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Annual Report and Accounts 2011

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Reserves and Resources

"The Petra Group controls one of the largest diamond resources in the world."

Jim Davidson, Technical Director

Petra controls one of the world's largest diamond resources and the consolidation of this major carat base has been a key strategic objective for the Group. Taking into account the rough diamond supply/demand imbalance which is forecast to emerge in the coming years, Petra's "carats in the ground" are expected to become increasingly valuable over time and the Group's growing production will be an ever more important source of supply.

The careful management of such a large resource will ensure sustainable, long-life mining operations for the Petra Group for many years to come. It also provides flexibility in terms of organic growth, dependent on diamond and capital market conditions.

Whilst quoted on AIM, Petra had previously reported resources exclusive of reserves. The Company now reports resources inclusive of reserves in line with best practice for a company of Petra's size and complexity. Carats in the Probable and Proved Reserve categories are now also reported in the Indicated and Measured Resource categories without the application of modifying factors, which has resulted in an apparent increase in the total carats base from 302.7 million carats to 305.7 million carats. Both reporting formats are compliant with the guidelines of the SAMREC Code.

Gross Reserves and Resources

As at 30 June 2011 (on this revised reporting basis), the Group's total resource was 305.7 million carats (stated inclusive of Finsch which contributed a total of 43.7 million carats on a gross basis to the Group), including 49.2 million carats in reserves.

Attributable Reserves and Resources

As at 30 June 2011, the Group's attributable resource was 226.6 million carats (stated inclusive of Finsch which contributed 32.3 million carats on an attributable basis to the Group), including 36.4 million carats in reserves.

Summary of reserves and resources by status as at 30 June 2011 (stated inclusive of Finsch)

 
Gross
 
Net attributable
Category
Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
  Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
Reserves
 
Proved
16.623 7.03 1.169   12.304 7.04 0.866
Probable
111.789 42.99 48.062   82.726 42.99 35.566
Subtotal
128.412 38.34 49.231   95.030 38.34 36.432
Resources
 
Measured
15.726 8.29 1.304   11.638 8.30 0.966
Indicated
463.302 48.35 223.999   343.830 48.22 165.809
Inferred
1,248.126 6.44 80.397   932.496 6.42 59.847
Total Resources inclusive of Reserves
1,727.154 17.70 305.701   1,287.965 17.60 226.622

Cullinan

 
Gross
 
Net attributable
Category
Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
  Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
Reserves
 
Proved
 
Probable
41.082 48.58 19.958   30.400 48.58 14.769
Subtotal
41.082 48.58 19.958   30.400 48.58 14.769
Resources
 
Measured
 
Indicated
265.339 70.39 186.780   196.351 70.39 138.217
Inferred
168.502 10.04 16.918   124.692 10.04 12.519
Total Resources inclusive of Reserves
433.842 46.95 203.698   321.043 46.95 150.736

Notes:
1. Resource bottom cut-off: 1mm.
2. Reserve bottom cut off: 1mm.
3. Resource tonnes and grade in current mining blocks are based on block cave depletion modelling and include external waste.
4. Reserve carats and grades are factorised as per the following resource to reserve liberation factors: "Brown" kimberlite 75.8%, "Grey"
    kimberlite 71.4% and Hypabyssal kimberlite 71.8%.
5. Probable Reserves have increased in accordance with the mine planning for the C-Cut Phase 1 and the addition of 18 new drawpoints
    in the current mining blocks.

Finsch

 
Gross
 
Net attributable
Category
Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
  Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
Reserves
 
Proved
 
Probable
58.598 43.99 25.779   43.362 43.99 19.076
Subtotal
58.598 43.99 25.779   43.362 43.99 19.076
Resources
 
Measured
 
Indicated
54.408 47.98 26.102   40.262 47.98 19.316
Inferred
43.132 40.71 17.558   31.917 40.71 12.993
Total Resources inclusive of Reserves
97.539 44.76 43.661   72.179 44.76 32.309

Notes:
1. Resource bottom cut-off: 1.47mm.
2. Reserve bottom cut-off 1.47mm.
3. Reserve tonnes and grade are based on block cave depletion modelling and include external waste.

Koffiefontein

 
Gross
 
Net attributable
Category
Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
  Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
Reserves
 
Proved
15.179 3.20 0.485   11.232 3.20 0.359
Probable
6.551 9.57 0.627   4.848 9.57 0.464
Subtotal
21.730 5.12 1.112   16.080 5.12 0.823
Resources
 
Measured
15.179 3.20 0.485   11.232 3.20 0.359
Indicated
34.702 8.35 2.898   25.679 8.35 2.144
Inferred
90.412 3.04 2.751   66.905 3.04 2.036
Total Resources inclusive of Reserves
140.293 4.37 6.135   103.817 4.37 4.540

Notes:
1. Resource bottom cut-off (Koffiefontein underground and Ebenheazer): 0.5mm.
2. Resource bottom cut-off (Eskom tailings): 1mm.
3. Reserve bottom cut-off: 1mm.
4. 690L Probable Reserve moved back to Indicated Resource pending mine plan re-evaluation based on numerical modelling.

