Petra Diamonds has announced that it has achieved its objective of increasing annual diamond production to over 1 million carats (diamond production for the year ending June 30, 2009 - 1,108,815 carats), thus recording a five-fold increase over the previous financial year (200,287 carats).

Diamond mining gross revenue for the said period came to $94.4 million, a 22.1% increase over the previous year. The group’s revenue for the year ending on June 30, 2009 declined to $69.1 million as compared to $76.9 million in the previous year.

Total diamond production came to 1,108,815 carats, a 453.6% increase over 2008 (200,287 carats).

Two exceptional blue diamonds from the Cullinan diamond mine were sold for record prices: A 39.19 carat blue diamond sold as a rough stone in October 2008 for $8.8 million ($225,934 per carat), and a 7.03 carat blue diamond sold as a polished stone (cut from a 26.58 carat rough diamond) achieved $9.4 million ($1,349,752 per carat) on auction in May 2009. The latter achieved a record auction price for a fancy vivid blue diamond.

The company attributed the net increase in diamond production and sales to the Cullinan mine coming on stream in July 2008 as well as the Williamson diamond mine in November 2008. This was offset by the fall in rough diamond prices across all operations due to market conditions, reduced diamond production at Koffiefontein (now rectified) and Star/Helam. It was decided to reduce diamond production at Star and Helam in February 2009, rather than placing the mines on care and maintenance.

Petra noted that further diamond production growth is expected in the course of the next financial year following the acquisition of a 75% interest in the Williamson diamond mine in Tanzania in November 2008. Petra expects the acquisition of an additional asset, the Kimberley Underground diamond mines in South Africa, to be completed in the near future.

Petra Diamonds CEO Johan Dippenaar, said, “This has been a year in which Petra Diamonds has established itself as a significant diamond producer. We have grown our diamond production substantially, continued to find world class diamonds, effectively managed our cost base and expanded our geographic footprint.”

He added: “Trading conditions remain challenging and our cash flow remains tight, with the recent strengthening of the rand absorbing much of the benefit of the increase in rough prices. Management will remain vigilant to guide the Company through these difficult times.”