Diamond Fields Resources Inc. has entered into definitive agreements to acquire privately owned Moydow Holdings Ltd., which holds interests in a number of West African gold exploration projects.
Transaction highlights:
Acquisition of a right to an 80-per-cent controlling stake in an advanced exploration stage gold project, Labola, in Burkina Faso — a highly prospective project with more than 65,500 metres of historical drilling. A recently completed RC (reverse circulation) drilling campaign is expected to lead to publication of a maiden resource estimate prepared in accordance with National Instrument 43-101 before the end of the year;Additional exposure to minority, joint venture interests in projects located in Mali (Kalaka — 40 per cent) and Nigeria (up to 32.5 per cent), providing multistage exploration prospects;Continuing exposure to Diamond Fields Resources’ high-grade zircon project, Beravina and Namibian offshore diamond resources;Combination of management from Moydow and Diamond Fields Resources to create a strengthened technical team with significant expertise in developing gold projects led by Brian Kiernan and David Reading; New equity financing in Moydow and DFR totalling $2.75-million from key shareholders, Jean-Raymond Boulle and Mr. Kiernan, to eliminate existing debt in Diamond Fields Resources and finance exploration of the properties and for working capital purposes.
- Acquisition of a right to an 80-per-cent controlling stake in an advanced exploration stage gold project, Labola, in Burkina Faso — a highly prospective project with more than 65,500 metres of historical drilling. A recently completed RC (reverse circulation) drilling campaign is expected to lead to publication of a maiden resource estimate prepared in accordance with National Instrument 43-101 before the end of the year;
- Additional exposure to minority, joint venture interests in projects located in Mali (Kalaka — 40 per cent) and Nigeria (up to 32.5 per cent), providing multistage exploration prospects;
- Continuing exposure to Diamond Fields Resources’ high-grade zircon project, Beravina and Namibian offshore diamond resources;
- Combination of management from Moydow and Diamond Fields Resources to create a strengthened technical team with significant expertise in developing gold projects led by Brian Kiernan and David Reading;
- New equity financing in Moydow and DFR totalling $2.75-million from key shareholders, Jean-Raymond Boulle and Mr. Kiernan, to eliminate existing debt in Diamond Fields Resources and finance exploration of the properties and for working capital purposes.
The transaction is expected to close in the first quarter of 2022 and is subject to approval by the TSX Venture Exchange, required shareholder approvals and completion of satisfactory confirmatory due diligence by Diamond Fields Resources.
Sybrand Van Der Spuy, chief executive officer and president of Diamond Fields Resources, stated: “The board of DFR has reviewed many projects and we are delighted to have located one that satisfies our acquisition criteria and which presents an exceptional opportunity for future development. We believe that the transaction represents a compelling opportunity in the gold sector and in Africa, a continent in which all of our recent investments have been made. I would like to thank DFR’s strategic committee for its tireless efforts in pursuit of this opportunity.
“There exists a long-standing mutual respect for the track records of the respective key shareholders and management teams in Moydow and DFR, which facilitated this transformative agreement. By combining Moydow’s strong, gold-focused operational competence in West Africa with DFR’s access to financial markets and development skills the company expects to rapidly progress the highly prospective Labola project. This will involve the continued consolidation and analysis of historic geological data, as well as recently completed drilling and assaying. The short-term objective is to report a maiden resource estimate for the Labola project prepared in accordance with NI 43-101 by the end of this year.”
Brian Kiernan, executive chairman and founder of Moydow, stated: “This transaction will enable public participation in this exciting suite of assets. We understand the potential of Labola and the combined company will have the necessary resources to rapidly advance the project. We already have a dedicated team of six highly experienced geologists on the project, who are led by David Reading. Moydow’s initial drilling program has concluded, and a maiden resource estimate is expected to be filed by end of year.”
David Reading, director of Diamond Fields Resources and lead technical consultant to Moydow, stated: “This is a unique opportunity for investors to gain access to an advanced exploration project, Labola, in a highly prospective region, with an extensive database of historic exploration work. There are multiple targets for further expansion on Labola, which we expect to aggressively pursue. Historic work on the project will enable us to accelerate the reporting of a maiden resource estimate and further drilling is expected to increase the resource over time as targets are drilled.”
