Business
Disposal of Calibrated Diamon
Disposal of Calibrated Diamon.
About this update from Petra Diamonds Limited
[{"type":"text","content":"\n RNS Number : 0452E Petra Diamonds Ld 23 September 2008 \n \n\n\n\n\n\n\n\n\n23 September 2008\n\n\n\n\n\nAIM: PDL\n\n\n\n\n\n\nPetra Diamonds Limited\n\nDisposal of Calibrated Diamonds \n\n\nPetra Diamonds Limited ('Petra', 'the Company' or 'the Group'), the international diamond mining group, announces the disposal of Calibrated Diamonds Investment Holdings (Pty) Limited ('Calibrated'), together with associated assets, to Gem Diamonds Limited ('Gem Diamonds') for a total cash consideration of R47.0 million (US$5.9 million) ('the Transaction').\n\nThis disposal follows the substantial growth of Petra's production and revenue base, and the Board's decision to focus on the Group's core skills of diamond production and exploration.\n\n\nBackground and rationale for the Transaction\n\nPetra acquired Calibrated in November 2006 with the objective of growing Group revenues by cutting and polishing ('beneficiating') Petra's own rough diamond production using Calibrated's proprietary technology processes.\n\nSince the acquisition of Calibrated, Petra has transformed its diamond production operations with the acquisitions of the Cullinan, Koffiefontein, Kimberley Underground and Williamson diamond mines. These acquisitions will increase Group production from 200,000 carats in the financial year ('FY') 2008 to over 1 million carats for FY 2009. There is also the potential for further substantial upside from FY 2010 given the opportunities for production increases at certain of the operations.\n\nGiven the dramatic change in the Group's production and revenue base, Petra will now focus on its core skills of diamond production and exploration. Petra is expecting substantial revenue and cash flow growth from these assets and the increased focus will enable the Company to maximise returns. \n\nPetra will continue to evaluate its beneficiation strategy over the medium term, particularly with regards to certain of its mines which are renowned for the production of high value and large diamonds. \n\nThe Transaction agreement with Gem Diamonds includes an option which gives Petra future exposure to Gem Diamonds' soon to be est...