7th Mar 2007 07:04
Dwyka Diamonds Limited07 March 2007 DWYKA SIGNS MOU TO ACQUIRE UP TO 90% OF GOLD PROJECT IN SWAZILAND Highlights - Dwyka secures access to prospective gold project in Swaziland - Approximately 13,000 metres of drilling completed by previous owners - Potential for large, high grade gold mineralisation - Swaziland is Rand common monetary area Dwyka Diamonds Limited ("Dwyka" or the "Company") (London AIM & ASX) todayannounces that it has signed a legally-binding Memorandum of Understanding ("MOU") with the shareholder of Swazi Gold Ventures (Pty) Ltd ("SGV"), the holder of 90% of the issued shares in Swaziland Gold (Pty) Ltd ("SwaziGold"), which in turn owns the Swazigold project in Swaziland (the "Project"). Swazigold Project The Project is located in Swaziland, in the highly prospective ArchaeanBarberton Greenstone Belt that straddles the border between Mpumalanga Province,South Africa and Swaziland. Such Greenstone Belts host many major gold depositsin South Africa, Canada, and Australia, including the giant Kalgoorliegoldfield. The Barberton Greenstone Belt was the location of the first golddiscovery in South Africa, and subsequent gold rush in 1884. Since that time,the belt has produced 11.5 million ounces of gold. Current underground minesinclude the Fairview, Sheba and Consort mines of Barberton Mines Limited,controlled by Metorex Limited. Swazigold's project area is a large 425km2 'greenfields' exploration play withmany targets ranging from 'walk up' advanced drilling targets to promisinggeochemical anomalies. The prospective licence area comprises more than 40km ofstrike length containing multiple mineralised structures and more than 40 goldshowings. Historic detailed drilling has been restricted to the Wyldsdale,Lomati and Daisy prospects where cumulate drilling by previous owners is inexcess of 13,000 metres. Dwyka's initial conclusion from a review of the geology and of this historicwork is that the potential exists for several million tonnes of high grade goldmineralisation. Under the terms of the MOU, Dwyka has the right to acquire the followingpercentage shareholding in SGV on the following basis: - Payment of US$200,000 plus Dwyka shares to the value of US$1,500,000 (atmarket price) - Dwyka earns a 50% interest; - US$750,000 worth of Project expenditure by 30 June 2008; payment of US$200,000plus Dwyka shares to the value of US$1,000,000 (at 80% of market price) - Dwykaearns a further 20% interest (total 70%); - Payment of US$400,000 plus Dwyka shares to the value of US$1,000,000 (at 80%of market price) by 30 June 2009; Project expenditure to reach bankablefeasibility stage by 30 June 2011 - Dwyka earns a further 15% interest (total85%); and Issue of Dwyka shares to the value of US$3,000,000 (at 80% of market price)pursuant to the exercise of an option exercisable at any time between 30 June2009 and 30 June 2011 - Dwyka acquires remaining 20% interest (total 100%). Under the terms of the MOU, Dwyka will be the manager of the Project, which willbe overseen by a management committee in which the vendor shareholder and Dwykawill each have equal representation. Voting will be in accordance with theparties' shareholding percentages in SGV, provided that the manager will have acasting vote in the event of a deadlock. Dwyka may withdraw from the Project at any time, in which case it will dilute toa 49.9% shareholding in SGV and will relinquish management control. In addition,if such withdrawal occurs after the bankable feasibility stage, Dwyka will havea 2% royalty with respect to all minerals produced from the Project area. The MOU is intended to be replaced with a more formal agreement which willexpand upon its terms and contain the usual range of provisions found in similardocuments. Commenting on the signing today of the MOU, Melissa Sturgess, Executive Chairmanof Dwyka said: "This is another important step for Dwyka in its strategy to become asignificant player in the diversified minerals sector. This deal sees Dwykaobtain a controlling interest in a project that is located in an area that hashistorically been highly prospective for gold, for minimal cash outlay and withthe opportunity to increase that interest over time for a fixed consideration." The technical exploration and mining information contained in the aboveannouncement has been reviewd by Ed Nealon, who has sufficient experience whichis relevant to the style of mineralisation and type of deposit underconsideration and to the activity which he is qualified as a Competent Person asdefined in the 2004 Edition of the 'Australasian Code for Reporting ofExploration Results, Mineral Resources and Ore Reserves'. Mr Nealon is a DwykaDiamonds Ltd Director and provides consulting services via his company, AthloneInternational Pty Ltd. Ed Nealon consents to the inclusion in this announcement of the matters based onhis information in the form and context in which it appears. For further information please contact: Melissa Sturgess (Chairman, Dwyka Diamonds): +618 9324 2955 Adrian Griffin(CEO, Dwyka Diamonds): +618 9324 2955 Richard Brown(Ambrian Partners): +44 207 776 6417 Richard Chase (Ambrian Partners): +44 207 776 6461 Laurence Read/Leesa Peters (Conduit PR): +44 207 429 6605 or +44 7979 955 923 Or visit http://www.dwykadiamonds.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Nyota Minerals