Brazilian Diamonds Limited

Brazilian Diamonds Limited

May 15, 2009 14:05 ET

Brazilian Diamonds Limited: Quarterly Results for the Three Month Period Ended 31 March 2009

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 15, 2009) - As with most other junior resource exploration companies, Brazilian Diamonds Limited ("Brazilian Diamonds" or the "Company") (TSX:BDY)(AIM:BDY) has been affected by the continuing uncertainties in international capital markets which have negatively impacted the ability of junior resource exploration companies to finance their activities. As a consequence, as at March 31, 2009, the Company had a net working capital deficiency of $650,000.

To manage its liquidity requirements, the Company has been reviewing its strategic plans for the future activities of the business. On April 22, 2009, the Company announced the signing of formal contracts for the sale of the Patos de Minas laboratory and associated plant and equipment to third parties for $452,000 ($350,000 USD) payable in cash. A non-refundable deposit of $14,000 ($11,000 USD) was received on March 24, 2009. On May 5, 2009, the Company received a deposit of $197,000 ($168,000 USD). The balance of payment is due on May 15, 2009.

In addition, on April 22, 2009, the Company announced the signing of formal contracts for the sale of the Company's wholly owned subsidiary, Cobre Sul Mineracao Ltda., through which the Company holds the Santo Antonio do Bonito alluvial diamond project to third parties for $968,000 ($750,000 USD). A cash payment of $452,000 ($350,000 USD) is due on June 15, 2009. At the election of the purchasers, the balance of $516,000 ($400,000 USD) may be paid in polished diamonds to be independently valued in New York, USA and then delivered to the Company by July 15, 2009.

The proceeds of both transactions will be used to repay debt and to provide working capital to fund the Company's ongoing activities which are primarily focused on efforts to advance the Canastra 1 kimberlite project towards development.

The Company remains encouraged by the recent publication of the government's inter-departmental deliberations over the finalization of permanent boundaries for the Serra da Canastra National Park which is located in proximity to the Canastra 1 project and the progress made with respect to the passage of this legislation. A draft bill (Projeto de Lei # 1448/2007) was submitted in June 2007 to the Brazilian Congress to formally exclude the Company's projects in the Serra da Canastra region from any new proposed Canastra National Park boundary. The draft bill was approved by the Camara dos Deputados (Lower House) on October 29, 2008 and has moved to the Senado (Upper House) for final approval which is expected during 2009. The Company has renewed the Canastra mineral licenses that it holds and is maintaining them in good standing while waiting for trial mining permits to be issued which is expected to follow final approval of this legislation. The Company hopes to commence trial mining at its Canastra 1 project once the bill has received final approval but in the meantime the Company's projects in the Serra da Canastra region will remain on care and maintenance.

The Company has kept its mineral licenses in the Santo Antonio do Bonito River region in good standing and the Company hopes to continue work on the project in the future but for the moment, the Santo Antonio do Bonito River kimberlite exploration project remains on care and maintenance. Licensing for the Regis and Tucano projects in the Patos de Minas region has also been renewed and they are being maintained in good standing while these projects will remain on care and maintenance.

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Contact Information

  • Brazilian Diamonds Limited
    Kenneth P. Judge
    + 44-7733 001 002
    Brazilian Diamonds Limited
    Stephen Fabian
    President & CEO
    + 55-31- 9186-4660
    Brazilian Diamonds Limited
    Jon Bey
    Investor Relations
    Hanson Westhouse Limited
    Tim Feather / Matthew Johnson
    + 44 113 246 2610