REG-Petra Diamonds: Publication of Prospectus

Petra DiamondsAnnouncement

22/12/2020 15:20

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO
THE UNITED STATES, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY OTHER
JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL. THIS ANNOUNCEMENT IS FOR
INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY
JURISDICTION.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT. NOTHING IN IT SHALL CONSTITUTE AN OFFERING OF
ANY SECURITIES.

PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

FOR IMMEDIATE RELEASE

 22 December 2020   LSE: PDL 

Petra Diamonds Limited

("Petra", the "Company" or, in conjunction with its subsidiaries, the "Group")

Publication of Prospectus, Appointment of Non-Executive Director, Trading
Update and Update Regarding Williamson Parcel of Diamonds

Publication of Prospectus

Petra Diamonds Limited has today published a combined circular and prospectus
(the "Prospectus") dated 22 December 2020 in relation to, among other things:
(i) a proposed Capital Reduction; and (ii) a proposed Debt for Equity
Conversion involving the issue of 8,844,657,929 New Ordinary Shares in
consideration for the assignment by the Noteholders to the Company of
approximately US$409.9 million of the Notes Debt, which has been approved by
the UK Financial Conduct Authority.

Subject to certain exceptions, Shareholders will shortly be sent a copy of the
Prospectus or notification of the availability of the Prospectus. The
Prospectus will also be available for inspection on the Company’s website at
www.petradiamonds.com/investors/2020-financial-restructuring/ and will be
submitted to the National Storage Mechanism, where it will be available for
inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

The Prospectus contains a Notice of Special General Meeting of the Company to
be held at 9.30 a.m. GMT on 13 January 2021.

The Prospectus is not, subject to certain exceptions, available (whether
through the Company’s website or otherwise) to Shareholders in the United
States or any of the Restricted Jurisdictions.

Rothschild & Co is acting as Financial Adviser to Petra Diamonds. BMO Capital
Markets Limited is acting as Sponsor.

The defined terms set out in the Prospectus apply in this Announcement.

Appointment of Non-Executive Director

In connection with the Debt for Equity Conversion and a Nomination Agreement
entered into with Monarch Master Funding 2 (Luxembourg) S.à r.l., as
described in the Prospectus, Mr. Matthew Glowasky is being appointed
prospectively to the Board as a Non-Executive Director subject to the
successful implementation of the Consensual Restructuring.

A further announcement containing further details of Mr. Glowasky's
prospective appointment and all information required by LR 9.6.13 will be made
by the Company today.

Trading Update

The Company is also today providing the following update on Q2 FY 2021
trading, which has been included in the Prospectus. The Company expects to
release its H1 FY 2021 Trading Update, giving production and sales for the
first half of the 2021 financial year, on 19 January 2021.

The diamond market has continued to show improved demand for rough diamonds,
as evidenced by the publicly disclosed sales from the majors De Beers and
ALROSA, with polished stock and industry debt levels at lower levels than they
were at the same time in 2019 due to positive consumer demand as we enter the
holiday retail season. In particular, demand for larger stones (+1 carat) has
improved and there are expectations that this will carry into the new calendar
year. However, there remains a risk around further disruption as a result of
COVID-19.

In terms of production in Q2 FY 2021 to date, the Cullinan mine continues to
run ahead of the Company’s internal plan, combined with the positive revenue
impact of the sale of the Letlapa Tala Collection for US$40.36 million in
November 2020.

The Finsch mine, however, has seen higher than expected levels of waste
ingress in a number of the upper levels of the Block 5 Sub Level Cave, which
has served to negatively impact the recovered grade. The Company has been
going through a detailed exercise to better understand this issue and has put
a plan in place to mitigate the impact. In the short term, this will include a
revision to the draw strategy to limit planned draw tonnage for the next four
months, a build-up of inventory rings to allow for increased blasting from
March 2021, and a change to the drill and blast designs to optimise ore
extraction. In the longer term, the Company will also investigate ore mixing
programmes to better assist with the prediction of waste ingress. A
combination of the reduced ore tonnage extraction (further to the dilution
caused by the waste material ingress) and a lower grade is expected to lead to
Finsch’s production for FY 2021 being ca. 15 per cent. lower in carat
volumes than the Company’s internal plan (bearing in mind production
guidance remains suspended while the COVID-19 pandemic continues to cause
uncertainty in the short term).

