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Diamond Fields announces agreement to advance Beravina Project

Mining News - Published on Mon, 20 May 2019

Image Source: diamondfields.com
Diamond Fields Resources Inc announced that it has entered into a cooperation agreement with TMH Acquisition Co, a special purpose vehicle established by Denham Mining Fund LP, to advance the Company’s Beravina Project in Madagascar. Pursuant to the Agreement, TMH will make an immediate payment of USD 250,000 to the Company and will fund the next stage of exploration and development work on Beravina. The 2019 Work Program, which will be under TMH’s control, is expected to cost approximately USD 500,000 and should be completed within 7 months. TMH will have the right to extend the Evaluation Period by a further 3 months if it has incurred expenditures of USD 500,000 and made a further payment of USD 250,000.

Upon completion of the 2019 Work Program, TMH will have the option (“the Option”) to acquire 100% of the Project in consideration of:

A. a net payment of USD 2,000,000; and

B. a nine percent (9%) sales royalty (“Royalty”).

If the Option is exercised, TMH will incur all future capital and operating expenditures in relation to the Project and the Company will benefit, in perpetuity, from its right to nine percent (9%) of all future mineral sales, subject only to limited deductions. If the Option is not exercised by TMH during the Evaluation Period, the Project must be returned to the Company without TMH retaining any interest, along with all of the results from the 2019 Work Program.

Upon exercise of the Option, TMH is required to place the Project into production by no later than 30 June 2023, subject to certain extensions for events of force majeure such as permitting delays, but not longer than 30 June 2025. If the Project is not placed into production by the Project Long-stop Date, then TMH will be required to make advance royalty payments to the Company, as follows:

A. USD 500,000 on the Project Long-stop Date;

B. USD 500,000 six months after the Project Long-stop Date; and

C. USD 500,000 on every anniversary of the Project Long-stop Date thereafter.

If TMH should fail to make any advance royalty payment, when due, then the Company shall have the right to reacquire the Property in consideration of US$1 and 50% of all advance royalty payments actually made by TMH, if any.

Sybrand van der Spuy, CEO, said “We are pleased to have secured the cooperation of such a strong financial and technical partner for Beravina. We have confidence that the 2019 Work Program will meet expectations and confirm the technical merits of the Project. If the Option is exercised, DFR will be in the enviable position of being carried through to production at no cost whilst retaining a very substantial economic stake in future sales revenue from Beravina.”

Source :

Posted By : Rabi Wangkhem on Mon, 20 May 2019
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