London, England — MININGREVIEW.COM — 03 February 2009 – Petra Diamonds – now one of the world’s largest independent diamond groups in terms of resources – has decided to withdraw from its Angolan operations in order to focus on building its cash-generative, world-class production portfolio.
In an exploration update released here, the company said it had decided – based on the ongoing exploration results and global weakness in financial markets – to withdraw from the Luangue project. Care and maintenance was not an option that is permissible under the Angolan contractual conditions, so Petra’s interest in Luangue would revert to Endiama.
This follows hard on the heels of the Petra announcement late last year that it was halting the Alto Cuilo project, adjacent to Luangue in the north of Angola.
The company has also been reviewing options regarding the Kono advanced exploration project in Sierra Leone with its joint venture partner, Stellar Diamonds Limited. The company exploration update revealed that from 1 January 2009, Stellar had assumed sole funding of the Kono project. Petra had until the end of 2009 to elect to refund Stellar for the 51% of the exploration spend incurred since 1 January 2009, or to dilute its interest in Kono.
Petra went on to say that Botswana still offered an exceptional basis for exploration, in that it ranked highly with regard to diamond prospectivity, and very favourably in terms of operating costs and ease of logistical operation. The company’s spend in Botswana for the six months to June 2009 was estimated at US$500 000 (R5 million). Thereafter, Petra had earmarked an annual spend of US$500 000 R5 million) in Botswana, the only group exploration spend going forward.
CEO Johan Dippenaar commented: “The decision to focus on cash generative production at our world-class assets is the right move to enhance our growing business momentum. As one of the lower cost diamond producers, our portfolio of world-class assets, low levels of debt and our robust management team places the group in a strong position to benefit as soon as diamond prices normalise.”