Overview of Moydow
Moydow is a privately owned, British Virgin Islands-registered, West Africa-focused gold exploration business, which was formed in 2019. It acquired its interests in the Labola project (Burkina Faso) and the Kalaka project (Mali) from Alternative Investment Market-listed Panthera Resources PLC in 2020 and 2021, respectively.
At closing of the transaction, Moydow will be majority-controlled by Diamond Fields Resources through the acquisition (and exchange) of Moydow shares currently owned by Mr. Kiernan, an experienced gold industry entrepreneur, and several other minority shareholders, including Al Gourley, chairman of Diamond Fields Resources. A restructuring of the Panthera shareholding in Moydow will result in the project interests set out below.
Labola — Burkina Faso (Diamond Fields Resources 80-per-cent interest at closing; Panthera 20 per cent)
Moydow’s flagship asset is the Labola gold exploration project, which is located in the Banfora greenstone belt of the West African Birimian supergroup in southwestern Burkina Faso. Labola is approximately 370 kilometres west-southwest of Ouagadougou and 100 km northeast of the Wahgnion gold mine, operated by Endeavour Mining. Significant historic exploration data as well as recent work by Moydow mean that a maiden resource estimate prepared in accordance with NI 43-101 is expected to be filed before the end of 2021.
Moydow currently holds an exclusive option until May 27, 2024, to purchase 100 per cent of the licence holder’s interest in the Wuo Land (Labola) exploration licence through the payment of $1.0-million (U.S.). An additional payment of $1.0-million (U.S.) will be made to the licence holder upon the successful definition and reporting of a resource of at least one million ounces of gold (under JORC (Joint Ore Reserves Committee) guidelines). In addition, the licence holder will retain a 1-per-cent net smelter return royalty (NSR) on all gold produced up to a total aggregate payment of $2.0-million (U.S.).
At closing, following a restructuring of the interests of Moydow and Panthera, Diamond Fields Resources will be vested with an 80-per-cent effective interest in the project with Panthera holding a 20-per-cent carried interest. Diamond Fields Resources will maintain its 80-per-cent interest on the condition that it invests $18.0-million (U.S.) in the project by Sept. 30, 2026. If Diamond Fields Resources were to make no investments in Labola during the specified period, subject to the exercise by Panthera of its buyback right (described below), its interest would decrease to no less than 60 per cent.
Panthera shall have the right to acquire an additional 10-per-cent holding in Labola on the earlier of (i) 90 days following Diamond Fields Resources completing an investment of $18-million in Labola; or (ii) Sept. 30, 2026, by making a payment to Diamond Fields Resources of up to $7.2-million, to be adjusted down based on Diamond Fields Resources’ actual investment in the Labola project during the specified period.
Moydow has benefited from exploration activities undertaken at Labola by previous operators, High River Gold Mines Ltd. (HRG) (now Nord Gold SE) and Taurus Gold Ltd. having executed an exploration data, reports and samples purchase agreement on Oct. 9, 2020, with Nord Gold to purchase all of the historic data in consideration of a 0.5-per-cent NSR (net smelter return) capped at $3.0-million (U.S.).
More than 65,500 metres of drilling (541 holes) have been completed across multiple drilling campaigns by HRG and Taurus, consisting of principally diamond and RC drilling (24,589 m/39,339 m, respectively). Mineralization has been intercepted in three main zones over a 14 km strike length. Previous historical drilling and historical artisanal mining has demonstrated continuity of mineralization within two of the three zones over strike lengths of up to nine km. Historical ground IP (induced polarization) surveys, acquired by Moydow, highlight the opportunity for further extensions and additional zones.
Moydow has recently consolidated all the previous exploration data into a single database for the first time in the project’s history. The database includes an extensive amount of information, including drilling and soil sampling data, ground and airborne geophysics, and lidar surveys. Moydow recently completed its inaugural exploration drilling program, which included 4,740 m of RC drilling, with assay results expected in the third quarter of 2021. The twin drilling and exploration programs are expected to confirm the historic database, outline some potential new extensions and support efforts aiming to report a maiden resource estimate prepared in accordance with NI 43-101.
The drill program comprises twin drilling of 19 holes in two areas of known, high-grade mineralization, seven infill holes as well as five exploration drill holes to test potential extensions. Gold mineralization at Labola is related to quartz veining, areas of silica alteration and disseminated pyrite. A previous ground IP survey highlighted the coincidence between mineralized zones and high chargeability (sulphides) and resistivity (quartz veining and silicification) anomalies. This correlation outlines many additional opportunities for resource expansion drilling in the future.
