Cape Town, April 20th, 2006 – Diamond Fields International Ltd. (TSX: DFI) (“DFI” or the “Company”) is pleased to announce that it has signed a Joint Operation Agreement (“JOA”) with a 100% owned subsidiary of Bonaparte Diamond Mines NL (“Bonaparte”), a company listed on the Australian Stock Exchange (ASX symbol: BON), for the continued development of one of its marine diamond concessions, the Exclusive Prospecting License area EPL1607b.
Under the terms of the JOA, Bonaparte will spend US$500,000 over three years to earn 50% interest in any diamond deposits brought to production. Should DFI elect not to mine any deposits found by Bonaparte it would retain a 10% gross royalty on all diamonds produced.
Bonaparte will have exclusive rights to use its BoSS sampling system to explore for diamonds in Exclusive Prospecting License area EPL 1607b, a part-explored diamond property located between active marine mining operations in Luderitz Bay in the south and Hottentot Bay to the north. Exploration work conducted on the property by Diamond Fields includes a geophysical survey from which a number of prospective targets were identified as well as a limited amount of seabed sampling, which confirmed the presence of diamonds in the property.
Bonaparte’s stated objective is the discovery and exploitation of marine diamond deposits off the coasts of northern Australia and Namibia. It initially targeted diamond placer deposits at the mouths of the Ord and Berkeley Rivers in the Joseph Bonaparte Gulf, northern Australia but has now refocused its efforts on Namibian coastal waters. Bonaparte is one of very few companies internationally, that owns and operates a technically proven marine diamond sampling system. This system comprises the Bonaparte Seabed Sampler (BoSS) and materials processing and recovery plant.
Commenting on the new agreement, DFI’s President and CEO, Roger Daniel said “We are pleased to have concluded this agreement with Bonaparte which we anticipate will speed up the development of the EPL1607b area and enhance the Company’s overall resource base and mine planning flexibility. We look forward to developing a mutually beneficial working relationship with Bonaparte.”
Details of Agreement
The JOA is between DFI’s 100% owned subsidiary Diamond Fields (Namibia) (Pty) Ltd (“DFN”), and Bonaparte Diamond Mines (Namibia) (Pty) Ltd (“BDN”), a 100% owned Namibian subsidiary of Bonaparte. The agreement is subject to relevant approvals from the Ministry of Mines and Energy, Namibia and to either renewal of EPL1607b or conversion of the area to a Mining License, appropriate applications for which have been submitted. In terms of the agreement, BDN will fund 100% of the exploration costs and provide all resources required for exploration with the objective being to discover and exploit any economically viable diamond deposits in the EPL1607b area.
If BDN discovers an economically viable diamond deposit in the EPL1607b area, DFN will have first option to mine the deposit using their own or any other diamond mining vessel operated by the Company. If mining is conducted by DFN then DFN and BDN will each receive a 50% share of the gross diamond sales value. Agreed operational costs will be shared between the parties on a 50%:50% basis. If DFN elects not to mine the deposit, then Bonaparte will have the right to mine the deposit using its own equipment or using a sub-contractor. If mining is conducted by BDN then DFN will receive a royalty of 10% of gross diamond sales value from any mining operations in the JOA Area. BDN will cover all mining costs and receive 90% of all net revenues from sales.
Mining in the EPL1607b area will be subject to a separate Mining Agreement that will incorporate these base commercial terms. In terms of the JOA Bonaparte is committed to a minimum expenditure of N$3,000,000 (approx. US$ 500,000) over 3 years, being the initial term of the agreement. The agreement is automatically renewable subject to BDN satisfying the terms of the agreement. Bonaparte may cancel the agreement at any time subject to having made a minimum expenditure of N$1,500,000 (Approx US$250,000). DFN may cancel the agreement if BDN defaults in terms of the agreement or in the compliance with appropriate Namibian regulations.
DFN will have the right to sell all product recovered during the tenure of this agreement in terms of its existing exclusive marketing agreement. BDN will receive 100% of any net revenues derived from any product recovered and sold from exploration during the tenure of this agreement and, if relevant, up to the commencement of mining operations in the JOA area. BDN will pay all of the associated royalties, sales commissions, security insurance and transport costs.
Diamond Fields International Ltd. and Moydow Mines International Inc. (TSX: MOY)(AIM: MOY) (“Moydow”) announced in press releases dated March 1, 2006 that they had reached an agreement effective February 28th, 2006 (the “Agreement”) pursuant to which Moydow security holders will exchange their Moydow securities for securities of Diamond Fields (the “Acquisition”). The Acquisition is subject to various conditions as previously announced. Moydow, like Diamond Fields, is engaged in mineral exploration and development worldwide.
DIAMOND FIELDS INTERNATIONAL LTD.
“Roger J. Daniel”
Roger J. Daniel, President and CEO
For further information, contact Greg Girdler, Investor Relations at (604) 288-1400
Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in Diamond Fields’ 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. Diamond Fields does not assume the obligation to update any forward-looking statement.