| Thu 2 Apr 2009, 7:16 | | BCD - BRC DiamondCore - BRC Diamondcore reports 2008 financial results |
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BCD
BCD
BCD - BRC DiamondCore - BRC Diamondcore reports 2008 financial results
BRC DIAMONDCORE LTD
(Incorporated in Canada)
(Corporation number 627115-4)
Share code: BCD & ISIN Number: CA05565C1095
("BRC DiamondCore" or "the Company")
BRC DIAMONDCORE REPORTS 2008 FINANCIAL RESULTS
Toronto, Canada - April 1, 2009 - BRC DiamondCore Ltd. (the "Company")
(TSX - "BCD"; JSE - "BCD") announced its financial results for the year ended
December 31, 2008. The Company also announces that it has filed a National
Instrument 43-101 technical report on its Tshikapa project in the Democratic
Republic of the Congo (the "DRC").
The Company reported a net loss for 2008 of Cdn$103 million caused by the
impairment of goodwill of Cdn$54.6 million arising from the Company`s
acquisition of Diamond Core Resources Limited in February 2008 and the
impairment of mineral properties and capital assets in an amount of Cdn$43.4
million. While the main cause of the impairment has been the collapse of
diamond prices and the current severe economic conditions, the Company will
have legal counsel review the representations and warranties it received prior
to the acquisition of Diamond Core Resources Limited.
Full details regarding the fiscal 2008 financial results are set out in the
Company`s audited consolidated financial statements as at and for the
financial year ended December 31, 2008 and the related management`s discussion
and analysis, which have been filed on SEDAR at www.sedar.com.
Owing to the change in market conditions in the fourth quarter of 2008 and
lower resultant cash-flows, bulk sampling operations at all of the Company`s
South African operations were suspended. Early this year when it became clear
that the diamond industry would remain depressed for an extended period the
decision was taken to retrench the Company`s entire labour force in the South
African operations, and place the projects on care and maintenance. This
strategy has been adopted by a large part of the diamond industry.
To assist the Company during this difficult period, several of the Company`s
directors have made cash advances to the Company in order to meet certain
critical near term creditors. The Company is actively looking at alternative
avenues for finance, including, but not limited to, selling non-core assets in
South Africa and actively working to conclude strategic partnerships both in
South Africa and the DRC.
As a further cash conservation step, the Company`s exploration programs in the
DRC have been significantly scaled back until further funding becomes
available. However, the Company remains optimistic about the prospects of its
Tshikapa project in the south of the DRC. The Tshikapa project properties are
located within the popularly known Tshikapa triangle, bordering the Kasai
River in the east, the Loange River in the west and the Angolan border in the
south. The properties also lie within the broader so called kimberlite
emplacement corridor which extends from known kimberlite pipes located in
Angola. The Tshikapa diamond field has been extensively mined through
alluvial operations by medium and small-size companies and small-scale miners,
and it is estimated that it has produced more than 100 million carats of
diamonds since 1907. Although the popular explanation for the presence of
these diamonds is that they have been sourced out of Angola, the Company`s
focus is on kimberlite exploration within the Tshikapa triangle, as there are
many geological factors which indicate that there are primary sources present
in this triangle. The Company has prepared a technical report on the Tshikapa
project dated March 31, 2009 and entitled "National Instrument 43-101
Technical Report on the Tshikapa Project of BRC DiamondCore Ltd. in the
Democratic Republic of Congo". A copy of the report can be obtained from
SEDAR at www.sedar.com or from the Company`s web-site at www.brc-
diamondcore.com. The Company has done extensive geological work in the area
and, while kimberlites have not yet been found, the results of this work
suggest that the Tshikapa project is prospective for kimberlites.
The application by the Company`s subsidiary, Samadi Resources (SA) (Pty) Ltd,
in the high court in South Africa for a declarator against its former BEE
partner, Sefalana Mineral Resources, was refused by the court on March 27,
2009. The judgement did not interfere with the current shareholder structure
and has no effect on the Company financially or on its current mining order
rights. The application was brought by Samadi for its benefit in order to
dispose of any uncertainty regarding the termination of the BEE agreements
between Samadi and Sefalana. Samadi remains committed to its current BEE
shareholder Leswika Resources (Pty) Ltd and will oppose any attempt by
Sefalana to rely on the court`s refusal to issue a declarator in favour of
Samadi. Samadi has been advised by its legal representatives that there are
good grounds for an appeal and will shortly file a notice appealing the
judgment.
The Company is an African-focused diamond explorer with properties in South
Africa and the Democratic Republic of the Congo. 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 at 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: Brian Scallan, Director and Vice President, Finance at +2711-
958-2885 or +2782 9026273.
Qualified Person
Dr. Mike de Wit, President of the Company, is the "qualified person" (as such
term is defined in National Instrument 43-101) who is responsible for the
technical information in this press release relating to the Tshikapa project.
Forward-Looking Statements: This press release contains forward-looking
statements. All statements, other than statements of historical fact, that
address activities, events or developments that the Company believes, expects
or anticipates will or may occur in the future (including, without limitation,
statements relating to exploration results, potential mineralization and the
Company`s exploration plans) are forward-looking statements. These forward-
looking statements reflect the current expectations or beliefs of the Company
based on information currently available to the Company. Forward-looking
statements are subject to a number of risks and uncertainties that may cause
the actual results of the Company to differ materially from those discussed in
the forward-looking statements, and even if such actual results are realized
or substantially realized, there can be no assurance that they will have the
expected consequences to, or effects on the Company. Factors that could cause
actual results or events to differ materially from current expectations
include, among other things, uncertainties relating to the availability and
costs of financing needed in the future, the possibility that future
exploration results will not be consistent with the Company`s expectations,
changes in equity markets, changes in diamond markets, foreign currency
fluctuations, inflation, political developments in South Africa or the DRC,
changes to regulations affecting the Company`s activities, delays in obtaining
or failure to obtain required project approvals, the uncertainties involved in
interpreting geological data and the other risks involved in the diamond
exploration business. Any forward-looking statement speaks only as of the
date on which it is made and, except as may be required by applicable
securities laws, the Company disclaims any intent or obligation to update any
forward-looking statement, whether as a result of new information, future
events or results or otherwise. Although the Company believes that the
assumptions inherent in the forward-looking statements are reasonable, forward-
looking statements are not guarantees of future performance and accordingly
undue reliance should not be put on such statements due to the inherent
uncertainty therein.
Sponsor
Arcay Moela Sponsors (Proprietary) Limited
(Registration number 2006/033725/07)
Date: 02/04/2009 07:16:15 Produced by the JSE SENS Department.
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