Cape Town, August 1, 2007: Diamond Fields International Ltd. (DFI:TSX) (“DFI” or the “Company”) announces strong production and sales results for the quarter ended June 30, 2007 from marine diamond mining joint operations (“JO”) with Bonaparte Diamond Mines NL (“Bonaparte”).
Key points:
- Total JO production for the June 2007 quarter of 20,269 gem diamonds weighing 8,279 carats at an average size of 0.43 carats/stone.
- Three JO diamond sales of 9,224 carats completed in the quarter generating total revenue of US$1,919,676 (70% (DFI): 30% (Bonaparte) revenue and operating costs split).
- Total JO sales to date of 10,567 carats sold for US$2,266,018 at an average value of US$214/carat.
- Amended JO agreement resulting in expansion of JO resource area to 10.1 km2 and increase in Bonaparte’s interest to a 35% share of agreed cost and revenues when mining is undertaken with DFI’s vessel MV DF Discoverer in expanded area.
- Marine sampling program in expanded JO area planned for implementation in second half of 2007.
Mining Activities
The DFI/Bonaparte JO marine diamond mining operation off Luderitz, Namibia continued throughout the quarter with strong results, and has now been operating for a total of 5 months since commencement in late January 2007.
JO diamond production of 8,279 carats for the June 2007 quarter represents an increase of 78% over production achieved in the previous quarter. During both April and May, successive monthly record productions were achieved, driven by the full availability of the dual airlift mining system which was established at the end of March 2007. Production for April reached 3,189 carats and in May reached 3,529 carats. In June the production declined due to poor seasonal (winter) weather conditions and resultant technical problems affecting operations. For part of this month only one airlift could be operated. During the September 2007 quarter operational improvements are again anticipated as a result of improving weather and the ongoing replacement and repair of key pieces of equipment.
JO mining results continue to meet expectations from the resource, and as a result large stones have been regularly recovered with diamonds in excess of 2.0 carats occurring regularly. The largest diamond recovered to date, was a 9.2 carat diamond. Fancy colored diamonds are also recovered occasionally. The diamonds recovered to date continue to be of approximately 95% gem quality.
Diamond production is summarized in Table 1 below.
Table 1 — Diamond Production
Production Period Stones Carats Ave Size
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Production Period Stones Carats Ave Size
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Pre JO 1657 605 0.37
JO 8208 4038 0.49
Total Q3 production
(January to March 2007) 9,865 4,643 0.47
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Total production Q4- all
JO (April to June 2007) 20,269 8,279 0.41
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Total production
(January to June 2007) 30,134 12,922 0.43
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The total production from JO mining at June 30, 2007 stands at 28,477 diamonds weighing 12,318 carats with average stone size of 0.43 carats per stone and representing an effective 5 months mining since commencement at end January 2007. Mining to date continues to show that the mineralization and economic grades extend in places beyond the resource boundaries defined by the sampling data.
Mining is presently taking place in the Diaz Prospect 1 JO mining area in mining license ML111, under the terms of the formal mining agreement which was announced on February 20, 2007. The agreement provides for a minimum of 6 months mining in the DP1 JO area, which has since been extended for up to 12 months by mutual agreement. The JO mining operations are being conducted by DFI utilizing its vessel MV DF Discoverer on a 70% (DFI): 30% (Bonaparte) shared revenue and agreed operating cost basis. Mining is currently in progress in the 315,000m2 area within DP1 incorporating a 63,000 carat Indicated Resource (National Instrument 43-101 compliant), identified in late 2006.
Based on the success of the initial JO operations, discussions to extend both the minimum mining term in the JO area, as well as expansion of the scope of the JO have been concluded.
The JO partners have now signed an amendment to the JO Mining Agreement (announced July 16, 2007), whereby the original 1.6 km2 JO area in the Diaz Reef Prospect of ML111 license offshore Luderitz, has been expanded to a total prospective area of 10.8 km2. This area will be sampled by Bonaparte at its cost, with the objective of substantially expanding the mining resources available to the JO mining operations. In addition, Bonaparte’s interest in the expanded JO area has increased to 35%, where DFI is the mining operator (i.e. gross revenue and agreed operating cost will be shared on the basis of 65% DFI, and 35% Bonaparte). The amendment to the agreement also requires Bonaparte to fund an amount of not less than Namibian$5,000,000 directly on resource development within the expanded JO area in ML111 over a period of 2 years from the effective date of this agreement.
Sampling in the expanded JO area is expected to commence within the next 2-3 months, subject to availability of a suitable vessel. The delineation of substantially larger JO mining resources in 2007 and 2008 is expected to provide a basis for increased production, and may also allow consideration for introducing a second mining vessel, at an appropriate stage.
Sales
During the quarter ended June 30, 2007, three sales of JO production were completed in Antwerp, Belgium via DFI’s existing sales agreement with Diamond Tenders (Belgium) NV. The three sales comprised a total of 9,224 carats (increase of 258% over previous quarter) realizing US$1,919,676 (250% increase over previous quarter). To date, a total of four JO diamond production sales have been completed at an average value per carat sold of US$214. The average value per carat realized for the June quarter was US$208. Sales results are summarized in Table 2 below.
Table 2: Total Diamond Sales
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Period/Date of sale Carats Total Average value
US$ US$/ct
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Pre JO sales 2,221 420,729 189
JO sales 1,343 346,342 258
Total Q3 sales
(January to March 2007) 3,564 767,071 215
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JO sale, April 07 2,030 484,692 239
JO sale, May 07 3,344 661,615 198
JO sale, June 07 3,850 773,369 201
Total Q4 sales - all JO
(April to June 2007) 9,224 1,919,676 208
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Total sales (January to
June 2007) 12,788 2,686,747 210
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The above represents sales on production up to May 29, 2007. Overall the sales price remains above the US$200 mark, indicating the strong demand for the high gem quality production.
Sales this quarter included the following high value diamonds:
Diamond Size (Carats) Sales Price (US$) US$/Carat
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7.72 24,018 3,111
6.16 13,668 2,219
5.38 13,057 2,426
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Roger J. Daniel, B.Sc. (Hons) Geology, London, Pr.Sci.Nat., the Company’s President and CEO, who is a Fellow of the South African Institute of Mining and Metallurgy (SAIMM) and is also a registered geological scientist with the South African Council for Natural Scientific Professions (SACNASP) and is thus a Qualified Person in terms of National Instrument 43-101, has compiled and reviewed the scientific and technical information contained in this News Release.
DATED August 1, 2007.
DIAMOND FIELDS INTERNATIONAL LTD.
“Roger J. Daniel”
Roger J. Daniel, President and CEO
For further information, contact Roger Daniel at +27 21 425 1990
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 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.