News

Petra/Xceldiam cheer Angola deal

30 May 2006 09:29:00

Petra Diamonds and Xceldiam both improved today after announcing details of a new strategic cooperation agreement with regards to the Luangue and Alto Cuilo diamond exploration projects in north-east Angola.

The pair said they believe that Luangue, where Xceldiam is focused, may host kimberlite geology similar to that of Alto Cuilo, Petra's concern.

It is the area within 20km either side of the common border shared by the two sites that each project, based on geology and diamond prospectivity, is focusing its exploration activities.

Xceldiam and Petra will share information and cooperate on technical, operational and other related matters with regards to the development of the two prospects.

As part of the deal, Petra has also been granted warrants with a total exercise price of £14m to acquire up to 26% of Xceldiam's wholly owned subsidiary, Frannor, which holds its interest in Luangue.

Funds paid to Frannor on exercise of the cooperation warrants will be ring-fenced to further develop Luangue.

There is no other financial consideration payable by either party with regards to the agreement and cooperation warrants, said the pair.

In addition, Petra has also been granted a right of first refusal to participate in any disposal, transaction or joint venture concerning Xceldiam's interest in Frannor.

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