Afri-Can Marine Minerals Corp. has signed a memorandum of understanding with International Mining and Dredging Holding Ltd. (IMDH) for the development and mining of the mining leases (ML) under option with Diamond Fields International Ltd. (DFI) and of the exclusive prospecting licence (EPL) 3403, both situated off the coast of Namibia.
Salient features of the memorandum of understanding are:
IMDH will design and operate a large sampling program of up to 800
samples mainly on ML 111 and, to a lesser extent, on EPL 3403. The
sampling program will serve to establish mining blocks and grades in
preparation for mining and to upgrade some of the NI 43-101 inferred
resources to the indicated category, as well as further the development
of EPL 3403. Afri-Can will finance the program on or before March 1,
2014. Budgets will be prepared by IMDH and approved by Afri-Can. The
company is currently revising various options in order to raise the
funds needed;
Afri-Can and IMDH will create a joint venture company, which will finance and operate the mining program on ML 111 and EPL 3403 if deemed
economically viable. IMDH will finance the preparation of the mining vessel
and Afri-Can will finance the vessel operating costs for the three first months
of the mining program;
Afri-Can and IMDH will share equally in the net profits from production
after payment of 10 per cent of the net profits to DFI and 10 per cent of the net
profits to Woduna Mining Holding (Pty.) Ltd.;
Afri-Can is currently preparing a prefeasibility study and a
preliminary economic assessment (PEA). IMDH will prepare the mining plan
from the PEA and from the results of the sampling program;
The first financing phase of the program will include a payment of
$350,000 (U.S.) to IMDH by Afri-Can, which is due from the last sampling
program on EPL 3403 carried out in December, 2012. Afri-Can will also
deposit $500,000 (U.S.) with AfrAsia Corporate Finance (Africa) Ltd., the
first $200,000 (U.S.) of which will be paid to IMDH in order to complete the
transfer of ownership of the remaining 80 per cent of the shares of Thyme
Investment (Pty.) Ltd., the owner of EPL 3403. The balance of
$300,000 (U.S.) will serve as a deposit for the funding of the sampling
program;
Upon payment of the $200,000 (U.S.) to IMDH, Afri-Can will complete the
acquisition of all the shares of Thyme and in accordance with the
agreement signed with IMDH on Sept. 27, 2010, Afri-Can will issue
9.75 million of its common shares to IMDH and 3.25 million of its common
shares to BV Investment (Pty.) Ltd. Afri-Can will then hold 100 per cent of EPL
3403.
- IMDH will design and operate a large sampling program of up to 800
samples mainly on ML 111 and, to a lesser extent, on EPL 3403. The
sampling program will serve to establish mining blocks and grades in
preparation for mining and to upgrade some of the NI 43-101 inferred
resources to the indicated category, as well as further the development
of EPL 3403. Afri-Can will finance the program on or before March 1,
2014. Budgets will be prepared by IMDH and approved by Afri-Can. The
company is currently revising various options in order to raise the
funds needed;
- Afri-Can and IMDH will create a joint venture company, which will finance and operate the mining program on ML 111 and EPL 3403 if deemed
economically viable. IMDH will finance the preparation of the mining vessel
and Afri-Can will finance the vessel operating costs for the three first months
of the mining program;
- Afri-Can and IMDH will share equally in the net profits from production
after payment of 10 per cent of the net profits to DFI and 10 per cent of the net
profits to Woduna Mining Holding (Pty.) Ltd.;
- Afri-Can is currently preparing a prefeasibility study and a
preliminary economic assessment (PEA). IMDH will prepare the mining plan
from the PEA and from the results of the sampling program;
- The first financing phase of the program will include a payment of
$350,000 (U.S.) to IMDH by Afri-Can, which is due from the last sampling
program on EPL 3403 carried out in December, 2012. Afri-Can will also
deposit $500,000 (U.S.) with AfrAsia Corporate Finance (Africa) Ltd., the
first $200,000 (U.S.) of which will be paid to IMDH in order to complete the
transfer of ownership of the remaining 80 per cent of the shares of Thyme
Investment (Pty.) Ltd., the owner of EPL 3403. The balance of
$300,000 (U.S.) will serve as a deposit for the funding of the sampling
program;
- Upon payment of the $200,000 (U.S.) to IMDH, Afri-Can will complete the
acquisition of all the shares of Thyme and in accordance with the
agreement signed with IMDH on Sept. 27, 2010, Afri-Can will issue
9.75 million of its common shares to IMDH and 3.25 million of its common
shares to BV Investment (Pty.) Ltd. Afri-Can will then hold 100 per cent of EPL
3403.
Afri-Can’s immediate goal is to focus on ML 111’s existing resources in order to resume production in the shortest time frame possible. There are also several other features, additional to those containing resources, within the four DFI leases that hold potential for diamond mineralization but have been insufficiently sampled, and these features will be investigated. The second goal is to complete the sampling program on EPL 3403, which remains a high-priority exploration target.
Pierre Leveille, president and chief executive officer of Afri-Can, stated that: “We are very pleased with this agreement as it gets us to a level that will allow mining and provide regular development and value for our shareholders. The DFI portfolio of mining leases complements EPL 3403 and offers very good development potential. We feel that we are sitting in a strong project in a very solid industry.”
About ML 111
ML 111 lies between five and 20 kilometres north of Luderitz. It covers 312 square kilometres and sits in water ranging from 30 to 70 metres in depth. ML 111 hosts at least three mineralized geological features. The ML was originally granted for a period of 15 years and is renewable on Dec. 4, 2015. A recent NI 43-101 report estimates 413,000 carats of indicated diamond resources and 453,000 carats of inferred diamond resources remain on ML 111. A portion of the indicated resources, about 255,000 carats grading at 0.30 carat per square metre, will be the first focus for mining development. The company is currently preparing a prefeasibility study and a PEA on this resource and until the study is completed it is uncertain that the resource will prove to be economic.
The resource exists in the Marshall Fork, Staple Basin/Conical Beach and Diaz Reef areas. DFI produced intermittently between 2001 and 2007 about 158,200 carats, mainly from the Marshall Fork area. Special stones recovered from Marshall Fork included a gem quality 17.42 carat stone, a rare 5.26-carat light blue diamond which sold for $10,457 (U.S.) per carat, and a 2.45-carat pink gem diamond which sold for $16,771 (U.S.) per carat. DFI ceased production following the world financial crisis.
About EPL 3403
EPL 3403 covers 800 square kilometres and is adjacent to the Atlantic One deposit (operated by De Beers Marine), which is the world’s largest marine diamond deposit with a resource estimated at about 100 million carats. Previous sampling on EPL 3403 by Afri-Can and IMDH discovered three diamond deposits and recovered 117 diamonds. The four largest diamonds were of 2.69, 1.76, 1.60 and 1.30 carats. Several stones weighed over 0.50 carat. The average diamond sizes found in EPL 3403 are similar to those in adjacent concessions.
Richard Foster, BSc (honours geology), PrSciNat, is the qualified person who has prepared the NI 43-101 report, reviewed this press release and is responsible for the technical part of this press release, and is the designated qualified person under the terms of National Instrument 43-101.
