Afri-Can Marine Minerals Corporation

Afri-Can Marine Minerals Corporation

January 23, 2014 10:49 ET

Afri-Can Marine Announces Positive Pre-Feasibility Study on Mining Lease 111 Off the Coast of Namibia

MONTREAL, QUEBEC--(Marketwired - Jan. 23, 2014) - Afri-Can Marine Minerals Corporation ("Afri-Can") (TSX VENTURE:AFA) has completed a preliminary study of the feasibility of resuming mining during 2014 on Mining Lease ("ML") 111 situated off the coast of Namibia (see Map 1 and Map 2), for which Afri-Can has an option to acquire an 80% interest from Diamond Fields Ltd ("DFI"). The Pre-Feasibility Study ("PFS") is based on existing Probable Diamond Reserves of 319,000 carats, which are estimated from portions of the Indicated Mineral Resources that were press released on October 1st, 2013.

A National Instrument 43-101 compliant technical report covering the Pre-Feasibility Study has been filed on Sedar and can be viewed at: or on the web site of Afri-Can at

Pre-Feasibility Study Highlights:

Afri-Can's share of Net Present Value (NPV) (after tax) US $20.2 million
Afri-Can's share of Internal Rate of Return (IRR) (after tax) 31%
Probable Diamond Reserves 319,000 carats
Average annual production 159,500 carats
Diamond price (projected average) US $484 per carat
Initial Mine Life 2 years

Salient features of the Pre-Feasibility Study are as follows:

- Estimated Probable Diamond Reserves of 319,000 carats at an average grade of 0.24 carats per square metre are based upon the economically extractable portions of the Indicated Mineral Resources only - and none of the Inferred Resources - that were press released on October 1st, 2013. The economic cut-off grade for the project will be 0.126 carats per square metre.
- Diamond prices are estimated based upon the last sales from ML 111 in 2008, escalated by the amount which Namibian diamonds have subsequently risen, adjusted to take into account the different average diamond sizes in each area of ML 111, which gives a weighted average value of $484 per carat.
- The most efficient mining method for ML 111 is the seabed crawler system. The joint venture with International Mining and Dredging Holding Ltd (IMDH) announced on December 5th, 2013, will facilitate the charter of the mining vessel m.v. "Ya Toivo", which has an efficient seabed crawler system;
- Vessel operating costs for the first three months are to be funded by Afri-Can and are estimated from reported 2002 operating costs for the same vessel, escalated by the South African inflation rate to 2014. The estimated operating costs of the vessel and equipment are $122,000 per day, which after the first three months of operations, are expected to be financed from diamond sales revenue. The Memorandum of Understanding between Afri-Can and IMDH announced on December 5th, 2013, provides for the costs of preparing the vessel for the work to be covered by IMDH. Afri-Can has no requirement for capital expenditure to acquire equipment. Afri-Can is committed to fund the vessel's operating costs of $3.7 million per month for a maximum of three months, by which time the operations are expected to be cash flow positive.
- Afri-Can's share of the total net earnings before interest and taxes for the two years of initial mine life will amount to an estimated $20.4 million (due to corporate losses carry forward, taxes for the first 2 years will be zero);
- It is anticipated, but not guaranteed, that additions will be made to the Probable Reserves by sampling in areas of Inferred Resources, by re-classification of the Reserves because of favourable working attributes or by exploration of areas which potentially contain undiscovered deposits.

Recommendations of the Pre-Feasibility Study

- Probable Reserves can be economically mined, and it is recommended that mining operations should commence as soon as practicable;
- Sampling should be undertaken in the areas of Inferred Resources to generate more Indicated Resources and thus additional Probable Reserves;
- An exploration program should be drawn up with the objective of generating new resources.

Pierre Léveillé, President and CEO of Afri-Can, stated that, "We are very pleased with this Pre-Feasibility Study. It confirms that ML 111 forms a strong basis for the start of a mining venture that will provide regular development and value for our shareholders. The DFI portfolio of Mining Leases complements EPL 3403 and offers very good development potential. We feel that we are sitting on a strong project in a very solid industry."

Afri-Can's immediate goal is to focus on ML 111's existing reserves in order to resume production in the shortest time frame possible. Afri-Can's technical team is currently designing a sampling program of up to 800 samples that will serve to establish mining blocks and mining grades as well as serve to increase some or all of the Inferred Resources to the Indicated category. A detailed mine plan will be design upon completion of the sampling program. It is anticipated, but not guaranteed, that it will be possible to re-classify portions of the new Indicated Resources as additional Probable Reserves. The schedule for this program will be communicated to our investors once discussions with IMDH, as per the Memorandum of Understanding announced on December 5th, 2013, are finalized.

