Delrand Resources Limited

Delrand Resources Limited

March 31, 2009 20:00 ET

BRC DiamondCore Reports 2008 Financial Results


Toronto, Canada -- April 1, 2009 -- BRC DiamondCore Ltd. (the "Company") (TSX -- "BCD"; JSE -- "BCD") announced its financial results for the year ended December 31, 2008. The Company also announces that it has filed a National Instrument 43-101 technical report on its Tshikapa project in the Democratic Republic of the Congo (the "DRC").

The Company reported a net loss for 2008 of Cdn$103 million caused by the impairment of goodwill of Cdn$54.6 million arising from the Company's acquisition of Diamond Core Resources Limited in February 2008 and the impairment of mineral properties and capital assets in an amount of Cdn$43.4 million. While the main cause of the impairment has been the collapse of diamond prices and the current severe economic conditions, the Company will have legal counsel review the representations and warranties it received prior to the acquisition of Diamond Core Resources Limited.

Full details regarding the fiscal 2008 financial results are set out in the Company's audited consolidated financial statements as at and for the financial year ended December 31, 2008 and the related management's discussion and analysis, which have been filed on SEDAR at www.sedar.com.

Owing to the change in market conditions in the fourth quarter of 2008 and lower resultant cash-flows, bulk sampling operations at all of the Company's South African operations were suspended. Early this year when it became clear that the diamond industry would remain depressed for an extended period the decision was taken to retrench the Company's entire labour force in the South African operations, and place the projects on care and maintenance. This strategy has been adopted by a large part of the diamond industry.

To assist the Company during this difficult period, several of the Company's directors have made cash advances to the Company in order to meet certain critical near term creditors. The Company is actively looking at alternative avenues for finance, including, but not limited to, selling non-core assets in South Africa and actively working to conclude strategic partnerships both in South Africa and the DRC.

As a further cash conservation step, the Company's exploration programs in the DRC have been significantly scaled back until further funding becomes available. However, the Company remains optimistic about the prospects of its Tshikapa project in the south of the DRC. The Tshikapa project properties are located within the popularly known Tshikapa triangle, bordering the Kasai River in the east, the Loange River in the west and the Angolan border in the south. The properties also lie within the broader so called kimberlite emplacement corridor which extends from known kimberlite pipes located in Angola. The Tshikapa diamond field has been extensively mined through alluvial operations by medium and small-size companies and small-scale miners, and it is estimated that it has produced more than 100 million carats of diamonds since 1907. Although the popular explanation for the presence of these diamonds is that they have been sourced out of Angola, the Company's focus is on kimberlite exploration within the Tshikapa triangle, as there are many geological factors which indicate that there are primary sources present in this triangle. The Company has prepared a technical report on the Tshikapa project dated March 31, 2009 and entitled "National Instrument 43-101 Technical Report on the Tshikapa Project of BRC DiamondCore Ltd. in the Democratic Republic of Congo". A copy of the report can be obtained from SEDAR at www.sedar.com or from the Company's web-site at www.brc-diamondcore.com. The Company has done extensive geological work in the area and, while kimberlites have not yet been found, the results of this work suggest that the Tshikapa project is prospective for kimberlites.

The application by the Company's subsidiary, Samadi Resources (SA) (Pty) Ltd, in the high court in South Africa for a declarator against its former BEE partner, Sefalana Mineral Resources, was refused by the court on March 27, 2009. The judgement did not interfere with the current shareholder structure and has no effect on the Company financially or on its current mining order rights. The application was brought by Samadi for its benefit in order to dispose of any uncertainty regarding the termination of the BEE agreements between Samadi and Sefalana. Samadi remains committed to its current BEE shareholder Leswika Resources (Pty) Ltd and will oppose any attempt by Sefalana to rely on the court's refusal to issue a declarator in favour of Samadi. Samadi has been advised by its legal representatives that there are good grounds for an appeal and will shortly file a notice appealing the judgment.

The Company is an African-focused diamond explorer with properties in South Africa and the Democratic Republic of the Congo. Led by a management team with extensive experience in diamond exploration and mine development, the Company has a broad spectrum of projects ranging from advanced stage trial mining operations through grass-roots exploration. The Company's projects comprise both prospective alluvial gravels and primary kimberlite targets. The Company works in a systematic and responsible manner to discover, assess and develop diamond resources for the benefit of its shareholders and local stakeholders.

For further information, please visit our website at www.brc-diamondcore.com, or contact:
In Toronto: Martin D. Jones, Vice President, Corporate Development, at (416) 366-2221 or 1-800-714-7938.
In Johannesburg: Brian Scallan, Director and Vice President, Finance at +2711-958-2885 or +2782 9026273.

Qualified Person
Dr. Mike de Wit, President of the Company, is the "qualified person" (as such term is defined in National Instrument 43-101) who is responsible for the technical information in this press release relating to the Tshikapa project.

Forward-Looking Statements: This press release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements relating to exploration results, potential mineralization and the Company's exploration plans) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things, uncertainties relating to the availability and costs of financing needed in the future, the possibility that future exploration results will not be consistent with the Company's expectations, changes in equity markets, changes in diamond markets, foreign currency fluctuations, inflation, political developments in South Africa or the DRC, changes to regulations affecting the Company's activities, delays in obtaining or failure to obtain required project approvals, the uncertainties involved in interpreting geological data and the other risks involved in the diamond exploration business. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.

View this News Release in PDF Format: