River Diamonds PLC
("River Diamonds" or "the Company")
River Diamonds Signs Agreement to Acquire Emperor Gold Mine, and Conditional Placing of lb 4,250,000
River Diamonds announces today that it has signed a sale and purchase agreement (the Agreement") to acquire the remaining 80% of Viso Gero International Inc. ("VGI") from Viso Gero Global Inc 6% of Westech Gold Pty Ltd completion of the Acquisitions, River Diamonds will own 100% of VGI and will indirectly hold a 100% interest in the (also known as the Vatukoula Gold Mine)
Acquisitions constitute a reverse takeover under the AIM Rules and therefore require shareholder approval. Accordingly, a of the Company is to be convened at which resolutions will be proposed to approve the Acquisitions
The consideration payable under the Agreement consists of the issue of 477,633,333 new ordinary shares in River Diamonds at 6 pence per share ("Consideration Shares") and the payment of $ 2,100,000 in cash to give a total consideration of lb29,561,000.
The board of River Diamonds is also pleased to announce a conditional placing of 70,833,333 new ordinary shares at 6 pence per share with institutional investors raising gross proceeds of lb4,250,000 (the "Placing"). The Placing is conditional on completion of the Acquisitions.
The Consideration Shares will represent 29.18% of the share capital of the Company as enlarged by the Acquisitions and Placing.
The shares of the Company are currently suspended pending the publication of a re-admission document and shareholder circular in relation to the Acquisitions Further details of the Acquisitions will be provided in the re-admission document.
Colin Orr Ewing, Chairman of River Diamonds, commented: "Following the Acquisitions River Diamonds will be a potentially significant gold producer. Progress to date at the mine has been excellent and operational targets are being met. We are now well positioned for future growth and have the financing to move forward rapidly.
Qualified Person
Kiran Morzaria B.Eng (ACSM), (FGS), MBA, has reviewed the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School. Kiran is the Finance Director of River Diamonds.
Enquiries:
Colin Orr-Ewing, Executive Chairman
River Diamonds plc
Tel: 020 7352 4117
Dave Paxton
Hichens Harrison & Co. plc
Tel: 020 7832 7785
Beth Harris/Laura Llewelyn
Parkgreen Communications
Tel: 020 7851 7480
James Joyce/David Porter
W.H. Ireland Limited
Tel: 020 7220 1666
Notes to the Editors
Background on the Emperor Gold Mine
A recent technical review by River Diamonds, states that as of June 2006, the Emperor Gold Mine had a JORC approved underground delineated gold reserve of tonnes grading 11.4 g/tonne for 858,000 ounces within a total underground resource of 11,700,000 tonnes grading 13.08 g/tonne for million ounces underground. There are an additional 250,000 ounces of gold in mine tailings from 5,180,000 tonnes grading 1.5g/tonne.
At the mine site there is a 1,000,000 tonne process facility, which includes crushing, grinding, flotation, roaster, CIP and two tailings dams. Equipment at the mine includes several Toro load-haul-dump vehicles, jumbo rigs, support trucks and all the other associated equipment. Infrastructure includes a 20 megawatt power station, freehold land, and over 100 houses and buildings with appropriate amenities.
The Emperor Gold Mine assets include four mining areas with three shafts serviced by recently refurbished mine winders, pumps, hoists and associated equipment necessary to operate a 140,000 ounce per year underground mining operation. On the surface there is an estimated A$ in stores stock, A$ in new mining machines still in stock, five diamond drills, workshops, housing, offices, laboratories and all the associated infrastructure to operate the mining operation. Additionally there is an extensive exploration portfolio.
The Emperor Gold Mine is one of the longest continuously operating high grade mines in the world with an operational history that extends over 70 years. The mine commenced production in 1936 and has produced over ounces
