| Fri 3 Jul 2009, 8:43 | | BCD - BRC Diamondcore Announces Agreement To Sell Alluvial Diamond Projects In |
|
BCD
BCD
BCD - BRC Diamondcore Announces Agreement To Sell Alluvial Diamond Projects In
South Africa And Renewal Of Cautionary Announcement
BRC DIAMONDCORE LTD.
(Incorporated in Canada)
(Corporation number 627115-4)
Share code: BCD & ISIN Number: CA05565C1095
("BRC DiamondCore" or "the Company")
BRC DIAMONDCORE ANNOUNCES AGREEMENT TO SELL ALLUVIAL DIAMOND PROJECTS IN SOUTH
AFRICA AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
Toronto, Canada and Johannesburg, South Africa - July 3, 2009 - BRC
DiamondCore Ltd. ("BRC" or the "Company") (TSX - "BCD"; JSE - "BCD") announces
that it has entered into a Heads of Agreement (the "Agreement") with KIG
Mining Plc ("KIG") pursuant to which KIG has agreed to purchase BRC`s alluvial
diamond projects in South Africa, consisting of the Silverstreams, De Kalk,
Muishoek, Sanddrift and Uitdraal projects, together with the processing plant,
mining fleet and equipment which are associated with these projects. These
assets (the "Purchased Assets") are held by BRC through South African
subsidiaries of BRC.
The purchase price for the Purchased Assets set out in the Agreement is
US$10.7 million, consisting of the following:
(a) US$2.0 million in cash to be paid to BRC (such payment is to be made in
two tranches, with the first tranche of US$500,000 to be made no later
than one month after the hand-over of operations at the Silverstreams
project and the remaining US$1,500,000 to be made no later than two
months after the hand-over);
(b) 18,000,000 ordinary shares of KIG (the "KIG Consideration Shares") to be
issued to BRC at a price of US$0.478 per share (or US$8.6 million in the
aggregate); and
(c) US$100,000 to be paid by KIG directly to existing creditors to facilitate
the resumption of operations at the Silverstreams project.
KIG is a publicly-traded gold and diamond exploration company (symbol: 5KM on
the Frankfurt Exchange) with properties in Liberia, West Africa and is not a
related party to BRC. KIG`s head office is in the United Kingdom.
The Agreement provides that (i) BRC will have a put option to sell the KIG
Consideration Shares, which trade on the Frankfurt Exchange, to KIG at a price
of US$0.478 per share, exercisable in stages over a 13 month period commencing
in May 2010, and (ii) KIG will have a call option to purchase the KIG
Consideration Shares from BRC at a price of US$0.75 per share exercisable in
stages over a 13 month period commencing in May 2010. The said put and call
options will remain in place until August 31, 2011, after which BRC may sell
any of the KIG Consideration Shares still held by BRC (i.e. which have not
been previously sold or purchased pursuant to the put and call options).
The transfer of the Purchased Assets to KIG will only be completed upon the
expiry of the said put and call options. For as long as the said put and call
options are still in place, BRC will be entitled to nominate one director to
the board of directors of KIG.
KIG intends to resume operations at the Silverstreams project, utilizing staff
previously employed at this operation, and a plan for the transition of the
project into production will be assisted by BRC over the next two to four
weeks. KIG will be responsible for providing the working capital to resume
such operations.
The Agreement further provides that should KIG default on any of the terms
contained in the Agreement, BRC would be entitled to cancel the Agreement and
that, in the event of cancellation, KIG would be required to vacate the
project sites, the Purchased Assets would be returned to BRC, and any amounts
paid to BRC under the Agreement would be forfeited to BRC as unliquidated
damages.
The Agreement contemplates the entering into by BRC and KIG of a further
purchase and sale agreement (which is referred to in the Agreement as the
"Main Agreement") containing such other terms and conditions as are normal and
appropriate for a sale and purchase of assets as envisaged by the Agreement.
BRC DiamondCore Ltd. is an African-focused diamond explorer active 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, www.brc-diamondcore.com, or
contact:
In Toronto: Martin D. Jones, Vice President, Corporate Development, (416) 366-
2221 or 1-800-714-7938.
In Johannesburg: Brian P. Scallan, Vice President, Finance +27 11 9582885.
Forward-Looking Information
This press release contains forward-looking information which is not comprised
of historical facts. Forward-looking information involves risks,
uncertainties and other factors that could cause actual events, results,
performance and opportunities to differ materially from those expressed or
implied by such forward-looking information. Forward looking information in
this press release includes, but is not limited to, the expected effect of the
sale of the Purchased Assets (the "Sale") on the Company`s financial position,
the expected terms and conditions of the Sale, the anticipated timing for the
Company receiving from KIG the cash payments completing by the terms of the
Sale, the value of the KIG Consideration Shares and the Company`s put option
to sell the KIG Consideration Shares to KIG. Factors that could cause actual
results to differ materially from those described in such forward-looking
information include, but are not limited to, failure to complete the Sale in
accordance with all of the terms contemplated by the Agreement, adverse
general market conditions, adverse changes in diamond prices, foreign currency
fluctuations, inflation, political developments in South Africa, changes to
regulations affecting the Company`s activities, delays in obtaining or failure
to obtain required project approvals and those other risks set out in the
Company`s public documents filed on SEDAR.
Although the Company believes that the assumptions and factors used in
preparing the forward-looking information are reasonable, undue reliance
should not be placed on such information, which only applies as of the date of
this press release, and no assurance can be given that such events will occur.
The Company disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new information, future
events or otherwise, other than as required by law.
PRO FORMA FINANCIAL EFFECTS
Pro forma financial effects of the transaction will be announced in due
course.
RENEWAL OF CAUTIONARY
Shareholders are advised to continue to exercise caution in dealings in their
securities until a further announcement detailing the pro forma financial
effects of the transaction are announced.
JOHANNESBURG
July 03, 2009
Date: 03/07/2009 08:43:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
