Delrand Resources Limited

Delrand Resources Limited

June 11, 2008 20:00 ET

BRC Diamondcore and Rio Tinto Sign Letter of Intent for Rio Tinto to Earn in to BRC Diamondcore's Five Northern DRC Projects

Rio Tinto can earn a 60% interest in a project by spending US$13 million on the project


Toronto, Canada and Johannesburg, South Africa - June 12, 2008. BRC DiamondCore Ltd. ("BRC" or the "Company") (TSX - BCD; JSE - BCD) announces that the Company has signed a Letter of Intent with Rio Tinto Mining and Exploration Limited ("Rio Tinto"), whereby Rio Tinto can earn a 60% interest in the Company's five diamond exploration projects (the "Northern Projects") in the northern Democratic Republic of the Congo (the "DRC") under a staged earn-in arrangement.

These five Northern Projects relate to a total of 106 exploration permits covering approximately 27,000 square kilometres in the Equateur and Oriental Provinces in the northern DRC. It is believed that the region's geology, which represents an extension of the Mboumou Craton from the Central African Republic, is prospective for the hosting of kimberlite pipes. Alluvial diamonds are currently being recovered in this region.

Under the proposed arrangement, Rio Tinto would fund an exploration program with the objective of finding and defining kimberlite ore deposits capable of economic development. The Letter of Intent contemplates the following three phases:

Reconnaissance Phase. Rio Tinto contributes US$550,000 towards the initial reconnaissance sampling phase to be completed by BRC by year-end 2009.

Phase 1 Exploration. Upon completion of the reconnaissance phase and receipt and interpretation by Rio Tinto of all reconnaissance sample results, Rio Tinto has the exclusive option to earn an initial 35% interest in whichever Northern Project Rio Tinto selects by spending US$3 million in exploration expenditure on each of the projects it selects by no later than December 31, 2012. Rio Tinto may elect to earn this 35% interest in multiple Northern Projects by spending the said US$3 million on each Northern Project selected by Rio Tinto by no later than December 31, 2012. This Phase 1 exploration program will be as agreed upon by the parties and will be operated by BRC.

Phase 2 Exploration. Upon completion of Phase 1 exploration on a Northern Project, Rio Tinto would then have the right to earn an additional 25% interest in the applicable Northern Project by spending an additional US$10 million in exploration expenditure on each project by no later than December 31, 2014. At the point during Phase 2 exploration where a kimberlite requires the first bulk sample, BRC would hand over operation of the bulk sampling program to Rio Tinto.

Following Phase 2 exploration, a joint venture company would be formed with Rio Tinto holding a 60% interest and BRC holding a 40% interest.

The above proposed earn-in arrangement is subject to various conditions, including completion of due diligence and negotiation and execution of a definitive agreement between the parties.

This proposed earn-in arrangement applies solely to BRC's northern DRC projects and does not impact the Company's major DRC projects of Tshikapa, Kwango River and Lubao.

Company President, Dr. Mike de Wit, said: "We are very pleased to be joint-venturing with such a highly respected mining company as Rio Tinto on the exploration of these promising diamond projects. Both companies are of the view that these properties are highly prospective for the hosting of diamondiferous kimberlites."

Rio Tinto is a leading international mining group headquartered in the United Kingdom, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange. Rio Tinto's business is finding, mining and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.

BRC DiamondCore Ltd. is an African-focused diamond explorer active in South Africa and the DRC. 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, 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: James Duncan, Russell & Associates, at 27 11 880-3924.

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 the exploration of the Northern Projects pursuant to the proposed earn-in arrangement with Rio Tinto, potential mineralization and plans and objectives with respect to the exploration and development of the Northern Projects) 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, failure to conclude the proposed earn-in arrangement with Rio Tinto as a result of one of the conditions to such conclusion not being fulfilled (including failure to execute a definitive agreement between the parties), the possibility that future exploration results will not be consistent with expectations, changes in equity markets, changes in diamond markets, foreign currency fluctuations, political developments in the DRC, changes to regulations affecting exploration or development activities, uncertainties relating to the availability and costs of financing needed in the future, 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.