit. A similar programme will be considered for other suitable
alluvial targets elsewhere in the concession area.

By the end of February 2005, 4,927 macro diamonds with a total caratage of
1,241.48 had been recovered, at an average stone size of 0.25 carats.

Petra also has interest in two further projects in Angola; Medio Kwanza, west of
Alto Cuilo and Muriege, east of Alto Cuilo. Petra has a 70% interest in the
Power Corporation Angola Limited, which has a 50% interest in the Medio Kwanza
project. Petra therefore effectively has a 35% interest in the Medio Kwanza
project. Petra currently has a 5% free carry interest in Muriege and is a
passive shareholder. Petra considers the Muriege project to currently represent
a 'greenfields' exploration project.

South Africa

In South Africa, Petra has two current diamond exploration projects: the Limpopo
farms and Syferfontein. The Limpopo farms project covers seven of the diamond
portfolio properties acquired by Petra in 1999 from Gold Fields Mining &
Development Ltd of RSA ('Goldfields'), on three of which indicator minerals have
been discovered since exploration began in early 2003. Petra has conducted a
bulk sampling programme on Syferfontein for which final results are awaited.

Petra is a 29.5% shareholder in Nabera Mining (Pty) Ltd ('Nabera'), which
managed the Alexkor diamond mine between 1999 and 2001. Under the terms of the
management agreement by which Nabera managed the mine, it is entitled to
one-third of the 'value added' to the mine during its management period. The
independent opening and closing valuation reports completed by Snowden Mining
Industry Consultants('Snowden') in accordance with the principles contained
within the management agreement were submitted to Alexkor, Nabera and the South
African Government. The 'value added', as calculated from the Snowden valuations
has been disputed by the other parties to the management agreement; it is
Petra's objective that the Nabera value-added settlement be finalised with the
South African Government and Alexkor in the near future. Petra is, along with
Nabera, taking the appropriate steps to bring this matter to a conclusion.

Information on Crown and its assets

Crown is a diamond mining and exploration company listed on ASX with a market
capitalisation of approximately AS$75.6 million. Crown's current diamond
producing assets are all situated in South Africa. They encompass the Helam and
Star mines which are 100% owned by Crown and the Messina/Dancarl joint venture
in which Crown has a 74.5% interest. All three of these diamond operations are
kimberlite fissure mines with life of mine in excess of 15 years each and each
produce high quality diamond gem stones. It is estimated that the Crown
operations will produce in excess of 167,000 carats of predominantly gem quality
stones in 2005. In addition Crown has a joint venture interest in a diamond
exploration project in Sierra Leone.

Messina and Dancarl Diamond Mines

Located in the Warrenton District, Northern Cape Province in South Africa, the
Messina Diamond Mine is operated by Messina Diamonds (Pty) Ltd, a subsidiary of
Crown.

The Messina Mine property is composed of mining leases, diamond rights, surface
rights and free holdings on various farms in the Northern Cape Province and
covers 1,700 metres of a 2,400-metre kimberlite fissure (known as the Bobbejaan
Fissure). The fissure system consists of three distinct vertical units which
range in width between 20 and 110 centimetres and average 55 centimetres. In
February 2005, Snowden Mining Industry Consultants published an updated Ore
Reserve Statement for the Messina Mine. The ore reserve, after applying the JORC
guidelines, has been estimated to be 436,000 hoisted run of mine (ROM) tonnes
grading 28 cpht.

Messina produced around 25,000 carats in the 2004 calendar year at an average
price of US$259 per carat running at an average grade of 25 cpht.

On 27 October 2004, Crown Resources (Pty) Ltd, a subsidiary of Crown, acquired a
40% interest in Autumn Star Trading 192 (Pty) Ltd, the parent entity of Dancarl
Diamonds (Pty) Ltd ('Dancarl'), the owner of the Dancarl Diamond Mine for
A$2,723,608. The acquisition was funded by way of a bank loan for the full
consideration. Subsequent to 31 December 2004, Messina Diamonds (Pty) Ltd,
another subsidiary of Crown, has consummated a joint venture with Dancarl
whereby, effective from 1 January 2005, the two mines will be operated jointly
and share costs of mining and revenue derived from diamonds produced. The final
written terms are being finalised and are expected to be executed shortly. The
Company's effective interest in the revenue and costs of the joint venture will
be 74.5%. The majority owners of Dancarl (Sedibeng Mining (Pty) Ltd (42%) and
Bokone Properties (Pty) Ltd (18%)) are persons who meet the empowerment charter
provisions of the Broad Based Socio Economic Empowerment Charter of the South
African Mining Industry in respect of ownership.