The twin drill program will examine the coarse gold component of the mineralization via the accelerated cyanide leach technique LeachWell. This assay method will involve full leaching of larger samples to test for coarse and fine free gold so that a comparison can be undertaken with historical results. Historical artisanal activity indicates that the Labola deposit has a significant amount of free gold, which historical assay data may not have fully recognized.
Following completion of the current exploration drilling program, a maiden resource estimate is targeted, followed by further infill and extensional drilling and metallurgical, plant and infrastructure studies with a view to the preparation of a preliminary economic assessment.
The company notes the recent security concerns related to northeastern Burkina Faso. While Labola is located in the southwest of the country, in an area less prone to instability, the safety and security of all employees and contractors is of the upmost importance. Diamond Fields Resources will therefore closely monitor developments in country and will take appropriate actions as required.
Kalaka — Mali (Diamond Fields Resources 40-per-cent interest at closing; Panthera 40 per cent)
The Kalaka gold project is located 260 km southeast of Bamako in southern Mali, 80 km south of the eight-million-ounce Morila gold mine owned by Barrick/AngloGold and 85 km northwest of the six-million-ounce Syama gold mine owned by Resolute. On closing, Moydow will control a 40-per-cent interest in the project with Panthera also controlling a 40-per-cent interest and acting as operator; a local participant will hold the remaining 20-per-cent interest. All project interests are participating.
Previous exploration work includes 7,349 soil samples, airborne geophysics comprising 909 line km magnetics and EM (electromagnetics), ground IP and 20,952 m RAB (rotary air blast), AC (air core), RC and DD (diamond drill) drilling in 372 holes. This work indicates a large, low-grade zone of mineralization with multiple drill intersections exceeding 150 m at the 0.5 g/t Au level at the K1A prospect, just one of several similar targets within the 62.5-square-kilometre permit area along an interpreted 47 km combined strike. Similarities between the mineralization at K1A and Morila have been noted, in particular, the early intrusion-hosted mineralization at Morila.
At the K1A prospect, there is a substantial zone of mineralization that is about 750 m long, 150 m wide and open at depth (but at least 200 m deep) grading 0.4 to 0.6 g/t Au. Drill intercepts from previous explorers include:
249.3 m at 0.54 g/t Au from 52 m (to end of hole), including eight m at 3.17 g/t Au from 107 m;176.4 m at 0.49 g/t Au from 24 m (to end of hole), including eight m at 1.83 g/t Au from 52 m;191.8 m at 0.52 g/t Au from nine m (to end of hole), including six m at 1.47 g/t Au and four m at 2.47 g/t Au.
- 249.3 m at 0.54 g/t Au from 52 m (to end of hole), including eight m at 3.17 g/t Au from 107 m;
- 176.4 m at 0.49 g/t Au from 24 m (to end of hole), including eight m at 1.83 g/t Au from 52 m;
- 191.8 m at 0.52 g/t Au from nine m (to end of hole), including six m at 1.47 g/t Au and four m at 2.47 g/t Au.
Potential also exists for higher grade zones of mineralization to the south of the licence area, where extensive artisanal workings exist, and high-grade (10 g/t) rock chip samples have been reported.
An exploration program is currently under way including a recently completed further gradient array IP survey over the southern part of the Kalaka licence area. This survey extended Moydow’s previous IP survey over the K1A prospect. The previous IP survey defines the large, low-grade K1A mineralization. The latest survey has enhanced the definition of existing targets as well as identifying several additional targets, in particular in the east of the survey area. Despite continuing constitutional issues in Mali, exploration activities have been unaffected.
The Kalaka exploration licence is currently held through a subsidiary of Moydow under a joint venture agreement with a local joint venture participant, pursuant to which there is an obligation to pay the local participant a fee of $80,000 (U.S.) (or equivalent in shares) and incur exploration expenditure of approximately $312,000 (U.S.) by Dec. 31, 2021, and a further $300,000 (U.S.) by June 30, 2022. The local participant is also entitled to a gross royalty capped at $3-million (U.S.) in total.
