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DMR
DMR
Diamond Core Resources Limited - Update On The Capital Raising Proposed By The
Company And Further Cautionary Announcement
DIAMOND CORE RESOURCES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013468/06)
Share code: DMR ISIN : ZAE000045688
("Diamond Core" or "the company")
Update on the capital raising proposed by the company and further cautionary
announcement
1. Introduction
Shareholders are referred to the announcement relating to the merger of Diamond
Core and Samadi Resources SA (Pty) Limited ("Samadi") ("the merger") and the
associated capital raising process ("the capital raising") published on 18 July
2005 and to the cautionary announcement contained in the annual financial
results of the company published on 28 September 2005 and to the further
cautionary announcement published on 9 November 2005 ("the further cautionary
announcement").
2. Update on the impact of the terms of the BEE agreement on the capital
raising
As set out in the further cautionary announcement, in terms of the agreement
between Samadi and a broad based BEE consortium, Sefalana Mineral Resources
(Pty) Limited ("Sefalana") ("the BEE agreement"), Sefalana holds 50% equity
interests in each of the Samadi operating subsidiaries and agreed to secure its
pro rata share of the capital required to fund the Samadi operating
subsidiaries, or a portion thereof, by 31 December 2005.
Sefalana was not able to secure such financing and, accordingly, in terms of the
BEE agreement, Samadi will be providing funding to Sefalana by way of a
structured loan finance arrangement. The terms of this arrangement provide
that, after repayment of the loan, Samadi will be entitled to 70% of the
dividends received by Sefalana from the Samadi operating subsidiaries.
3. Further cautionary
Diamond Core can now continue with the capital raising, subject to shareholder
approval as described in the announcement of 18 July 2005. As the company has
not yet finalised the amount to be raised or the issue price of the Diamond Core
shares and options to be issued in terms of the capital raising, the pro forma
financial effects of the implementation of the merger, the BEE agreement and the
capital raising have not yet been established. Shareholders are accordingly
advised to continue to exercise caution until a full announcement is made.
4. Documentation
A circular, which is subject to the approval of the JSE Limited and will contain
full details of the merger and the capital raising, will be posted to
shareholders as soon as possible.
6 January 2006
Hyde Park
Sponsor to Diamond Core
QuestCo (Pty) Limited
Date: 06/01/2006 08:00:05 AM Produced by the JSE SENS Department
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