BRAZILIAN DIAMONDS LIMITED
Sale of Cobre Sul (SAB) and Patos Laboratory
Brazilian Diamonds Limited ("Brazilian Diamonds" or "the Company"),
TSX/AIM: BDY, is pleased to announce the signing of formal contracts
for the sale of both the Company's Patos do Minas Laboratory and
associated plant and equipment and the Company's wholly owned
subsidiary, Cobre Sul Mineracao Ltda, through which the Company holds
the Santo Antonio do Bonito alluvial diamond project.
Each of the assets are being sold to Gilmar Alves Campos and his
brother, Geraldo Magela Campos, for an aggregate consideration of
US$1,100,000. The brothers are well known in Brazil for their
successful alluvial diamond mining interests. The US$350,000
consideration for the laboratory and associated equipment is payable
in cash while the US$750,000 payable in respect of Cobre Sul
Mineracao Ltda is being paid as to US$350,000 in cash and, at the
election of the purchasers, the balance may be paid by the delivery
of diamonds with an agreed value of US$400,000. A non-refundable
deposit of Reis$25,000 has been received and completion of both
transactions is expected within 90 days.
In the Company's consolidated audited accounts for the year ended 31
December 2008, the assets being sold were written down to the
consideration anticipated to be received by the Company. Therefore
no profit or loss is expected to arise upon completion.
The proceeds of these transactions will be used to repay debt and to
provide working capital to fund the Company's ongoing activities
which are primarily focused on efforts to advance the Canastra 1
kimberlite project towards development.
The Company is encouraged by the recent publication of the
government's inter-departmental deliberations over the finalization
of permanent boundaries for the Serra da Canastra National Park which
is located in proximity to the Canastra 1 project and the progress
made with respect to the passage of this legislation. In June 2007 a
draft bill (Projeto de Lei #1448/2007) was submitted to the Brazilian
Congress to formally exclude the Company's projects in the Serra da
Canastra region from any expansion of the Canastra National Park.
The draft bill was approved by the Camara dos Deputados (Lower
House) on October 29, 2008 and has now moved to the Senado (Upper
House) for final approval which is expected during 2009.
Brazilian Diamonds has renewed the Canastra mineral licences that it
holds while awaiting the issue of trial mining permits which are
expected to follow confirmation of final approval of this
legislation. The Company hopes to commence trial mining at its
Canastra 1 project once the bill has received final approval, but in
the meantime the Company's projects in the Serra da Canastra region
will remain on care and maintenance.
The Company will continue to hold a substantial portfolio of mineral
licences in the Santo Antonio do Bonito River region which are
considered prospective for kimberlite exploration. The Santo Antonio
do Bonito kimberlite project is currently on care and maintenance and
will remain so pending the availability of funding for a return to
active exploration.
Licences for the Regis and Tucano kimberlite exploration projects,
also in the Patos do Minas region, have been renewed and those
licences are to be maintained in good standing pending a return to
active exploration in the region.
Certain statements included herein constitute "forward-looking
statements" within the meaning of applicable Canadian securities
legislation. These forward-looking statements are based on certain
assumptions by Brazilian Diamonds and as such are not a guarantee of
future performance. Actual results could differ materially from
those expressed or implied in such forward-looking statements due to
factors such as general economic and market conditions, increased
costs of exploration and unforeseen logistical issues. Brazilian
Diamonds is under no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable laws.
For further information contact:
Kenneth P. Judge, Chairman
Tel: + 44 7733 001002
Stephen Fabian, President & CEO
Tel: + 55 31 8444 0475
Jon Bey, Investor Relations
Tel: 1 866 689 2599
Email: jbey@braziliandiamonds.com
Hanson Westhouse Limited (Nomad to the Company)
Tim Feather / Matthew Johnson
Tel: + 44 113 246 2610
---END OF MESSAGE---
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.