' DiamondWorks' Trans Sahara supplies crude oil to Zambia
DiamondWorks Ltd (2)
DMW
Shares issued 52,120,015
Jul 16 2002 close $ 0.45
Tuesday July 16 2002
News Release
Mr. J. Scott Drever reports
DIAMONDWORKS LTD. ANNOUNCES FIRST FLOW OF FUNDS FROM ZAMBIAN ...
Trans Sahara Trading Ltd. (TST), a wholly owned subsidiary of Otterbea
International (Proprietary) Ltd., has completed the loading of the first 90,000
metric tonnes of crude oil under its exclusive contract to supply petroleum to
Zambia. DiamondWorks recently acquired an 80.1-per-cent interest in Otterbea.
This phase of the contract represents a turnover of approximately $21-million
(U.S.), for which TST will receive net commissions and management fees of
$2.9-million (U.S.). TST has received an advance of $2-million (U.S.) from
ABSA Bank Ltd., a major South African bank, against the final settlement
amount. Management of TST anticipates transactions of similar size to occur
approximately every 60 days.
The role of TST under the contract with Zambia is to manage the importation,
refinement and selling of petroleum products in Zambia. In connection with this
mandate, TST has secured a one-year $65-million (U.S.) revolving crude oil
import credit facility from ABSA.
The ABSA credit facility may be used for the supply of crude feedstock to the
Tazama Pipelines terminal at Dar es Salaam in Tanzania, the transport to the
Indeni refinery at Ndola in Zambia, the refining at Indeni, and the storage and sales
of refined petroleum products from the Zambian National Oil Company terminal.
The credit facility has been put in place in conjunction with Zambian National
Commercial Bank (ZANACO) and Standard Chartered Bank of Zambia
(Standard). The ABSA credit facility may be used up to eight times per year, for
total annual availability of about $425-million (U.S.).
Management of TST is of the view that the model for the Zambian crude oil
contract is applicable to other African nations and is pursuing these potential
opportunities for additional contracts.
Otterbea International (Proprietary) Ltd., the parent company of TST, is owned
80.1 per cent by DiamondWorks and specializes in procurement and logistics into
the African continent. Through a series of subsidiaries, Otterbea operates in 14
African countries and has representative offices in Europe. Since 1960, Otterbea
has traded as a principal and, through a substantial infrastructure throughout
sub-Sahara Africa, provides comprehensive services to the mining industry,
including transportation, warehousing, procurement, sales and distribution of
essential equipment, and supplies.
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