Messina and Dancarl are expected to produce at least 35,000 carats in the 2005
calendar year as underground mining gets underway at Dancarl and the ground is
mined from Messina infrastructure. The life of mine is in excess of 15 years. In
February 2005, Snowden Mining Industry Consultants published an updated Mineral
Resource Statement for the Dancarl Mine. Snowden elected to classify the fissure
resource at Dancarl as inferred. The inferred resource, after applying the JORC
guidelines, has been estimated to be 483,000 fissure tonnes grading 70 cpht.

Star Diamond Mine

Located in the Theunissen District, Free State Province in South Africa the Star
Diamond Mine is owned by Star Diamonds (Pty) Ltd, a 100% owned subsidiary of
Crown.

The Star Mine property covers approximately 1,034 hectares and is composed of a
combination of mining leases, mining licences, diamond rights and free holdings
on various segments and portions of farms in the Free State. The mine exploits a
series of kimberlite fissures segments over an east-west trending strike length
of 4.5 kilometres which is part of a more extensive 15 kilometre long series of
fissures. The individual fissures range in width between 5 and 80 centimetres
and average 47 centimetres. In February 2005, Snowden Mining Industry
Consultants published an updated Ore Reserve Statement for the Star Mine. The
ore reserve, after applying the JORC guidelines has been estimated to be 718,700
ROM tonnes grading 44 cpht.

Star produced 16,000 carats in the 2004 calendar year at an average price of
US$179 per carat at an average grade of 47 cpht. Production in the 2005 calendar
year is expected to increase to approximately 36,000 carats. The life of mine is
in excess of 15 years.

Helam Diamond Mine

Located in the Swartruggens District, North West Province in South Africa the
Helam Diamond Mine is operated by Helam Mining (Pty) Ltd, a 100% owned
subsidiary of Crown.

Continuous mining of the fissure array at Helam has taken place since 1933. The
fissure array consists of three main kimberlite types which occur in four mining
units being the John, Edward, Second Lease and Third Lease units.

The fissures have been exploited over a strike length of 7,000 metres and to a
depth of 700 metres below surface at the deepest point. In February 2005,
Snowden Mining Industry Consultants published an updated Ore Reserve Statement
for the Helam Mine. The ore reserve, after applying the JORC guidelines has been
estimated to be 1,672,000 ROM tonnes grading 81 cpht.

The mine has consistently produced more that 80,000 carats annually over the
past 3 years and is now targeting 144,000 carats per annum after completion of a
capital upgrade programme, which commenced in 2004.

Production for the 2005 calendar year is expected to be around 96,000 carats,
running at an average grade of 81 cpht. The mechanisation program in place at
Helam will enhance the ability of this mine to meet future production targets.
In addition, Helam has some encouraging and as yet unexplored targets that
should be investigated. Without these, the life of mine is in excess of 15
years.

Sierra Leone

In December 2004 Crown announced that it had entered into a joint venture with
Mano River Resources Inc. ('Mano') for the production of diamonds from
underground mining of diamond-bearing kimberlite dykes (the 'Lion' dykes)
defined within Mano's three contiguous licence areas that cover 260km2 across
the world famous Kono diamond district ('Kono Licences') of Sierra Leone.

The heads of agreement state that the basis of the joint venture will allow
Crown to earn a 51% profit or earned interest by spending US$1.5 million on the
project, providing a further US$1 million in a Trust Fund for drawing of further
expenditure on the project and providing a guarantee for a further US$0.5
million. A full expenditure of US$3 million will also earn a 51% equity
interest. A full written agreement is to be entered into shortly. The Kono
project is a kimberlite project with several identified fissures already known
from which small scale production is envisaged during the next twelve months.
Prospecting for kimberlite pipes and blows, which are known to exist in the
area, will commence during 2005. Initial indications show good geochemical
results with a fissure strike length greater than that of Crown's current
producing mines.

