Business
Petra increases holding in Cu
Petra increases holding in Cu.
About this update from Petra Diamonds Limited
[{"type":"text","content":"\n RNS Number : 6790C Petra Diamonds Ld 18 November 2009 \n \n\n\n\n\n\n\n\nImmediate release\n\n\n18 November 2009\n\n\n\n\n\n\nPetra Diamonds Limited \n \nOption to increase ownership in Cullinan to 74% and confirmation of Placing\n\n\nPetra Diamonds Limited (\"Petra\" or the \"Company\" or the \"Group\") is pleased to announce that, on 17 November 2009, Petra and Al Rajhi Holdings W.L.L. (\"Al Rajhi\") entered into an option agreement whereby Petra can, by 18 December 2009, acquire (at its election) Al Rajhi's 37% interest in the Cullinan mine (the \"Option\") on the terms set out below. Exercise of the Cullinan Option would take Petra's interest in this iconic diamond mine from 37% to 74%, substantially increasing the Group's attributable revenues and resource base.\n\nThe Cullinan mine is one of the world's most celebrated diamond mines as it regularly produces large, high quality gems, and is the only reliable source of very rare and valuable blue diamonds. In addition, it contains the world's second largest inferred diamond resource, with a total of 204.6 million carats.\n\nPetra also notes the recent speculation in the media regarding a potential fundraising. The Company confirms its intention to undertake an equity fundraising (\"the Placing\"), led by Canaccord Adams Limited and RBC Capital Markets. The Company is undertaking the Placing in order to exercise the Option, strengthen its balance sheet by reducing its debt, implement development programmes at Cullinan and Williamson in order to increase production, and improve liquidity by broadening the shareholder base.\n\n\nBenefits to Petra of exercising the Option:\n\n\n\nDoubles Petra's ownership of the Cullinan mine from 37% to 74%;\n\n\nDoubles Cullinan attributable resources from 75.7 million carats to 151.4 million carats;\n\n\nDoubles Cullinan attributable diamond production from approximately 320,000 carats to over 650,000 carats per annum (based on FY 2009 production);\n\n\nIncreases cashflows to the Company from the Cullinan mine as Cullinan cashflows will no...