Premier Diamond Corp.
NEX BOARD : PDC.H

January 08, 2007 17:52 ET

Premier Diamond Corp. Update on Proposed Acquisition of Mexican Silver Mines 'Guernsey' Limited and Increase in Size of Financing

CALGARY, ALBERTA--(CCNMatthews - Jan. 8, 2007) - Premier Diamond Corp. (NEX BOARD:PDC.H) ("Premier") announces that it continues to conduct its due diligence review of Mexican Silver Mines (Guernsey) Limited ("Mexican Silver") and its properties, all of which are located in the Monterrey area of northern Mexico (the "Property"). On July 6, 2006, Premier announced that it had entered into a letter of intent that set out the basic terms and conditions for the acquisition by Premier of all of the shares of Mexican Silver (the "Proposed Acquisition").

Mexican Silver has recently completed an airborne geophysical survey on the Property and is in the final stages of completing a National Policy 43-101 technical report (the "Report") in respect of the Property. ACA Howe International Limited has been engaged by Mexican Silver as its Qualified Person to complete the Report. The Report is expected to be completed not later than mid-January 2007. Premier anticipates being able to complete its due diligence review of Mexican Silver shortly following the completion of the Report. A definitive agreement providing for the Proposed Acquisition is anticipated to be entered into following the completion of Premier's due diligence review of Mexican Silver and its property.

On July 6, 2006, Premier announced a proposed private placement ("Private Placement") of common shares at the price of $0.25 per share for a minimum gross proceeds of up to $1,100,000, concurrent with the closing of the Proposed Acquisition. In order to satisfy Premier's capital requirements following the completion of the Proposed Acquisition and in response to stronger than anticipated demand for the Private Placement, the Private Placement will be completed for maximum proceeds of $2,000,000. Additionally, the securities issued under the Private Placement have been changed to units ("Units") of Premier to be issued at the price of $0.25 per Unit. Each Unit will consist of one common share and one-half of one share purchase warrant ("Warrant") of Premier. Each full Warrant will entitle the holder to purchase one additional common share of Premier at a price of $0.50 during the period expiring on the second anniversary of the issue of the Warrants, provided that if the trading price of the common shares is greater than $0.80 for ten consecutive days of trading at any time during the term of the Warrants, Premier will have the right to shorten the term of the Warrants to thirty days from the day on which Premier provides notice to the holders of the shortened exercise term.

Premier may accept subscriptions for and close upon up to 840,000 Units ($210,000) prior to completion of the Proposed Acquisition (the "Initial Closing"). The Warrants forming part of the Units issued at the Initial Closing will have a one year term unless Premier is listed on the TSX Venture Exchange on or before the first anniversary of the date of the Initial Closing. If Premier is listed on the TSX Venture on or before the first anniversary of the date of the Initial Closing these Warrants will expire on the second anniversary of the Initial Closing. If the trading price of the common shares is greater than $0.80 for ten consecutive days of trading at any time during the one or two year term of these Warrants, as the case may be, Premier will have the right to shorten the term of these Warrants to thirty days from the day on which Premier provides notice to the holders of the shortened exercise term. The remainder of the Private Placement will be completed concurrently with the completion of the Proposed Acquisition. Upon the Initial Closing, up to $210,000 of the proceeds of the Private Placement will be immediately available for use by Premier. The proceeds of the Private Placement will be used by Premier for general working capital purposes, including to fund expenditures incurred in connection with the Proposed Acquisition and to fund the exploration programme to be carried out on Mexican Silver's property following completion of the Proposed Acquisition. Finders fee may be applicable to portions of the Private Placement. Completion of the Private Placement remains subject to acceptance by the TSX Venture Exchange and NEX.

Premier hereby reserves $0.25 as the deemed price of its common shares to be issued pursuant to the Proposed Acquisition, the exercise price of the Stock Options to be issued in conjunction with the completion of the Acquisition and the issue price of the Units issued pursuant to the Private Placement.

Additional information regarding the Proposed Acquisition, Mexican Silver and the Private Placement will be announced by Premier in due course in advance of the resumption in trading in its common shares.

Completion of the Proposed Acquisition is subject to a number of conditions, including but not limited to, Exchange approval and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Proposed Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Acquisition will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Acquisition, any information released or received with respect to the Proposed Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of Premier should be considered highly speculative.

ON BEHALF OF THE BOARD OF PREMIER DIAMOND CORP.

Feisal Somji, B.Sc., MBA, President

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this press release. The NEX does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Premier Diamond Corp.
    Feisal Somji
    President
    (403) 236-5089
    (403) 398-0693 (FAX)