Diamond Fields Announces Agreement to Advance Beravina Project
Diamond Fields Announces Agreement to
Advance Beravina Project
Vancouver, B.C. (16 May 2019) – Diamond Fields Resources Inc. (TSX-V: DFR)
(“DFR” or, including its subsidiaries, the “Company”) is pleased to announce that it has
entered into a cooperation agreement (“the Agreement”) with TMH Acquisition Co
(“TMH”), a special purpose vehicle established by Denham Mining Fund LP, to advance
the Company’s Beravina Project in Madagascar (“Beravina” or “the Project”).
Pursuant to the Agreement, TMH will make an immediate payment of US$250,000 to the
Company and will fund the next stage of exploration and development work on Beravina
(the “2019 Work Program”). The 2019 Work Program, which will be under TMH’s control,
is expected to cost approximately US$500,000 and should be completed within seven (7)
months (the “Evaluation Period”). TMH will have the right to extend the Evaluation
Period by a fur ther three (3) months if it has incurred expenditures of US$500,000 and
made a further payment of US$250,000 (which, if exercised, will be deducted from the
Option exercise payment of US$2,000,000 referred to below).
Upon completion of the 2019 Work Progra m, TMH will have the option (“the Option”) to
acquire 100% of the Project in consideration of:
A. a net payment of US$2,000,000; and
B. a nine percent (9%) sales royalty (“Royalty”).
If the Option is exercised, TMH will incur all future capital and operati ng expenditures in
relation to the Project and the Company will benefit, in perpetuity, from its right to nine
percent (9%) of all future mineral sales, subject only to limited deductions (such as VAT,
third party sales commissions, third party freight and any third party toll treatment
charges). If the Option is not exercised by TMH during the Evaluation Period, the Project
must be returned to the Company without TMH retaining any interest, along with all of
the results from the 2019 Work Program.
Upon exercise of the Option, TMH is required to place the Project into production by no
later than 30 June 2023 (“Project Long -stop Date”), subject to certain extensions for
events of force majeure such as permitting delays, but not longer than 30 June 2025. If
the Project is not placed into production by the Project Long -stop Date, then TMH will be
required to make advance royalty payments to the Company, as follows:
A. US$500,000 on the Project Long-stop Date;
B. US$500,000 six months after the Project Long-stop Date; and
C. US$500,000 on every anniversary of the Project Long-stop Date thereafter.
If TMH should fail to make any advance royalty payment, when due, then the Company
shall have the right to reacquire the Property in consideration of US$1 and 50% of all
advance royalty payments actually made by TMH, if any.
Sybrand van der Spuy, CEO, said “We are pleased to have secured the cooperation of
such a strong financial and technical partner for Beravina. We have confidence that the
2019 Work Program will meet e xpectations and confirm the technical merits of the
Project. If the Option is exercised, DFR will be in the enviable position of being carried
through to production at no cost whilst retaining a very substantial economic stake in
future sales revenue from Beravina.”
DFR was advised by Tamesis Partners LLP, as financial advisor, and Fasken Martineau
LLP, as legal advisor.
DFR has agreed to pay the following fees to Tamesis in connection with its services:
$25,000 on signing of the Agreement, US$75,000 on e xercise of the Option and
US$100,000 following the commencement of commercial production at Beravina.
The Agreement is subject to approval of the TSX Venture Exchange, which approval DFR
expects to obtain.
Ends
About Beravina
The Beravina Project is a hard rock zircon deposit with a NI 43-101 Inferred Mineral
Resource estimate of 1.5 million tons at 22.7% zircon (ZrSiO4) equivalent to 15.3%
ZrO2, See the NI 43-101 Technical Report, with an effective date of 14 December 2018
and filed on the Company’s SEDAR profile on 29 January 2019, written by MSA Group
(Pty) Ltd. (Michael S. Cronwright, Pr.Sci.Nat., FGSSA, John Derbyshire, Pr.Eng.,
FSAIMM, Jeremy Witley, Pr.SCI.Nat., FGSSA and Andre van der Merwe, Pr.Sci.Nat.,
MAusIMM, FGSSA), each of whom is a “qualified person” for purposes of NI 43-101, and
independent of the Company as defined in NI 43-101. The Project, which covers 625
hectares, is located in Western Madagascar. Results so far show that, utilizing industry
standard beneficiation technologies, zircon can be concentrated to levels of between
50% ZrO2 and 58% ZrO2 with varying levels of thorium ingrained.
DIAMOND FIELDS RESOURCES INC.
Sybrand van der Spuy, CEO and Director
Contact: +27 78 4558700
Michael Oke/Andy Mills: +44 20 7321 0000
Aura Financial LLP: www.aura-financial.com
Notes to Editors:
DFR is a TSX Venture Exchange listed exploration and mine development company with
assets in Madagascar and Namibia. In Madagascar, DFR is developing the Beravina
Project, an advanced high grade hard rock zircon exploration prospect located in the
west of the country, approximately 220km east of the port of Maintirano and near a
state road. DFR acquired Beravina from Pala Investments and Austral Resources in 2016.
In Namibia, International Mining and Dredging Holdings (Pty) Limited is undertaking an
initial six month (non-continuous) offshore diamond mining program on DFR’s ML 111
licence area. The ML 111 concession has a ten year mining licence, effective until 4
December 2025, and lies within Luderitz Bay between Diaz Point in the south and
Marshall Rocks in the north and at depths of 15 to 70 metres.
Website: www.diamondfields.com
The Company’s public documents may be accessed at www.sedar.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Forward-Looking Statements:
Statements in this release that are forward-looking statements are subject to various
risks and uncertainties concerning the specific factors identified in the Company’s
periodic filings with Canadian Securities Regulators. Such forward-looking information
represents management’s best judgment based on information currently available. No
forward-looking statement can be guaranteed and actual future results may vary
materially. The Company does not assume the obligation to update any forward-looking
statement, except as otherwise required by law.