Other projects (Diamond Fields Resources 10-per-cent interest at closing, earning up to 32.5 per cent)
Moydow also holds a 20-per-cent interest in various gold exploration projects in Nigeria, where historically very little systematic, modern exploration has been undertaken. The projects are located within the gold-bearing (schist belt) terrain of the Benin-Nigeria shield, which has broad similarities to the Birimian of the Man shield of West Africa. This area has become one of the most productive gold provinces globally over the past 35 years. Pursuant to the transaction, Moydow and Panthera will each hold an equal 10-per-cent interest in these projects and, together, they can earn up to a 65-per-cent combined interest (32.5 per cent each) by financing $2-million (U.S.) in total project expenditures on or before July, 2023. The remaining interest is held by the local joint venture participant. First pass drilling and other early-stage exploration work have been completed on the projects through the expenditure of approximately $783,000 (U.S.) to date.
Transaction structure, founder investments and continuing rights
Diamond Fields Resources and Panthera have entered into an implementation agreement pursuant to which both parties, subject to conditions (as described in more detail below), have agreed to carry out the steps required to implement the transaction. Diamond Fields Resources and Mr. Kiernan have entered into a share exchange agreement pursuant to which Mr. Kiernan has agreed, subject to conditions, to sell to Diamond Fields Resources all ordinary shares of Moydow held by him in exchange for common shares of Diamond Fields Resources on the basis of one common share of Moydow for 16.46 common shares of Diamond Fields Resources. Separately, Diamond Fields Resources has entered into share exchange agreements (on the same terms as Mr. Kiernan’s exchange agreement) with each of the minority shareholders and options exchange agreements with each holder of management options to acquire all of the remaining securities in Moydow other than those retained by Panthera.
In connection with the transaction, Mr. Kiernan and Mr. Boulle, through Spirit Resources SARL, have executed subscription agreements with Diamond Fields Resources and otherwise agreed to invest a combined $2.75-million (U.S.) as part of the transaction as follows:
Mr. Kiernan has agreed to exercise $350,000 (U.S.) of his options in Moydow (which will be exchanged for common shares of Diamond Fields Resources at the exchange ratio on closing) and to make a further investment of $900,000 (U.S.) in Diamond Fields Resources by way of a subscription for 4,147,465 common shares of Diamond Fields Resources at a price per common share of 21.7 U.S. cents conditional on the closing of the transaction. The exercise of the Moydow options and the Kiernan subscription, together with a recent exercise of $250,000 (U.S.) Moydow options by Mr. Kiernan, will result in an aggregate capital contribution of $1.5-million (U.S.).Mr. Boulle, via Spirit, will invest $1.5-million (U.S.) into Diamond Fields Resources through the exercise of 10,666,667 existing warrants having an exercise price of 12.5 cents ($1,333,334 or approximately $1,063,264 (U.S.)) and an additional investment of $436,736 (U.S.) at a price per common share of 21.7 U.S. cents conditional on closing of the transaction.
- Mr. Kiernan has agreed to exercise $350,000 (U.S.) of his options in Moydow (which will be exchanged for common shares of Diamond Fields Resources at the exchange ratio on closing) and to make a further investment of $900,000 (U.S.) in Diamond Fields Resources by way of a subscription for 4,147,465 common shares of Diamond Fields Resources at a price per common share of 21.7 U.S. cents conditional on the closing of the transaction. The exercise of the Moydow options and the Kiernan subscription, together with a recent exercise of $250,000 (U.S.) Moydow options by Mr. Kiernan, will result in an aggregate capital contribution of $1.5-million (U.S.).
- Mr. Boulle, via Spirit, will invest $1.5-million (U.S.) into Diamond Fields Resources through the exercise of 10,666,667 existing warrants having an exercise price of 12.5 cents ($1,333,334 or approximately $1,063,264 (U.S.)) and an additional investment of $436,736 (U.S.) at a price per common share of 21.7 U.S. cents conditional on closing of the transaction.
The funds received from the warrant exercise will be used to repay an existing $1-million (U.S.) loan, as well as interest amounting to $15,123 (U.S.) thereon, held by Spirit with the remaining funds received pursuant to the founder investments to be used for working capital.
In addition, Mr. Kiernan, Spirit and Panthera hold warrants to subscribe to up to 70,000 Moydow shares each at a price of $3.50 (U.S.) per share until Dec. 31, 2021. Any shares acquired pursuant to the exercise of the Moydow warrants will convert to shares in Diamond Fields Resources at the exchange ratio on closing.
