19th Oct 2005 14:44
SouthernEra Diamonds Inc. - Alliance with World's Largest Resources Company - BHP Billiton to become SouthernEra's largest shareholder - Subject to regulatory approval, BHP Billiton agrees to a private placement with gross proceeds of US$8,000,000 Shares Issued and Outstanding: 112,279,101 TSX: SDM AIM: SRE TORONTO and LONDON, UK, Oct. 19 /CNW/ - SouthernEra Diamonds Inc. (TSX:SDM; AIM: SRE) announced today that BHP Billiton has agreed to complete aprivate placement with SouthernEra, at a premium to the prevailing marketprice. Part of the funds will be directed towards exploration, evaluation andpotentially the development of SouthernEra's diamond properties in theDemocratic Republic of the Congo (DRC). BHP Billiton will purchase approximately 15,636,000 shares of SouthernEraat C$0.60 for gross proceeds of US$8,000,000, becoming SouthernEra's largestshareholder with an approximate 12% holding. The placement is subject toregulatory and stock exchange approval. An agreement has been concluded between the companies to explore forprimary diamond deposits and all other minerals within SouthernEra's DRCexploration permits, covering in excess of 13,000 square kilometres. Thepermits have been grouped into six distinct geographic permit areas.SouthernEra will retain a 100% interest in all known or discovered alluvialdiamond deposits within these permit areas. SouthernEra will initially be project manager for all six permit areasand BHP Billiton can earn a 25% interest in a specific permit area and becomeproject manager by completing a 300 tonne bulk sample on any kimberlitediscovery. An additional 25% interest in that individual permit area may beearned by the completion of a pre-feasibility study and a further 15% by fullyfunding a bankable feasibility study. A bankable (full) feasibility study is acomprehensive analysis of the economics of a project (+/- 15% precision) andis used in the banking industry for financing purposes. US$4,000,000 of the US$8,000,000 proceeds from the private placement willbe used to fund the DRC exploration joint venture program and once fullyutilised, BHPB will fully fund exploration up to and including the completionof a pre-feasibility study. The remaining US$4,000,000 will be used bySouthernEra to support its global exploration, development program and generalcorporate purposes. SouthernEra's President and CEO Alasdair MacPhee said: "We are verypleased to have gained the support of BHP Billiton, the world's largestresource company, and look forward to building a long-standing relationshipwith a company of BHPB's calibre and mine discovery track record. It alsoprovides a strong endorsement of the potential of the permits we have underour control in the DRC. This association will enable us to more rapidlyadvance the kimberlite program in the DRC and the private placement willstrengthen SouthernEra's diamond discovery and development strategy goingforward". The majority of SouthernEra's permits in the DRC lie within what isconsidered a 'kimberlite emplacement corridor', underlain by basement Archaeangranite-gneiss of the Congo Craton, which extends from the DRC into the worldrenowned diamond producing Lunda Norte Province in neighboring Angola. In mid-October, 2004, SouthernEra completed over 43,000 line-kilometers ofairborne magnetic and radiometric geophysical surveys. The surveys focused onselected permit areas in the diamond-rich Kasai-Oriental Province which hasproduced two of the 'top-ten' largest gem quality diamonds in the world andproduces in excess of 20 million carats of diamonds annually. SouthernEra's first phase regional stream sampling and soil sample follow-up of selected aeromagnetic survey targets during 2005 has producedpositive kimberlitic indicator mineral results as well as the recovery ofdiamonds in some of the samples. An exploration program agreed to by bothpartners will commence immediately. SouthernEra Diamonds is one of Canada's largest fully integrated diamondcompanies with extensive diamond exploration in six countries includingCanada, Gabon, the DRC, Zimbabwe and South Africa. The Company maintains an18 percent free-carried interest in the Camafuca Diamond Project in Angola andalso operates the Klipspringer Diamond Mine in South Africa. For further information: Toronto: SouthernEra Diamonds Inc.:Mr. Alasdair MacPhee, President and CEO Or Mr. Howard Bird, Senior VicePresident, Global Exploration, Telephone: (416) 359-9282, Fax: (416) 359-9141,E-mail: inbox(at)southernera.com, www.southernera.com; London: 4C-Burvale,Carina Corbett, Director, Telephone: ++ 44 (0) 207-907-4761, Fax:++ 44 (0) 207-907-4769, Email: corbett(at)4cburvale.co.uk (SRE SDM.)ENDSOUTHERNERA DIAMONDS INCRelated Shares:
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