Enlarged Group strategy

The strategy of the Enlarged Group is to build a mid-tier diamond group by
creating a solid exploration base combined with successful income producing
mines and a geographically diversified spread of quality diamond assets on the
African continent. The Merger will balance Petra's current exploration portfolio
with Crown's producing diamond operations, allowing the Company to benefit from
a diamond market in which analysts predict demand will exceed supply in the
short to medium term. Following the Merger, the Enlarged Group will continue to
explore opportunities to enhance further its portfolio of diamond assets.

Current trading and prospects of the Enlarged Group

Petra

At Alto Cuilo, core drilling has continued in the ML Complex on anomaly 4/13 and
as at the end of February 2005 diamond core drilling had been completed at 43
sites, with a total 6,436 metres having now been drilled. Since commissioning of
the diamond recovery plant (MB100 and DMS) in September 2004, alluvial gravels
from the Luangue river and kimberlitic material from the AC2 complex continued
to be treated by the plant and as of 26 February 2005, 4,927 macro diamonds have
been recovered with a total mass of 1,241 carats. With BHP Billiton taking up
sole funding of the kimberlite exploration and becoming involved in the project
there has been a technical shift in the priority listing of drilling. Starting
in March the emphasis is on completing one hole on each magnetic anomaly to try
and identify other kimberlites rather than to continue on proving up anomaly 4/
13. Once the micro diamond work from Canada is complete a decision will be made
on future work for anomaly 4/13. Applications to fly approximately 13,400 line
kilometers of helimag survey have been submitted. Assuming the approvals are
forthcoming, this work will take place in May to July. The results from this
will be further used to site drill holes. Mobilisation of BHP Billiton personnel
to site is underway and over the next month a full technical crew will be
established at Alto Cuilo. Cape Diving from South Africa have also visited the
site to survey the Cuilo River and their formal proposal on a diving programme
for the centre channel is awaited.

Crown

Production build up at all the Crown mines has progressed well this year, with
combined production for the first quarter to 31 March 2005 of 38,095 carats,
6.7% greater than forecast. In addition average prices achieved for goods sold
at all the mines has been above budget as well as being above the average sale
prices achieved for 2004.

Preparation for the commencement of the Mano joint venture is progressing well
with the vanguard party scheduled to visit the Kono site in April.

At the individual mines, progress was as follows:

• Messina/Dancarl - at the Messina section, 23 level has been fully established 
  with the return ventilation airway to 22 level completed and stope preparation 
  now underway. Full production should be achieved by the end of the second 
  quarter. On 20 level, development into the Dancarl section has progressed well 
  with 3 crosscuts already having been driven onto fissure. At the Dancarl 
  section, progress has been good with 13 and 14 levels having been lifted to 
  full mining status with production of 200 tonnes per day having been achieved. 
  The Dancarl tailings plant has been fully commissioned and is now going 
  through its start up phase. In addition the plant has been fully refurbished 
  and commissioned so as to treat any surplus ore that may arise from the 
  Messina plant.


• Star - 15 level at both Wynandsfontein and Burns has been established.  These 
  levels are both in good ground conditions. Burns zero crosscut is now only 10 
  metres from fissure and the intersection of the good fissure previously 
  drilled is imminent. The Burns 13E return ventilation airway holing to 10 
  level has been established through the bad ground conditions and has greatly 
  improved the ventilation of the Burns section. The second holing from 10 to 9 
  level has not yet been effected due to poor ground conditions.


• Helam - the mechanisation programme is progressing well with John main shaft 
  now equipped to 18 level. All aspects of this programme are on track to meet 
  their projected deadlines. The re-establishment of Second Lease as a separate 
  mining entity is also progressing well and on schedule. At the Edward shaft 
  the mechanization process is progressing well with all previously planned ore 
  passes having been completed and commissioned. The plant and other upgrades 
  are all on schedule.

The Directors and Proposed Directors remain confident of the outlook for the
Enlarged Group for the coming year and, while ensuring that work and production
continues as planned at current operations, will continue to explore
opportunities within the stated strategy of creating a diversified diamond
group.

