Reserves & resources

Jim Davidson, Technical Director

Careful management of Petra's major diamond resource will ensure sustainable, long-life mining for many years. It also provides flexibility in terms of organic growth and the Company has plans in place to substantially increase output, most notably at the Cullinan and Williamson mines.

Gross reserves and resources

As at 30 June 2010, the Group's total carat base had reduced by roughly one million carats to 261 million carats (FY2009: 262 million carats), mainly due to depletion by production at the mining operations over the year.

Attributable reserves and resources

The Group's attributable reserves and resources increased significantly in the Period by approximately 75 million carats to 194 million carats (FY2009: 119 million carats). This major increase is due to the doubling of Petra's interest in the Cullinan mine, which accounts for some 77% of the overall Group reserves and resources.

General notes on reporting criteria

Resources are reported exclusive of reserves.
Tonnes are reported as millions. Contained diamonds are reported as millions of carats (“Mcts”).
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.
Resource tonnages and grades are reported exclusive of internal waste, unless where otherwise stated.
Reserve tonnages and grades are reported inclusive of external waste, mining and geological losses and plant modifying factors. Reserve carats will be less than resource carats on conversion and this has been taken into account in the applicable statements.

The following table summarises the reserve and resource status of the combined Petra Group operations as at 30 June 2010:
	Gross			Net attributable
Category	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)
Ore/Diamond reserves per asset
Proven	17.898	7.13	1.276	12.837	8.38	1.076
Probable	37.441	22.85	8.555	27.418	23.99	6.576
Sub-total	55.339	17.76	9.831	40.255	19.01	7.652
Diamond resources per asset
Measured
Indicated	354.709	52.83	187.400	263.217	52.70	138.711
Inferred	1226.551	5.21	63.895	912.924	5.27	48.148
Sub-total	1581.260	15.89	251.295	1176.140	15.89	186.859
Total			261.126			194.511

“cpht” – carats per hundred tonnes; “Mcts” – millions of carats

Summary of reserves and resources by status – Cullinan
	Gross			Net attributable
Category	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)
Ore/Diamond reserves per asset
Proven
Probable	13.866	37.10	5.144	10.261	37.10	3.807
Sub-total	13.866	37.10	5.144	10.261	37.10	3.807
Diamond resources per asset
Measured
Indicated	253.757	71.49	181.401	187.780	71.49	134.237
Inferred	167.105	10.04	16.777	123.657	10.04	12.415
Sub-total	420.862	47.09	198.178	311.437	47.09	146.652
Total			203.322			150.459

Resource bottom cut-off: 1 mm.
Reserve bottom cut-off: 1.2 mm.
Resource tonnes and grade are based on block cave depletion modelling, and include external waste.
Reserve carats and grades are factorised as per the following resource to reserve liberation factors: “Brown” kimberlite 75.8%, “Grey” kimberlite 71.4%, and Hypabbysal kimberlite 71.8%.
A total of 10 new drawpoints were added to the reserve.

Summary of reserves and resources by status – Koffiefontein
	Gross			Net attributable
Category	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)
Ore/Diamond reserves per asset
Proven	16.404	3.35	0.550	11.483	3.35	0.385
Probable	18.284	8.26	1.510	12.798	8.26	1.057
Sub-total	34.688	5.94	2.060	24.281	5.94	1.442
Diamond resources per asset
Measured
Indicated	4.196	6.01	0.252	2.937	6.01	0.177
Inferred	101.978	3.34	3.408	71.384	3.34	2.386
Sub-total	106.174	3.45	3.660	74.321	3.45	2.563
Total			5.720			4.005

Resource bottom cut-off (Koffiefontein underground and Ebenhaezer): 0.5 mm.
Resource bottom cut-off (Eskom tailings):1 mm.
Reserve bottom cut-off: 1.2 mm.
Changes due to geological re-evaluation and modelling of drilling results below 520 Level.

