Petra Diamonds Limited

("Petra" or "the Company")

Improved resilience through capital deferrals and reduction in operating and group expenditure

Petra announces steps taken to provide further financial flexibility should prevailing market conditions continue if diamond prices remain weaker-for-longer.

Richard Duffy, Chief Executive Officer of Petra, commented:

"Actions announced today in response to the diamond market weakness are aimed at ensuring Petra remains resilient and able to withstand weaker-for-longer market conditions. While diamond inventories remain elevated in both rough and polished goods, we are confident that the discipline shown by diamond producers as well as the Indian diamond import moratorium to mid-December will lead to a recovery in pricing once demand strength returns. Through adapting our cost base and deferring two of our capital projects, we are targeting cash savings of up to US$75m by June 2024 whilst minimising the impact of these deferrals and aiming to deliver increased production into a stronger pricing environment. We will continue to maintain our flexibility to respond to market conditions safely and responsibly, through our enhanced operating model and flexible sales approach."

Petra believes the steps recently introduced by the diamond industry will curb declining diamond prices through rebalancing inventory levels across the pipeline. Notwithstanding this, the Company is taking immediate and prudent steps to provide further financial flexibility and preserve the Company's short to medium term liquidity as well as increase its headroom and flexibility until such time as the market has sufficiently stabilised. Through these actions, the Company expects to be able to continue to meet all its obligations should a weaker-for-longer diamond market scenario persist.

Amendments to capital spend

Certain amendments and deferrals to capital programmes have been approved for immediate implementation which are expected to reduce Petra's extension capex for FY 2024 by up to US$65 million. These include:

·      At Cullinan Mine:

o  The deferral of the C-Cut extension project until the end of June 2024.

o  The partial deferral of the CC1E project until the end of June 2024, with approximately half of the development crews continuing to develop the 813 and 833 Levels of the Sub-Level Cave (SLC) to ensure higher-grade ore is brought into production from the end of June 2024 onwards.

·      At Finsch:

o  The deferral of the 3-Level SLC extension project until the end of June 2024.

o  The 78-Level Phase II project will continue as planned to bring these production areas online during FY 2024 to supplement production from the existing SLC which is nearing its end of life.

·      The deferral of US$3-5 million of sustaining capex against the FY 2024 guidance.

·      Delaying delivery of equipment on order given the pause in execution of the development programmes outlined above.

·      The deferral of feasibility studies related to future capital investment opportunities and trade-off studies at all operations.

During this period of reduced development activity, the Company will assess further value-engineering opportunities for its capital development programmes aimed at improving efficiencies and/or lowering overall costs, whilst undertaking re-planning work that looks to minimise the impact of these deferrals on the Company and its growth profile. Although the deferred programmes are currently expected to restart from July 2024, the Company retains the flexibility to restart the deferred programmes earlier should market conditions improve.

Reduction in operating and Group expenditure

Further to the capital deferrals outlined above, the Company has identified operating and group cost savings of US$7-10 million against the FY 2024 guidance.

Increasing headroom and flexibility

As previously announced, Management is in discussions with Absa Bank to increase the Company's existing ZAR1 billion Revolving Credit Facility by up to ZAR750 million (c. US$40 million) to provide additional operational and sales flexibility in the event of protracted market weakness. An in-principle decision is expected during November 2023.

Guidance

Production guidance for FY 2024 is maintained, although is now expected to be towards the lower end of the guidance range of 2.9 to 3.2 Mcts. The impact of the project deferrals on production and capex guidance for FY 2025 and FY 2026 will be provided on a mine-by-mine basis once the value-engineering and re-planning work has been completed. We expect there will be a reduction in current production guidance for these two years at a reduced cost base. We expect to communicate this, together with our Interim Results announcement, in February 2024 and will provide further information on the potential of Petra's assets at the Company's Capital Markets Day, now anticipated in Q4 FY 2024.

This announcement includes inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is being released on behalf of Petra by the Company Secretary.

For further information, please contact:

Investor Relations, London                  Telephone: +44 20 7494 8203                                        

Patrick Pittaway                                                investorrelations@petradiamonds.com

Julia Stone

Kelsey Traynor

Financial PR (Camarco)

Gordon Poole                                       Telephone: +44 20 3757 4980

Owen Roberts                                       petradiamonds@camarco.co.uk

Elfie Kent

About Petra Diamonds Limited

Petra Diamonds is a leading independent diamond mining group and a supplier of gem quality rough diamonds to the international market. The Company's portfolio incorporates interests in three underground mines in South Africa (Finsch and Cullinan Mine) and one open pit mine in Tanzania (Williamson). The Koffiefontein mine is currently on care and maintenance in preparation for closure.

Petra's strategy is to focus on value rather than volume production by optimising recoveries from its high-quality asset base in order to maximise their efficiency and profitability. The Group has a significant resource base which supports the potential for long-life operations.

Petra strives to conduct all operations according to the highest ethical standards and only operates in countries which are members of the Kimberley Process. The Company aims to generate tangible value for each of its stakeholders, thereby contributing to the socio-economic development of its host countries and supporting long-term sustainable operations to the benefit of its employees, partners and communities.

Petra is quoted with a premium listing on the Main Market of the London Stock Exchange under the ticker 'PDL'. The Company's loan notes due in 2026 are listed on the Irish Stock Exchange and admitted to trading on the Global Exchange Market. For more information, visit www.petradiamonds.com.