Diamond Fields International Ltd. has signed a joint
operation agreement with a 100-per-cent-owned subsidiary of Bonaparte Diamond
Mines NL, a company listed on the Australian Stock Exchange, for the continued development of one of its marine diamond
concessions, the exclusive prospecting licence area EPL1607b.
Under the terms of the JOA, Bonaparte will spend $500,000 (U.S.) over three
years to earn 50-per-cent interest in any diamond deposits brought to production.
Should DFI elect not to mine any deposits found by Bonaparte it would retain a
10-per-cent gross royalty on all diamonds produced.
Bonaparte will have exclusive rights to use its BoSS sampling system to
explore for diamonds in exclusive prospecting licence area EPL 1607b, a partly explored diamond property located between active marine mining operations in
Luderitz Bay in the south and Hottentot Bay to the north. Exploration work
conducted on the property by Diamond Fields includes a geophysical survey from
which a number of prospective targets were identified as well as a limited
amount of seabed sampling, which confirmed the presence of diamonds in the
property.
Bonaparte’s stated objective is the discovery and exploitation of marine
diamond deposits off the coasts of northern Australia and Namibia. It
initially targeted diamond placer deposits at the mouths of the Ord and
Berkeley rivers in the Joseph Bonaparte gulf, Australia, but has now
refocused its efforts on Namibian coastal waters. Bonaparte is one of very few
companies internationally, that owns and operates a technically proven marine
diamond sampling system. This system comprises the Bonaparte Seabed Sampler
(BoSS) and materials processing and recovery plant.
Commenting on the new agreement, DFI’s president and chief executive officer, Roger Daniel,
said: “We are pleased to have concluded this agreement with Bonaparte which we
anticipate will speed up the development of the EPL1607b area and enhance the
company’s overall resource base and mine planning flexibility. We look forward
to developing a mutually beneficial working relationship with Bonaparte.”
Details of agreement
The JOA is between DFI’s 100-per-cent-owned subsidiary Diamond Fields (Namibia)
(Pty.) Ltd., and Bonaparte Diamond Mines (Namibia) (Pty.) Ltd. (BDN), a
100-per-cent-owned Namibian subsidiary of Bonaparte. The agreement is subject to
relevant approvals from the Ministry of Mines and Energy, Namibia, and to
either renewal of EPL1607b or conversion of the area to a mining licence,
appropriate applications for which have been submitted. In terms of the
agreement, BDN will finance 100 per cent of the exploration costs and provide all
resources required for exploration with the objective being to discover and
exploit any economically viable diamond deposits in the EPL1607b area.
If BDN discovers an economically viable diamond deposit in the EPL1607b
area, DFN will have first option to mine the deposit using their own or any
other diamond mining vessel operated by the company. If mining is conducted by
DFN then DFN and BDN will each receive a 50-per-cent share of the gross diamond sales
value. Agreed operational costs will be shared between the parties on a
50:50 basis. If DFN elects not to mine the deposit, then Bonaparte will have
the right to mine the deposit using its own equipment or using a subcontractor. If mining is conducted by BDN then DFN will receive a royalty of
10 per cent of gross diamond sales value from any mining operations in the JOA area.
BDN will cover all mining costs and receive 90 per cent of all net revenues from
sales.
Mining in the EPL1607b area will be subject to a separate mining
agreement that will incorporate these base commercial terms. In terms of the
JOA Bonaparte is committed to a minimum expenditure of approximately
$500,000 (U.S.) over three years, being the initial term of the agreement. The
agreement is automatically renewable subject to BDN satisfying the terms of
the agreement. Bonaparte may cancel the agreement at any time subject to
having made a minimum expenditure of about $250,000 (U.S.). DFN may
cancel the agreement if BDN defaults in terms of the agreement or in the
compliance with appropriate Namibian regulations.
DFN will have the right to sell all product recovered during the tenure
of this agreement in terms of its existing exclusive marketing agreement. BDN
will receive 100 per cent of any net revenues derived from any product recovered and
sold from exploration during the tenure of this agreement and, if relevant, up
to the commencement of mining operations in the JOA area. BDN will pay all of
the associated royalties, sales commissions, security insurance and transport
costs.
