Petra Diamonds has announced that on November 17 2009, Petra and Al Rajhi Holdings entered into an option agreement whereby Petra can, by December 18 2009, acquire Al Rajhi's 37% interest in the Cullinan diamond mine. Exercise of the Cullinan Option will increase Petra's interest in this renowned diamond mine from 37% to 74%, this substantially increasing the Group's revenues.

The Cullinan mine is one of the world's most famous diamond mines due to its regular yield of large, high-quality gems, and the fact that it is the only reliable source of very rare and valuable blue diamonds. In addition, the diamond mine contains the world's second largest inferred diamond resource, with a total of 204.6 million carats.

Petra also confirmed its intention to undertake an equity fundraising led by Canaccord Adams Limited and RBC Capital Markets. The diamond company noted that it is undertaking the placing in order to exercise the option, strengthen its balance sheet by reducing its debt, and implement development programs at the Cullinan and Williamson diamond mines in order to increase production and improve liquidity by broadening the shareholder base.

Johan Dippenaar, Petra's CEO, stated: "The consolidation of the Cullinan diamond mine acquisition and the simplification of the ownership structure will be highly value accretive to us and our shareholders. We are pleased that Al Rajhi has decided to restructure its direct ownership in the Cullinan diamond mine and, due to its belief in the potential of Petra's other assets, increase its ownership at Group level. Petra remains one of the few growth companies in the diamond industry, which is showing clear signs of a strong and sustainable recovery."