Here is the Diamond Works Press Release:
DIAMONDWORKS ACQUIRES THE YETWENE DIAMOND CONCESSION IN LUNDA NORTE PROVINCE, ANGOLA
VANCOUVER, May 15 /CNW/ - Eric Friedland, Chairman and Chief Executive
Officer of DiamondWorks Ltd., announced today that the company's wholly-owned subsidiary, Branch Energy Ltd., has entered into an agreement with Sociedade Mineira do Lucapa, S.M.L. ("SML") and Sociedade Mineira e de Investimentos da Lunda, S.A. ("Yetwene"), concurrent with an agreement entered into by DiamondWorks with Zizania Holdings Limited ("Zizania"), the parent company of Yetwene, whereby DiamondWorks has acquired a 50% participating interest in the Yetwene diamond concession in Lunda Norte Province, northeast Angola. SML and Yetwene are both Angolan companies and Zizania is a private Jersey, U.K. company. The Yetwene concession is DiamondWorks' fifth diamond property in Angola, and the fourth in the prolific diamond-producing province of Lunda Norte.
The Yetwene concession encompasses an area of nearly 550 square kilometres. It is accessible by road and is located approximately 20 kilometres northwest of Lucapa, the capital of Lunda Norte. The concession straddles a series of north-flowing rivers and streams, with the Chicapa and Lumanha rivers being the largest. Both rivers are important sources of alluvial diamonds. DiamondWorks anticipates the Yetwene will be a key source of high-quality alluvial gem diamonds, with production anticipated to begin in the third quarter of this year. DiamondWorks is presently mining diamonds from alluvial deposits along the Chicapa River at its Luo concession, approximately 100 kilometres south of the Yetwene concession.
At the Yetwene property, alluvial gravels along approximately 16 kilometres of the Chicapa and Lumanha rivers have been explored by drilling (more than 2,000 drill holes) and test pitting. The work, which covered only 15% to 20% of the concession, was performed in the early 1970s by Diamang, the former Angolan mining consortium that included De Beers. Diamang estimated that the portion of the concession that was explored has an alluvial resource of 2.5 million cubic metres of gravel grading 0.30 carats per cubic metre, containing more than 750,000 carats. Endiama, the Angolan state diamond mining company, estimates the diamonds are 99% gem quality and have an average value of approximately US$280 per carat. Only a small portion of the concession has been explored and DiamondWorks believes there is excellent potential to add to the estimated diamond resources.
The onset of Angola's civil war in the mid-1970s prevented further work on the project. The end of the civil war in 1994 and the recent formation of the new Angolan Government of Unity and National Reconciliation have led to the reopening of many of Angola's diamond areas, including the Yetwene concession.
Under the terms of the agreements, DiamondWorks is required to issue to Zizania one million common shares of DiamondWorks. The shares will be subject to a three-year escrow agreement. DiamondWorks also will make payments to Zizania for consulting services of US$10,000 per month for one year and pay a signing fee of US$50,000 to SML. DiamondWorks has agreed to reimburse Zizania US$398,000 for camp and mining equipment purchased by Zizania for the Yetwene property. DiamondWorks also is required to advance all operating costs as well as all capital costs up to US$5 million to bring the Yetwene concession into production. DiamondWorks will be the operator of the project and will receive 50% of the net profits from diamond mining on the concession, as well as preferential payback of the funds advanced for capital expenditures.
The agreement is subject to a due diligence review by DiamondWorks and
all requisite regulatory and stock exchange approvals, including governmental approvals in Angola. DiamondWorks plans to begin alluvial diamond mining at the Yetwene concession upon completion of its due diligence and receipt of all necessary approvals.
DiamondWorks is a Canada-based exploration, development and mining
company with interests in diamonds and precious metals. The company is
producing diamonds at its Luo diamond operation in Angola. In Sierra Leone, the company has begun the mining phase of its bulk sampling program at its Koidu kimberlite diamond mine as part of the mine feasibility study. The company also has a variety of active diamond development and exploration programs in Angola, Sierra Leone, and Canada's Northwest Territories, and has interests in various gold and polymetallic exploration properties in China and Venezuela.
DiamondWorks' shares trade on the Toronto and Vancouver Stock Exchanges under the symbol DMW.
DiamondWorks Ltd.
Eric Friedland
Chairman and Chief Executive Officer
For further information:
Investor or media information, please call (604) 669-8871 or view
DiamondWorks' home page at www.diamondworks.com |