Petra's "carats in the ground" are expected to become increasingly valuable over time and the Group's growing production will be an ever more important source of supply


Kimberley Underground

 
Gross
 
Net attributable
Category
Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
  Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
Reserves
 
Proved
 
Probable
3.515 12.98 0.456   2.601 12.98 0.338
Subtotal
3.515 12.98 0.456   2.601 12.98 0.338
Resources
 
Measured
 
Indicated
9.393 18.97 1.782   6.951 18.97 1.318
Inferred
56.303 9.44 5.314   41.664 9.44 3.932
Total Resources inclusive of Reserves
65.696 10.80 7.095   48.615 10.80 5.251

Notes:
1. Resource bottom cut-off (Dutoitspan West Extension): 1mm.
2. Resource bottom cut-off (all other underground blocks): 0.5mm.
3. Reserve bottom cut-off: 1mm.
4. Changes in Probable Reserves due to a reduction in ROM grade based on accurate waste measurements taken from producing drawpoints
    at Bultfontein and Dutoitspan. Wesselton ROM grade based on 1060L bulk sampling, adjusted for external waste.

Williamson

 
Gross
 
Net attributable
Category
Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
  Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
Reserves
 
Proved
 
Probable
 
Subtotal
 
Resources
 
Measured
 
Indicated
98.634 5.00 4.928   73.975 5.00 3.696
Inferred
888.123 3.96 35.158   666.092 3.96 26.368
Total Resources inclusive of Reserves
986.756 4.06 40.086   740.067 4.06 30.065

Notes:
1. Resource bottom cut-off: 1mm.
2. Resource depletion calculated from in-pit survey.
3. Stockpile of 955,000 tonnes of RVK and BVK accumulated since plant shutdown at the end of March 2010.
4. Increase in total carats based on an increase in RVK tonnages in the northern section of the open pit delineated by diamond drilling during 2010.

Fissure mines combined (Helam, Sedibeng, Star)

 
Gross
 
Net attributable
Category
Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
  Tonnes
(millions)
Grade
(cpht)
Contained
diamonds
(Mcts)
Reserves
 
Proved
1.444 47.35 0.684   1.071 47.29 0.507
Probable
2.044 60.78 1.242   1.514 60.74 0.920
Subtotal
3.488 55.22 1.926   2.586 55.17 1.426
Resources
 
Measured
0.547 149.61 0.82   0.406 149.39 0.606
Indicated
0.827 182.60 1.509   0.612 182.46 1.117
Inferred
1.654 163.12 2.698   1.226 163.00 1.998
Total Resources inclusive of Reserves
3.028 166.00 5.026   2.244 165.85 3.722

Notes:
1. Resource bottom cut-off: 1mm.
2. Reserve bottom cut-off: 1mm.
3. Measured Resources are classified as one level below current workings or where a block is bounded above and below by current workings.
4. Indicated Resources are classified as two levels below Measured Resources.
5. Inferred Resources are classified as three levels below Indicated Resources.
6. Measured and Indicated Resources have been converted to Reserves by applying historically derived external dilution and in-stope
    loss factors to resource tonnages and grades.
7. Increase in Inferred Resource based on the diamond drilling programme at Sedibeng.

General notes on reporting criteria

1.
Resources are reported inclusive of Reserves.

2.

Tonnes are reported as millions; contained diamonds are reported as million carats.

3.

Tonnes are metric tonnes and are rounded to the nearest 1,000 tonnes; carats are rounded to the nearest 1,000 carats; rounding off of numbers may result in minor computational discrepancies.

4.

Resource tonnages and grades are reported exclusive of internal waste, unless where otherwise stated.

5.

Reserve tonnages and grades are reported inclusive of external waste, mining and geological losses and plant modifying factors; reserve carats will generally be less than resource carats on conversion and this has been taken into account in the applicable statements.

6.

The Reserves and Resources Statement shown above is based on information compiled internally within the Group under the guidance and supervision of Jim Davidson, Pr. Sci. Nat. (reg. No. 400031/06). Jim Davidson has over 30 years' relevant experience in the diamond industry and is a full-time employee and Director of Petra.

7.

All Reserves and Resources have been independently verified by Dr Patrick Bartlett, Pr. Sci. Nat. (reg. No. 400060/87) as a competent person, in his report dated 23 November 2011. Dr Bartlett is a competent person with over 30 years' relevant experience in the diamond mining industry, who was appointed as an independent consultant by the Company for this purpose. A Competent Person's Report was not produced in arriving at the Reserves and Resources independent verification. Dr Bartlett was subsequently appointed as an independent Non-Executive Director of the Company on 28 November 2011; the Company is of the clear opinion that prior to Dr Bartlett's appointment to the Board, he was an independent consultant to the Company and there were no conflicts of interest or other matters arising that would affect his independence as an expert consultant.

Jim Davidson

Technical Director

28 November 2011