Brazilian Diamonds Limited

Brazilian Diamonds Limited

April 22, 2009 02:00 ET

Brazilian Diamonds Limited: Sale of Cobre Sul (SAB) and Patos Laboratory

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 22, 2009) - Brazilian Diamonds Limited ("Brazilian Diamonds" or "the Company") (TSX:BDY)(AIM:BDY) is pleased to announce the signing of formal contracts for the sale of both the Company's Patos do Minas Laboratory and associated plant and equipment and the Company's wholly owned subsidiary, Cobre Sul Mineracao Ltda, through which the Company holds the Santo Antonio do Bonito alluvial diamond project.

Each of the assets are being sold to Gilmar Alves Campos and his brother, Geraldo Magela Campos, for an aggregate consideration of US$1,100,000. The brothers are well known in Brazil for their successful alluvial diamond mining interests. The US$350,000 consideration for the laboratory and associated equipment is payable in cash while the US$750,000 payable in respect of Cobre Sul Mineracao Ltda is being paid as to US$350,000 in cash and, at the election of the purchasers, the balance may be paid by the delivery of diamonds with an agreed value of US$400,000. A non-refundable deposit of Reis$25,000 has been received and completion of both transactions is expected within 90 days.

In the Company's consolidated audited accounts for the year ended 31 December 2008, the assets being sold were written down to the consideration anticipated to be received by the Company. Therefore no profit or loss is expected to arise upon completion.

The proceeds of these 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 is 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. In June 2007 a draft bill (Projeto de Lei #1448/2007) was submitted to the Brazilian Congress to formally exclude the Company's projects in the Serra da Canastra region from any expansion of the Canastra National Park. The draft bill was approved by the Camara dos Deputados (Lower House) on October 29, 2008 and has now moved to the Senado (Upper House) for final approval which is expected during 2009.

Brazilian Diamonds has renewed the Canastra mineral licences that it holds while awaiting the issue of trial mining permits which are expected to follow confirmation of 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 will continue to hold a substantial portfolio of mineral licences in the Santo Antonio do Bonito River region which are considered prospective for kimberlite exploration. The Santo Antonio do Bonito kimberlite project is currently on care and maintenance and will remain so pending the availability of funding for a return to active exploration.

Licences for the Regis and Tucano kimberlite exploration projects, also in the Patos do Minas region, have been renewed and those licences are to be maintained in good standing pending a return to active exploration in the region.

Certain statements included herein constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. These forward-looking statements are based on certain assumptions by Brazilian Diamonds and as such are not a guarantee of future performance. Actual results could differ materially from those expressed or implied in such forward-looking statements due to factors such as general economic and market conditions, increased costs of exploration and unforeseen logistical issues. Brazilian Diamonds is under no 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 laws.

Contact Information

  • Brazilian Diamonds Limited
    Kenneth P. Judge
    + 44-7733 001 002
    Brazilian Diamonds Limited
    Stephen Fabian
    President & CEO
    + 55-31- 8444-0475
    Brazilian Diamonds Limited
    Jon Bey
    Investor Relations
    Hanson Westhouse Limited (Nomad to the Company)
    Tim Feather / Matthew Johnson
    + 44 113 246 2610