Assuming completion of the transaction and founder investments and all Moydow warrants having been exercised prior to closing, existing Diamond Fields Resources and Moydow shareholders will own approximately 57.4 per cent and 42.6 per cent, respectively, of the Diamond Fields Resources common shares immediately following completion. Under Mr. Kiernan’s exchange agreement and the other exchange agreements with the minority security holders of Moydow, an aggregate of 4.15 million Moydow shares will be exchanged for an aggregate 68,309,000 newly issued Diamond Fields Resources shares, and 400,000 Moydow options will be exchanged for an aggregate 3,571,320 Diamond Fields Resources shares. Assuming exercise of all Moydow warrants, Diamond Fields Resources will issue to the warrant holders an aggregate of 3,456,600 Diamond Fields Resources shares. Following completion of the transaction, founder investments and assuming exercise of all of the Moydow warrants, Mr. Boulle will hold (through Spirit) 42.8 per cent of Diamond Fields Resources’ outstanding shares and Mr. will hold 37.5 per cent of Diamond Fields Resources’s outstanding shares.
Under the terms of Mr. Kiernan’s exchange agreement, Mr. Kiernan will be appointed as a director and chairman of Diamond Fields Resources at closing. As long as Mr. Kiernan beneficially owns, directly or indirectly, more than 25 per cent of the issued and outstanding Diamond Fields Resources shares, he will be entitled to a total of two nominees on the Diamond Fields Resources board of directors. If Mr. Kiernan beneficially owns, directly or indirectly, at least 10 per cent but less than 25 per cent of the issued and outstanding Diamond Fields Resources shares, Mr. Kiernan shall only be entitled to one nominee on the board of directors. Given Mr. Kiernan’s long-term commitment to the company, the consideration shares to be received by Mr. Kiernan will be subject to a 30-month hold period from the time of closing, during which time they cannot be sold, transferred, pledged, assigned or disposed of.
Transaction approvals and timeline
Diamond Fields Resources expects the transaction to constitute a fundamental acquisition under Policy 5.3 — Acquisitions and Dispositions of Non-Cash Assets of the TSX Venture Exchange.
The terms of the transaction have been approved by the board of directors of Diamond Fields Resources. Certain Diamond Fields Resources directors with an interest in Moydow abstained from voting on the transaction in accordance with applicable law, namely, Mr. Gourley and Mr. Reading. Pursuant to the terms of the implementation agreement, the closing of the transaction is subject to a number of conditions including: the approval of the transaction by the TSX-V, any shareholder approvals required by the TSX-V (including shareholder approval of Mr. Kiernan as a new control person of Diamond Fields Resources in accordance with the rules of the TSX-V) and satisfactory confirmatory due diligence by Diamond Fields Resources.
Under the rules and policies of the TSX-V and applicable Canadian securities laws, Diamond Fields Resources will prepare and file on SEDAR a technical report in respect of the Labola project in accordance with NI 43-101. A shareholder meeting may be required by the TSX-V to approve the transaction. It is anticipated that the transaction will close during the first quarter of 2022 following such shareholder meeting as may be required by the TSX-V.
Diamond Fields Resources confirms that, notwithstanding the fact that certain shareholders and directors of the company also hold shares of Moydow and a director of Moydow is also a director of Diamond Fields Resources, Diamond Fields Resources has carried out an analysis under Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions and confirms that the transaction is not a related-party transaction under MI 61-101. The Spirit subscription is considered a related-party transaction under MI 61-101 due to the fact that Spirit is a major shareholder of and a related party to Diamond Fields Resources. The Spirit subscription is exempt from the formal valuation and minority shareholder approval requirements under MI 61-101 (pursuant to subsections 5.5(b) and 5.7(a)) on the basis that the company is not listed on a specified market and the fair market value of the common shares to be issued to Spirit does not exceed 25 per cent of Diamond Fields Resources’ current market capitalization. The Spirit subscription was approved by the company’s independent directors.
Management and board
Upon completion of the transaction the following changes will be made to the board of the company:
Mr. Kiernan will be appointed as a non-executive director and chairman and Len Comerford and Carlo Baravalle will be appointed as non-executive directors.Mr. Van Der Spuy will continue as a director of Diamond Fields Resources and Mr. Gourley, Mr. Reading and Bertrand Boulle will continue as non-executive directors of the company. Philip Murphy, Norman Baker and Francois Collette will resign as non-executive directors of Diamond Fields Resources.
