Key points
- Lion Fields holds exclusive rights to explore for copper, gold, silver, zinc, lead and germanium over 444 square kilometres in Solwezi district, western Zambia.
- The joint venture will be split 80 per cent Diamond Fields to 20 per cent Lion Fields, subject to Toronto Stock Exchange acceptance.
- Diamond Fields will reimburse Lion Fields US$200,000 and must spend a minimum of US$200,000 (U.S.) on exploration before the licence expires in December 2008.
- Lion Fields is controlled by Jean-Raymond Boulle, DFI’s largest shareholder, making the deal a related-party transaction under OSC Rule 61-501 involving a company with a market capitalization of about $32.4-million.
Diamond Fields International Ltd. (DFI) has successfully concluded a
joint venture agreement with Lion Fields Ltd. for mineral exploration in a highly prospective area in western
Zambia.
Lion Fields has been granted the exclusive right to conduct exploration
work for copper, gold, silver, zinc, lead and germanium over a 444-square-kilometre property in the Solwezi district of western Zambia.
DFI believes that the property has the potential to host extensions to the
world-class Kipushi orebody, located immediately adjacent to the property,
within the Democratic Republic of Congo. Kipushi is one of the highest-grade
zinc mines in the world.
Subject to obtaining the acceptance of the Toronto Stock Exchange, Lion
Fields and DFI have agreed to form a joint venture, on an 80-per-cent (DFI) to 20-per-cent
(Lion Fields) basis, for the exploration, valuation, and, if justified, the
development and mining of any mineral resources discovered on the property,
upon the terms and conditions set out in the joint venture agreement.
Pursuant to the joint venture agreement, DFI will reimburse Lion Fields
$200,000 (U.S.) against a portion of Lion Fields’ total project costs incurred to
date, following which the joint venture will be deemed to be formed between
the parties.
DFI will be appointed operator of the joint venture with overall
management responsibility for the prospecting operations on the property, and,
among other things, will be required to incur minimum exploration expenditures
of $200,000 (U.S.) over the existing term of the property licence (which is due to
expire in December, 2008) and $200,000 (U.S.) during each subsequent renewal term of
the licence, if any, in order to maintain its interest in the property.
As Lion Fields is controlled by Jean-Raymond Boulle, the largest
shareholder of the company and an insider of the company, the joint venture
constitutes a related-party transaction under Rule 61-501 of the Ontario
Securities Commission and is subject to acceptance by the Toronto
Stock Exchange. The directors of the company, all of whom are independent of
Lion Fields, and Mr. Boulle have approved the transaction, and have determined
that the transaction is exempt from the formal valuation and minority
shareholder approval requirements of the rule on the basis that neither the
fair market value of the subject matter nor the consideration for the
transaction is greater than 25 per cent of DFI’s market capitalization of
approximately $32.4-million.
Roger J. Daniel, DFI’s president and chief executive officer, commented: “We believe this is a
highly prospective exploration project with good potential to host significant
extensions of the world-class Kipushi mine. Diamond Fields has recruited a
geologist for the project and a work program has now commenced.”
Mr. Daniel, BSc (honours), geology, London, PrSciNat, is a fellow of the South African Institute of Mining and
Metallurgy (SAIMM), and is also a registered geological scientist with the
South African Council for Natural Scientific Professions (SACNASP). He is thus
a qualified person in terms of National Instrument 43-101, and has compiled and
reviewed the scientific and technical information contained in this news
release.
