Q1 FY 2024 Operating Update

Petra Diamonds Limited

("Petra" or "the Company")

Q1 FY 2024 Operating Update

Petra reports improved diamond production in the first quarter of FY 2024

Richard Duffy, Chief Executive Officer of Petra, commented:

"With stabilising operations at Cullinan Mine and Finsch, and Williamson resuming production ahead of schedule, production increased 12% from the previous quarter. This was accompanied by a continuation of our strong safety performance from Q4 FY 2023 following our renewed safety focus.

We believe the actions taken by the major producers to curb supply and the two-month Indian diamond import moratorium will assist in stabilising the market and supporting prices as inventory levels reduce. Whilst we continue to see support for the market in the medium to longer term as a result of the structural supply deficit, we are taking prudent steps to enhance our business resilience in light of these market challenges and uncertainties that are expected to continue over the coming months. By bringing forward our second tender of FY 2024 we were able to sell 75% of our goods ahead of the moratorium, with the balance sold shortly after. We are in discussions with our first lien lender to upsize our existing Revolving Credit Facility and are evaluating options to provide further financial flexibility, such as optimising our operational expenditure and deferring capital spend.

We are confident these actions will enable us to navigate this period of market weakness whilst limiting the impact on our value-led growth strategy."

Highlights vs Q4 FY 2023

• We maintained our improved safety performance with LTIs and LTIFR remaining at 2 and 0.12, respectively.
• Total diamond production increased 12% to 696,639 carats mainly due to Williamson successfully resuming operations ahead of schedule. Production at Cullinan Mine was largely in line with expectations, with a small increase in tonnes treated offset by grade trending towards the lower end of expectations. At Finsch, tonnes treated decreased 23% from the preceding quarter, largely offset by a 26% increase in ROM grade, reflecting increased quarter-on-quarter volatility associated with the sub-level cave maturity. Production guidance for FY 2024 remains unchanged.
• Revenue totalled US$97.6 million, which included Tender 1 sales of US$79.3 million and a portion of Tender 2 sales concluded prior to 30 September, with the balance of Tender 2 adding a further US$22.2 million post period end.
• Unrestricted cash balances amounted to US$56.5 million (30 June 2023: US$44.1 million), with a further US$33.0 million (30 June 2023: US$8.9 million) cash received from diamond debtors shortly after period end. Cash balances include a ZAR850 million (US$45.0 million) drawdown from the Company's ZAR1 billion (US$53.0 million) Revolving Credit Facility.
• Consolidated net debt increased to US$192.4 million (30 June 2023: US$176.8 million) due to the timing of closing the Company's sales tenders, the continued lower diamond pricing environment, working capital funding for the resumption of mining at Williamson and the increasing capex spend profile, as previously announced, to extend the life of our operations at Cullinan Mine and Finsch.

Operating Summary

2 Petra classifies "Exceptional Stones" as rough diamonds which sell for US$15 million or more each

INVESTOR WEBCASTS

Webcast presentation for institutional investors and analysts at 09:30am BST today

Petra's CEO, Richard Duffy, and CFO, Jacques Breytenbach, will host a live webcast including Q&A for institutional investors and analysts today at 09:30 BST to discuss this operating update.

Webcast link for live presentation: https://brrmedia.news/PDL_Q1FY24

Dial in details:

United Kingdom 033 0551 0200

South Africa 0800 980 512

United States (Local) +1 786 697 3501

Password (if prompted): Quote "Petra Diamonds Q1 Operations Update"

Link for recording (available later in the day):

Investor Meet Company webcast at 14.30pm BST today

Petra's CEO, Richard Duffy, and CFO, Jacques Breytenbach, will also present these results live on the Investor Meet Company platform, predominantly aimed at retail investors. To join: https://www.investormeetcompany.com/petra-diamonds-limited/register-investor

• LTIFR: lost time injury frequency rate, calculated as the number of LTIs multiplied by 200,000 and divided by the number of hours worked
• FY: financial year ending 30 June
• Q: quarter of the financial year
• ROM: run-of-mine (i.e. production from the primary orebody)
• m: million
• Mt: million tonnes
• period: the first quarter of FY 2024

Corporate and financial summary 30 September 2023

Note: The following exchange rates have been used for this announcement: average for 3M FY 2024 US$1: ZAR18.65 (FY 2023: US$1: ZAR17.77); closing rate as at 30 September 2023 US$1: ZAR18.92 (30 June 2023: ZAR18.83, 31 December 2022: US$1: ZAR17.00, and September 2022: ZAR18.15).

Notes:

• The Group's cash balances comprise unrestricted balances of US$56.5 million (30 June 2023: US$44.1 million), and restricted balances of US$17.8 million (30 June 2023: US$17.0 million).
• Recorded at the lower of cost and net realisable value.
• Diamond inventories for periods prior to 30 June 2023 include the 71,654.45 carat Williamson parcel of diamonds blocked for export during August 2017, with a carrying value of US$12.5 million. Under the Framework Agreement entered into with the Government of Tanzania (GoT) in December 2021, it is stated that the proceeds from the sale of this parcel are to be applied to the Williamson mine to assist with the restart of operations and that in the event such proceeds are not received by Williamson, Williamson is not required to pay a US$20 million liability relating to the settlement of past tax disputes. During earlier discussions, the GoT confirmed that the blocked parcel was partially sold during FY 2023 and so this parcel was excluded from diamond inventories in the Group's FY 2023 accounts and expensed to other direct mining expense with the calculated fair value proceeds of US$12.4 million for the blocked parcel recognised as other direct mining income and trade and other receivables as at 30 June 2023. During these discussions, the parties also confirmed their intent to resolve the treatment of the blocked parcel sale proceeds and the related US$20 million settlement liability.
• Post period-end, the Company completed Tender 2 with the sale of 207,792 carats from Cullinan Mine and Finsch, yielding US$22.2 million.
• The 2026 US$336.7 million loan notes, originally issued following the capital restructuring (the "Restructuring") completed during March 2021, have a carrying value of US$254.6 million which represents the outstanding principal amount of US$209.7 million (after the debt tender offers as announced in September and October 2022) plus US$54.4 million of accrued interest and is stated net of unamortised transaction costs capitalised of US$9.5 million.
• Bank loans and borrowings represent the Group's ZAR1 billion revolving credit facility (RCF). During Q1 FY 2024, as a result of the deferment of the June 2023 diamond tender, the Group drew down ZAR850 million (US$44.9 million) on the RCF.
• Consolidated Net Debt is bank loans and borrowings plus loan notes, less cash and diamond debtors.

Mine-by-mine tables:

Cullinan Mine - South Africa