Vancouver, November 14, 2003—Diamond Fields International Ltd. (DFI: TSX) reported revenues of $1.9 million for the year ending June 2003 compared with revenues of $2.9 million in 2002. Net loss for the year was $1.9 million or $0.04 per share, compared with a loss of $686,544 or $0.01 per share in 2002. Losses were incurred from unforeseen disruptions in operations and an increase in non-recurring general and administrative expenses. These include an increase in legal fees of $593,073, the majority of the increase relates to costs associated with the proxy battle, also contributing was legal costs associated with the Trans Hex settlements
During 2003, the Company sold 14,727 carats of diamonds recovered from the Marshall Fork marine concessions located in Luderitz Bay off the coast of Namibia. The diamonds were sold at an average price of $142.65 per carat generating revenue of $1.9 million for Diamond Fields International. (Approximately 3,600 carats of diamonds sold during the year ending June 2003 were collected during the Trans Hex joint venture arrangement and Trans Hex received 40% of the revenue generated by the sale of these diamonds.) Operating costs for the year including production, royalty and selling expenses totaled $1.4 million resulting in an operating profit of $480,884 in 2003 compared with $1.28 million in 2002.
Namibia Marine Diamond Project
Lower than forecast revenue resulted from disruptions in operations on the Namibia Marine Diamond Project. The contract mining vessel mv Anya was not active for the full year. The sale of the vessel in April 2003 required a change in flag state and classification society, which resulted in extensive engineering works, and bureaucratic delays, which prevented the vessel from returning to operation during the fiscal year. During the six-month stoppage, the vessel underwent technical modifications to improve the vessel itself and the efficiency of the diamond recovery process. The vessel returned to the Marshall Fork concessions and commenced operation in September 2003.
On July 1, 2002, Trans Hex unilaterally suspended mining operations at the Company’s Marshall Fork deposit without prior consultation or notification to the Company. As a result, on July 3, 2002, Diamond Fields’ joint venture with Trans Hex was terminated. On September 6, 2002, the Company instituted an action for damages in the High Court of South Africa in Cape Town against Trans Hex. In response, on November 15, 2002,Trans Hex filed a counterclaim. On December 13, 2002, the Company’s new management team reached a settlement with Trans Hex resulting in Diamond Fields International realizing a gain of $415,248.
New Board of Directors
During November 2002, a proxy contest resulted in the appointment of a new Board of Directors for the Company. The new directors included: Mr. Gregg J. Sedun, now president and Chief Executive Officer, Mr. Jean-Raymond Boulle (who was CEO from November to June 2003 when replaced by Mr. Sedun), Mr. Mark Collins, Mr. Steve Malouf and Mr. Norman Roderic Baker. Since then there have been additional changes to the Board with Messrs. John Collier, Earl Young and Roger Daniel replacing Messrs. Boulle, Collins and Malouf as directors of the Company.
Looking forward, fiscal 2004 marks the beginning of a new phase in the development of Diamond Fields as a mining and exploration company. Upon receiving positive cash flow from the resumption of diamond mining activities in Namibia, proceeds will be directed towards expanding the Company’s current diamond resource base and funding future diamond and nickel exploration projects in Sierra Leone, Madagascar and Greenland.
In July 2003, the Company entered into an agreement with its controlling shareholder Mr. Jean- Raymond Boulle and his company Gondwana (Investments) S.A. to acquire an interest in several diamond and nickel properties located in Madagascar, Sierra Leone and Greenland.
Diamond Fields has agreed to acquire approximately 90% of a private company controlling roughly six million acres of prospective nickel and diamond properties in Madagascar, making the Company one of the largest landholders in the country. Madagascar is a vast under-explored region with geological formations consistent to those found in Southern Africa’s prolific diamond, gold and base metal camps. Following the discovery of two large (23 and 8 carat) diamonds by alluvial sapphire miners from an area in the region of our concessions, initial field work has focused on defining the potential of two large concession areas to host diamondiferous kimberlite.
The Company has also agreed to acquire a 100% interest in exploration rights in certain diamond exploration concessions in Sierra Leone. Sierra Leone is the origin of some of the largest gem-quality diamonds ever discovered, and since joining the Kimberley Process in 2001, has once again become an attractive, highly prospective region for diamond exploration and mining. Initial exploration has resulted in the discovery of several kimberlite indicator minerals and a macro diamond—evidence to support the possibility of local kimberlite occurrences.
Diamond Fields has also entered into an agreement to acquire an 80% interest in a nickel project on Ammassalik Island off the east coast of Greenland. This Project covers an area of 55,000 hectares (137,500 acres). Initial fieldwork has traced nickel bearing massive sulphide boulders in talus over nine kilometres along strike. In addition, similarly mineralized boulders have been found four kilometres across strike indicating a second horizon. According to the exploration team, field tests indicate nickel, in unknown concentrations, is present within the sulphide boulders on both horizons.
In October of 2003, the Company agreed with investors to carry out non-brokered private placements totaling Cdn$8,100,000 by the issuance of 6,600,000 units and 6,900,000 subscription receipts convertible into units on a one for one basis both at a price of Cdn$0.60 per unit/receipt. Proceeds from these private placements will be used to fund continued development of the Company’s Namibian marine diamond concession, as well as exploration activities in Greenland, Sierra Leone, and Madagascar, and for general working capital purposes.
Gregg J. Sedun
“Gregg J. Sedun”
President, Chief Executive Officer and Director
For further information contact: Investor Relations (1-604-682-2113)
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. All dollar amounts are reported in U.S currency unless otherwise indicated.