SYMBOL: DFI
CAPE TOWN, South Africa, Sept. 1 /CNW/ - Diamond Fields International
Ltd. (DFI:TSX) ("DFI" or the "Company") is pleased to announce that it has
entered into a standby guarantee agreement with Spirit Resources SARL
("Spirit") in relation to a proposed rights offering of the Company pursuant
to which the Company will, subject to receipt of all necessary regulatory
approvals, offer to distribute to the Company's shareholders on a pro rata
basis and at no charge, transferable rights to purchase up to 28,000,559
common shares of the Company at a price of $0.09 per share for gross proceeds
of up to $2,520,050 (representing up to approximately 24.7% of the Company's
outstanding shares). Pursuant to the standby guarantee agreement, Spirit has
agreed to participate in the proposed rights offering by purchasing up to
$2,000,000 of the offering through exercising its basic subscription
privilege, additional subscription privilege and by purchasing additional
shares on a stand-by commitment basis if necessary. Spirit has also advanced
to the Company $500,000 to be applied towards Spirit's participation in the
rights offering. Under the agreement, DFI is entitled to employ such funds for
its general corporate purposes and the advance will, pending closing of the
rights offering, constitute a non-interest bearing loan from Spirit to DFI.
Spirit is controlled by Jean-Raymond Boulle, who is the Company's largest
shareholder currently beneficially owning, directly or indirectly,
approximately 16% of the Company's issued and outstanding common shares. None
of Spirit, Jean-Raymond Boulle or any affiliated company will receive any
consideration from DFI for Spirit's covenant to participate in the rights
offering pursuant to the standby guarantee agreement. The standby guarantee
agreement has been accepted by the Toronto Stock Exchange.
Further details on the proposed rights offering will be provided by the
Company in due course and will be contained in a rights offering circular to
be mailed to shareholders as of a record date to be set by DFI's Board of
Directors. The rights offering remains subject to applicable Canadian
securities laws and stock exchange rules, including completion and approval of
all necessary filings with applicable Canadian securities regulatory
authorities and the Toronto Stock Exchange.
The Company anticipates that the proceeds of the rights offering will be
used for completion of the Company's mining vessel dry docking, upgrade and
maintenance program, continuation of the Liberian diamond and gold exploration
projects and for general working capital and administrative expenses.
Roger Daniel, President and CEO commented: "We are delighted that by
means of the commitment to the proposed rights offering through the standby
guarantee agreement, our largest shareholder is showing significant support
and recognizing potential value in the Company's assets and business plan."
DIAMOND FIELDS INTERNATIONAL LTD.
"Roger J. Daniel"
Roger J. Daniel, President and CEO
Forward-Looking Statements:
Statements in this release that are forward-looking statements are
subject to various risks and uncertainties concerning the specific factors
identified in Diamond Fields' periodic filings with Canadian Securities
Regulators. Such forward-looking information represents management's best
judgment based on information currently available. No forward-looking
statement can be guaranteed and actual future results may vary materially.
Diamond Fields does not assume the obligation to update any forward-looking
statement.