Summary of reserves and resources by status – Kimberley Underground
	Gross			Net attributable
Category	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)
Ore/Diamond reserves per asset
Proven
Probable	3.219	19.58	0.630	2.382	19.58	0.466
Sub-total	3.219	19.58	0.630	2.382	19.58	0.466
Diamond resources per asset
Measured
Indicated	6.750	18.29	1.234	4.995	18.29	0.913
Inferred	55.798	10.03	5.595	41.291	10.03	4.140
Sub-total	62.548	10.92	6.829	46.286	10.92	5.053
Total			7.459			5.519

Resource bottom cut-off (Dutoitspan West Extension): 1 mm.
Resource bottom cut-off (all other underground blocks): 0.5 mm.
Reserve bottom cut-off: 1.2 mm.
Changes due to a complete geological re-evaluation of remaining resources and reserves in Wesselton 995 m Centre block cave, and Dutoitspan 870 m East and West block cave, plus re-evaluation of exploration development, drilling and sampling results for Dutoitspan NW corner.

Summary of reserves and resources by status – Kimberley Underground
	Gross			Net attributable
Category	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)
Ore/Diamond reserves per asset
Proven
Probable	3.219	19.58	0.630	2.382	19.58	0.466
Sub-total	3.219	19.58	0.630	2.382	19.58	0.466
Diamond resources per asset
Measured
Indicated	6.750	18.29	1.234	4.995	18.29	0.913
Inferred	55.798	10.03	5.595	41.291	10.03	4.140
Sub-total	62.548	10.92	6.829	46.286	10.92	5.053
Total			7.459			5.519

Summary of reserves and resources by status – Williamson
	Gross			Net attributable
Category	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)
Diamond resources per asset
Measured
Indicated	90.006	5.01	4.512	67.505	5.01	3.384
Inferred	900.048	3.94	35.444	675.036	3.94	26.583
Sub-total	990.054	4.04	39.956	742.541	4.04	29.967
Total			39.956			29.967

Resource bottom cut-off: 1 mm.
Resource depletion calculated from in-pit survey.
Stockpile of 594,000 tonnes of RVK and BVK accumulated since plant shutdown at end of March 2010.

Summary of reserves and resources by status – Fissure mines combined (Helam, Sedibeng, Star)
	Gross			Net attributable
Category	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)	Tonnes (millions)	Grade (Cpht)	Combined diamonds (Mcts)
Ore/Diamond reserves per asset
Proven	1.494	48.57	0.726	1.354	51.01	0.690
Probable	2.073	61.30	1.270	1.976	63.07	1.246
Sub-total	3.567	55.96	1.996	3.330	58.17	1.936
Diamond resources per asset
Measured
Indicated
Inferred	1.622	164.66	2.672	1.555	168.77	2.624
Sub-total	1.622	164.66	2.672	1.555	168.77	2.624
Total			4.667			4.560

Resource and reserve bottom cut-off: 1 mm.
Resource bottom cut-off: 1 mm.
Reserve bottom cut-off: 1 mm.
Measured resources are classified as 1 level below current workings, or where a block is bounded above and below by current workings.
Indicated resources are classified as 2 levels below measured resources.
Inferred resources are classified as 3 levels below indicated resources.
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.

Notes

The annual reserve and resource statements for Petra shown above are 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 is the qualified person for the purposes of the AIM guidance note on Mining, Oil and Gas companies (2006). Jim Davidson has over 30 years’ relevant experience in the diamond industry and is a full-time employee of Petra.

All reserves and resources have been independently verified by Patrick Bartlett, Pr.Sci. Nat. (reg. No. 400060/87), a competent person with over 30 years’ relevant experience in the diamond mining industry. Reserves and resources have been reported in accordance with the South African code for the reporting of mineral reserves and mineral resources (SAMREC 2007).

Jim Davidson
Technical Director
24 November 2010