Printer Friendly


 VANCOUVER, British Columbia, Aug. 23 /PRNewswire/ -- Jean-Raymond Boulle, president of Diamond Fields Resources Inc. is announced that the company has entered into agreements which will result in the acquisition of an integrated 100 percent interest in the properties comprising the Guariche Mining District in Bolivar Province, Venezuela. The 100,000-acre holdings, which are being consolidated by the two transactions described below, contain infrastructure and acquisition investments of more than Cdn. $12,000,000 on the part of the vendors.
 Guariche is one of the famous historical gold districts in Venezuela with a 200-year history of gold production from lower proterozoic greenstones. The district is located approximately 60 kilometers southwest of El Callao and 60 kilometers northwest of the KM 88 gold camp. The acquisition will include two complete modern base camps, two air strips, complete machine shop facilities, a twin engine aircraft and a multi-million dollar inventory of heavy machinery and spare parts to support profitable placer production in the district. Road access to Puerto Ordaz and Ciudad Bolivar exists with only minor upgrading required.
 Upon completion of the acquisition, DFR intends to aggressively explore and develop the hard rock potential of the district, which is comprised of Ministry of Mines concessions, some of which already include vein rights. Advanced discussions with major mining companies in this regard are underway.
 The acquisition will secure the company's growth based on strong underlying assets of gold production from Venezuela and diamond production from Namibia.
 The agreements have been entered into with L.B. Mining Co., an Idaho General Partnership, comprised of L.B.Industries Inc., Frank Barnes and Henry J. Williams ("LB") of Boise, Idaho, and with Robert M. Friedland ("RMF") of Vancouver. The company has agreed to acquire from LB all of the issued and outstanding shares of three Venezuelan companies owned by LB which hold Guariche district and Las Flores district assets. The company will issue LB a minimum of 2,000,000 common shares in the capital stock of the company or up to the maximum of 3,000,000 shares, depending on the degree of completion of certain financing obligations by LB, which vary from a minimum of Cdn. $1,500,000 to a maximum of approximately Cdn. $2,600,000. The private placement to be completed by LB will be at a price of $3.40 per share, being that price which is 15 percent below the price of the company's common shares as last traded on the exchange prior to execution of the agreement.
 The company has also agreed to assume certain obligations of LB relating to the Venezuelan companies not to exceed Cdn. $260,000 and will pay LB the sum of Cdn. $520,000 plus certain interest payments as partial reimbursement of acquisition costs incurred by LB in connection with the Venezuelan companies.
 LB has agreed to pool any shares received over a five-year period with 20 percent being released one year from the closing date and 20 percent each year thereafter, with certain additional resale restrictions imposed on half of the shares issued to LB on release from pool.
 The company has also agreed to acquire from RMF 100 percent of the shares of Minas Guariche C.A. which owns 100 percent of the Triunfo No.3 and Triunfo No.4 concessions, totalling approximately 25,000 acres, which are contiguous to the LB holdings in the Guariche District. The consideration due to RMF for these concessions is up to 400,000 common shares of the company plus reimbursement to RMF of all the funds expended on the acquisition of the Triunfo No.3 and 4 concessions which are currently estimated to be approximately Cdn. $1,300,000 RMF has agreed to accept a promissory note from the company due in two years which note will bear interest at prime plus 2 percent, and shall be convertible into common shares of the company at RMF's option for the two-year period at $3.40 per share. The company will also assume the balance of payments owing to a Venezuelan vendor of approximately Cdn. $1,950,000 payable over three years.
 In addition to the private placement financing obligations of LB set out above, there are a number of other conditions which must be satisfied prior to the closing date. The company will make further announcements with respect to the acquisition of the Venezuelan concessions from LB and RMF in due course.
 In conjunction with the above, the company has agreed to undertake a brokered private placement with First Marathon Securities Ltd. and Yorkton Securities Inc. (the "agents") to raise up to Cdn. $5,000,000 through the sale of commons shares of the company also at a price of Cdn. $3.40 per share with commissions in accordance with exchange regulations to be payable to the agents in common shares of the company. Of this brokered private placement, up to Cdn. $1,000,000 may be designated by the company and the agents as a flow-through offering providing certain tax benefits to the investors. The proceeds to be raised by LB on its private placement together with the flow-through portion of the offering will form part of the Cdn. $5,000,000 brokered private placement.
 All of the transactions announced today are subject to regulatory approval.
 -0- 8/23/93
 /CONTACT: Jean-Raymond Boulle, president of Diamond Fields Resources, 604-688-7166, or 501-777-0600/

CO: Diamond Fields Resources Inc. ST: British Columbia IN: MNG SU: TNM

EH-JB -- LA016 -- 5018 08/23/93 11:38 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 23, 1993

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters