Diamond Core - Disposal of Dense Medium Separation plant
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`)
Disposal of Dense Medium Separation (`DMS`) plant
1. Terms of and rationale for the disposal
In terms of an agreement dated 13 May 2005, Diamond Core has disposed of its DMS
plant, which is located on the company`s Paardeberg East site, to Supermix
Mining (Pty) Limited (`Supermix`) (`the disposal`). The disposal consideration
amounted to R5,5 million, exclusive of VAT, payable in cash. The effective date
of transfer of ownership of the DMS plant to Supermix was 26 May 2005, being the
date that the disposal consideration was received by Diamond Core.
As set out in the company`s annual report for the year ended 30 June 2004, it
has always been the intention of management to dispose of this DMS plant, as it
is inappropriately sized for the needs of the Paardeberg East project. CDM
Group (Pty) Limited has completed the detailed design work for a new 50 ton per
hour mobile geological sampling / trial mining DMS plant which is tailored to
the company`s strategy and needs. The company intends to commence with the
construction and commissioning of this new DMS plant at the Paardeberg East site
in the latter half of 2005.
2. Application of the disposal proceeds
The proceeds from the disposal will be applied by the company in further
developing and exploring the Paardeberg East project and in progressing the
exploration program on its Skeyfontein property.
3. Pro forma financial effects
The pro forma financial effects presented below are the responsibility of the
board of directors of the company and are presented for illustrative purposes
only to provide information on how the disposal might have impacted on the
reported financial information of Diamond Core if it had been implemented in the
six months ended 31 December 2004. Because of their nature, the pro forma
financial effects may not give a fair reflection of Diamond Core`s financial
position at 31 December 2004.
Cents Before the After the % change
disposal(1) disposal(2)
Earnings per share (0.68) (0.64) 5.88
for the six month
period ended 31
December 2004
Headline earnings (0.70) (0.67) 4.29
per share for the
six month period
ended 31 December
2004
Net asset value per 4.26 4.27 0.23
share at 31 December
2004
Net tangible asset 2.17 2.19 0.92
value per share at
31 December 2004
Shares in issue 647 939 287 647 939 287
Assumptions
1. The figures in this column are extracted from the reviewed interim results
of Diamond Core for the six months ended 31 December 2004.
2. The figures in this column are based on the reviewed interim results of
Diamond Core for the six months ended 31 December 2004 and are based on the
assumptions that:
a. for earnings purposes, the disposal consideration was received on 1 July
2004 and earned interest for the period at a pre tax rate of 6% per annum; and
b. for asset value purposes, the disposal consideration was received on 31
December 2004.
4. Option agreement
Shareholders are referred to the announcements dated 28 January 2005 and 8 March
2005 regarding the exclusive option granted to Diamond Core to acquire all of
the shares in and claims against Samadi SA (Pty) Limited (`Samadi SA`) which, if
exercised, will result in the merger of Samadi SA and Diamond Core (`the
merger`). Shareholders are advised that Venmyn Rand (Pty) Limited is in the
process of finalising a Competent Person`s Report prior to the two companies
entering into discussions regarding the terms of the merger.
27 May 2005
Hyde Park
Corporate advisor and sponsor
QuestCo (Pty) Limited
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
