Petra Diamonds secures funding for expansion

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Company confirms receipt of loans that will finance mining projects.

Petra Diamonds has confirmed that it has signed final loan agreements to finance expansions at its diamond mines in Tanzania and South Africa.

The group has received joint funding from IFC, a member of the World Bank Group, and Rand Merchant Bank, a division of FirstRand Bank to secure debt facilities of about US$78 million (£49.4 million).

Petra plans to use the borrowed money, along with contributions from its own treasury, to finance the expansions of its Williamson mine in Tanzania and the Cullinan mine in South Africa. In addition, the facilities will be applied to general group working capital needs and, immediately after completion, the settlement of the outstanding US$31 million (£19.6 million) loan due to Al Rajhi Holdings, thereby removing the short-term debt obligation from its balance sheet.

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Petra chief executive Johan Dippenaar said: “We are pleased to have secured the loan facilities through the signature of the final form loan agreements and we will be working hard to satisfy the conditions precedent and achieve draw down as soon as possible. Completion of this financing will be an important step in enabling the company to deliver on its core objectives of doubling production by 2014 and trebling it by 2019.”

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