DFI eyes $8.1 million as production resumes

Having recently resumed mining on the Marshall Fork marine diamond deposit in Luderitz Bay,Namibia, Diamond Fields International (DFI-T) has arranged a non-brokered private placement worth $8.1 million.

The financing deal will see DFI issue 6.6 million units and 6.9 million subscription receipts both priced at 60 apiece. The receipts are convertible into units on a one-for-one basis; each unit comprises one DFI common share plus a non-transferable share purchase warrant. One warrant is good for one share at $1 per share for three years. DFI can mandatorily redeem the warrants with in 30 days if its share price exceeds $1.30 for 20 consecutive days any time between 6 months and 35 months after closing.

Diamond Fields will seek shareholder approval for the issuance of the subscription receipts at its upcoming annual general meeting.

Proceeds will fund development of DFI’s Namibian marine diamond concession, plus exploration in Greenland, Sierra Leone, and Madagascar. It will also apply a portion to the repayment of debt and general working capital.

Also under the deal, DFI will pay a finders’ fee equal to 6% of the funds raised, accompanied by compensation warrants equal to 6% of the subscription receipts sold by the finders. The warrants are exercisable into shares at 60 per share.

At the end of September, DFI announced that the contract mining vessel M.V. Anya resumed production on the Marshall Fork deposit. The vessel recovered about 9,500 carats of diamonds from Marshall Fork (the entire year’s expected haul) before returning to Cape Town in March for repairs and re-registration under the South African flag. Work on the processing plant and mining systems took longer than expected, and plans to deploy a second vessel Lady S, were scrapped thanks to M.V. Anya’s superlative performance.

DFI’s main Namibian concession covers more than 70 km of coastal waters between Hottentot Point to the north and Diaz Point to the south, centred at Luderitz. Within that area are the diamondiferous Marshall Fork, Diaz Reef and Conical Beach features.

Meanwhile in Sierra Leone, DFI plans follow-up work on the east-central Foindu license where a single diamond exceeding 1 mm in diameter was found near two G10 garnets. Efforts will also focus on several areas containing kimberlitic ilmenite on exploration license 40/96.

In Madagascar, DFI plans to acquire up to an 83% stake in International Gemstones, which holds the Midonge land concessions on the eastern shore of the country and the Horombe Plateau blocks centred on prospective Archean-aged basement rocks in the central highlands. So far, crews have collected 24 stream sediment samples on the eastern block; sampling is underway on Horombe.

Alluvial miners working near DFI’s land unearthed two diamonds weighing 23.8 and 8.4 carats, respectively. International Gemstones recently acquired the “high quality and purity” stones, and staked some 45,000 sq. km. of land near where they were found.

Chip sampling on a newly acquired nickel discovery on Ammassilik Island off the southeast coast of Greenland averaged 1% nickel, 0.3% copper, plus minor precious metal values. Fieldwork continues.

Shares in DFI were unchanged at 74 in early trading in Toronto following the news on Oct. 21; the shares trade in a 52-week range of 16-89.