| Wed 14 Mar 2007, 10:00 | | DMR - Diamond Core - Agreement to Acquire the Sand |
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DMR
DMR
DMR - Diamond Core - Agreement to Acquire the Sanddrift Project: Middle Orange
River
Diamond Core Resources Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/013468/06)
Share code: DMR ISIN Number: ZAE000076956
("Diamond Core" or "the Company")
AGREEMENT TO ACQUIRE THE SANDDRIFT PROJECT: MIDDLE ORANGE RIVER
Diamond Core Resources Limited ("the Company") is pleased to announce the
conclusion of an agreement to acquire the Sanddrift Project from SouthernEra
Management Services (Pty) Limited ("SouthernEra") and Minex Projects (Pty)
Limited ("Minex"). The Sanddrift Project is situated to the immediate north-east
of the Silverstreams Project in which the Company has an interest, together with
Sefalana Mineral Resources (Pty) Limited, and on which the Company is currently
constructing bulk sampling/ trial mining metallurgical infrastructure suited to
the diamondiferous alluvial gravels present thereon.
SouthernEra and Minex have conducted grassroots exploration for primary deposits
on the Sanddrift Project and access to all information and results relating to
historical exploration activities form part of the agreement.
Commenting on the transaction, as well as on the exploration Projects, Theo
Botoulas, CEO of Diamond Core, said "As detailed in previous SENS announcements,
the stock in trade of an exploration Company is access to exploration acreage
via prospecting rights and the ability to efficiently explore the acreage which
has been allocated. The acquisition of the Sanddrift Project could significantly
add to the alluvial gravel resources of the Company on the Middle Orange River,
as well as adding to our portfolio of primary targets, and falls within two of
the stated objectives of the Company - to conduct systematic greenfields
exploration and to bring to account economically viable discoveries. As part of
its strategy the Company will continue to explore for new economically viable
diamondiferous deposits in a focussed and systematic manner in the Northern Cape
Province of South Africa, and to acquire assets only when these are considered
to be value accretive to our shareholders and which meet our investment
criteria."
Sanddrift Project
The Sanddrift Project is a brownfields exploration Project in the Diamond Core
portfolio and will be explored for both primary (kimberlite) and secondary
(alluvial) deposits.
The details of the exact location of the Sanddrift Project are available on the
Company website at www.diamondcore.co.za.
Geology and Modelling
The Sanddrift Property has an Orange River frontage of 13km. Diamondiferous
gravels occur between 5 and 40 metres above the present day Orange River as
erosional remnants of terrace deposits. These gravels were deposited on a planar
surface comprising glacial shale and tillite of the Dwyka Formation. At
Silverstreams, immediately to the south-west of Sanddrift, a resource in excess
of 30 million tonnes of alluvial gravels has been identified by the Company to
date, and at which the Company is currently constructing bulk sampling/ trial
mining facilities, trenches and metallurgical infrastructure and conducting
further exploration work.
Recent Exploration
After reviewing the area Mr Hano Hamman, the Group Geologist, has identified the
potential for additional alluvial resources to supplement the resource in the
Company portfolio of alluvial projects. The Middle Orange River is known for
producing diamonds of exceptional quality, with average US $ per carat values
from nearby operations exceeding $1 200 per carat.
The Sanddrift Property is also known to host a number of diamondiferous
kimberlitic fissures/dykes. The potential economical value of these fissures is
still to be determined and as part of the transaction, the data collected thus
far by SouthernEra and Minex will be made available to the Company.
Future Exploration Plan and Budget
Alluvial potential
The Group Geologist has proposed that the first step in the exploration of the
area should be the mapping of surface exposures to rapidly determine the extent
of the palaeo-Orange River deposits. This will be followed by wide-spaced
reverse circulation drilling in order to study the nature and composition of the
ancient fluvial environment and to estimate the potential gravel deposit size.
If positive drilling results are obtained, a more comprehensively designed
exploration programme could be undertaken including denser drilling patterns and
various geophysical methods to map the bedrock, gravel layers and overburden.
From this phase a more accurate determination of the extent of the gravel
deposit would be possible, and if the alluvial gravel deposit was to meet the
Company criteria, a bulk sampling exercise would be conducted.
The budget for this initial exploration work on the alluvial gravel terraces,
pre-bulk sampling, is R 300 000.
Kimberlite potential
Diamondiferous kimberlite fissures have been identified on the farm by
SouthernEra and Minex. A holistic regional satellite photo analysis and
geophysical programme for primary deposits has been planned for all the Projects
in the Company portfolio in the Prieska area.
Terms of the Transaction
The acquisition is dependent on the consent of the Minister of Minerals and
Energy being granted in terms of section 11 of the Minerals and Petroleum
Resources Act 28 of 2002 ("MPRDA"). The rights will be transferred to Sanddrift
Exploration (Pty) Limited ("the OPCO"), a 100% subsidiary of the Company.
The Company is currently in negotiation with a broad-based BEE entity with
regards to an equity participation in the OPCO in order that compliance with the
requirements of the MPRDA and Charter promulgated there under can be attained.
Purchase Consideration
As purchase consideration for the cession of the Prospecting Right into the name
of Sanddrift Exploration (Pty) Limited, Diamond Core shall pay the following
consideration to Minex, namely:
- if payment is made during the first year after the approval of the
prospecting right by DME, the purchase consideration will be
R1 000 000 (one million rand);
- if payment is made during the second year after the approval of the
prospecting right by DME, the purchase consideration will be
R2 000 000 (two million rand);
- if payment is made during the third year after the approval of the
prospecting right by DME, the purchase consideration will be
R3 000 000 (three million rand);
- if payment is made during the fourth year after the approval of the
prospecting right by DME, the purchase consideration will be
R4 000 000 (four million rand);
- if payment is made during the fifth year after the approval of the
prospecting right by DME, the purchase consideration will be
R5 000 000 (five million rand).
Payments
Diamond Core shall pay the following fees to Minex, dated with effect from the
approval of the prospecting right by DME to the OPCO:
Anniversary of the Approval of the Amount payable
prospecting right by DME to
Sanddrift Exploration (Pty) Ltd
1 st Anniversary R250 000
2 nd Anniversary R500 000
3 rd Anniversary R1 000 000
4 rd Anniversary R1 500 000
5 th Anniversary R5 000 000
Should the Purchase Consideration be met prior to any of the Anniversary dates
the requirement for paying these fees will immediately lapse. If Sanddrift was
to elect not to pay the purchase consideration at the end of five years after
the approval date, the prospecting rights would automatically revert to Minex.
For more information on Diamond Core Resources Limited, please visit the Company
website at www.diamondcore.co.za.
For further information or enquiries, please contact Theo Botoulas on
+(27)828522150 or on +(27)117064888.
14th March 2007
Epsom Downs
Sandton
Attorneys to Diamond Core Resources Ltd
Werksmans
Sponsor
River Group
Date: 14/03/2007 10:00:01 Produced by the JSE SENS Department.
