Diamond Fields Reports Second Quarter Results

Mar 1, 2004 | 2004, Corporate News

Vancouver, March 1, 2004 — Diamond Fields International Ltd. (TSX: DFI) announced a net loss for the three months ended December 31, 2003 of US$384,641 or $0.01 per share, compared with a net loss of US$593,957 or $0.01 per share for the same period in 2002. Year-to-date the net loss is US$701,018, compared with a loss of US$836,065 for the same period of 2002. The current period revenues increased as a result of diamond production recommencing in late September 2003 at the Company’s Namibia marine diamond concessions. The contract mining vessel mv Anya operated for three months during the period.

All of the Company’s revenue for the six-month period ended December 31, 2003 resulted from the sale of diamonds recovered during operations or held in inventory. During the six-month period 8,354 carats of diamonds were produced from the Luderitz sea diamond concession. A total of 5,728 carats were sold at an average price of $143.02 per carat generating net revenue of $789,930, up from 2,189 carats and net revenue of $312,231 for the same period in 2002.

Production, royalty and selling expenses associated with the sale of inventory totaled $500,539 compared to $170,465 for the same period in fiscal 2003. The Company’s operating margin for the six months ended December 31, 2003 was $289,391 compared with $141,866 for the same period in 2002.

Operations, including exploration and development, as well as general and administrative costs, were financed from cash on hand at the beginning of the period and from revenue generated by the sale of diamonds during the period, as well as from a non-brokered financing.

During the six month period ended December 31, 2003, Diamond Fields expanded diamond exploration activities, broadened the Company’s exploration scope to include nickel exploration, completed non-brokered private placements totaling C$8,100,000 and resumed diamond production on its Luderitz sea diamond concession. Proceeds from the financing and cash flow from Luderitz will allow the Company to expand its diamond and nickel exploration activities.

Property Acquisitions
On July 31, 2003, the Company contracted to acquire exploration properties in Madagascar (nickel and diamonds), Greenland (nickel) and Sierra Leone (diamonds).

In November 2003, Diamond Fields negotiated the exclusive right to acquire a 100% interest in the Valozoro lateritic nickel deposit located in Madagascar, a deposit with a historically calculated resource of 3.7 million tonnes grading 1.75% nickel for 65,000 tonnes contained nickel. The estimates were reported by UGINE who, during 1956 and 1957, conducted extensive prospecting. These are historical resource estimates which do not comply with National Instrument 43-101 standards of disclosure. Diamond Fields’ exploration plans include a continuation of the sampling to build a more accurate and complete picture of nickel grade and tonnage distribution in the deposit, as well as prospecting in the vicinity for additional mineralization. Diamond Fields plans for this deposit include assessment of the costs to mine and ship concentrate from the site to in-country mills or offshore processors.

On November 28, 2003, the Company closed non-brokered private placements totaling Cdn$8,100,000 with the issuance of 6,600,000 units at a price of Cdn$0.60 per unit for aggregate proceeds of Cdn$3,960,000 and the issuance of 6,900,000 subscription receipts convertible into units on a one for one basis at a price of Cdn$0.60 per subscription receipt for aggregate proceeds of a further Cdn$4,140,000. Each Unit consists of one common share of Diamond Fields and one non-transferable share purchase warrant (“Warrant”), each Warrant entitling the holder to purchase one additional common share until November 28, 2006 at a price of Cdn.$1.00 per share. However, the Warrants must be exercised after notice by Diamond Fields should the weighted average closing price of Diamond Fields’ common shares equal or exceed Cdn.$1.30 per share for a period of 20 consecutive days at any time between six months and thirty-five months after closing of the private placements. Otherwise, the Warrants will expire. Proceeds from these private placements will be used to fund continued development of Diamond Fields’ Namibian marine diamond concession, as well as exploration activities in Greenland, Sierra Leone and Madagascar, and for repayment of debt and general working capital purposes.

On February 19, 2004, Diamond Fields announced it had entered into a joint venture agreement with Samicor Mining Services (Pty) Ltd. to carry out diamond mining operations on a 50/50 basis on Diamond Fields’ marine mining license ML111 located near Luderitz, Namibia. Although diamond production will be split equally between the parties, operational costs to Diamond Fields will be capped to the fixed US dollar amount of US$400,000 per month. Diamond Fields’ commitment to fund its full share of operating costs is subject to certain assurances of Samicor as to equipment availability. Diamond mining operations will utilize Samicor’s chartered vessel mv Kovambo, which is equipped with the 3rd Generation Seabed Crawler based on the Namssol Crawler (“the Seabed Crawler”) mining system and a diamond processing plant. The Seabed Crawler, built at a cost of US$30 million, operated on Namco’s cross border extensions to the Marshall Fork deposits during parts of 1998 through 2000 producing 200,000 carats of diamonds in 1999. The joint venture provides Diamond Fields with the highest level of production capacity in the Company’s history. The arrangement is contingent on the mutual approval of a mine plan.

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

“Gregg J. Sedun”
Gregg J. Sedun, President and Chief Executive Officer
For further information contact: Investor Relations (1-604-682-2113)
Website: www.diamondfields.com
All dollar values are stated in U.S. currency unless otherwise specified.

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 Diamond Fields’ period filings with Canadian Securities Regulators. Such forwardlooking information represents managements’ best judgment based on information currently available. No forwardlooking 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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