Q3 FY 2016 Production and Sales Report of Petra Diamonds

Petra Diamonds Limited announces the trading update (unaudited) for the period from 1 January 2016 to 31 March 2016 (the “Period,” “Q3 FY 2016” or “Q3”).

The highlights are:

Production up 26% to 995,905carats (Q3 FY 2015: 791,443 carats); Q3 production favourably impacted by production from the Kimberley tailings operations attributable to Petra following completion of the Kimberley Mines acquisition in January 2016. Production for nine months to 31 March 2016 up 10% to 2,625,308 carats (nine months to 31 March 2015: 2,392,511 carats).

Production guidance for FY 2016 increased to 3.6 – 3.65 Mcts from 3.3 – 3.4 Mcts following the initial integration of the Kimberley Mines assets.

Revenue up 25% to US$120.5 million (Q3 FY 2015: US$96.1 million), due to increased sales volumes and the sale of the 32.33 carat pink diamond from Williamson for US$15 million. Revenue for nine months to 31 March 2016 down 12% to US$274.4 million (Q3 FY 2015: US$311.0 million).

Diamonds sold increased 13% to 937,526 carats (Q3 FY 2015: 826,815 carats) further to the initial integration of the Kimberley Mines assets.

Rough diamond prices up ca. 3.5% on a like for like basis in comparison to the average for H1 FY 2016, due to an improvement in rough diamond market conditions.

Expansion programmes, including the Cullinan plant project, remain in line with expectations.

Cash at bank at 31 March 2016 of US$39.0 million (31 March 2015: US$41.8 million), diamond inventories of ca. US$54.3 million (31 March 2015: ca. US$37.3 million) and diamond debtors of US$46.0 million (31 March 2015: US$15.0 million).

Net debt at 31 March 2016 of US$395.6 million (31 March 2015: US$99.3 million). The Company has bank facilities undrawn and available of US$114.2 million (31 March 2015: US$91.1 million), split as to ZAR1.6 billion and US$6.2 million.

Agreement reached post Period end with lender group for improved covenant measurements regarding the Company’s senior lender facilities.

Johan Dippenaar, Chief Executive Officer, commented, “Petra has delivered another firm production quarter and we are pleased to announce an increase in our FY 2016 production target to 3.6 – 3.65 Mcts, further to the integration of the Kimberley Mines assets. We are excited about our partnership in Kimberley, given the potential for long-term sustainable operations to the benefit of employees and the local communities there.Our expansion programmes remain on track and the opening up of undiluted mining areas has continued to yield improved grades at both Finsch and Cullinan. The construction of the new plant at Cullinan is also on track, and we remain highly focused on delivering the capital projects on time and within budget. Petra is currently near the end of its peak Capex year and the Group is confident that its revised covenant and debt facility levels are aligned to successfully complete its expansion programmes.”