Afri-Can Marine Minerals Corporation
FRANKFURT : AJF
TSX VENTURE : AFA

Afri-Can Marine Minerals Corporation

January 19, 2006 12:56 ET

Afri-Can Signs Agreement With an International Marine Contractor To Resume Diamond Exploration on Block J in Namibia

MONTREAL, QUEBEC--(CCNMatthews - Jan. 19, 2006) - Afri-Can Marine Minerals Corporation ("Afri-Can") (TSX VENTURE:AFA) is pleased to announce that it has signed an agreement with International Mining and Dredging Holding Ltd. ("IMD") to resume diamond exploration on marine concession Block J in Namibia. Upon completion of this exploration program, Afri-Can will be in a position to delineate diamond resources in compliance with National Instrument 43-101 on Block J.

The exploration program is planned in two phases: first, to carry out a geophysical survey totalling up to 3,100 lines/kilometre and, second, to retrieve 319 large samples over the sampling target areas called Features F, H & J. Work is scheduled to begin in the first half of 2006, and will continue for approximately six months. The final schedule and details for the program will be disclosed in the coming weeks.

IMD is an international marine mining contractor with state-of-the-art geophysical survey and sampling equipment. The parent company of IMD owns several marine exploration and mining vessels, including the mv Ya Toyvo which has been operating diamond mining projects successfully in Namibian territorial waters for over six years. The vessel designated to conduct the exploration program on Block J is the mv Mare Oceano. She has a gross tonnage of 2,033 tons and is equipped with DGPS positioning system as well as advanced survey and geotechnical equipment. The vessel will be equipped with a two square metre sampling tool and a dense media separation plant with a capacity of 10 tons per hour. For further details about the vessel, please visit www.argosrl.com.

The salient features of the agreement are summarized as follows:

Afri-Can will charter the vessel and supervise the survey and sampling program. The complete survey and sampling program is estimated to cost approximately US $2.5 million, Afri-Can will pay for fuel consumption at the end of each month of vessel utilization. At the end of the sampling program, the remaining balance, after payment of mobilization fees and fuel costs, is estimated to be about US $1.8 million.

Upon completion of the sampling program, IMD will have the choice of requesting a cash payment, estimated at US $1.8 million, or choosing one of the following options:

Option 1

IMD will have the option of converting the remaining balance, increased by a value of 40% of the said balance, into shares of Afri-Can at a price equal to the market value of Afri-Can's shares on the same day as the notification of the remuneration election by IMD. IMD shall also have the right to appoint one Director to the Board of Directors of Afri-Can. The amount to be paid in shares under Option 1, is estimated to be about US $2.5 million.

Option 2

IMD shall have the option to convert the remaining balance, increased by a value of 40% of the said balance, into a new Namibian company (Newco) to be established, that will own the 70% of Block J which is presently owned by Afri-Can. IMD shall own 51% and Afri-Can 49% of Newco.

Under Option 2, ownership of Block J would be IMD: 35.7%, Afri-Can: 34.3% and Woduna Mining Holding (PTY) Ltd: 30%. Under Option 2, ownership of Afri-Can's other concessions in Namibia would not be affected and would remain unchanged.

Option 3

IMD shall have the option to convert the remaining balance, increased by a value of 40% of the said balance, into a direct 51% holding of the Block J joint venture. In the event that IMD elects Option 3, Afri-Can shall have the option to pay IMD the remaining balance in cash, excluding the 40% (forty percent) value added described in Options 1 and 2 above. Afri-Can shall have the obligation to complete the payment within 30 days after IMD's election notification date but not earlier than 30 days after completion of the prospecting work.

In the event that Afri-Can exercises its option to pay the remaining balance in cash, the resulting ownership of Block J would remain unchanged, with Afri-Can at 70% and Woduna Mining Holding (PTY) Ltd at 30%. In the event that Afri-Can does not exercise its option to pay the remaining balance in cash, the resulting ownership of Block J would be IMD: 51%, Woduna Mining Holding (PTY) Ltd: 30% and Afri-Can: 19%. Ownership of Afri-Can's other concessions in Namibia would not be affected by Option 3, and would remain unchanged.

The agreement with IMD contains a cancellation clause which stipulates that Afri-Can can cancel the agreement at any time before mobilization, in consideration of a cancellation fee of US $250,000, and at any time after mobilization in consideration of US $250,000 plus the daily utilization fee of the vessel for the number of days that the vessel was working on the sampling program.

The agreement is subject to the approval of the payment options by the shareholders of Afri-Can at their Annual General Meeting to be held on February 23, 2006. In the event that Afri-Can's shareholders do not grant the approval of the payment options and that IMD does not successfully acquire new additional offshore Exploration and Prospecting Licenses in Namibia on or before February 23, 2006, IMD shall have the right to cancel the agreement.

The existing joint-venture agreement between Afri-Can and Woduna Mining Holding (PTY) Ltd. shall remain in force unless re-negotiated by the parties involved. The joint-venture agreement stipulates that Afri-Can is the operator and manager of the exploration and development programs on the Concession Block J. It also stipulates that, in the event that Block J becomes a commercial mining lease, Afri-Can, and if applicable, IMD, shall be reimbursed their full investment with interest before Woduna can receive its 30% share of the net profit. As of August 31, 2005, Afri-Can's exploration and development investment on the Block J amounted to CDN $3.4 million.

The agreement is subject to the approval of Canadian regulatory authorities.

President and Chief Executive Officer of Afri-Can, stated, "We are pleased with this agreement as it enables Afri-Can to resume exploration on its most prospective marine diamond area with one of the leading marine mining contractors."

Afri-Can is a Canadian company, actively involved in the acquisition, exploration and development of major mineral properties in Namibia. Afri-Can's large and prospective license holdings, together with its growth strategy, place it as the partner of choice for Namibian Empowerment Groups.

The TSX Venture Exchange (TSX) does not accept responsibility for the adequacy or accuracy of this release.

This press release contains certain "forward-looking statements," as identified in the Afri-Can's periodic fillings with Canadian Securities Regulators that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements

Shares outstanding: 107,103,434

Contact Information

  • Afri-Can Marine Minerals Corporation
    Pierre Leveille
    President & CEO
    (514) 846-2133
    (514) 846-1435 (FAX)
    or
    Afri-Can Marine Minerals Corporation
    Bernard J. Tourillon
    Executive V.P. & CFO
    (514) 846-2133
    (514) 846-1435 (FAX)
    info@afri-can.com
    www.afri-can.com