Operating Margin Improves In Second Quarter

Feb 28, 2002 | 2002, Corporate News

Mr. H. D. Lee, Chief Financial Officer of Diamond Fields International Ltd. (DFI-TSE), is pleased to announce that the Company recorded a positive operating margin for a second consecutive quarter since the Diamond Fields-Trans Hex Group joint venture began diamond mining operations. The Company’s operating profit margin for the second quarter ended December 31, 2001 improved significantly over the first quarter primarily due to production cost recoveries.

Joint venture operations commenced on May 24, 2001 with a program of trenching and mining in the Marshall Fork area of the Company’s Luderitz concessions in order to assess how airlift technology applies itself in the various geological and grade environments of the joint venture area. On November 6, 2001, full-scale mining commenced when Trans Hex deployed a fully dedicated vessel to Marshall Fork. Results from the operations to December 31, 2001 were as follows:

                              Joint venture          DFI's share
                          December 31, 2001    December 31, 2001
                         Quarter Six months   Quarter Six months
Carats produced           8,210*     16,470     4,926      9,882
Carats sold               4,866      10,124     2,920      6,074
Gross profit from operations      $ 363,487            $ 392,993

* Includes seven weeks of full scale mining commencing November 6, 2001

At December 31, 2001, the Company’s share of the joint venture’s diamond inventory was over 3,800 carats recorded at a cost of $451,000. These were sold in January for proceeds of approximately $840,000, reflecting a surge in rough diamond prices over the sales in the December quarter.

Mr. Lee stated: “We are encouraged by the results of our operations to date. We previously reported that our mined grades in January were 170% over the estimated grades reported by MRDI in our October 2000 feasibility study. With increased recoverability of diamonds, and continued low costs of production, we expect to continue to achieve positive operating results. Furthermore, rough diamond prices have surged since its lows following the September 11th events, adding to prospects of improving operating profitability.”

Mr. Lee added: “We would like to assure our shareholders that we adopt conservative accounting practices and adhere strictly to generally accepted accounting principles. All of our financial statements are reviewed by our auditors on a quarterly basis and audited on an annual basis. Our company policy is to conduct business with the utmost integrity and transparency.”


Horng Dih Lee
Chief Financial Officer and Corporate Secretary

For further information contact H.D. Lee: (604) 682-2113
Website – https://dfrgold.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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