Moydow Mines International Inc. and Diamond Fields International Ltd. have reached an agreement, effective Feb. 28, 2006, pursuant to which Moydow securityholders will exchange their Moydow securities for securities of Diamond Fields. The acquisition is conditional on, among other things, the approval of the shareholders of Moydow. Diamond Fields is engaged in mineral exploration and development worldwide. The information that follows concerning Diamond Fields is based upon information provided by Diamond Fields.
Diamond Fields’ principal assets consist of its Namibian marine diamond mining project, and its exploration portfolio of diamond and gold properties. Diamond Fields’ 71,600-hectare concessions off the coast of Namibia have been worked since the summer of 2005 by Diamond Fields’ own marine diamond mining vessel, the DF Discoverer. To date, 11,310 carats of diamonds have been recovered by the DF Discoverer, and 9,494 carats have been sold, generating proceeds of $1,704,119 (U.S.). The ship is currently working in the Diaz reef, an area known to host diamonds of larger average stone size than those recovered to date.
In Liberia, Diamond Fields is moving forward aggressively with its diamond and gold exploration programs on its 1,813-square-kilometre Grand Cape and Grand Gedeh licences. Earlier this month, Diamond Fields unveiled the discovery of kimberlite at Grand Cape in an area forming a swampy depression suggesting the structure of a pipe of about three kilometres in size, along with initial results of its extensive grid-sampling work, including the Henry Town and Barteajam gold prospects.
As a condition to the acquisition, Moydow is required to complete a private equity placement to raise net proceeds of at least $1.8-million (U.S.). More details of the intended financing will follow. Upon completion of the placing and the satisfaction of all conditions and regulatory requirements, Moydow shareholders will exchange all of their Moydow shares, including shares to be issued as part of the placing, for a total of 75,412,208 Diamond Fields shares, with warrants and options of Moydow being exchanged for warrants and options of Diamond Fields in proportion to the share exchange. Diamond Fields will acquire all of the issued shares of Moydow and the shares to be issued pursuant to the placing. Diamond Fields currently has 113,118,312 outstanding common shares. Upon completion of the proposed acquisition, Diamond Fields will have 188,530,520 shares in issue of which Moydow shareholders (including the shareholders pursuant to the placing) will own 40 per cent.
The acquisition is subject to, among other things, receipt of all necessary regulatory, court and stock exchange approvals, Moydow shareholder approval, a valuation or fairness opinion by each company, and lock-up agreements executed by Noel Kiernan and Brian Kiernan under which they will have agreed to vote in favour of the merger as well as entry of the parties into a definitive agreement. In the event that the merger is not completed, under certain circumstances, the party that terminates the agreement will be required to pay to the other a break fee of $250,000 (U.S.).
Diamond Fields and Moydow have agreed that following completion of the acquisition, Diamond Fields’ board will consist of three directors from Diamond Fields’ current board, three directors from Moydow’s current board, and one director agreed upon by directors of both companies. It is the intention of the parties that the president and chief executive officer of Diamond Fields, on conclusion of the transaction, will be Brian Kiernan, the current chief executive officer of Moydow. It is expected that the following individuals from the Moydow team will assume positions with Diamond Fields following completion of the acquisition.
Noel Kiernan, chairman of Moydow
Noel Kiernan is a geologist with over 40 years of experience in the mining and oil industries, including 20 years of mining and exploration experience in West Africa, and he is the Ghanaian Honourary Consul to Ireland. Noel Kiernan was the original applicant for the property now known as the Teberebie gold mine in Ghana and, as managing director of the project, brought the mine through feasibility and into production. With Moydow, Noel Kiernan has also been associated with the discovery of the Wassa mine and the Ntotoroso deposits.
Brian Kiernan, president and chief executive officer of Moydow
Brian Kiernan has been the president and chief executive officer of Moydow since 1998, and as such was part of the team credited with the discovery of the Ntotoroso project ultimately sold to Newmont for approximately $40-million (U.S.). Brian Kiernan is a graduate of the University of Ulster, Dublin, Ireland, with a bachelor of arts (honours) in business studies.
J. Joseph Breen, chief operating officer of Moydow
Mr. Breen is a geologist with over 30 years of experience in base- and precious-metal exploration in North and South America, Europe, Asia, and Africa. He has served as project geologist and senior exploration geologist for major mining companies, including Noranda and Phelps Dodge, and was co-founder of a junior mining company based in Calgary called Goldquest Inc. He has been associated with major mineral discoveries including the Mina Angela gold/silver deposit in southern Argentina, the Paracatu lead/zinc mine in Brazil, and the Wassa mine and Ntotoroso gold deposits in Ghana.