Update Regarding Williamson Parcel of Diamonds

Petra Diamonds is aware of media reports suggesting that the parcel of 71,654
carats of diamonds from the Williamson mine in Tanzania, which was blocked for
export in September 2017 (the "Parcel"), has been nationalised.

To date the Company has not received any communication from the Government of
Tanzania about this matter and Williamson Diamonds Limited ("WDL"), the owner
and operator of the Williamson mine, has written to the Minister of Minerals
requesting an update on the status of the Parcel.

WDL’s export and sales processes are conducted in a transparent manner, and
in full compliance with both the legislation in Tanzania and the Kimberley
Process.  Importantly, all final royalty payments to the Government of
Tanzania are based on the actual sales proceeds for the diamonds, once sold in
Antwerp, rather than the provisional value prior to export. In the event that
the Parcel had been undervalued, the royalty payment would have been adjusted
based on the final selling price.

Further information on this matter and documentation relating to the Parcel
remains publicly available on the Company’s website at
https://www.petradiamonds.com/our-operations/our-mines/williamson/blocked-diamond-parcel/.

~ Ends ~

For further information, please contact:

Petra Diamonds,
London                                        
Telephone: +44 20 7494 8203

Cathy
Malins                                                  
            investorrelations@petradiamonds.com

Des Kilalea

Marianna Bowes

Rothschild & Co

Giles
Douglas                                                
            giles.douglas@rothschildandco.com

Glen
Cronin                                                    
            glen.cronin@rothschildandco.com

Mahir
Quraishi                                               
            mahir.quraishi@rothschildandco.com

BMO Capital Markets
Limited                                 

Thomas
Rider                                                
            thomas.rider@bmo.com

Neil
Elliot                                                        
            neil.elliot@bmo.com

About Petra Diamonds Limited

Petra Diamonds is a leading independent diamond mining group and a consistent
supplier of gem quality rough diamonds to the international market. The
Company has a diversified portfolio incorporating interests in three
underground producing mines in South Africa (Finsch, Cullinan and
Koffiefontein) and one open pit mine in Tanzania (Williamson).

Petra's strategy is to focus on value rather than volume production by
optimising recoveries from its high-quality asset base in order to maximise
their efficiency and profitability. The Group has a significant resource base
of ca. 243 million carats, which supports the potential for long-life
operations.

Petra conducts all operations according to the highest ethical standards and
will only operate in countries which are members of the Kimberley Process. The
Company aims to generate tangible value for each of its stakeholders, thereby
contributing to the socio-economic development of its host countries and
supporting long-term sustainable operations to the benefit of its employees,
partners and communities.

Petra is quoted with a premium listing on the Main Market of the London Stock
Exchange under the ticker 'PDL' and is a constituent of the FTSE4Good Index.
The Company’s US$650 million loan notes due in 2022, currently subject to
restructuring, are listed on the Global Exchange market of the Irish Stock
Exchange. For more information, visit www.petradiamonds.com.

IMPORTANT NOTICES

This announcement contains statements about Petra that are or may be forward
looking statements. All statements other than statements of historical facts
included in this announcement may be forward looking statements. Without
limitation, any statements preceded or followed by or that include the words
"targets", "goals", "should", "would", "could", "continue", "plans",
"believes", "expects", "aims", "intends", "will", "may", "anticipates",
"estimates", "hopes", "projects" or words or terms of similar substance or the
negative thereof, are forward looking statements.

Such forward looking statements involve risks and uncertainties that could
significantly affect expected results and are based on certain key
assumptions. Many factors could cause actual results to differ materially from
those projected or implied in any forward looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue reliance on
such forward looking statements, which speak only as of the date hereof. Petra
disclaims any obligation to update any forward looking or other statements
contained herein, except as required by applicable law or regulation.

