Cape Town, December 18, 2006 – Diamond Fields International Ltd. (DFI:TSX) (“DFI” or the “Company”) is pleased to announce that it has received applicable Canadian regulatory approvals for and is proceeding with the proposed rights offering (the “Rights Offering”) originally announced in the Company’s news release dated September 1, 2006. The Rights Offering is being made to shareholders resident in Canada and shareholders resident in eligible offshore jurisdictions (collectively, “Eligible Shareholders”).
Under the Rights Offering, each shareholder of record on December 28, 2006 (the “Record Date”) will receive one transferable right (“Rights”) for every common share of the Company held. 4.041 Rights will entitle Eligible Shareholders to purchase one common share of the Company at the subscription price of $0.09, until the expiration of the Rights Offering which shall be 4:00 p.m., Toronto time, on January 30, 2007 (the “Rights Expiry Date”).
The Rights will be posted for trading, and the Company’s common shares will commence trading on the Toronto Stock Exchange (“TSX”) on an ex-rights basis, at market open on December 22, 2006. The Rights will trade under the symbol “DFI.RT”.
In the event that all of the Rights are exercised, the Company will receive gross proceeds of approximately $2,523,297, which will be used to fund the completion of the Company’s mining vessel dry docking, upgrade and maintenance program, to continue the Liberian diamond and gold exploration projects, to pay for the expenses of the Rights Offering and for general working capital and administrative expenses.
A detailed Rights Offering Circular and Rights Certificate will be mailed to all Eligible Shareholders on or about January 3, 2007 and will also be available on the SEDAR website at www.sedar.com. Computershare Investor Services Inc., as subscription agent under the Rights Offering, has agreed to sell the Rights of all ineligible shareholders on a best-efforts basis on their behalf and to remit the pro rata net proceeds (if any) from such sale to the ineligible shareholders following completion of the Rights Offering. Shareholders should refer to the detailed Rights Offering Circular for the terms and conditions of the Rights Offering.
The Company has been advised that certain of the directors and officers of the Company may exercise the Rights they will receive under the Rights Offering (subject to compliance with the laws of the jurisdiction in which they are resident); however, no commitments to do so have been made. The directors and officers of the Company, as a group, own less than 2% of the Company’s outstanding shares.
As disclosed in the Company’s news release dated September 1, 2006, Spirit Resources SARL (“Spirit”), which is controlled by the Company’s largest shareholder Jean-Raymond Boulle, has agreed to participate in the Rights Offering by purchasing up to $2,000,000 of the offering through exercising its basic subscription privilege, additional subscription privilege and by purchasing additional shares on a stand-by commitment basis if necessary, pursuant to the standby guarantee agreement between the Company and Spirit dated August 23, 2006. In connection with the standby guarantee agreement, Spirit has advanced to the Company an aggregate of $1.8 million to be applied towards Spirit’s participation in the Rights Offering and such advance will, pending completion of the Rights Offering, constitute a non-interest bearing loan from Spirit to the Company. Please refer to the Company’s news releases dated September 1, 2006 and November 3, 2006 for further details on the standby guarantee agreement and Spirit’s participation in the Rights Offering, as well as the Rights Offering Circular.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in any state or jurisdiction, including the United States, in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any public offering of securities to be made in the United States can only be made pursuant to an effective registration statement. The Company has no intention of filing such a registration statement in connection with this Rights Offering. Accordingly, the Rights Offering is not being made to shareholders resident in the United States nor will US persons (as defined under applicable US securities laws) be entitled to exercise rights under the Rights Offering.
DIAMOND FIELDS INTERNATIONAL LTD.
“Roger J. Daniel”
Roger J. Daniel, President and CEO
For further information, contact Roger Daniel or Randal Cullen at +27 21 425 1990
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.