Petra Diamonds Buys Finsch Mine From De Beers

Diamond miner Petra Diamonds Ltd. (PDL.LN) said Friday it agreed to buy South Africa's second-largest diamond mine from Anglo American PLC's (AAL.LN) De Beers unit for 1.43 billion South African rand ($210 million), in a deal that will more than double its current production.

Petra said Finsch is expected to produce 1.5 million carats in its first full year of production under Petra's ownership, pushing overall group production to roughly four million carats a year by 2014.

Finsch adds a resource of 48.1 million carats, including 26.6 million carats of reserves. The deal will increase Petra's resource base to 309 million carats, which, at current prices, represents $38 billion of diamonds.

"Finsch is a major diamond producer and this acquisition will serve to immediately more than double our current production, significantly enhance earnings and cashflow and will increase our resource base to over 300 million carats," said Petra Chief Executive Johan Dippenaar.

Petra said it agreed to raise GBP205 million in a share sale to help fund the deal. It placed roughly 137 million shares with investors at 150 pence a share, a 7% discount to Thursday's closing price.

-By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; [e-mail]