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Gold/Mining/Energy : DIAMONDWORKS DMW.v -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Hamlin who wrote (123)	12/29/1998 1:56:00 PM
From: Kevin Hamlin	Respond to of 413

I just received an email from DMW in response to some questions I had. They sent their response within 1 hour of me sending the questions, and the tone of their response was refreshingly realistic. Very much appreciated DMW. I like it! <<<<1) How will the recent escalation in fighting affect Mr. Walsham's suggestion that the mine will be re-opened by the end of January? Furthermore, if the conditions that exist today, also exist at the end of January, would this mean the mine will NOT re-open at this time? 1. I do not believe that the recent escalation in fighting in Angola will have a direct impact on our plans to restart operations at Yetwene, mainly because the fighting is concentrated in the rebel stronghold in the central highlands, hundreds of kilometres away from our mines. The current fighting appears to be a long-anticipated offensive by the FAA to try and force UNITA to honour the conditions of the 1994 Lusaka accord. However, if the current FAA offensive is unsuccessful and fighting expands into Lunda Norte and Lunda Sul provinces, we will have to reconsider. <<<<2) Given the greater armament of the UNITA forces (more than many thought they had), will the security arrangements be enough....or really ever be enough? 2. That is a very difficult question to answer, and one that can not be answered with any certainty. Neither our security or the Angolan army was prepared for the size, military force and precision of the November 8th attack at Yetwene. Our physical security arrangements at our operations have now been greatly enhanced based on recommendations of private security consultants. In addition, the Angolan army have added additional troops in the area. The government has stated that it is committed to making sure that the area is safe for foreign companies to operate in the diamond region of Lunda Norte and Lunda Sul. We are confident that the area is safer now than prior to the attack. <<<3) What prospects are there for cash infusion to get the mine up andrunning again. What happens to these prospects if there are further delays due to the fighting?>>> 3. We are optimistic that we will receive that necessary cash infusion. However, the recent escalation in fighting is obviously a concern to us as well as our potential investors. On a positive note, it should be noted that many of Angola's diamond mines in the Lunda provinces operated without interruption during the last major blowup in Angola in 1992-93. <<<4) House 64 (Octagon) has sold just under 1.5 MILLION shares during the month of October and have bought NONE. Comments as to why? 4. I belive that Octagon represented a small fund that sold its entire position this fall. Thanks DMW!! Kevin