Re Agreement with World's Largest Resources Com...
SouthernEra Diamonds Inc. - Alliance with World's Largest Resources
Company
- BHP Billiton to become SouthernEra's largest shareholder
- Subject to regulatory approval, BHP Billiton agrees to a private
placement with gross proceeds of US$8,000,000
Shares Issued and Outstanding: 112,279,101
TSX: SDM
AIM: SRE
TORONTO and LONDON, UK, Oct. 19 /CNW/ - SouthernEra Diamonds Inc. (TSX:
SDM; AIM: SRE) announced today that BHP Billiton has agreed to complete a
private placement with SouthernEra, at a premium to the prevailing market
price. Part of the funds will be directed towards exploration, evaluation and
potentially the development of SouthernEra's diamond properties in the
Democratic Republic of the Congo (DRC).
BHP Billiton will purchase approximately 15,636,000 shares of SouthernEra
at C$0.60 for gross proceeds of US$8,000,000, becoming SouthernEra's largest
shareholder with an approximate 12% holding. The placement is subject to
regulatory and stock exchange approval.
An agreement has been concluded between the companies to explore for
primary diamond deposits and all other minerals within SouthernEra's DRC
exploration permits, covering in excess of 13,000 square kilometres. The
permits have been grouped into six distinct geographic permit areas.
SouthernEra will retain a 100% interest in all known or discovered alluvial
diamond deposits within these permit areas.
SouthernEra will initially be project manager for all six permit areas
and BHP Billiton can earn a 25% interest in a specific permit area and become
project manager by completing a 300 tonne bulk sample on any kimberlite
discovery. An additional 25% interest in that individual permit area may be
earned by the completion of a pre-feasibility study and a further 15% by fully
funding a bankable feasibility study. A bankable (full) feasibility study is a
comprehensive analysis of the economics of a project (+/- 15% precision) and
is used in the banking industry for financing purposes.
US$4,000,000 of the US$8,000,000 proceeds from the private placement will
be used to fund the DRC exploration joint venture program and once fully
utilised, BHPB will fully fund exploration up to and including the completion
of a pre-feasibility study. The remaining US$4,000,000 will be used by
SouthernEra to support its global exploration, development program and general
corporate purposes.
SouthernEra's President and CEO Alasdair MacPhee said: "We are very
pleased to have gained the support of BHP Billiton, the world's largest
resource company, and look forward to building a long-standing relationship
with a company of BHPB's calibre and mine discovery track record. It also
provides a strong endorsement of the potential of the permits we have under
our control in the DRC. This association will enable us to more rapidly
advance the kimberlite program in the DRC and the private placement will
strengthen SouthernEra's diamond discovery and development strategy going
forward".
The majority of SouthernEra's permits in the DRC lie within what is
considered a 'kimberlite emplacement corridor', underlain by basement Archaean
granite-gneiss of the Congo Craton, which extends from the DRC into the world
renowned diamond producing Lunda Norte Province in neighboring Angola. In
mid-October, 2004, SouthernEra completed over 43,000 line-kilometers of
airborne magnetic and radiometric geophysical surveys. The surveys focused on
selected permit areas in the diamond-rich Kasai-Oriental Province which has
produced two of the 'top-ten' largest gem quality diamonds in the world and
produces in excess of 20 million carats of diamonds annually.
SouthernEra's first phase regional stream sampling and soil sample
follow-up of selected aeromagnetic survey targets during 2005 has produced
positive kimberlitic indicator mineral results as well as the recovery of
diamonds in some of the samples. An exploration program agreed to by both
partners will commence immediately.
SouthernEra Diamonds is one of Canada's largest fully integrated diamond
companies with extensive diamond exploration in six countries including
Canada, Gabon, the DRC, Zimbabwe and South Africa. The Company maintains an
18 percent free-carried interest in the Camafuca Diamond Project in Angola and
also operates the Klipspringer Diamond Mine in South Africa.
For further information: Toronto: SouthernEra Diamonds Inc.:
Mr. Alasdair MacPhee, President and CEO Or Mr. Howard Bird, Senior Vice
President, Global Exploration, Telephone: (416) 359-9282, Fax: (416) 359-9141,
E-mail: inbox(at)southernera.com, www.southernera.com; London: 4C-Burvale,
Carina Corbett, Director, Telephone: ++ 44 (0) 207-907-4761, Fax:
++ 44 (0) 207-907-4769, Email: corbett(at)4cburvale.co.uk
(SRE SDM.)
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