DIAMOND FIELDS RECEIVES POSITIVE SCOPING STUDY FOR INITIAL
MINING OPERATION AT MARSHALL FORK FEATURE, NAMIBIA
Diamond Fields International (DFI-TSE) is pleased to announce the positive
results of an independent scoping study undertaken by AGRA Simons, of
Vancouver, B.C., Canada, for an initial sea diamond mining operation on
Diamond Fields' 100% owned Marshall Fork feature near Luderitz, Namibia.
The Marshall Fork feature is one of four known diamond-bearing features on
Diamond Fields' primary concessions totaling 660 square kilometers near
Luderitz, Namibia.
Diamond Fields retained AGRA Simons to prepare a scoping study to develop
capital and operating costs parameters for the recovery of diamonds from
the Marshall Fork feature. AGRA Simons estimates that diamond mining at
Marshall Fork could commence within one year of Diamond Fields' decision to
proceed with an operation as outlined in their study. Diamond Fields plans
to proceed to a full feasibility study. Diamond Fields' management is very
encouraged by the findings of the study as they clearly support the
Company's belief that the Marshall Fork feature has the potential to host a
highly profitable sea diamond mining operation.
The scoping study is based on an independent resource estimate completed by
MRDI, a division of AGRA Simons. MRDI's estimate showed that Diamond
Fields' Marshall Fork main feature contains an indicated resource of
364,900 carats and an inferred resource of 549,700 carats totaling 914,600
carats over an area of one million square meters.
Scoping Study Financial Analysis
The AGRA Simons scoping study estimates capital and operating costs of
US$39 million over a two year period. Net revenue based on the indicated
resource estimate (the "Base Case"), is US$52.1 million. Net revenue is
based on an average sales price of US$150 per carat for the 95%+ gem
quality diamonds typically found on the property, less a 10% royalty
payable to the Namibian government prior to export for sale. Over 10,000
carats of diamonds recovered from bulk sampling operations were sold in
1999 for an average price in excess of US$160 per carat. Net revenues
increase to US$86.0 million for the Base Case plus recovery of 50% of the
inferred resource ("Case 1") and to US$119.8 million for the Base Case plus
recovery of 100% of the inferred resource ("Case 2"). There would be no
change to the capital and operating costs in recovering any or all of the
inferred resources. The pre-tax project rate of return exceeds 100% on the
Base Case.
Financial Analysis Summary
(All figures shown in US$ millions. Net revenues and project cash flows
include 10% royalty payment.)
Pre-tax
Case Capital Operating Net Project
Cash
Expenditure Expenditure Revenues Flow
Base Case $10.8 $27.7 $52.1 $13.7
Case 1 (50% of inferred) 10.8 27.7 86.0 45.5
Case 2 (100% of inferred) 10.8 27.7 119.8 81.4
Considering the indicated resource only, the scoping study Base Case
projects that the mine would produce at an initial rate of over 250,000
carats per year. With the estimated productivity of the mining method, an
average sediment thickness of only 1.3 meters and depending upon the
recovery of all or a portion of the inferred resources, the initial
production rates could be significantly higher. Namibian Minerals
Corporation ("Namco") successfully mines diamonds from their concession
that adjoins Marshall Fork on the south with an average sediment thickness
in excess of 3.0 meters. Namco's production for 1999 was projected to be
approximately 260,000 carats on the adjoining feature.
Mining Technology
The scoping study estimates (with an accuracy of +/- 30%-35%) are based on
proposed mining technology developed by Seacore Ltd. of Gweek, Cornwall,
UK, an established marine drilling and civil engineering company, and 50%
owned by AGRA Simons. The technology proposed in the scoping study is a
horizontal mining system utilizing an articulated, slewing mining arm and
pump assembly attached at the base of a rigid, heave compensated slurry
pipe. This system, capable of excavation at a rate of over 4,000 cubic
meters per day, would deliver diamondiferous gravels to a nominal 100
tonne-per-hour DMS plant aboard a support vessel. Deployment and recovery
of the mining system via a through-the-hull moon pool would be performed by
standard marine drill recovery equipment. The proposed mining system is
based on proven technology components and would also be suitable to conduct
pre-mining development of Diamond Fields' other diamondiferous features off
Luderitz. Further analysis of the suitability of the proposed system would
be undertaken as part of a full feasibility study.
The Company's 100% owned Marshall Fork feature is currently held under an
exclusive prospecting license. Commencement of mining at Marshall Fork is
subject to the conversion of the relevant portion of this license to a
mining license.
With total resource estimates of over 2,000,000 carats, there is strong
growth potential beyond Marshall Fork. Phase 3 reconnaissance sampling
work has just been completed with a primary focus on the Boat Bay gravel
feature. New resource estimates from this work will be released upon
receipt of the final data from DeBeers Marine and review by Diamond Fields.
DFI Resource Estimates
(February 2000)
Feature Area Indicated Inferred Total
Marshall Fork 364,900 549,700 914,600
Diaz Reef Features 524,200 81,100 605,300
Staple Basin Area (Boat Bay) 150,700 73,800 224,500
Shallow Waters - 276,000 276,000
Totals 1,039,800 980,600 2,020,400
Diamond Fields is an international diamond exploration and mining company
and continues to pursue diamond business opportunities worldwide with a
current focus on the development of its sea diamond concessions in Namibia.
ON BEHALF OF THE BOARD OF DIRECTORS
OF DIAMOND FIELDS INTERNATIONAL LTD.
Daniel D. Johnson
President and CEO
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Copyright (c) 2000 DIAMOND FIELDS INTERNATIONAL LTD. (DFI) All rights
reserved worldwide. For more information, please visit our website at
diamondfields.com or send electronic
mailto:inquire@diamondfields.com
Message sent on Tue Feb 8, 2000 at 2:41:58 PM Pacific Time
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