| Fri 28 Jan 2005, 14:21 | | Diamond Core - Diamond Core signs option agreement |
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Diamond Core - Diamond Core signs option agreement to acquire alluvial diamond
projects in the Middle Orange River
DIAMOND CORE RESOURCES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013468/06)
Share code: DMR ISIN Number: ZAE000045688
(`Diamond Core` or `the company`)
Diamond Core signs option agreement to acquire alluvial diamond projects in the
Middle Orange River
In terms of an agreement signed on 26 January 2005 (`the option agreement`),
Diamond Core has been granted, for no consideration, an exclusive option to
acquire all of the shares in and claims against Samadi Resources SA (Pty)
Limited (`Samadi SA`) by Samadi Resources Limited (`Samadi UK`), the UK-
incorporated holding company of Samadi SA.
Samadi SA has applied for rights to explore and mine a number of alluvial
diamond mining projects on the Middle Orange River. These projects are held in
the following companies:
- Sandstraat Eksplorasie (Edms) Bpk, which holds the Silverstreams project;
- Prieska Diamond Mining (Pty) Limited, which holds the Uitdraai project;
- Samadi (Douglas) Exploration (Pty) Limited, which holds the De Kalk
project; and
- Samadi Exploration (Pty) Limited, which holds a number of unexplored `blue
sky` projects.
Samadi SA holds an 85% stake in each of the above companies, the balance being
held by a black empowerment entity, the Sefalana Consortium.
The purchase consideration for Samadi SA is to be based upon reports prepared by
duly appointed, independent competent persons and will be settled through the
issue of Diamond Core shares.
Background
Shalom Nachom, a non-executive director of Diamond Core, owns 24% of Samadi UK
and approximately 17% of Diamond Core. Mr Nachom, Theo Botoulas and David
Levithan are directors of the Samadi group of companies as well as being
directors of Diamond Core.
Samadi SA was formed by Samadi UK during the period that Diamond Core`s listing
was suspended and the company faced an uncertain future due to, amongst other
factors, a liquidation application having been brought against one of its
subsidiaries. Subsequent to the implementation of the rescue of Diamond Core
and its re-listing in March 2004, no acquisitions have been made by the Samadi
group of companies. However, the boards of directors of Diamond Core and the
Samadi group are of the view that it is critical to resolve the conflict of
interest which exists and accordingly the option agreement was drawn up and has
now been signed. Due to this conflict of interest, Mr Nachom, Mr Botoulas and
Mr Levithan will recuse themselves from all negotiations relating to
establishing appropriate values for the purposes of Diamond Core acquiring the
interests of Samadi UK in Samadi SA. In addition, the transaction would be
considered to be a related party transaction in terms of the Listings
Requirements of the JSE Securities Exchange South Africa, and thus a fair and
reasonable opinion would be required. All JSE required documentation and
announcements will be published as necessary.
The Samadi assets
Both Silverstreams and Uitdraai are alluvial projects located in the Middle
Orange River downstream from the Saxendrift mine, which is owned by Trans Hex
Group Limited. Drilling work conducted to date as well as modeling of the
Silverstreams and Uitdraai ore bodies indicates that they have similar
geological characteristics to those of Saxendrift.
De Kalk is also an Orange River alluvial project and is the site of the first
diamond discovery in South Africa. Whilst the surface gravels at De Kalk have
been extensively mined in the past, Samadi management believes that the calcrete
layer may overlay a basal gravel deposit.
`We believe that a merger of these two diamond exploration companies will
benefit Diamond Core shareholders and will give Diamond Core the critical mass
it requires. We have commissioned competent persons` reports on both Diamond
Core and Samadi SA as a first step towards establishing appropriate values for
the two entities,` said Theo Botoulas, Managing Director of Diamond Core.
Diamond Core enquiries:
Diamond Core is a South African-based diamond exploration and mining company
which is listed on the JSE Securities Exchange South Africa. It holds a diamond
mining licence over the farm Paardeberg East in the Northern Cape Province and
was recently awarded prospecting rights over the farm Skeyfontein, also situated
in the Northern Cape.
Managing director : Theo Botoulas +27 11 325 5750
Investor & media relations : James Allan +27 11 575 3420 / +27 (0)82 565 4507
Sponsor : Sasfin Corporate Finance, A division of Sasfin Bank Limited
Corporate advisor : QuestCo (Pty) Limited
Geological contractors : MSA Geoservices
Website : www.diamondcore.co.za
Date: 28/01/2005 01:23:03 PM
Produced by the JSE SENS Department