Directors, Proposed Directors and employees

The Directors believe that the present Board, once enlarged by the Proposed
Directors, and operational management structure is appropriate for, and
reflects, the current scale of the Company's operations. Information on the
Directors, Proposed Directors and employees is set out below:

Directors

• Adonis Pouroulis, (Executive Chairman) aged 35, is a mining engineer with a 
  mining degree from the University of Witwatersand in Johannesburg. On leaving 
  University he was involved for one year working in South African gold mines 
  thereafter for a further year investigating mining propositions in the former 
  Soviet Union. In 1997 he created and founded Petra Diamonds Limited and 
  floated the company on the AIM of London Stock Exchange in April of the same 
  year. Mr Pouroulis was instrumental in the creation of the Nabera mining 
  consortium which led the successful bid for the management contract on 
  Alexkor, the State owned diamond mine.


• Kevin John Dabinett, (Chief Executive Officer) aged 50, was born in Zambia and 
  educated in England, graduating with an Honours Degree in Mining Engineering 
  in 1976 from the Royal School of Mines, London. He has since gained extensive 
  operational and management experience within the mining industry across 
  Southern Africa. Throughout his career, he has successfully managed various 
  mining operations in Southern Africa, often in difficult conditions. Most 
  recently, Mr Dabinett was with Impala Platinum Ltd as General Manager of the 
  Marula platinum project. Whilst at Auridiam Zimbabwe (Pvt) Ltd as General 
  Manager, he oversaw the feasibility study and commissioning of a pilot plant 
  at the River Ranch diamond project in Zimbabwe, managing the expansion of the 
  project into a 2 million tonne per annum operating mine.


• David Abery (ACA), (Finance Director) aged 42, is a Chartered Accountant
  (ICAEW), who brings to Petra extensive experience as a finance Director in
  both the South African and UK business environments, as well as an in-depth
  knowledge of AIM. Prior to Petra, Mr Abery was Finance Director of Mission
  Testing plc, the Gatwick based software testing consultancy successfully
  floated on AIM in December 2000. Before that, he was Head of Finance for
  Tradepoint Financial Networks plc (consequently renamed Virt-x plc), the
  high-tech electronic stock exchange which was also quoted on AIM.


• Volker Ruffer, (Non-executive Director) aged 65, consults for KPMG Frankfurt 
  where he specialises in international tax planning, mergers, acquisitions and 
  company re-organisations. He was previously managing partner from 1972 to 
  1994. He holds a Masters degree in business administration from the University 
  of Munster, Germany. Mr Ruffer was appointed to the Board in 1997. On 
  completion of the Merger, Mr Ruffer intends to step down from the Board.


• Charles Michael Segall, (Deputy Chairman and Non-executive Director) aged 63, 
  is a director of the Atlantic Trust Company Limited of South Africa where he 
  specialises in providing trustee services. He is admitted as an attorney of 
  the High Court of South Africa.


• Charles Finkelstein, (Non-executive Director) aged 44, is a member of the 
  Antwerp Diamond Bourse and a director of SC Diamantaire CH Finkelstein and Co 
  NV, one of the world's leading diamond traders. CH Finkelstein's head office 
  is in Antwerp and the business has been in existence for more than 100 years.

Proposed Directors

• Christoffel Johannes Dippenaar (CA), (Proposed Chief Executive Officer)
  aged 47, is the Managing Director of Messina Investments Limited (a wholly
  owned subsidiary of Crown), Managing Director of Helam Mining (Pty) Ltd and
  Chief Executive Officer of Crown having held that role in Messina
  Investments Limited since 1990. He is a chartered accountant by profession
  and a member of the Chartered Accountants of South Africa with over 17
  years' experience in the management of companies of which 15 years has been
  in the management of mining companies.


• James Murry Davidson, (Proposed Technical Director) aged 59, is a Director of 
  Messina Investments Limited (a wholly owned subsidiary of Crown), Technical 
  Director of Helam Mining (Pty) Ltd, Technical Director Crown and is 
  responsible for all operational and geological matters of Messina Investments 
  Limited having held that role since 1991. He is a qualified geologist and a 
  member of the Geological Society of South Africa with over 20 years experience 
  in mine management.

Employees

As at 31 December 2004, Petra had 18 employees (excluding the Angolan staff
complement employed at Alto Cuilo) and Crown had 1,700 employees.


Corporate governance

The Directors support high standards of corporate governance and confirm that,
following Admission, they intend to comply with the Combined Code in so far as
practicable given the Company's size and nature and propose to follow, where
practicable, the recommendations on corporate governance of the Quoted Companies
Alliance. The Company intends to recruit a non-executive director to replace
Volker Ruffer, who intends to step down from the Board following completion of
the Merger. It is intended that his replacement will join the Audit and
Remuneration Committees.