The Independent PFS was compiled by Richard Foster, B.Sc. (Hons. Geology), Pr. Sci. Nat., for Afri-Can with inputs from other specialised consultants under the management of Afri-Can. As per National Instrument 43-101, Mr. Foster is independent from the corporation. Mr. Foster has over 40 years of direct experience in the marine diamond exploration and mining industry off the Namibian coast. He is the Qualified Person who has prepared the NI 43-101 report, reviewed this press release and is responsible for the technical part of this press release, and is the designated Qualified Person under the terms of National Instrument 43-101.

About ML 111

Mining Lease 111 lies between 5 and 20 kilometres north of Luderitz, covers 312 square kilometres, and lies in water depths up to 130 metres. ML 111 hosts at least 3 mineralised geological features. The ML was originally granted for a period of 15 years and is renewable on December 4th, 2015. A recent Afri-Can NI 43-101 report estimated the remaining diamond resources on ML 111 at 413,000 carats as indicated resources and 453,000 carats in the inferred category. The resources exist in the Marshall Fork, Staple Basin/Conical Beach and Diaz Reef areas. Diamond Fields International Ltd ("DFI") produced intermittently between 2001 and 2007 some 158,200 carats, mainly from the Marshall Fork area. Special stones recovered from Marshall Fork included a gem quality 17.42 carat stone, a rare 5.26 carat light blue diamond which sold for US$10,457 per carat, and a 2.45 carat pink gem diamond which sold for US$16,771 per carat. DFI ceased production following the world financial crisis.

About Afri-Can Marine Minerals Corporation

Afri-Can is a Canadian company, actively involved in the acquisition, exploration and development of major mineral properties in Namibia. Afri-Can's creative and scientific approach targets large marine diamond deposits in prospective territories.

Shares outstanding: 91,527,864

Forward-Looking Statements

This press release contains forward-looking statements, which reflect the Corporation's expectations regarding future growth, results of operations, performance and business prospects. These forward-looking statements may include statements that are predictive in nature, or that depend upon or refer to future events or conditions, and can generally be identified by words such as "may", "will", "expects", "anticipates", "intends", "plans", "believes", "estimates", "guidance" or similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These statements are not historical facts but instead represent the Corporation's expectations, estimates and projections regarding future events.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Corporation, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: the future financial or operating performance of the Corporation and its subsidiaries and its mineral projects; the anticipated results of exploration activities; the estimation of mineral resources; the realization of mineral resource estimates; capital, development, operating and exploration expenditures; costs and timing of the development of the Corporation's mineral projects; timing of future exploration; requirements for additional capital; climate conditions; government regulation of mining operations; anticipated results of economic and technical studies; environmental matters; receipt of the necessary permits, approvals and licenses in connection with exploration and development activities; changes in commodity prices; recruiting and retaining key employees; construction delays; litigation; competition in the mining industry; reclamation expenses; reliability of historical exploration work; reliance on historical information acquired by the Corporation; optimization of technology to be employed by the Corporation; title disputes or claims and other similar matters.

If any of the assumptions or estimates made by management prove to be incorrect, actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained herein. Such assumptions include, but are not limited to, the following: that general business, economic, competitive, political and social uncertainties remain favorable; that actual results of exploration activities justify further studies and development of the Corporation's mineral projects; that the future prices of minerals remain at levels that justify the exploration and future development and operation of the Corporation's mineral projects; that there is no failure of plant, equipment or processes to operate as anticipated; that accidents, labour disputes and other risks of the mining industry do not occur; that there are no unanticipated delays in obtaining governmental approvals or financing or in the completion of future studies, development or construction activities; that the actual costs of exploration and studies remain within budgeted amounts; that regulatory and legal requirements required for exploration or development activities do not change in any adverse manner; that input cost assumptions do not change in any adverse manner, as well as those factors discussed in the section entitled "Risk Factors" in the Corporation's Annual Management Analysis and Discussion of the audited Financial Statements for the year-ended August 2013 found on

The Corporation disclaims any intention or 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 law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the maps associated with this press release, please visit the following link:

Contact Information

  • Afri-Can Marine Minerals Corporation
    Pierre Leveille
    President & CEO
    (514) 846-2133 or TOLL FREE North America: 1 (866) 206-7475

    Afri-Can Marine Minerals Corporation
    Bernard J. Tourillon
    Executive V.P. and CFO
    (514) 846-2133 or TOLL FREE North America: 1 (866) 206-7475
    (514) 372-0066 (FAX)