Petra, BHP Billiton to Develop Angola Diamond Project Jointly

Petra Diamonds Limited and BHP Billiton have formed a joint venture to develop the Luangue diamond project in northeastern Angola. Under the agreement, BHP has acquired 25 percent of Frannor Investments, which holds interests in the project.

South Africa-based Petra acquired Frannor in February for $65.14 million. BHP Billiton paid $22.35 million in cash for the 25 percent stake. BHP and Petra have another joint venture agreement – the neighboring Alto Cuilo project.

According to the agreement, BHP Billiton will fund the development of Luangue up to the BHP Billiton earn-in date, which will be either at the formation of a kimberlite mining company or 180 days following the submission of a technical and economic viability study, whichever occurs first.

Frannor holds a 39 percent interest in Luangue’s exploration license for kimberlite diamond deposits and a 40 percent interest in the exploration license for alluvial diamond deposits.

Frannor has two Angolan partners at the project – Endiama, which represents the Angolan government and is a required partner according to Angolan law, and Bapsil Service Limitada, an Angolan commercial company.

Adonis Pouroulis, chairman of Petra, said, “The Luangue joint venture agreement with BHP Billiton exemplifies the relationship that both Petra and BHP Billiton have with Endiama and Luangue’s local Angolan partners. The Luangue joint venture will provide increased investment and accelerated development for Project Luangue towards proving a sustainable diamond resource, achieving our goal with BHP Billiton and our Angolan partners of developing world class exploration projects in Angola.”