Board Committees

The Board has established three committees: the Audit Committee, the
Remuneration Committee and the Corporate Governance Committee.

Audit Committee

The Audit Committee comprises Charles Segall and Volker Ruffer, both being
non-executive Directors and is chaired by Volker Ruffer. The Committee may take
independent advice, at the expense of the Company, if considered necessary. The
Committee makes recommendations to the Board on the appointment of the external
auditors, their independence and the level of their fees; it reviews the
findings of the external auditors and ensures appropriate action is taken by
management; it reviews the Group's interim and annual financial statements prior
to submission to the Board; it reviews the Group's statement on internal control
systems, considers the effectiveness of internal financial controls and any
internal audit resource, making recommendations for changes if appropriate, and
institutes and reviews special projects and investigations on any matter as it
sees fit.

Remuneration Committee

The Remuneration Committee comprises Charles Segall and Volker Ruffer, both
being non-executive Directors, and is chaired by Charles Segall. The Committee
may take independent advice, at the expense of the Company, if considered
necessary. The main responsibilities of the Remuneration Committee are to
determine, on behalf of the Board and Shareholders, the overall policy for
executive remuneration; to determine the base salary, benefits, performance
related bonus and any equity participation schemes (including share options) for
each of the executive Directors and other senior management of the Group; and to
approve all Director's service contracts. The Committee ensures that a
significant proportion of the executive Directors' remuneration is directly
related to the performance of the Group.

Corporate Governance Committee

The Corporate Governance Committee is composed of David Abery and Charles
Segall. This committee is mandated to review and ensure the Company's ongoing
compliance with the various securities and regulatory authorities that govern it
as well as ensuring that the Company continues to conduct itself in a manner
appropriate for that of a public company given current Shareholder expectations
in respect of various matters including, but not limited to, transactions
involving insiders. The Corporate Governance Committee is responsible for
overseeing the Company's policy for communications with shareholders, the
investment community, the media, governments and the general public. The
Corporate Governance Committee will meet annually with additional meetings as
required during the year.

Share option schemes

On 8 March 2005 the Company adopted the Share Option Plan, whereby the directors
of the Company can grant options to any eligible employee within the Group. The
Share Option Plan was adopted due to the fact that the Petra share option scheme
that was adopted on 27 March 1997 ('the 1997 Scheme') was no longer best suited
for the Company's requirements. No further options will be granted under the
1997 Scheme.

Additionally, the Company has undertaken to recognise the outstanding share
options in Crown by way of a deed of acknowledgement. Under this deed, Crown
option holders will be able to exercise their options and receive shares in the
Company on the 8 to 1 conversion basis set out in the Scheme. On Admission,
these options will represent 0.3% of the Enlarged Share Capital of the Company.

Dividend policy

The Company has not paid any dividends in any of its previous financial years.
The Company intends to retain future earnings to finance continued development
of its business and, accordingly, does not expect to pay dividends on its
Ordinary Shares in the immediate future. The declaration and payment by the
Company of any dividends and the amount thereof will depend on the results of
the Group's operations, its financial position, cash requirements, prospects,
profits available for distribution and other factors deemed by the Directors to
be relevant at the time.


Lock-in arrangements

The Directors and Proposed Directors have undertaken, save in limited
circumstances, not to dispose of any of their respective interests in shares of
the Enlarged Group at any time prior to the date falling six months after
Admission. In total 17,377,828 Ordinary Shares representing 13.3% of the
Enlarged Share Capital of the Company will be subject to the lock-in
arrangements referred to above.

The Extraordinary General Meeting

The Resolutions are as follows:

• to approve the Merger;


• to increase the authorised share capital of the Company from £12,000,000 to
  £20,000,000 for the purposes of effecting the Merger, issuing Ordinary
  Shares under the Placing and creating additional headroom for the issue of
  new Ordinary Shares; and


• to approve and adopt revised Bye-laws for the purposes of ASX listing rule 
  compliance.


Recommendation

The Board consider that the Merger is in the best interests of the Company and
its Shareholders as a whole. Accordingly, the Directors have unanimously
recommended to Shareholders that they should vote in favour of the Resolutions,
as the Directors intend to do in respect of their beneficial shareholdings that
together comprise 22.1% of the issued share capital of the Company.