A copy of the Prospectus will be available from the registered office of Petra
and on Petra’s website at www.petradiamonds.com, provided that, subject to
certain exceptions, the Prospectus is not being made available to Shareholders
or investors in the United States or any other Restricted Jurisdiction.

Neither the content of Petra’s website (or any other website) nor any
website accessible by hyperlinks on Petra’s website (or any other website)
is incorporated in, or forms part of, this announcement.

The information contained in this announcement is for background purposes only
and does not purport to be full or complete. No reliance may be placed for any
purpose on the information contained in this announcement or its accuracy or
completeness. The information in this announcement is subject to change.
Nothing in this announcement should be interpreted as a term or condition of
the Consensual Restructuring, the Debt for Equity Conversion, the Capital
Reduction or any other matter disclosed in the Prospectus.

Subject to certain exceptions, this announcement and/or the Prospectus should
not be distributed, forwarded or transmitted in or into the United States or
any other Restricted Jurisdiction. This announcement and/or the Prospectus
does not constitute or form part of any offer to buy or any invitation to sell
or issue, or any solicitation of any offer to buy or subscribe for, New
Ordinary Shares in any jurisdiction.

Should the Debt for Equity Conversion proceed, New Ordinary Shares will only
be issued to Noteholders situated outside Australia pursuant to the Debt for
Equity Conversion. The New Ordinary Shares have not been and will not be
registered under the applicable securities laws of Australia. The Prospectus
is being provided to Shareholders with registered addresses in Australia
solely for the purposes of the Special General Meeting convened pursuant to
the Notice of Special General Meeting.

The New Ordinary Shares have not been and will not be registered under the US
Securities Act of 1933, as amended (the "US Securities Act") or under the
securities laws of any state or other jurisdiction of the United States, or
the relevant laws of any state, province or territory of any other Restricted
Jurisdiction and, subject to certain exceptions, may not be offered, sold,
resold, transferred, distributed or delivered, directly or indirectly, in,
into or from the United States or any other Restricted Jurisdiction. This
document does not constitute an offer to sell or a solicitation of an offer to
buy New Ordinary Shares in any jurisdiction in which such offer or
solicitation is unlawful. Subject to certain exceptions, this document will
not be distributed in or into the United States or any of the other Restricted
Jurisdictions. The New Ordinary Shares are being made available (i) outside
the United States in reliance on Regulation S under the US Securities Act, and
(ii) in the United States to a limited number of institutional accredited
investors (as defined in Rule 501(a)(1), (2), (3), (7), (8), (9), (12) or (13)
under the US Securities Act) in transactions exempt from the registration
requirements of the US Securities Act. There will be no public offer of the
New Ordinary Shares in the United States.

Neither the United States Securities and Exchange Commission ("SEC") nor any
state securities commission in the United States has approved or disapproved
of the New Ordinary Shares or passed upon the accuracy or adequacy of this
document. Any representation to the contrary is a criminal offence in the
United States.

The distribution of this announcement and/or the Prospectus and/or the
transfer of New Ordinary Shares in jurisdictions outside the United Kingdom
may be restricted by law and therefore persons into whose possession this
announcement and/or the Prospectus come should inform themselves about and
observe such restrictions. Any failure to comply with any of these
restrictions may constitute a violation of the securities law of any such
jurisdiction.

BMO Capital Markets Limited ("BMO"), which is authorised and regulated in the
United Kingdom by the FCA, is acting exclusively for the Company and no one
else in connection with the contents of this announcement and the Prospectus,
the Debt for Equity Conversion, Admission or any other matters referred to in
this announcement and/or the Prospectus and will not regard any other person
(whether or not a recipient of this announcement and/or the Prospectus) as a
client in relation to the Debt for Equity Conversion, Admission or any other
matters referred to in this announcement and/or the Prospectus and will not be
responsible for providing the protections afforded to its clients nor for
giving advice in relation to the contents of this announcement and/or the
Prospectus, the Debt for Equity Conversion, Admission or any other matter or
arrangement referred to in this announcement and/or the Prospectus.

