AMN - SOUTH AFRICA: Petra and Ekapa in joint venture

Petra Diamonds and 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)

2. Ekapa Mining's tailings operations (via its subsidiaries Super Stone Mining and Kimberley Miners Forum

3. Kimberley Mines tailings operations (via Ekapa Minerals owned 50.1% Ekapa Mining and 49.9% Petra).

Ekapa Minerals acquired Kimberley Mines from De Beers Consolidated Mines and this 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 million tonnes/year '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 has 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% and Ekapa Mining 24.1%

Petra Diamonds CEO Johan Dippenaar says: "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.”

Petra Diamonds has interests in six producing diamond operations: four underground mines in South Africa (Finsch, Cullinan, Koffiefontein and Kimberley Underground), extensive tailings operations in Kimberley (via its interest in the Kimberley Mines) and one open pit mine in Tanzania (Williamson). It also maintains an exploration program in Botswana. Petra has a core objective to steadily increase annual production to some 5 million carats by 2019. The Group has a significant resource base of circa 300 million carats.

Ekapa Mining is a medium sized Tailings Mineral Resources (TMR) processing business, which has been operating in Kimberley, South Africa, for more than 25 years. Ekapa Mining owns a 60.6% share in 40 million tonnes of TMRs in Kimberley sourced from the famous five cluster of old Kimberley mines. The company, which has experience in a comprehensive range of the most modern and advanced mining, processing and recovery technologies, operates a highly efficient processing plant, with an effective throughput of 3 million tonnes/year.

Kimberley Mines comprise a number of producing tailings dumps (TMR) in the Kimberley area, as well as a 6 million tonnes/year 'state-of-the-art' CTP capable of processing ore from both ROM and tailings sources. The Kimberley Mines TMRs have resources of 2.8 million carats, as well as further potential for the treatment of other TMR deposits, containing an estimated 4.4 million carats (as at 31 December 2014); grade of the TMRs is expected to be circa 11 carats/100 tonnes for the first three years of operation by Ekapa Minerals, reducing to circa 6 carats/100 tonnes thereafter, when the higher grade tailings have been treated.

The Kimberley Underground operation comprises three kimberlite pipe mines: Bultfontein and Dutoitspan (serviced by the Joint Shaft) and Wesselton. These mines were at the heart of South Africa's early diamond rush in Kimberley, where the world's first hard rock diamond deposits were discovered, hence the name 'kimberlite'. The Kimberley mines were integral to the economic development of South Africa as their output effectively financed development of the nascent gold industry. They are currently mining at depths of between 845 and 995 metres below surface.

www.petradiamonds.com

News courtesy of International Mining