BVI Company News

On February 5, 2007 Diamondcorp PLC has announced the commencement of trading in its ordinary shares on AIM, following a placing with institutional investors at 90 pence per ordinary share of 3 pence each of the Company. Based on the placing price, Diamondcorp’s market capitalisation is J30.6 million, with 33,987,078 Ordinary Shares in issue.

The one wholly owned subsidiary of Diamondcorp is Crown Diamond Mining Limited, a company incorporated in the British Virgin Islands. In its turn, Crown Diamond is the owner of 74% of the issued share capital of Lace property, a company registered in South Africa, with an estimated resource of 13.7 million carats of diamonds at an estimated value of $125/carat (In-ground value estimated in excess of $1.7 billion). Crown Diamond is also the owner of 100% of the issued capital of Soapstone Investments (Proprietary) Limited, incorporated in South Africa.

Diamondcorp PLC was formed in March 2005, with the purpose of acquisition and development of diamond assets in South Africa. Since the incorporation date, the Company has raised about J11.8 million through private placements of shares and convertible loans, as well as an institutional placing completed upon admission to AIM, principally to give it the possibility to acquire the Lace diamond property, and finance construction of a 1.6 million tonne per annum diamond recovery plant.

The planned phase one will include tailings retreatment, prefeasibility and exploration (2007-2009). Phase two will probably start in 2009, and will include upgrading of plant and the larger mining operation.

The Lace Property, 74% owned by the BVI-based Crown Diamond and located about 200 km southwest of Johannesburg, includes:

• diamondiferous tailings from previous mining operations for which there is the potential to recover an estimated 370,000 carats from retreatment; and
• diamondiferous kimberlites containing a potential resource in excess of 13 million carats of diamonds with a potential underground mine life of 20 years.

The rest 13% in the Lace Property are owned by Black Economic Empowerment (“BEE”) Partners, Sphere Investments (Proprietary) Limited (“Sphere”) and Shanduka Resources (Proprietary) Limited (“Shanduka”) each owning 13 per cent.

Paul Loudon, Managing Director and CEO of Diamondcorp plc, has commented, “We are delighted to have successfully completed our Admission to AIM. It is anticipated that the group will begin to generate cash in the near-term from a tailings retreatment project. This has the potential to create a strong platform from which the Company can grow, provide cash flow to take a bulk sample from the Company’s assets and generate significant cashflow for the Company over a number of years. Management is also seeking other diamond production opportunities in South Africa as we believe the world outlook for diamond prices is strong, with demand forecast to exceed mine supply in the foreseeable future.”