DiamondWorks Ltd.
DMW VSE
November 18, 1996
Will Not Proceed with Acquisition of China Diamond Corp
VANCOUVER, Nov. 18 /CNW/ - Eric Friedland, Chairman and Chief Executive Officer of
DiamondWorks Ltd., today announced that the company will not be proceeding with the
proposed acquisition of China Diamond Corp. (CDC).
As a result, DiamondWorks will not be issuing the 25 million common shares necessary to
complete the transaction, as originally outlined in its March 12, 1996, news release.
While regulatory approval of the proposed transaction was obtained by DiamondWorks, and
although the company's shareholders approved the CDC acquisition on October 10, 1996,
completion of the transaction remained conditional on the government of the People's Republic of
China issuing the necessary diamond mining and exploration licences and related permits and
approvals.
Following discussions with CDC shareholders, DiamondWorks offered to keep its acquisition
offer open until January 31, 1997. However, all the CDC shareholders were required to either
confirm by 5 p.m. on November 15, 1996, that they agreed with the timetable, or be in a position
to close the transaction. When the deadline passed on November 15, some CDC shareholders
had consented to the extension, while others had not - effectively terminating the transaction.
``Our business plan always projected that the majority of our diamond revenues would come from
our African assets, consisting of projects in Angola and Sierra Leone,'' Mr. Friedland said.
``The company's calculations, based on independent evaluations, put an in situ value of US$3.2
billion on our diamond reserves and resources in Africa. In comparison, the in situ value of the
China Diamond reserves and resources were estimated to be worth about one-fifth of the value of
our African assets.''
Mr. Friedland said that diamonds from the Changma mine, in which CDC holds a 50 percent
interest, had been independently valued at an average of US$80 a carat. Diamonds from
DiamondWorks' Sierra Leone properties are valued at an average of US$250 a carat, and at an
average of US$400 a carat from the company's alluvial deposits in Angola.
Mr. Friedland said he is pleased with the progress being made on plans for the start of commercial
production of diamonds from DiamondWorks' properties in Africa. ``We are confident that initial
production of 240,000 carats can be achieved in 1997.''
DiamondWorks' shares currently trade on the Vancouver Stock Exchange under the symbol
DMW.
DiamondWorks Ltd.
Eric Friedland
Chairman and CEO
The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.
For further information: investor or media, please call (604) 669-8871 |
