| Tue 30 Oct 2007, 9:10 | | DMR - Diamond Core Resources Limited - BRC Diamond |
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DMR
DMR
DMR - Diamond Core Resources Limited - BRC Diamond and Diamond Core merger and
project update
DIAMOND CORE RESOURCES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013468/06)
Share code: DMR & ISIN Number: ZAE000076956
("Diamond Core" or "the company")
BRC DIAMOND AND DIAMOND CORE MERGER AND PROJECT UPDATE
BRC Diamond Corporation ("BRC") (TSX-V: BRC) and Diamond Core Resources Limited
("Diamond Core") announce that several milestones have been achieved in the
process of effecting a merger of the two businesses (the "Merger").
Importantly, both companies` projects have been also advanced aggressively, with
encouraging results.
Theo Botoulas, CEO of Diamond Core, stated "The process of merging a foreign
domiciled business with Diamond Core and trying to achieve simultaneous share
listings on the TSX and JSE has been lengthy, with complex and involved
documentation from a technical, legal and accounting perspective. However, as
we have worked through the various aspects of our businesses, our conviction of
the merits of the Merger has strengthened - we are creating a unique business
and investment opportunity within our dynamic industry. To that end, we
appreciate the ongoing support that various stakeholders have shown us over the
last couple of months while this work has been ongoing."
Mike de Wit, President of BRC, added "The teams have really come together over
the last couple of months, not only in the offices and boardroom, but also in
the field. Both companies have gained from the relationship operationally and
in particular, I am looking forward to seeing our new bulk sampling plant arrive
on the Kwango project in the new year. As Theo mentioned, the logic of this
combination is prevalent in everything we have been doing and with documents now
being lodged with relevant regulatory bodies we have a relatively clear
timetable for closing the Merger, to which we`re all looking forward."
Merger progress
BRC and Diamond Core have been active in compiling the documentation required in
both jurisdictions, and this is now substantially complete.
Technical reports for the mineral properties of both BRC and Diamond Core have
been prepared having regard to both Canadian (National Instrument 43-101) and
South African (SAMREC / JSE) requirements. These documents will comprise a
substantial portion of the JSE pre-listing statement, which is expected to
shortly be submitted to the JSE for approval. A circular in respect of the
scheme of arrangement has also been compiled and will shortly be submitted to
the Securities Regulation Panel in South Africa and the JSE for approval. These
documents require finalized accounts for the Diamond Core financial year ended
June 30, 2007, which are expected to be released shortly.
Diamond Core currently anticipates posting documentation to shareholders in the
middle of November. At such time, the technical reports will be filed in Canada
on SEDAR.
BRC has applied to list its common shares on the Toronto Stock Exchange ("TSX"),
with such listing being subject to meeting the minimum listing requirements of
the TSX.
BRC has also prepared applications for each of the South African Reserve Bank
and the Competition Commission in South Africa in respect of the Merger, which
are expected to be filed shortly.
Assuming the aforementioned timing for posting of documents is achieved, Diamond
Core expects to hold a shareholder meeting in mid December and, subject to
various regulatory, court and other approvals, anticipates the Merger closing
early in the new year.
Project update
Ongoing advancement of Diamond Core`s South African projects and those of BRC in
the Democratic Republic of Congo (the "DRC") has been a priority for both
companies over the last several months, with good progress being achieved. Of
note are the following updates for certain key projects of each company:
Silverstreams (Diamond Core) - At the Silverstreams alluvial project the 670tph
(front end) and 160tph trial mining processing plant started treatment of
stockpiled gravel from three mineralized horizons in July. Diamond Core
estimates that a total of approximately 70,000m3 of primary gravel and 5,000m3
of Rooikoppie gravel will be excavated and treated from the initial enlarged
bulk sample area. Trial mining will continue in conjunction with a mineral
resource drilling programme that was initiated last month. The three largest
diamonds recovered to date include 24.7, 23.6 and 10.8 carat stones.
Paardeberg (Diamond Core) - Following the making safe and other excavation work
at the PK1 deposit early in the year, a bulk sampling programme initially
consisting of twelve bulk samples at PK1 totalling 70,000t, three bulk samples
at PK2 totalling 15,000t and five bulk samples at PK3 totalling 32,000t are
being processed at present. Processing of these bulk samples through the
primary, secondary and tertiary crushing plant with a 50tph DMS plant began in
July. In addition to the processing of this bulk sample material, approximately
240,000t of tailings and stockpiled kimberlite material will be processed.
Diamond Core expects to complete a review of the initial sample results by year-
end.
Kwango (BRC) - Following the airborne and ground geophysical work in the prior
field season, more recent activities have included drilling, pitting and stream
sampling of identified targets zones for alluvial gravels on the Kwango River.
