London, England — MININGREVIEW.COM — 27 June 2008 – West African Diamonds plc – an AIM-listed diamond and precious metals explorer and developer – may be taken over in the near future.
In an operational update issued here, the company confirmed that it had received an approach from a third party which, if discussions were concluded satisfactorily, might lead to a takeover of the company. A non-binding memorandum of understanding had been signed, due diligence was being conducted and a conclusion was likely within eight weeks.
The update revealed that a separate decision had been made to expand operations in Guinea and to scale down activities in Sierra Leone, due to positive operational results in Guinea, a deteriorating security situation in Sierra Leone, and disappointing results at Plant 11. In light of this, the company had bolstered its short-term working capital through the issue of a £385 000 (close to R6 million) convertible loan at 17p per share.
Results from the bulk sampling and small scale mining activity on the Guinean Bomboko licence in the headwaters of the Aredor Mine suggest grades in excess of 30 cpht, the update continued, and values of US$135.34 (almost R1 100) per carat were achieved on the sale of a parcel of diamonds. “These are encouraging and West African Diamonds will expand these mining operations using equipment already owned by the company,” it added.
Favourable geophysical results from the Droujba kimberlite pipes have led to a decision to bulk sample the pipe, and to follow up with drilling.
West African Diamonds will continue to work in Sierra Leone, but will be scaling back operations for the present in view of the deteriorating security situation. “Work will for the present continue on follow-up sampling of a potential hydro-thermal gold mineralised system in the Nimini Hills Greenstone belt, following encouraging reconnaissance sampling results,” the update continued. “Bulk sampling of the nearby gold and diamond-rich Plant 6 Dump is also planned, as is further resource definition work on kimberlite Pipe 3 and associated kimberlite dykes,” it said.
The Plant 11 dump project was being run on a reduced basis while economic options were being evaluated, the statement concluded.