Diamond Fields International Ltd. has entered into
agreements for the sale of two real estate properties in Luderitz, Namibia, to
Spirit Resources SARL for consideration of $320,000 (U.S.)
(the purchase price). The properties, each held by the company’s
wholly owned subsidiary, Diamond Fields (Namibia) Pty. Ltd.,
consist of a commercial warehouse facility housing a basic diamond recovery
plant designed to treat gravel recovered from small-scale diver operations
and a nearby residential property containing two semi-detached houses, with out
buildings, which have been used primarily for crew accommodations as required
during transit to the company’s mining vessel. Neither property has been
extensively used by the company in recent years, but should the company require
future use of the properties, Spirit has agreed to a leaseback on
commercially reasonable terms.
Spirit is controlled by Diamond Fields’ major shareholder, Jean-Raymond Boulle, who
currently holds, directly or indirectly, approximately 16.3 per cent of the company’s issued
and outstanding common shares. The purchase price for the properties is based
upon and supported by reports of an independent Namibian property valuer.
The transaction constitutes a related-party transaction, under Ontario
Securities Commission Rule 61-501, but is exempted from the formal valuation
and minority approval requirements of that rule as neither the fair market
value of the subject matter of, nor the fair market value of the consideration
for the transaction exceeds 25 per cent of the company’s market capitalization, as
determined by the directors of the company. The transaction was unanimously
approved by the directors of Diamond Fields, all of whom are independent of Spirit and
at least 21 days prior to the completion of this transaction, as the company
and Spirit only recently concluded the terms of the transaction and, having
received approval of Diamond Fields’ directors and acceptance of the transaction by the
Toronto Stock Exchange, the company wishes to receive the sale proceeds and
close the transaction on an expedited basis for sound business reasons.
The proceeds from the transaction will be applied to the company’s
running expenses and working cash requirements.