Positive results have driven the decision to initiate bulk sampling and advanced
gravel volume estimation programmes. With the assistance of Diamond Core, BRC
is currently constructing a 70tph (front end) DMS plant for use on the Kwango
project. Including the required earthmoving equipment, total capital
requirements are estimated at approximately US$3.5 million, which is expected to
be financed, in part, through a CDN$3.0 million credit line with a Canadian
financial institution. BRC expects to dispatch this equipment to the DRC in the
first quarter of 2008; meanwhile, drilling and pitting programmes are ongoing.
Tshikapa (BRC) - The kimberlite potential of the Tshikapa project area has been
assessed through an initial and follow-up aeromagnetic survey and several stages
of stream sediment sampling. The follow-up sampling over the magnetic anomalies
yielded kimberlite indicator minerals. The results of this work have identified
a total of at least 22 targets for drilling activity, which is expected to be
start before year-end, given the recent purchase of a hydracore drill rig.
Lubao (BRC) - A rapid, yet staged approach to exploration for kimberlites,
similar to that employed at Tshikapa, was undertaken on the Lubao project area.
Based on the follow-up sampling over the magnetic anomalies, six targets have
been recommended for drilling activity, which is expected to be initiated in
early 2008.
Background
As announced on 5 July 2007, BRC and Diamond Core have agreed to merge by way of
a court-sanctioned scheme of arrangement under the provisions of Section 311 of
the Companies Act, 1973 (South Africa), pursuant to which BRC will acquire all
of the outstanding shares of Diamond Core in exchange for BRC shares. At
closing, all Diamond Core shareholders will receive 1 BRC common share for every
24.5 Diamond Core ordinary shares held. The closing of the Merger is subject to
typical conditions, including the approval of Diamond Core shareholders and
regulatory approvals from competition authorities, the South African Reserve
Bank and stock exchange authorities. For additional details, please see the
joint press releases of 5 July 2007, 2 August 2007 and 7 September 2007.
Both Diamond Core and BRC will remain committed to their current geographies
from an economic and social responsibility perspective with an ultimate goal of
sustainable resource developments that benefit all stakeholders.
Qualified persons
Mike de Wit, President and Chief Executive Officer of BRC, is the "qualified
person" (as such term is defined in National Instrument 43-101) who supervised
the preparation of and is responsible for the technical information in this news
release relating to BRC`s projects. Hano Hamman, Group Geologist of Diamond
Core, is the "qualified person" (as such term is defined in National Instrument
43-101) who supervised the preparation of and is responsible for the technical
information in this news release relating to Diamond Core`s projects.
About BRC
BRC is a Canadian-based diamond exploration company active principally in the
DRC. Led by a management team with extensive experience in the DRC, BRC was one
of the first companies to identify emerging diamond opportunities in the DRC and
today has a commanding land position, directly controlling approximately 8,101
square kilometers and retaining a further 14,784 square kilometers through
option agreements on three separate exploration projects. These properties are
located in some of the most prospective diamond regions of the country. Banro
Corporation, BRC`s largest shareholder with a 27.5% interest in BRC, is a
mineral exploration company focused on the DRC. BRC is listed on the TSX
Venture Exchange under the ticker "BRC".
About Diamond Core
The objectives of the South African-based Diamond Core group of companies are to
conduct systematic greenfields diamond exploration programs and to bring to
account economically viable diamond discoveries through the acquisition of
assets considered uneconomic or marginal by others. Diamond Core believes these
assets can successfully be brought to account using its technical skills,
entrepreneurial spirit and low cost operating structure. Diamond Core is
focused on, and currently active in, the Northern Cape Province of South Africa.
Diamond Core is actively involved in two kimberlite exploration projects, the
Paardeberg East Project, situated 40 km west of Kimberley, and the Skeyfontein
JV, located some 20 km south east of the town of Postmasburg. Through its
acquisition of Samadi (SA) Pty Ltd., Diamond Core has a suite of three alluvial
projects: Silverstreams, Uitdraai and the De Kalk Project. Diamond Core also
has a suite of five applications with the Department of Minerals and Energy
Affairs for additional prospecting rights in the Northern Cape Province. Diamond
Core is listed on the JSE Limited in South Africa under the ticker "DMR".
For further information, please contact:
In Johannesburg: James Duncan, Russell & Associates, 27 11 880-3924
In Toronto: Arnold T. Kondrat, Executive Vice President, or Martin D. Jones,
Vice President, Corporate Development, BRC Diamond Corporation, at (416) 366-
2221 or 1-800-714-7938.
Johannesburg
30 October 2007
Corporate adviser and sponsor to Diamond Core
River Group
Attorneys to Diamond Core
Werksmans Inc.
Competent person and independent advisor
Venmyn Rand
Financial adviser to BRC
RBC Capital Markets
Legal counsel to BRC
Macleod Dixon
Legal counsel to financial adviser
Fasken Martineau
Date: 30/10/2007 09:10:01 Produced by the JSE SENS Department.
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