Bannockburn Resources Limited
CNQ : BKNN

April 16, 2007 14:10 ET

Bannockburn to Acquire Interest in Mothae Diamond Project in Lesotho, Africa

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 16, 2007) - Bannockburn Resources Ltd. ("Bannockburn" or "the Company") (CNQ:BKNN) is pleased to announce that it has signed an Agreement in Principle with Motapa Diamonds Inc. in respect of an option to be granted to Bannockburn to acquire up to a 70% interest in the Mothae Diamond Project in Lesotho, Africa.

The Mothae Diamond Project is a 24.7 square kilometre concession located in one of the most prolific diamond producing regions in the world. The project hosts a large diamondiferous kimberlite pipe with an estimated surface extent of 8.8 hectares and is located adjacent to and directly on trend with the world-famous Letseng diamond mine. To view attached map please click on the following link: http://www.ccnmatthews.com/docs/bknn0416.jpg.

Letseng is a high-value, large tonnage, low-grade diamond mine operated by De Beers from 1976 to 1982 and recently put back into production by Gem Diamond Mining Company. Letseng has a reputation for producing very large, high quality type IIA diamonds. In late 2006 the recovery of the 603 carat "Lesotho Promise" attracted wide media attention. This stone is the fifteenth largest diamond ever found in the world and was sold for greater than US $12.3 million or US $20,500 per carat. A 216 carat almost flawless white D colour stone was reported in February, 2007 and is expected to garner an even higher value per carat. A production grade of 1.9 carats per 100 tonnes has been achieved at Letseng since 2004 and approximately 100,700 carats of diamonds have been recovered at an average current value of US $1,380 per carat. Other similar kimberlites in southern Africa are the low-grade (now mined out) Jagersfontein kimberlite and the Premier Mine, producer of the world's largest diamond, the Cullinan, which is a type IIA.

The Mothae kimberlite was discovered in the early 1960's and proven to be diamondiferous. However, exploration and sampling carried out at that time was insufficient to determine diamond size distribution and value. Current work and evaluation of the project by Motapa Diamonds Inc. has included an extensive ground geophysical program comprising gravity, magnetic and electromagnetic surveys which have greatly assisted in the delineation of the kimberlite body. Surface pitting has provided material to characterize kimberlite lithologies and to estimate the relative diamond potential of these lithologies based on kimberlite indicator mineral chemistry. This work in progress shows early results comparing favourably with Letseng.

To further test the Letseng exploration model at Mothae a bulk sample program is being designed. An aggregate 100,000 tonne bulk sample program is being planned and will use dense media separation (DMS) and modern grease belt recovery technology. The DMS plant is expected to be commissioned in the third quarter of 2007. The sample extraction and processing will be carried out in two stages: an initial 30,000 tonne sample will be evaluated to confirm the presence of an ultra-coarse diamond size fraction, subsequent to this, an additional 70,000 tonne sample will be processed to recover a sufficient diamond parcel for initial diamond valuation work. In addition, a limited diamond drill program will be carried out to further define the pipe at depth and to facilitate an inferred resource estimate.

In the Kingdom of Lesotho, the concentration of kimberlite pipes and dykes is among the highest in the world. Lesotho is a member of the British Commonwealth and has a long history of diamond production. Kimberlite occurrences are Cretaceous in age and intrude flat-lying Triassic sedimentary rocks (lowlands) and a thick sequence of Jurassic flood basalt (highlands). Much of the country is underlain by the Kaapvaal Craton which also encompasses large parts of Botswana and South Africa, hosting numerous economic diamond deposits throughout southern Africa.

Pursuant to the Agreement in Principle, Bannockburn will have an option to acquire up to a 70% interest in the Mothae Diamond Project from Motapa Diamonds Inc. in consideration for sole funding US $10 million. The Agreement in Principle provides for an investment by Bannockburn of US $3.8 million to earn a 51% interest, followed by a right to invest a further US $4.2 million to earn an additional 14% interest and a right to invest a further US $2 million to earn additional 5% in the project.

To maximize the potential of this exciting project, Bannockburn has assembled a world-class management team with diamond expertise and a highly successful track record. The Board of Directors will comprise:

Lukas Lundin

Paul Conibear

Brian Edgar

Donn Burchill

Richard Graham

Murray Sinclair

Management intends to aggressively explore and develop the highly prospective Mothae Diamond Project and continue to evaluate other opportunities in the diamond sector for possible acquisition.

ON BEHALF OF THE BOARD

Lukas Lundin, Director

Forward-looking statements: This press release contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management's capacity to execute and implement its future plans. Actual results may differ materially from those projected by management.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Bannockburn Resources Limited
    Sophia Shane
    Corporate Development
    (604) 689-7842
    (604) 689-4250 (FAX)