Joint Venture Formation between Petra and Ekapa Mining

Petra Diamonds recently announced that Petra and Ekapa Mining (Pty) Ltd (“Ekapa Mining”) have entered into a joint venture agreement, which combines the respective operations, owned and operated by the joint venture partners in the Kimberley area, into an unincorporated joint venture named the Kimberley Ekapa Mining Joint Venture (“KEM JV”).

The respective operations comprise:

1. Petra’s Kimberley Underground mines (via its subsidiary Crown Resources (Pty) Ltd);
2. Ekapa Mining's tailings operations (via its subsidiaries Super Stone Mining (Pty) Ltd ("Super Stone Mining"), and Kimberley Miners Forum (Pty) Ltd); and
3. Kimberley Mines tailings operations (via Ekapa Minerals (Pty) Ltd owned 50.1% Ekapa Mining and 49.9% Petra).

As previously reported, Ekapa Minerals acquired Kimberley Mines from De Beers Consolidated Mines (Pty) Limited, which came into effect on 18 January 2016. This transaction introduced a number of producing tailing deposits in the Kimberley area, as well as a 6 Mtpa 'state-of-the-art' Combined Treatment Plant (“CTP”), which will be capable of processing ore from both ROM and tailings sources. Processing of tonnes through the plants at Kimberley Underground mines have ceased and future processing of both underground and surface resources will be done utilising the CTP.

The effective date of the joint venture agreement is 1 July 2016 and will lead to the following effective interests in the combined operations:

- Petra Diamonds and its BEE partners – 75.9%

- Ekapa Mining – 24.1%

 

Johan Dippenaar, Chief Executive Officer, commented, “These assets fit well with the Group portfolio, given Petra’s existing Kimberley Underground operations in the area. Importantly, the transaction demonstrates our commitment to ensuring a sustainable future for the diamond mining industry in Kimberley, which will benefit the Kimberley Mines workforce and local community. The KEM JV is expected to bring significant synergies to the operations at Kimberley, including the ability to increase throughput and reduce operating costs, thereby extending the operation’s mine life. Further production guidance will be included in the Company's FY 2016 Trading Update and FY 2017 Market Guidance announcement, to be released on 25 July 2016.”