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Mining giant BHP Billiton has formed a joint venture with Petra Diamonds to develop the Luangue diamond project in Angola.

Luangue borders the promising Alto Cuilo project, where AIM-quoted Petra already has a joint venture with BHP Billiton. Under the new agreement, BHP Billiton has paid £121.2 million for 25 per cent of Luangue, where Petra, headed by chairman Adonis Pouroulis, bought 100 per cent in February for £32 million in shares and a £10 million loan with BHP.

BHP is further committed to earning a 75 per cent stake in Luangue by taking the project to the stage of a completed ‘technical and economic viability study’ or forming a kimberlite mining company to exploit it. In addition, BHP will use its contributions to refund £1.75 million spent by Petra on the project since February.

Petra shares, recommended by Growth Company Investor at 67.5p in March 2006, reached 155p in May when GCI suggested partial profit taking. Today they are 134.75p, up 1p this morning and valuing the company at £244.5 million.

Hold on.