- Mr. Kiernan will be appointed as a non-executive director and chairman and Len Comerford and Carlo Baravalle will be appointed as non-executive directors.
- Mr. Van Der Spuy will continue as a director of Diamond Fields Resources and Mr. Gourley, Mr. Reading and Bertrand Boulle will continue as non-executive directors of the company. Philip Murphy, Norman Baker and Francois Collette will resign as non-executive directors of Diamond Fields Resources.
Mr. Van Der Spuy and Jean Lindberg Charles will continue as chief executive officer and chief financial officer of the company, respectively.
Following closing, the officers and directors of the company will consist of:
Brian Kiernan:Non-Executive Director and Chairman
Brian Kiernan is currently the Executive Chairman of Moydow Holdings Limited and also the Chairman of Minerex Drilling Contractors Limited, a privately owned West African drilling contractor. Brian has over 25 years’ experience in the exploration and mining business in Africa and North America. Previously, Brian Kiernan was CEO of the successful exploration and development company Moydow Mines International Inc where he oversaw the discovery and development of a world class gold deposit, Subika, which is now a Newmont mine called Ahafo.
Mr. Van Der Spuy: chief executive officer, president and director
Mr. Van Der Spuy retired as a lieutenant-colonel from the South African National Defence Force in 1998. His career subsequently developed at an international level in the management of projects and the mitigation of operational risk within the mining and oil and gas industries. He has also served as strategic consultant to various governments with respect to operational and critical infrastructure requirements following extensive Middle Eastern and African experience in these areas.
Mr. Charles: chief financial officer, secretary
Mr. Charles is an experienced CFO and financial manager with more than 20 years experience in the mining, fishing and leisure industries across Africa. Prior to his appointment as Diamond Fields Resources’ CFO in 2018, he was CFO of Afritex, a group engaged in the harvesting of fish and other seafood in Mauritius and Mozambique for export worldwide. Between 2005 and 2014 Mr. Charles held a number of senior positions, including CFO, at Sierra Rutile Ltd., an Alternative Investment Market-listed mining company producing rutile and zircon in Sierra Leone that was acquired by Iluka Resources in 2016.
Mr. Baravalle: non-executive director
Mr. Baravalle co-founded AMED Funds, a private equity manager focused on mineral resource investments, which has raised and invested approximately $500-million in the past 10 years. One of three founding partners, he leads the structuring, financial and tax aspects of the investments, in addition to the structuring and operations of the fund, investor relations and compliance. He holds an MBA from INSEAD and has held numerous roles in the European and North American telecom industry, including director of the corporate finance telecom team at Warburg. In 2006 he co-founded NCP, a private equity fund of funds aimed mainly at Italian institutional investors, which raised over $150-million (U.S.) and is successfully invested in mid-cap and restructuring funds and co-investments globally.
Mr. Boulle: non-executive director
Mr. Boulle was born in Mauritius, educated in South Africa and the United Kingdom, and worked for De Beers and various independent diamond producers in the Democratic Republic of the Congo, Angola, Sierra Leone and Guinea Conakry. Mr. Boulle has over 20 years management experience as a senior executive in global financial markets within the European Union and Mauritius.
Mr. Comerford: non-executive director
Mr. Comerford is chief executive officer of PW Mining, a contract mining and civil engineering construction firm that operates across Africa. He is a civil engineer with more than 30 years experience in countries as diverse as Ghana, Burkina Faso, Mali, Tanzania, Nigeria, Ivory Coast, Democratic Republic of the Congo and Sierra Leone where he has negotiated, and executed major mining, civil and offshore engineering contracts. He was also previously chief executive officer of Sierra Rutile Ltd. (previously Titanium Resources Group).
Mr. Gourley: non-executive director
Mr. Gourley is an experienced mining director and executive who was chairman of Diamond Fields Resources’ board from 2016 until closing of the transaction. He currently serves as the London, United Kingdom, regional managing partner of Fasken Martineau LLP, a leading mining law firm, and is a globally recognized resource lawyer.