                                    Appendix

Definitions

The following definitions apply throughout this announcement, unless the context
otherwise requires:

'Admission'           the admission of the Enlarged Share Capital to trading on
                      AIM becoming effective in accordance with the AIM Rules

'AIM Rules'           the rules governing the operation of AIM as established by
                      the London Stock Exchange

'AIM'                 the market of that name operated by London Stock Exchange

'ASX'                 Australian Stock Exchange Limited

'Board' or            the directors of the Company
'Directors'

'Bye-laws'            the Bye-laws of the Company

'Combined Code'       the Combined Code on Corporate Governance, dated July 2003
                      and as appended to the Listing Rules of the UK Listing
                      Authority

'Consideration        the 37,820,113 new Ordinary Shares proposed to be issued
Shares'               pursuant to the Merger credited as fully paid, and which,
                      when issued, will rank pari passu in all respects with
                      Existing Ordinary Shares and the Placing Shares

'Crown'               Crown Diamonds NL (ACN 050 541 332)

'Enlarged Group'      the Company and its subsidiary undertakings as enlarged by
                      the Merger

'Enlarged Share       the ordinary share capital of the Company in issue
Capital'              immediately following the issue of the Consideration
                      Shares and the Placing Shares

'EGM' or              the Extraordinary General Meeting of the Company to be
'Extraordinary        held at the offices of Memery Crystal, 44 Southampton
General Meeting'      Buildings, London WC2A 1AP on 25 May 2005 at 10.00 a.m.,
                      or any adjournment thereof

'Existing Share       the 72,889,964 Ordinary Shares in issue at 25 April 2005
Capital' and
'Existing Ordinary
Shares'

'Group'               the Company, its subsidiaries and subsidiary undertakings
                      at the date of this announcement (excluding Crown)

'Loan Notes'          the 17,169,746 Crown convertible loan notes outstanding at
                      the date of this document, maturing on 30 November 2005

'London Stock         London Stock Exchange plc
Exchange'

'Merger'              the proposed conditional acquisition by the Company of the
                      entire issued share capital of Crown pursuant to the
                      Merger Implementation Agreement

'Merger               the agreement dated 8 February 2005 (as amended, with the
Implementation        final composite agreement being dated 24 March 2005)
Agreement'            between Petra and Crown

'ML Complex'          the Mussunuige-Luangue kimberlite complex

'Notice of EGM'       the notice convening the EGM

'Ordinary Shares'     ordinary shares of 10 pence each in the capital of the
                      Company

'Petra' or 'the       Petra Diamonds Limited, incorporated and registered in
Company'              Bermuda with registered number EC23123

'Placing'             the conditional placing by Williams de Broe of the Placing
                      Shares at the Placing Price pursuant to the Placing
                      Agreement

'Placing Price'       85p per Ordinary Share

'Placing Shares'      the 20,084,352 new Ordinary Shares proposed to be issued
                      pursuant to the Placing which, when issued, will rank pari
                      passu in all respects with the Existing Ordinary Shares
                      and Consideration Shares

'Proposed             Christoffel Johannes Dippenaar and James Murry Davidson
Directors'

'Resolutions'         the resolutions, as set out in the Notice of EGM, to be
                      proposed at the EGM

'RSA' or 'South       the Republic of South Africa
Africa'

'Scheme of            the scheme of arrangement to be entered into between Crown
Arrangement' or       and Crown shareholders
'Scheme'

'Scheme Booklet'      the information memorandum in respect of the Scheme to be
                      approved by the Supreme Court of Western Australia

'Share Option Plan'   the Petra Diamonds Share Option Plan approved by the
                      Shareholders on March 2005

'Shareholder(s)'      holder(s) of Ordinary Shares

'UK Listing           the Financial Services Authority, acting in its capacity
Authority'            as the competent authority for the purposes of Part VI of
                      the Financial Services and Markets Act 2000 of the United
                      Kingdom

'UK' or 'United       the United Kingdom of Great Britain and Northern Ireland
Kingdom'

'US' or 'United       The United States of America, its territories and
States'               possessions, and any state of the United States of America
                      and the District of Columbia

'Williams de Broe'    Williams de Broe Plc







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MSCIIFIASIIRFIE                                                                                                                                                                                                                                               

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