VANCOUVER, May 16, 2019 /CNW/ - Diamond Fields Resources
Inc. (TSX-V: DFR) ("DFR" or, including its
subsidiaries, the "Company") is pleased to announce that it has
entered into a cooperation agreement ("the Agreement") with TMH
Acquisition Co ("TMH"), a special purpose vehicle established by
Denham Mining Fund LP, to advance the Company's Beravina Project in
Madagascar ("Beravina" or "the
Project").
Pursuant to the Agreement, TMH will make an immediate payment of
US$250,000 to the Company and will
fund the next stage of exploration and development work on Beravina
(the "2019 Work Program"). The 2019 Work Program, which will be
under TMH's control, is expected to cost approximately US$500,000 and should be completed within seven
(7) months (the "Evaluation Period"). TMH will have the right to
extend the Evaluation Period by a further three (3) months if it
has incurred expenditures of US$500,000 and made a further payment of
US$250,000 (which, if exercised, will
be deducted from the Option exercise payment of US$2,000,000 referred to below).
Upon completion of the 2019 Work Program, TMH will have the
option ("the Option") to acquire 100% of the Project in
consideration of:
A.
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a net payment of
US$2,000,000; and
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B.
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a nine percent (9%)
sales royalty ("Royalty").
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If the Option is exercised, TMH will incur all future capital
and operating expenditures in relation to the Project and the
Company will benefit, in perpetuity, from its right to nine percent
(9%) of all future mineral sales, subject only to limited
deductions (such as VAT, third party sales commissions, third party
freight and any third party toll treatment charges). If the Option
is not exercised by TMH during the Evaluation Period, the Project
must be returned to the Company without TMH retaining any interest,
along with all of the results from the 2019 Work Program.
Upon exercise of the Option, TMH is required to place the
Project into production by no later than 30
June 2023 ("Project Long-stop Date"), subject to certain
extensions for events of force majeure such as permitting delays,
but not longer than 30 June 2025. If
the Project is not placed into production by the Project Long-stop
Date, then TMH will be required to make advance royalty payments to
the Company, as follows:
A.
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US$500,000 on the
Project Long-stop Date;
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B.
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US$500,000 six months
after the Project Long-stop Date; and
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|
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C.
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US$500,000 on every
anniversary of the Project Long-stop Date thereafter.
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If TMH should fail to make any advance royalty payment, when
due, then the Company shall have the right to reacquire the
Property in consideration of US$1 and
50% of all advance royalty payments actually made by TMH, if
any.
Sybrand van der Spuy, CEO, said
"We are pleased to have secured the cooperation of such a strong
financial and technical partner for Beravina. We have confidence
that the 2019 Work Program will meet expectations and confirm the
technical merits of the Project. If the Option is exercised, DFR
will be in the enviable position of being carried through to
production at no cost whilst retaining a very substantial economic
stake in future sales revenue from Beravina."
DFR was advised by Tamesis Partners LLP, as financial advisor,
and Fasken Martineau LLP, as legal advisor.
DFR has agreed to pay the following fees to Tamesis in
connection with its services: $25,000
on signing of the Agreement, US$75,000 on exercise of the Option and
US$100,000 following the commencement
of commercial production at Beravina.
The Agreement is subject to approval of the TSX Venture
Exchange, which approval DFR expects to obtain.
About Beravina
The Beravina Project is a hard rock zircon deposit with a NI
43-101 Inferred Mineral Resource estimate of 1.5 million tons at
22.7% zircon (ZrSiO4) equivalent to 15.3% ZrO2, See the NI 43-101
Technical Report, with an effective date of 14 December 2018 and filed on the Company's SEDAR
profile on 29 January 2019, written
by MSA Group (Pty) Ltd. (Michael S. Cronwright, Pr.Sci.Nat., FGSSA,
John Derbyshire, Pr.Eng., FSAIMM,
Jeremy Witley, Pr.SCI.Nat., FGSSA
and Andre van der Merwe,
Pr.Sci.Nat., MAusIMM, FGSSA), each of whom is a "qualified person"
for purposes of NI 43-101, and independent of the Company as
defined in NI 43-101. The Project, which covers 625 hectares, is
located in Western Madagascar.
Results so far show that, utilizing industry standard beneficiation
technologies, zircon can be concentrated to levels of between 50%
ZrO2 and 58% ZrO2 with varying levels of thorium ingrained.
DIAMOND FIELDS RESOURCES INC.
Sybrand van der Spuy, CEO and Director
Notes to Editors:
DFR is a TSX Venture Exchange listed exploration and mine
development company with assets in Madagascar and Namibia. In Madagascar, DFR is developing the Beravina
Project, an advanced high grade hard rock zircon exploration
prospect located in the west of the country, approximately 220km
east of the port of Maintirano and near a state road. DFR acquired
Beravina from Pala Investments and Austral Resources in 2016. In
Namibia, International Mining and
Dredging Holdings (Pty) Limited is undertaking an initial six month
(non-continuous) offshore diamond mining program on DFR's ML 111
licence area. The ML 111 concession has a ten year mining licence,
effective until 4 December 2025, and
lies within Luderitz Bay between Diaz Point in the south and
Marshall Rocks in the north and at
depths of 15 to 70 metres.
Website: www.diamondfields.com
The Company's public documents may be accessed
at www.sedar.com
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward-Looking Statements:
Statements in this release that are forward-looking statements are
subject to various risks and uncertainties concerning the specific
factors identified in the Company's periodic filings with Canadian
Securities Regulators. Such forward-looking information represents
management's best judgment based on information currently
available. No forward-looking statement can be guaranteed and
actual future results may vary materially. The Company does not
assume the obligation to update any forward-looking statement,
except as otherwise required by law.
SOURCE Diamond Fields Resources Inc.