25th Jun 2008 07:00
25th June2008
WEST AFRICAN DIAMONDS PLC
("West African Diamonds" or the "Company")
OPERATIONAL UPDATE
West African Diamonds in early stage discussions which may lead to a takeover offer for the company
Guinea diamond activities being expanded due to promising results
Sierra Leone activities being downgraded due to disappointing results at the Plant 11 Dump project and a deteriorating security situation
The board of West African Diamonds plc, the AIM listed diamonds and precious metals explorer and developer (AIM: WAD), is pleased to provide an operational update on its activities in Sierra Leone and Guinea.
West African Diamonds confirms that it has received an approach from a third party which, if discussions are concluded satisfactorily, may lead to a takeover of the Company. A non binding Memorandum of Understanding has been signed and due diligence is being conducted. A conclusion is likely within 8 weeks.
A separate decision has been made to expand operations in Guinea and to scale down activities in Sierra Leone, due to positive operational results in Guinea, a deteriorating security situation in Sierra Leone, and disappointing results at Plant 11. In light of this West African Diamonds has bolstered its short term working capital through the issue of a £385,000 convertible loan at 17p per share.
Results from the bulk sampling and small scale mining activity on the Guinean Bomboko licence in the headwaters of the Aredor Mine suggest grades in excess of 30 cpht (221.5 carats from a 675 tonne bulk sample) and values of $135.34 per carat achieved on sale of a parcel of diamonds. These are encouraging and West African Diamonds will expand the mining operations using equipment already owned by the company.
Favourable geophysical results from the Droujba kimberlite pipes have led to a decision to bulk sample the pipe, to be followed up by drilling.
West African Diamonds will continue to work in Sierra Leone but will be scaling back operations for the present in view of the deteriorating security situation. Work will for the present continue on follow-up sampling of a potential hydrothermal gold mineralised system in the Nimini Hills Greenstone belt, following encouraging reconnaissance sampling results. Bulk sampling of the nearby gold and diamond rich Plant 6 Dump is also planned as is further resource definition work on kimberlite Pipe 3 and associated kimberlite dykes. The Plant 11 Dump project is being run on a reduced basis whilst economic options are being evaluated.
Enquiries:
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West African Diamonds |
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John Teeling, Chairman |
+ 353 1 8332833 |
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James Campbell, Deputy Chairman |
+27 83 457 3724 |
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Blue Oar Securities Plc John Wakefield |
+44 (0) 117 933 0020 |
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College Hill Paddy Blewer Nick Elwes |
+44 (0) 20 7457 2020 +44 (0) 20 7457 2020 |
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This release has been approved by Alex van Zyl, Technical Director, West African Diamonds. Alex van Zyl (B.Sc. Stellenbosch, B.Sc. Hons. Pretoria) spent a long career in Anglo American in the diamond division, ending up 1990 to 1997 with worldwide responsibility for diamond exploration and evaluation. He was a consultant to De Beers from 1997 to 2002.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevant securities" of West African Diamonds, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of West African Diamonds, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of West African Diamonds company by West African Diamonds, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel."
West African Diamonds currently has 40,750,758 ordinary shares in issue (ISIN - GB00B1CQN147).
Related Shares:
Stellar Diamonds