| ||Tue Feb 20, 2007|
Formal Mining Agreement And Continued Strong Diamond Recoveries From Early Offshore Joint Operations
| ||(Cape Town, February 20, 2007) -- Diamond Fields International Ltd. (DFI:TSX) ("DFI" or the "Company") is pleased to announce that it has concluded a formal mining agreement with Bonaparte Diamond Mines NL ("Bonaparte") and that diamond production from the joint operations areas continues to deliver strong results.|
In terms of the formal mining agreement, DFI will continue current mining with its vessel the MV DF Discoverer for a period of 6 months in 2007, with provision to continue thereafter for up to 12 months, by mutual agreement. Thereafter any additional mining will be subject to review by the parties of available resource at that time. In summary, as DFI has elected to continue to operate, the Joint Mining Operations will be conducted on a 70% (DFI) : 30% (Bonaparte) revenue and cost share basis. Further details of the agreement are included below.
The initial mining operations in the joint operations area have continued to produce strong results. A total of 2,612 stones with an average size of 0.53 carat/stone and weighing 1,343 carats (with the two largest stones being 9.20 carats and 5.81 carats) have been produced in the first 17.5 days of mining since commencement of operations on 27 January 2007. This first parcel of 1,343 carats was transported from the mining vessel to Windhoek, Namibia on 14th February 2007 in preparation for exportation and sale in the next 2-3 weeks via DFI's existing sales agreement with Diamond Tenders (Belgium) NV in Antwerp, Belgium .
The mining completed to date continues to show that at the present location, mineralisation and payable grades are more extensive than originally defined within the estimated 63,000 carat Indicated Resource area. Consequently, mining at the present location has extended beyond the defined Indicated Resource boundaries within DP1and the defined mining area has been expanded by mutual agreement to incorporate these additional areas of payable grade.
DFI's President and CEO, Roger Daniel commented, "We are delighted to have now signed the formal mining agreement with Bonaparte and are extremely happy with the continued strong results from the initial mining results from the DP1 joint operations area. We now look forward to the sale results from this first parcel."
Details of Formal Mining Agreement
A Formal Mining Agreement has been signed between DFI's 100% owned subsidiary Diamond Fields (Namibia) (Pty) Ltd ("DFN") and Bonaparte's 100% owned Namibian subsidiary, Bonaparte Diamond Mines (Namibia) (Pty) Ltd ("BDN") relating to mining operations on the Diaz Prospect 1 (DP1) Joint Operations (JO) area in Mining Licence area ML111 held by DFN.
In terms of the agreement, DFN has the first option to mine the Indicated Resources identified in the JO area. If mining is conducted by DFN then the gross sales value of mining production will be shared as follows: 70% share to DFN and 30% share to BDN. Agreed operational costs will be shared between the parties on the same basis. If DFN opts not to mine the resource or if DFN's option to act as Mining Operator as defined in the agreement, is terminated or lapses within 6 months or if no mining is undertaken for a period of 6months, then BDN will have the right to undertake Mining Operations. If mining is conducted by BDN then DFN will receive a royalty of 14% of Gross sales value from any mining operations in the JO Area. BDN will then be entitled to an 86% share of the gross sales value and will be responsible for all operational costs including mining costs.
Mining operations will be overseen by a Management Committee to comprise 5 members with representatives from DFN and BDN, the appointed Mining Operator having 3 members on the committee. The committee will meet regularly during mining operations and certain key decisions, including approval of operating costs and mine plan, will require unanimous decision by the committee. The mining Operator will be responsible for providing all equipment and manpower needed to run the operations and carrying out the mine plan, in accordance with all regulated requirement s and conditions of licence. Basic performance criteria have been set for DFN as Mining Operator. BDN will be required to contribute cost contribution by way of cash call on invoice 14 days in advance with any shortfall to be made good upon call. Where DFN is the Mining Operator, the agreement may be suspended if BDN fails to pay cash call or if its share of costs have to be offset against revenue for more than 2 consecutive months. BDN may withdraw from this agreement at any time, by giving due written notice. DFN will have the right to sell all product recovered during the tenure of this agreement in terms of its existing marketing agreement. Associated sales costs will be paid by BDN and DFN proportionate to their revenue interests as provided for in terms of the agreement. Standard terms for conflict resolution and arbitration are included in the agreement.
Roger J. Daniel, B.Sc. (Hons) Geology, London, Pr.Sci.Nat., the Company's President and CEO, 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 NI43-101, has compiled and reviewed the scientific and technical information contained in this News Release.
DATED February 20, 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
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.
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