| Thu 12 Jun 2008, 8:56 | | BCD - BRC Diamondcore Ltd - BRC Diamondcore and Rio Tinto sign letter of |
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BCD
BCD
BCD - BRC Diamondcore Ltd - BRC Diamondcore and Rio Tinto sign letter of
intent for Rio Tinto to earn in to BRC Diamondcore`s Five Northern DRC
Projects
BRC DIAMONDCORE LTD.
(Incorporated in Canada)
(Corporation number 627115-4)
Share code: BCD & ISIN Number: CA05565C1095
("BRC DiamondCore" or "the Company")
BRC DIAMONDCORE AND RIO TINTO SIGN LETTER OF
INTENT FOR RIO TINTO TO EARN IN TO
BRC DIAMONDCORE`S FIVE NORTHERN DRC PROJECTS
Rio Tinto can earn a 60% interest in a project
by spending US$13 million on the project
Toronto, Canada and Johannesburg, South Africa - June 12, 2008. BRC
DiamondCore Ltd. ("BRC" or the "Company") (TSX - BCD; JSE - BCD) announces
that the Company has signed a Letter of Intent with Rio Tinto Mining and
Exploration Limited ("Rio Tinto"), whereby Rio Tinto can earn a 60% interest
in the Company`s five diamond exploration projects (the "Northern Projects")
in the northern Democratic Republic of the Congo (the "DRC") under a staged
earn-in arrangement.
These five Northern Projects relate to a total of 106 exploration permits
covering approximately 27,000 square kilometres in the Equateur and Oriental
Provinces in the northern DRC. It is believed that the region`s geology,
which represents an extension of the Mboumou Craton from the Central African
Republic, is prospective for the hosting of kimberlite pipes. Alluvial
diamonds are currently being recovered in this region.
Under the proposed arrangement, Rio Tinto would fund an exploration program
with the objective of finding and defining kimberlite ore deposits capable of
economic development. The Letter of Intent contemplates the following three
phases:
Reconnaissance Phase. Rio Tinto contributes US$550,000 towards the initial
reconnaissance sampling phase to be completed by BRC by year-end 2009.
Phase 1 Exploration. Upon completion of the reconnaissance phase and receipt
and interpretation by Rio Tinto of all reconnaissance sample results, Rio
Tinto has the exclusive option to earn an initial 35% interest in whichever
Northern Project Rio Tinto selects by spending US$3 million in exploration
expenditure on each of the projects it selects by no later than December 31,
2012. Rio Tinto may elect to earn this 35% interest in multiple Northern
Projects by spending the said US$3 million on each Northern Project selected
by Rio Tinto by no later than December 31, 2012. This Phase 1 exploration
program will be as agreed upon by the parties and will be operated by BRC.
Phase 2 Exploration. Upon completion of Phase 1 exploration on a Northern
Project, Rio Tinto would then have the right to earn an additional 25%
interest in the applicable Northern Project by spending an additional US$10
million in exploration expenditure on each project by no later than December
31, 2014. At the point during Phase 2 exploration where a kimberlite
requires the first bulk sample, BRC would hand over operation of the bulk
sampling program to Rio Tinto.
Following Phase 2 exploration, a joint venture company would be formed with
Rio Tinto holding a 60% interest and BRC holding a 40% interest.
The above proposed earn-in arrangement is subject to various conditions,
including completion of due diligence and negotiation and execution of a
definitive agreement between the parties.
This proposed earn-in arrangement applies solely to BRC`s northern DRC
projects and does not impact the Company`s major DRC projects of Tshikapa,
Kwango River and Lubao.
Company President, Dr. Mike de Wit, said: "We are very pleased to be joint-
venturing with such a highly respected mining company as Rio Tinto on the
exploration of these promising diamond projects. Both companies are of the
view that these properties are highly prospective for the hosting of
diamondiferous kimberlites."
Rio Tinto is a leading international mining group headquartered in the United
Kingdom, combining Rio Tinto plc, a London and NYSE listed company, and Rio
Tinto Limited, which is listed on the Australian Securities Exchange. Rio
Tinto`s business is finding, mining and processing mineral resources. Major
products are aluminium, copper, diamonds, energy (coal and uranium), gold,
industrial minerals (borax, titanium dioxide, salt, talc) and iron ore.
Activities span the world but are strongly represented in Australia and North
America with significant businesses in South America, Asia, Europe and
southern Africa.
BRC DiamondCore Ltd. is an African-focused diamond explorer active in South
Africa and the DRC. Led by a management team with extensive experience in
diamond exploration and mine development, the Company has a broad spectrum of
projects ranging from advanced stage trial mining operations through grass-
roots exploration. The Company`s projects comprise both prospective alluvial
gravels and primary kimberlite targets. The Company works in a systematic
and responsible manner to discover, assess and develop diamond resources for
the benefit of its shareholders and local stakeholders.
For further information, please visit our website, www.brc-diamondcore.com,
or contact:
In Toronto: Martin D. Jones, Vice President, Corporate Development, at (416)
366-2221 or 1-800-714-7938.
In Johannesburg: James Duncan, Russell & Associates, at 27 11 880-3924.
Johannesburg
12 June 2008
Sponsor
River Group
Date: 12/06/2008 08:56:01 Produced by the JSE SENS Department.
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