N.M. Rothschild & Sons Limited ("Rothschild & Co"), which is authorised and
regulated in the United Kingdom by the FCA, is acting exclusively for the
Company and no one else in connection with the contents of this announcement
and the Prospectus, the Debt for Equity Conversion or any other matters
referred to in this announcement and/or the Prospectus and will not regard any
other person (whether or not a recipient of this document) as a client in
relation to the Debt for Equity Conversion or any other matters referred to in
this announcement and/or the Prospectus and will not be responsible for
providing the protections afforded to its clients nor for giving advice in
relation to the contents of this announcement and/or the Prospectus, the Debt
for Equity Conversion or any other matter or arrangement referred to in this
announcement and/or the Prospectus.

Apart from the responsibilities and liabilities, if any, which may be imposed
upon BMO and/or Rothschild & Co by FSMA or the regulatory regime established
thereunder, BMO and/or Rothschild & Co do not accept any responsibility and
disclaim any liability for the accuracy, completeness or verification, or
concerning any other statement made or purported to be made by it, or on its
behalf, in connection with the Company, the New Ordinary Shares, the Debt for
Equity Conversion or Admission in this announcement and/or the Prospectus. No
representation or warranty, express or implied, is made by BMO and/or
Rothschild & Co as to the accuracy, completeness or verification of the
information set forth in this announcement and/or the Prospectus and nothing
in this announcement and/or the Prospectus is, or shall be relied upon as, a
promise or representation in this respect, whether as to the past or future.
Each of BMO and Rothschild & Co accordingly disclaims to the fullest extent
permitted by applicable law all and any responsibility and liability whether
arising in tort, contract or otherwise (save as referred to herein) which it
might otherwise have in respect of this announcement and/or the Prospectus or
any such statement.

None of the Company, the Directors, the Proposed Director, BMO and Rothschild
& Co, nor any of their respective affiliates, directors, officers, employees
or advisers, is making any representation to any acquirer of New Ordinary
Shares regarding the legality of an investment in the Debt for Equity
Conversion or the New Ordinary Shares by such acquirer under the laws
applicable to such acquirer.

INFORMATION TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained
within: (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive
(EU) 2017/593 supplementing MiFID II; and (c) local implementing measures
(together, the "MiFID II Product Governance Requirements"), and disclaiming
all and any liability, whether arising in tort, contract or otherwise, which
any 'manufacturer' (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the New Ordinary Shares
have been subject to a product approval process, which has determined that the
New Ordinary Shares are: (i) compatible with an end target market of retail
investors and investors who meet the criteria of professional clients and
eligible counterparties, each as defined in MiFID II; and (ii) eligible for
distribution through all distribution channels as are permitted by MiFID II
(the "Target Market Assessment"). Notwithstanding the Target Market
Assessment, distributors should note that: the price of the New Ordinary
Shares may decline and investors could lose all or part of their investment;
the New Ordinary Shares offer no guaranteed income and no capital protection;
and an investment in the New Ordinary Shares is compatible only with investors
who do not need a guaranteed income or capital protection, who (either alone
or in conjunction with an appropriate financial or other adviser) are capable
of evaluating the merits and risks of such an investment and who have
sufficient resources to be able to bear any losses that may result therefrom.
The Target Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation to the Debt
for Equity Conversion.

For the avoidance of doubt, the Target Market Assessment does not constitute:
(a) an assessment of suitability or appropriateness for the purposes of MiFID
II; or (b) a recommendation to any investor or group of investors to invest
in, or purchase, or take any other action whatsoever with respect to the New
Ordinary Shares.

For the avoidance of doubt, the Company is not subject to MiFID II, has no
obligations in relation to the MiFID II Product Governance Requirements and
makes no representations regarding the MiFID II Product Governance
Requirements falling on any authorised or regulated entity connected with the
issuance.



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