Brazilian Diamonds Limited Placing, Director Shareholding and Change of Year End
Wednesday January 26, 1:45 pm ET
VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 26, 2005) - Brazilian Diamonds Limited (TSX:BDY - News; AIM:BDY)
ADVERTISEMENT
The Directors of Brazilian Diamonds Limited ("Brazilian" or the "Company") are pleased to announce that on 25 January 2005, the Company placed 2,500,000 new common shares with an institutional investor at a price of Cdn 47 cents per share.
Also on 25 January 2005 Hamilton Capital Partners Limited ("Hamilton"), a company with which Kenneth Judge, the Chairman of the Company, is associated, placed 7,500,000 common shares in the Company with institutional investors at a price of Cdn 47 cents per share. Simultaneously, Hamilton exercised existing warrants over 7,500,000 new common shares at a price of Cdn 20 cents per share.
The Company has agreed to pay the London brokerage firm of Williams de Broe a commission of 3 per cent in connection with the above placings.
In addition, the Company has agreed with Hamilton and Rock Capital Partners Limited ("Rock Capital"), a company with which Stephen Fabian and Francis Johnstone, who are both directors of Brazilian, are associated, that Hamilton and Rock Capital will purchase 11,125,000 and 1,000,000 "Hidefield units" respectively from the Company at a price of 4.5 pence per unit. Each Hidefield unit comprises one ordinary share in Hidefield Gold plc ("Hidefield") and the right to acquire a further share in Hidefield from the Company at 6 pence per share within three years of the date of grant. The price of 4.5 pence represents a premium of approximately 9 per cent. to the closing mid-market price of Hidefield shares on 25 January 2005. Assuming the rights to acquire further shares are exercised in full, Brazilian would cease to have an interest in the share capital of Hidefield.
Upon completion of the above transactions, the Company has agreed to grant to Hamilton 2,500,000 warrants to subscribe for new common shares in the Company in consideration for Hamilton's agreeing to the early exercise of its 7,500,000 warrants. The new warrants will be exercisable within three years of the date of grant at an exercise price of Cdn 70 cents per share.
The above transactions remain subject to the acceptance of the Toronto Stock Exchange.
As a result of the placing of the new shares, the exercise of warrants by Hamilton and the sale of Hidefield units to Hamilton and Rock Capital, the Company will generate, in aggregate, approximately Cdn$3.9 million, before expenses. The funds raised through these transactions are intended to be used to fund the Company's kimberlite exploration program, development of the Canastra 1 kimberlite for which permitting is underway and the upgrading of the Company's laboratory at Patos de Minas, Minas Gerais, Brazil.
Notwithstanding the sale of Brazilian Diamonds' Hidefield shares, the two companies will continue to work closely on the Cata Preta joint venture, in Minas Gerais and where opportunities arise, elsewhere in Brazil taking advantage of Brazilian Diamonds substantial local infrastructure and extensive operating experience in the country.
The Directors (excluding Kenneth Judge, Stephen Fabian and Francis Johnstone) consider, having consulted with Westhouse Securities LLP, the Company's nominated adviser in respect of its listing on the AIM market of the London Stock Exchange, that the terms of the sale of the Hidefield units are fair and reasonable insofar as shareholders are concerned.
Application will be made for the 10,000,000 new common shares issued both in connection with the placing and resulting from the exercise of warrants to be admitted to trading on AIM. It is expected that admission will take place on 1 February 2005. As the new common shares issued in connection with the placing will not qualify for resale in Canada or to a resident of Canada through the Toronto Stock Exchange for a period of four months from the date of admission, those 2,500,000 new common shares will be traded under separate ISIM and SEDOL codes from the existing common shares for a period of four months.
The Company also wishes to announce that it has changed its financial year end to 31 December in order to bring the holding company's year end into alignment with requirements under Brazilian law that the Brazilian subsidiaries have a calendar year end. Accordingly, the Company's next annual results will be published on or before 31 March 2005.
Ken Judge, Chairman of Brazilian Diamonds said "We are delighted with this demonstration of the continuing support we have received from institutional investors in London and Montreal. The opportunity to sell the stake in Hidefield, which was received as consideration for the establishment of the Cata Preta joint venture, represents a significant financial gain for Brazilian Diamonds and will provide the Company with important funding to continue our exciting kimberlite exploration programs in the Santo Antonio and Abaete River Valleys in Minas Gerais, Brazil. We have an excellent working relationship with Hidefield and the two companies will continue to work closely together with Brazilian Diamonds assisting Hidefield with its exploration and evaluation activities wherever we can."
Contact: |
