Fissure mines

The fissure mines – Helam, Sedibeng and Star – were acquired when Petra merged with ASX quoted Crown Diamonds NL in May 2005. Petra is recognised as the world’s leading expert in narrow vein ‘fissure’ mining, a highly specialist area. Due to the limited tonnages that can be extracted in such operations, the former Crown Diamonds team honed a low cost culture over the years perfectly suited to ensuring these mines remained economic despite fluctuations in the capital and diamond markets.

Fissure mines vital statistics

Commencement of mining

Helam: 1933

Sedibeng: 1952

Star: 1952

Acquisition by Petra Diamonds

May 2005 (further to merger with Crown Diamonds NL)

Ownership

Helam: 100% Petra Diamonds

Sedibeng: 74.5% Petra Diamonds, 25.5% Sedibeng Mining (Pty) Ltd

Star: 74% Petra Diamonds, 26% Sedibeng Mining (Pty) Ltd

Operator

Petra Diamonds

Type of mining

Helam: Full shrinkage overhand stoping

Sedibeng: Full shrinkage overhand stoping

Star: Open stope underhand

Total resources

4.7 million carats

Type of mining

Underground fissure mining

Depth of mining
(metres underground)

Helam: 750

Sedibeng: 750

Star: 600

Status

Full production

Operating review

	Unit	Year ended 30 June 2010	Year ended 30 June 2009	Change
Production
Diamonds produced	Carats	74,232	71,274	+4%
Grade	Cpht	37.2	37.7	-1%
Sales
Revenue	US$M	13.5	15.3	-12%
Diamonds sold	Carats	72,629	82,126	-12%
Average price per carat	US$	185	186	-1%

Output from the three fissure mines in the 2010 financial year was significantly affected by lower production from Star and Helam, with the effects of the reorganisation at both mines, where retrenchment programmes in the previous financial period had reduced staff levels by around 50%, still being felt in this financial year. In addition, a two week strike at the Sedibeng mine further impacted production.

The lower grade encountered at the fissure mines related primarily to the Star mine where production is now transitioning to the 16 level. Bifurcating fissures had to be mined on the 15 level before the transition occurred.

The average price per carat reduced from the previous year due to a stone from Sedibeng, which sold for US$5.2 million in the year to June 2009. Without this stone, the year-on-year price per carat increase would have been approximately 52%.

Outlook

Our current life of mine plans incorporate Sedibeng at 13 years, Star at 18 years and Helam at 22 years. Diamond production is estimated to increase to 165,000 carats by 2015. Thereafter it will remain stable until 2022 when Sedibeng is depleted, with production gradually dropping off. The Sedibeng life of mine is based on the current resource statement which only accounts for six levels and can be increased once new levels are added on.

Reserves and Resources (as at September 2009 Resource statement)

Fissure Mines combined (Helam, Sedibeng, Star)

Category	Gross			Net attributable
	Tonnes (millions)	Grade (cpht)	Contained Diamonds (millions)	Tonnes (millions)	Grade (cpht)	Contained Diamonds (Mcts)
Diamond reserves per assets
Proven	1.606	47.70	0.766	1.457	50.02	0.729
Probable	2.235	59.76	1.335	2.137	61.35	1.311
Sub-total	3.840	54.72	2.101	3.594	56.76	2.040
Diamond resources per asset
Measured	–	–	–	–	–	–
Indicated	–	–	–	–	–	–
Inferred	1.488	173.57	2.583	1.421	178.50	2.536
Sub-total	1.488	173.57	2.583	1.421	178.50	2.536
Total			4.684			4.575

Notes:

1. Resource bottom cut-off: 1mm
2. Reserve bottom cut-off: 1.2mm
3. Measured resources are classified as 1 level below current workings, or where a block is bounded above and below by current workings
4. Indicated resources are classified as 2 levels below measured resources
5. Inferred resources are classified as 3 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.