Dia Bras announces closing of C$45 million private placement financing


TSX Venture Exchange - DIB
Bolsa de Valores de Lima - DIB

TORONTO, June 7, 2012 /CNW/ - Dia Bras Exploration Inc. (TSX-V:DIB) (BVL:DIB) ("Dia Bras" or the "Company") is pleased to announce that it has closed its previously announced C$45 million private placement of common shares at an offering price of C$3.00 per share (the "Offering").

The Company plans to use the proceeds of the Offering mainly to accelerate exploration and mine development at Cusi, its silver mine in Mexico; double production at Bolivar, its copper and silver mine in Mexico, by accelerating mine development and increasing the Piedras Verdes mill capacity from 1,000 to 2,000 tonnes per day; and explore high-priority regional targets such as La Verde and San Patricio in Mexico and Ipillo in Peru.

Daniel Tellechea, President and Chief Executive Officer of Dia Bras, commented, "We are very pleased to have completed this equity financing despite challenging market conditions while maintaining the support of key shareholders. This financing not only reduces the Company's risk profile as it moves our balance sheet to a net debt position of C$14 million with a strong cash balance of C$90 million, but also allows us to speed up the implementation of a more aggressive development and exploration programme at our Cusi silver mine in Mexico, the expansion of our mill at Bolivar in Mexico and operating improvements and regional exploration in Peru and Mexico. We consider that financial strength and flexibility are paramount in these market conditions and consider that having them combined with our high-quality assets with expansion opportunities is the right strategy for Dia Bras."

Dia Bras most important capex programmes for the following 12 - 18 months are described below:

    1)      Yauricocha mine (silver, copper in Peru):  This mine has a 15,000 metre exploration drilling programme in 2012 which is confirming orebody extensions at depth and discovering new orebodies.  Dia Bras has plans to deepen the mine with the construction of a new 1,000 metre shaft.  Dia Bras is also evaluating improvements in its gold-silver recoveries at its ore processing mill which should improve profit margins and production levels.
    2)      Bolivar mine (copper, zinc, silver in Mexico):  The mine is increasing production from 1,000 tonnes per day to 2,000 tonnes per day in 2013.  The recent discoveries extending the El Gallo deposit have increased the potential size of the Bolivar mine orebodies which continues to be a drilling target for 2012.
    3)     Cusi project (Silver in Mexico):  This project has been in pilot mining for several years and the recent discovery of a silver disseminated area with attractive silver grades by industry standards, as well as several high grade veins (San Bartolo, El Gallo, El Gallo Back, etc) have prompted the basis for accelerated exploration and development plans.
    4)      Regional exploration in Peru:  Besides the exploration of the three main orebodies currently in production the Company has identified: i) Purisima (gold-silver); ii) Adrico (gold); iii) Victoria (silver-copper); iv) San Juan (polymetallic); v) Ipillo (silver-zinc); vi) Éxito Sur (polymetallic); vii) Yauricocha fault extension (polymetallic); and, viii) Carmencita (silver-lead) most of these areas have been previously mined by Centromin and Cerro Pasco Corporation and also have been in production in the past.
    5)     Regional exploration in Mexico:  Dia Bras has several precious metal targets in Mexico, such as the La Sidra gold project at the Bolivar property, the Las Coloradas silver project at Melchor Ocampo (Zacatecas State), the Bacerac silver project (Sonora State) and the La Verde gold project at the Batopilas property (Chihuahua State). The Company is also exploring base metal projects in Mexico, such as the Corralitos intrusion-hosted molybdenum deposit (Chihuahua State).

The Offering was comprised of a brokered portion of 2,585,316 common shares and a non-brokered portion of 12,414,684 common shares.  The brokered offering was completed through a syndicate of agents led by RBC Capital Markets and also included Continental Bolsa SAB SA, Scotia Capital Inc., Credibolsa Sociedad Agente de Bolsa S.A., Canaccord Genuity Corp. and Dundee Securities Ltd.  The agents were paid a cash commission equal to 5% of the gross proceeds derived from the brokered offering.

The shares comprising the non-brokered portion of the Offering were purchased by Arias Resource Capital Fund II L.P. ("ARCF II") and Arias Resource Capital Fund II (Mexico) L.P. ("ARCF Mexico").  Arias Resources Capital Fund L.P., (together with ARCF II and ARCF Mexico, the "ARC Funds"), is an insider of the Company by virtue of its ownership, prior to completion of the Offering, of approximately 48.4% of the Company's common shares, on a partially-diluted basis.

The ARC Funds are managed by Arias Resource Capital Management LP (the "Manager").  The respective general partner of each of the ARC Funds retains the power to make investment and voting decisions in respect of the Company securities beneficially owned by the ARC Funds.  J. Alberto Arias, who serves as a director on the board of directors of the Company, is the sole director of each of the general partners of the ARC Funds and indirectly controls the Manager.  As such, Mr. Arias may be deemed to share voting and dispositive power with respect to the Company securities beneficially owned by the ARC Funds, but he disclaims any beneficial ownership of any such securities, except to the extent of his pecuniary interest therein.

The Offering is subject to receipt by the Company of the final approval of the TSX Venture Exchange. All securities issued under or in connection with the Offering are subject to a hold period in Canada until October 7, 2012.

About Dia Bras

Dia Bras Exploration is a Canadian exploration & mining company focused on precious and base metals in Chihuahua State, other areas of northern Mexico and most recently, at its Yauricocha silver-lead-zinc-copper-gold mine in Peru. The Company is accelerating exploration at the Yauricocha property as well as pursuing the development and exploration of its most advanced Mexican assets - the Bolivar property (copper-zinc-silver) and the Cusi property (silver-lead) - and is exploring several precious metal targets in Mexico, such as the La Sidra gold project at the Bolivar property, the Las Coloradas silver project at Melchor Ocampo (Zacatecas State), the Bacerac silver project (Sonora State) and the La Verde gold project at the Batopilas property (Chihuahua State). Dia Bras is also exploring base metal projects in Mexico, such as the Corralitos intrusion-hosted molybdenum deposit (Chihuahua State).

The Company's shares trade on the Bolsa de Valores de Lima and TSXV under the symbol "DIB".

This press release does not constitute an offer to sell or solicitation of an offer to buy the securities in the United States or any other jurisdiction. The Common Shares will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

Except for statements of historical fact contained herein, the information in this press release may constitute "forward-looking information" within the meaning of Canadian securities law. Other than statements of historical fact, all statements are "forward-looking statements", including the use of proceeds of the Offering, which involve various known and unknown risk and uncertainties and other factors, including market conditions that may affect the Company's ability to execute its current business plan.  Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in filings by the Company with the Canadian securities regulators, which filings are available at www.sedar.com.

SOURCE Dia Bras Exploration Inc.

For further information:

on Dia Bras visit www.diabras.com or contact:

Daniel Tellechea
President & CEO
Dia Bras Exploration Inc.
1 (866) 493‐9646

Matt Morrish
Director, Investor Relations
Dia Bras Exploration Inc.
1 (866) 493‐9646

Profil de l'entreprise

Dia Bras Exploration Inc.

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