Petra Acquires Cullinan Diamond Mine

Petra Diamonds Ltd. has entered into an agreement with De Beers Consolidated Mines to acquire the Cullinan diamond mine in South Africa, an operation that has yielded many of the world’s most spectacular diamonds.

The Cullinan kimberlite pipe located east of Pretoria was discovered in 1903 and has been mined for many years as a block cave mine. De Beers is of the opinion that it is the second largest indicated diamond resource in the world by in-situ value (estimated by De Beers at 193.1 million carats).

Cullinan has produced over 300 stones weighing more than 100 carats, and around a quarter of all of the world’s diamonds weighing more than 400 carats. During the last 15 years Cullinan produced more than 500 stones each weighing more than 60 carats. More recently, two stones weighing 363 carats and 285 carats were recovered in successive production series in 1997 with a combined value in excess of $23 million.

Cullinan comprises two parts, the first being the current operating mine and the second being the Centenary-Cut, an unexploited diamond resource which lies benearth the current mine. The operating mine consists of an underground block caving operation, processing plant and related infrastructure. Over the last 10 years, De Beers mined 14.5 million carats at an average recovered grade of 43.6 carats per hundred tons (cpht).

The operating mine has reserves to produce in excess of one million carats per annum at Petra’s planned extraction rates. In addition the operating mine has additional mineral resources which are expected to add significantly to Cullinan’s life of mine (excluding the C-Cut). Production will be further enhanced by the processing of the mine’s substantial tailing resources.

Petra will be the technical operator of the mine on behalf of the Petra Diamonds Cullinan Consortium; it expects that average annual production from Cullinan will meet, and potentially exceed, the production achieved by De Beers adding substantially to the Petra group revenues. Petra Diamonds owns a 37% stake in the consortium, while the company’s black empowerment partner, Thembinkosi Mining Investments, has 26%, and Saudi Arabiabased investment company, Al Rajhi Holdings, holds the remaining 37%.

As featured in Womp 07 Vol 9 -