Mr. Reading: non-executive director
Mr. Reading has over 35 years experience in the mining industry covering all stages of mine development, including exploration, feasibility, financing, construction and operations. He has an MSc in economic geology and is a fellow of the Institute of Materials, Minerals and Mining. His previous positions include CEO of Aureus Mining, CEO of European Goldfields and general manager of African exploration for Randgold Resources. In addition, Mr. Reading has held senior exploration and project development positions for Anglo American and Phelps Dodge. In these roles, Mr. Reading has overseen the financing and development of numerous mines across the world, including several in Africa.
Early warning reports
In connection with the transaction and founder investments and assuming all holders of Moydow warrants exercise such Moydow warrants prior to closing, Mr. Kiernan will acquire a total of 60,440,665 common shares of Diamond Fields Resources, representing approximately 37.5 per cent of the to-be-issued and outstanding common shares of the company after giving effect to the transaction, founder investments and exercise of the Moydow warrants. Mr. Kiernan is acquiring the common shares of Diamond Fields Resources as part of the transaction and for investment purposes. Depending on market and other conditions, Mr. Kiernan may from time to time in the future increase or decrease his ownership (noting, as described above, that he has agreed to a 30-month hold period), control or direction over Diamond Fields Resources securities as circumstances warrant.
As of the date hereof, Spirit holds 53,495,323 common shares of Diamond Fields Resources and warrants to acquire 10,666,667 common shares of Diamond Fields Resources, representing approximately 80.6 per cent of the issued and outstanding common shares of Diamond Fields Resources. In connection with the transaction and founder investments and assuming all holders of Moydow warrants exercise such Moydow warrants prior to closing, Spirit will acquire a total of 15,477,474 common shares of Diamond Fields Resources, for a total shareholding of 68,972,797, representing approximately 42.8 per cent of the to-be-issued and outstanding common shares of the company after giving effect to the transaction and founder investments and assuming exercise of all the Moydow warrants. The shares issuable to Spirit under the warrant exercise will be issued at an issue price of 12.5 cents per share for a total of $1,333,333. Spirit is acquiring the common shares of Diamond Fields Resources for investment purposes. Depending on market and other conditions, Spirit may from time to time in the future increase or decrease his ownership, control or direction over Diamond Fields Resources securities as circumstances warrant.
For the purposes of this notice, the head office of Diamond Fields Resources is Lot 223, Le Mahe Beau, Vallon, Mauritius, 50810. In satisfaction of the requirements of National Instrument 62-104 — Takeover Bids And Issuer Bids and National Instrument 62-103 — The Early Warning System and Related Takeover Bid and Insider Reporting Issues, an early warning report in respect of acquisition of common shares of Diamond Fields Resources by Mr. Kiernan and Spirit will be filed under the company’s SEDAR profile.
Mr. Reading, a qualified person as defined under Canadian National Instrument 43-101 — Standards of Disclosure for Mineral Projects, has prepared or supervised the preparation of, or approved, as applicable, the technical information contained in this press release. Mr. Reading has over 40 years experience in the mining industry covering all stages of mine development, including exploration, feasibility, financing, construction and operations. He has an MSc in economic geology and is a fellow of the Institute of Materials, Minerals and Mining and of the Society of Economic Geologists.
About Diamond Fields Resources Inc.
Diamond Fields Resources is a TSX Venture Exchange-listed exploration and mine development company with assets in Madagascar and Namibia. In Madagascar, Diamond Fields Resources is developing the Beravina project, an advanced high-grade hardrock zircon exploration prospect located in the west of the country, approximately 220 kilometres east of the port of Maintirano and close to a state road. Diamond Fields Resources acquired Beravina from Pala Investments and Austral Resources in 2016. In Namibia, the company owns several offshore diamond mining licences including the ML 111 concession, which has a 10-year mining licence, effective until Dec. 4, 2025.
About Moydow Holdings Ltd.
Moydow is a privately owned, British Virgin Islands-registered, West Africa-focused gold exploration business, which was formed in 2019 and subsequently in 2020 acquired, from AIM-listed Panthera Resources PLC, its interest in the Labola project (Burkina Faso), followed by the Kalaka (Mali) project interest in 2021. At closing Moydow will be controlled by Diamond Fields Resources. Moydow has interests in gold projects in West Africa: Labola in Burkina Faso, Kalaka in Mali, Dagma, Paimasa/Mint and Dext in Nigeria. Moydow has active exploration programs under way in all three countries.
