Diamond Fields Announces Ship Acquisition and Reports Diamond Production

Oct 14, 2004 | 2004, Corporate News

Vancouver, October 14, 2004 – Diamond Fields International Ltd. (TSX:DFI) is very pleased to announce that it has been declared the winning bidder for the fully equipped twin airlift diamond mining vessel to be named “mv Diamond Fields Discoverer” (formerly mv Anya) in a sealed tender process ordered by the High Court of Namibia. Under the conditions of sale the vessel will be acquired on closing, free of all liens, encumbrances, preferences and all arrests and attachments effected before the passing of ownership of the vessel.

The vessel previously operated successfully in Diamond Fields’ license areas under contract with Gemfarm Investments (Pty) Ltd and Lazig (Pty) Ltd. Diamond Fields intends to upgrade the vessel and improve its mining efficiency from that of previous owners. The Company contemplates resumption of mining with this vessel in approximately 6 months time after completion of required upgrades. Funding for the purchase price and applicable taxes will be provided under a secured loan from Quest Capital Corp. in the amount of Cdn $ 1,950,000. Quest Capital Corp. will be paid a fee, subject to regulatory approval, of 380,000 common shares of DFI plus interest for the loan, in addition to the 100,000 common shares of Diamond Fields that were previously issued to it for providing a standby guarantee.

Gregg J. Sedun, President and CEO of Diamond Fields stated: “We are delighted to have acquired our own ship mv Diamond Fields Discoverer at an excellent price. In the history of Diamond Fields, we have never enjoyed the security of having our own mining / sampling vessel, and reliance on third-party vessels has made DFI vulnerable to inconsistent production. We are confident that our planned improvements to the vessel will increase production performance from previous levels with this vessel.”

Diamond Fields is also pleased to announce the results from mining its Marshall Fork Deposit in Luderitz, Namibia for the 4 month period beginning with the commencement of mining on June 9, 2004 to October 7, 2004. Total production during this period consisted of 52,826 carats of 95% gem quality diamonds which are divided equally between DFI and its joint venture partner Samicor Mining Services (Pty) Ltd., resulting in a total of 26,413 carats to Diamond Fields. These production numbers are inclusive of interim production numbers previously announced on July 6, 2004. Total revenue to Diamond Fields from the sale of 20,799 carats sold to date from total production amounted to US$4.4 million for an average sale price of US$211 per carat. Diamonds recovered but not yet sold from the Samicor joint ventures (Diamond Fields’ share totaling approximately 5,530 carats) are in the pipeline and revenues therefrom will be received early November. Diamond Fields’ share of production of 26,413 carats in 4 months of mining in 2004 has exceeded that for 2003 by 85% and the average diamond price for goods sold to date has increased by 44% year on year. After 4 months of high volume production with outstanding mining and vessel equipment availability (mining for 76% of available operational time), the agreed initial mine plan with Samicor has been completed ahead of the originally contemplated six month period.

Diamond Fields also announces that it has agreed with Samicor in principle to amend the terms of their joint venture whereby the costs of operations and the diamonds recovered will be shared equally with Diamond Fields to increase its maximum contribution to costs up to US $575,000 per month to offset a portion of Samicor’s higher than expected operating costs. This agreement is subject to the parties agreeing on a new mine plan to use Samicor’s mv Kovambo and Seabed Crawler on Diamond Fields’ Marshal Fork concessions on a month to month basis. Production on Diamond Fields’ marine concession has been temporarily put on hold pending agreement on this new mine plan and re-deployment of the mv Kovambo to Diamond Fields’ Marshall Fork concession. In addition to the extended joint venture for diamond recovery with the mv Kovambo, Diamond Fields and Samicor are pursuing negotiations as to additional exploration and production options for Diamond Fields’ license areas.

Diamond Fields International Ltd. is an internationally active exploration and mining company pursuing mineral exploration opportunities worldwide. The Company’s corporate strategy is to maximize cash flow from its Namibian marine diamond concessions and systematically explore and develop its international mineral exploration projects. In addition, the Company continues to explore opportunities to acquire new economic mineral projects worldwide.


“Gregg J. Sedun”

Gregg J. Sedun
President and Chief Executive Officer

For further information contact Investor Relations (1-888-682-2113) Ext: 257
Website: www.diamondfields.com

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 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.

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