Theo Botoulas, MD, Diamond Core
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BRC to secure DRC alluvial project
Allan Seccombe
Posted: Thu, 05 Jul 2007

[miningmx.com] -- BRC Diamond Corp., which is acquiring and merging its assets with South Africa’s Diamond Core Resources, will make a payment of several hundred thousand dollars in the near future to take an 85% stake in a prospective alluvial deposit in the Democratic Republic of Congo.

The merged entity will leapfrog to fifth place on mid-tier Africa-focused diamond companies from tenth and twelfth places for BRC and Diamond Core respectively, giving it a market capitalisation of R1bn. The largest company in that ranking is Petra Diamonds with a R3.5bn market capitalisation.

BRC, which is listed on the TSX Venture Exchange, has the option to acquire from a group of DRC investors the 85% stake in the Kwango River project near the Angolan border. The investors in a vehicle called Acacia will retain a 15% free carry in the project. The project is ready for a bulk sampling exercise.

achieved a critical mass
“They will provide links with the government and bring to the table local services,” said Mike de Wit, who will be president of the merged companies to be called BRC DiamondCore.

“We will look to exercise our option fairly shortly,” he said, but declined to give an exact figure of what it would cost but said it would be a “couple of hundred thousand dollars.”

The 19,000 square kilometres BRC has rights to fall outside the current mineral rights review underway in the DRC because they were acquired after the introduction of the new mining laws in 2003, said De Wit, who worked at De Beers for 29 years.

About half of those rights are wholly owned and the rest is subject to options with local DRC companies, he added.

BRC DiamondCore will have cash of $17m, which will last about nine months to fund the current exploration phase the companies are conducting at alluvial and kimberlite prospects in the DRC and South Africa.

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The merged company is likely to list within four to five months on the main board of the Toronto bourse and on the Johannesburg exchange. The listing is not intended as a cash-raising exercise, but vaulting to fifth place in the mid-tier rankings will certainly secure it institutional investor interest in the future.

Kwango will be the second-most advanced alluvial project in BRC DiamondCore’s stable behind the Silverstreams project on the Orange River in South Africa where a 670 tonnes per hour bulk sampling project is underway.

Silverstreams is in an area that has grades of 0.3 to 1.5 carats per hundred tonnes, which means if there is a mine it could produce between 7,000 and 35,000 carats a year.

Diamond Core will design a bulk sampling plant of similar size for the Kwango project.

Theo Botoulas, CEO of Diamond Core and of the new entity, said the new company will combine the different skills within each company and allow a fast tracking of the 15 projects they have in total.

The two teams will spend the next month re-prioritising its projects and expenditure to start generating cash flow as soon as possible, he said.

“We have achieved a critical mass here in a growth market for diamonds. There are certain companies we would like to acquire and this merged entity has the ability to do that,” Botoulas said.

De Wit said there were areas of South Africa that could be re-explored using modern techniques, and this was something BRC DiamondCore would look at doing. It will also look for acquisitions once the projects it has are bedded down.