Williamson

The Williamson mine is an open pit diamond mine at Mwadui in the Shinyanga Province of northern Tanzania. At 146 hectares, Williamson is the largest kimberlite pipe ever to be mined economically, having been operated continuously as an open pit mine for almost 70 years. During this time it has produced over 20 million carats, and there remains a major resource of some 40 million carats. The mine regularly produces large, high-quality stones and is a source of rare and extremely valuable fancy pink diamonds.

Petra completed the acquisition of a 75% interest in the Williamson mine from De Beers in November 2008.

Williamson vital statistics

Size of kimberlite pipe

146 hectares

Commencement of mining

1940

Acquisition by Petra Diamonds

November 2008

Ownership

Petra Diamonds: 75%

Government of the United Republic of Tanzania: 25%

Operator

Petra Diamonds

Total resources

40.0 million carats

Type of mining

Open pit

Depth of mining

90 metres at deepest point

Status

Producing

Location

Williamson is located at Mwadui, 40 kilometres north east of Shinyanga, the capital of the Shinyanga Region in Tanzania.

Geology

The geology of the Mwadui deposit consists of a shale basin, Turbidite (Bouma) facies, granite breccia, reworked volcanistic kimberlite deposits, and primary pyroclastic kimberlite (Stiefenhofer 2000). The country rock consists of granite and gneiss. The Mwadui Pipe was emplaced in Archaean granitic basement and meta-sediments. The meta-sediments include schists, phyllites, occasional quartzites and rare banded iron stones. Many of the kimberlite occurrences in and around Shinyanga are characterised by the presence of crater deposits, suggesting that minimal erosion has taken place in this region since the Tertiary period when the kimberlites were emplaced. The country rock geology in the immediate vicinity of the pipe is dominated by granites which can be divided into two distinct types; a younger porphyritic variety which intruded an older gneissic suite.

Mining methods

The Williamson mine is a large open-pit operation, with a very low stripping ratio. The current operation comprises the open-pit mine feeding the main plant (3.7 million tonnes per annum capacity). There is also a dense media separation, multi-purpose plant and a pan plant on site. In 2007, the mine treated approximately 3.2 million tonnes of ore, recovering 220,000 carats at a grade of 6.9 carats per hundred tonnes. Total waste mined during 2007 was approximately 0.8 million tonnes, yielding a stripping ratio of approximately 0.24 tonnes of waste per tonne of ore.

Operating review

	Unit	Year ended 30 June 2010	Year ended 30 June 2009	Change
Bulk sampling
Diamonds produced	Carats	101,071	84,486	+20%
Grade	Cpht	5.8	5.7	+2%
Sales
Revenue	US$M	14.4	9.4	+53%
Diamonds sold	Carats	91,901	75,045	+22%
Average price per carat	US$	157	126	+25%

The Williamson mine is a large open-pit operation (maximum present mining depth of 90 metres) with a very low stripping ratio. The infrastructure acquired comprised of the open-pit mine feeding the main plant with an approximate capacity of 3.2 Mtpa. Since November 2008 Petra has, in line with its initial strategy, been undertaking a feasibility study in order to establish the new economics of the mine, including grade, value per carat, cost per tonne and overall production capacity of the infrastructure.

The results for Williamson listed above reflect only nine months’ production as bulk sampling production operations were effectively stopped on 1 April 2010 and the last tender of diamonds held in May 2010, further to the commencement of Petra’s expansion plan.

An average sales value of US$157 per carat was achieved for the 2010 financial year, but Petra expects that the new plant and processing techniques to be introduced at the mine will bring about substantial improvements to diamond values in the future, and that values of around US$200 per carat will be achievable over the medium term.

Outlook

The development programme at Williamson is expected to increase throughput from an average two million tonnes per annum (“mtpa”) to 10 mtpa which, at an average grade of 6 cpht, would yield an estimated annual production of approximately 600,000 carats. The expansion plan is estimated to take up to three years to complete and will cost approximately US$50 million. The IFC debt financing of US$40 million will be applied to this programme, with the balance being contributed from Petra’s own treasury.

During this time, the Company may undertake low volume production following the refurbishment of the current production plant; further information will follow in this regard when the Company’s plans are developed. However, meaningful revenues from Williamson are not likely to recommence until fiscal 2013/2014.

Reserves and Resources (as at September 2009 Resource statement)

Category	Gross			Net attributable
	Tonnes (millions)	Grade (cpht)	Contained Diamonds (millions)	Tonnes (millions)	Grade (cpht)	Contained Diamonds (Mcts)
Diamond reserves per assets
Proven	–	–	–	–	–	–
Probable	–	–	–	–	–	–
Sub-total	–	–	–	–	–	–
Diamond resources per asset
Measured	–	–	–	–	–	–
Indicated	91.952	5.01	4.606	68.964	5.01	3.455
Inferred	900.481	3.94	35.457	675.361	3.94	26.593
Sub-total	992.433	4.04	40.064	744.325	4.04	30.048
Total			40.064			30.048

Notes

1. Resource bottom cut-off:1mm