(All figures in U.S. dollars.)
Diamond Fields International has posted a net loss for the three months ending Sept. 30, 2003, of $316,377 or one cent per share, compared with a net loss of $242,108 or nil per share for the same period in 2002. Current period losses resulted from a disruption of operations at the company’s Namibia marine diamond concessions.
Mining on the Namibia Marine diamond project resumed in late September, 2003, and results to date continue to exceed the feasibility study estimates for the area. In April, 2003, the Motor Vessel Anya, the vessel contracted by Diamond Fields for marine diamond recovery, was sold to new owners. The sale required a change in flag state and classification society resulting in unexpected bureaucratic delays that prevented the vessel from returning to operation until September, 2003.
All of the company’s revenue for the three-month period ending Sept. 30, 2003, resulted from the sale of diamonds held as inventory and recovered during the prior year. The diamonds were sold at an average price of $158 per carat generating revenue of $89,137, down from $312,331 for the same period in 2002. Production, royalty and selling expenses associated with the sale of inventory totalled $81,421, whereas operating costs for the same period in 2002 were $170,465. The company’s operating margin for the current period ending Sept. 30, 2003, was $7,716 compared with $141,866 for the same period in 2002.
Operations, including exploration and development, as well as general and administration costs, were financed from cash at hand at the beginning of the period. Based on production activity subsequent to the three months ended Sept. 30, 2003, and the private placement financing reported in Stockwatch on Oct. 21, 2003, the company’s existing cash resources and anticipated cash flows are sufficient to meet its current level of operations, including maintaining its concessions in good standing.
Nickel and diamond property acquisitions
On July 31, 2003, the company expanded its diamond exploration activities and broadened the scope of its operations to include nickel exploration. The expansion was accomplished when Diamond Fields agreed to acquire exploration properties in Madagascar (nickel and diamonds), Greenland (nickel), and Sierra Leone (diamonds).
Financing
In October, 2003, the company announced non-brokered private placements totalling $8.1-million (Canadian) with the plan to issue 6.6 million units at a price of 60 Canadian cents per unit for total proceeds of $3.96-million (Canadian), concurrently issuing 6.9 million subscription receipts convertible into units on a one-for-one basis at a price of 60 Canadian cents per subscription receipt for total proceeds of a further $4.14-million (Canadian). These private placements closed on Nov. 28, 2003, however, the subscription receipt placement is subject to receipt of shareholder approval, which is being sought at the company’s annual general meeting scheduled for Dec. 17, 2003.
Proceeds from these private placements will be used to finance continued development of Diamond Fields’ Namibian marine diamond concession, as well as exploration activities in Greenland, Sierra Leone and Madagascar, and for repayment of debt and general working capital purposes.
WARNING: The company relies upon litigation protection for “forward-looking” statements.
