HALIFAX, Oct. 9 /CNW/ - Etruscan Resources Inc. (EET.TSX) announced today
that Etruscan Diamonds (Pty) Ltd. ("Etruscan Diamonds") has completed the
acquisition from Mvelaphanda Exploration (Pty) Ltd. ("Mvelaphanda
Exploration") of a 50% interest in the Tirisano Diamond Mine located in the
Ventersdorp Alluvial Diamond District of South Africa. Etruscan Diamonds owns
the remaining 50%. The Tirisano Diamond Mine is located adjacent to the
Hartbeestlaagte property where Etruscan Diamonds is presently undertaking a
The acquisition of control of the Tirisano Diamond Mine operation
together with the surrounding Nooitgedacht property will allow Etruscan
Diamonds to consolidate the development of the diamond resources on the
Nooitgedacht property with those on its adjacent Hartbeestlaagte and Zwartrand
properties. The project on the combined properties will be known as the "Blue
BEE Partner and IDC Financing
Etruscan Diamonds also announced today that it has reached an agreement
in principle with Mogopa Minerals (Pty) Ltd. ("Mogopa") to transfer a 26%
interest in the Tirisano Diamond Mine to Mogopa in consideration for the
payment of R26 million. Mogopa will replace Mvelaphanda Exploration as the
entity providing the black economic empowerment for the Tirisano project as
required by South African mineral legislation. Mogopa is also Etruscan
Diamonds' Black Economic Empowerment partner on the Hartbeestlaagte and
Zwartrand properties in which it already owns a 26% interest. Mogopa has
accepted an indicative term sheet from the Industrial Development Corporation
of South Africa Limited ("IDC") to finance Mogopa's acquisition of the 26%
interest in the Tirisano Mine Joint Venture. Etruscan Diamonds has also
accepted an indicative term sheet from the IDC to provide an additional
R25 million to fund additional working capital requirements to reactivate the
Tirisano Mine. These financings have been approved by the IDC's credit
committee and closing is expected to occur in October.
Acquisition Agreement Terms
Mvelaphanda Exploration transferred its 50% interest in the Tirisano
Diamond Mine to Etruscan Diamonds in consideration for the payment of
ZAR25 million (approximately CDN$ 3.6 million) and the delivery to Mvelaphanda
Exploration of 1,184,848 common shares of Etruscan Resources Inc..
Earlier this year Etruscan Resources and Mountain Lake Resources Inc.
(MOA.TSX-V) completed the formation of a new company named Etruscan Diamonds
Limited ("EDL") to hold their respective interests in their diamond assets in
South Africa. Each of Etruscan and Mountain Lake, together with other third
parties, transferred all of their interests (both debt and equity) in Etruscan
Diamonds to EDL for shares of EDL.
The shares of Etruscan Resources Inc. delivered to Mvelaphanda
Exploration on closing of the Tirisano acquisition were issued by Etruscan
Resources Inc. to EDL in exchange for 1,810,750 common shares of EDL. EDL
transferred the Etruscan shares to Etruscan Diamonds for delivery at the
Tirisano closing. Prior to the acquisition of Mvelaphanda Exploration's 50%
interest in the Tirisano Diamond Mine, Etruscan Resources Inc. held a 50.9%
ownership interest in EDL, Mountain Lake held a 17.2% interest and other third
parties held the remaining 31.9% interest. As a result of the Tirisano
acquisition, Etruscan Resources Inc. now holds a 53.7% ownership interest in
EDL, Mountain Lake holds a 16.2% interest and other third parties hold a 30.1%
interest. The ownership structure after the completion of the Tirisano
acquisition is described schematically below.
------------------ -------------- -------------
Etruscan Resources Mountain Lake Third Parties
Inc. Resources Inc.
53.7% 16.2% 30.1%
------------------ -------------- -------------
Etruscan Diamonds Ltd.
Etruscan Diamonds (Pty) Ltd.
Blue Gum Project
(1) 26% to be sold to Mogopa Minerals (Pty) Ltd. in accordance with
agreement in principle described above.
Strategic Significance of the Acquisition of the Tirisano Diamond Mine
Having control of the Tirisano Diamond Mine operation and surrounding
Nooitgedacht property will allow Etruscan Diamonds to consolidate the
development of the significant diamond resources on the Nooitgedacht property
with those on the adjacent Hartbeestlaagte and Zwartrand properties.
A National Instrument 43-101 compliant independent technical report dated
January 29, 2007 prepared by Dr. Tania Marshall of Explorations Unlimited
estimated the in situ inferred diamond resources on the Hartbeestlaagte
property to be 16.2 million cubic meters at an average grade of 3.18 carats
per hundred cubic meters (approximately 500,000 carats). Contract mining, bulk
sampling and drilling activities are currently underway to upgrade this
National Instrument 43-101 inferred resource into the indicated category. A
National Instrument 43-101 compliant independent technical report dated
August 13, 2003 by RSG Global estimated the in situ indicated diamond
resources on the Nooitgedacht property to be 12.3 million cubic meters at an
average grade of 2.8 carats per hundred cubic meters. As a result of this
acquisition, the resource calculations on the Nooitgedacht property, where the
Tirisano Mine is located, will now be updated and included as part of the
pre-feasibility study now underway.
Work has commenced to restart the Tirisano plant to provide additional
processing capacity for the bulk samples from the Hartbeestlaagte and
Nooitgedacht properties as part of the pre-feasibility work. Upon successful
completion of the pre-feasibility study, a public offering is planned together
with an application for a stock exchange listing in order to advance the Blue
Gum Project to full scale production.
Robert Harris P. Eng and Vice President of Operations of Etruscan
Resources Inc. is the Qualified Person overseeing the diamond projects in
About Etruscan Resources Inc.
Etruscan Resources Inc. is a gold focused Canadian junior mining company
with dominant land positions in district scale gold belts covering more than
10,000 square kilometers in West Africa. Its principal properties include the
Youga Gold Project in Burkina Faso which has entered its final phase of
construction (Press release dated October 3, 2007), the Agbaou Gold Project in
Côte d'Ivoire with an 11,000 meter feasibility study diamond drilling program
in progress (Press release dated May 31, 2007), the Diba Gold Project in Mali
where a major drill program was recently completed (Press release dated
July 26, 2007), the Finkolo Gold Project in Mali where an 8,200 meter reverse
circulation and diamond drilling program is being carried out (Press release
dated August 30, 2007) and the Banfora Gold Belt in Burkina Faso with eight
major gold targets identified and where a single sample auger drilling program
began in March 2007 (Press release dated November 27, 2006). Etruscan recently
announced a significant acquisition of strategic properties in Ghana (Press
release dated August 7, 2007). Etruscan also has a 52% interest in Etruscan
Diamonds Limited which has a dominant land position in the Ventersdorp Diamond
District located in South Africa. (Press release dated March 14, 2007). The
common shares of Etruscan are traded on The TSX Exchange under the symbol
"EET". More extensive information on Etruscan can be found on its home page at
About the Mogopa Community
The Mogopa community, through their trust, created the company Mogopa
Minerals (Pty) Ltd. to oversee all mining related interests for the community.
The community has about 350 families and is located in the vicinity of the
mining area. Etruscan Diamonds and the Mogopa community have shared a long
positive working relationship. This relationship made it possible for the
creation of the current sustainable farming projects on community land.
This press release may contain certain forward-looking statements which
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Forward-looking
statements may include statements regarding exploration results and budgets,
mineral reserve and resource estimates, work programs, capital expenditures,
mine operating costs, production targets and timetables, future commercial
production, strategic plans, market price of precious metals or other
statements that are not statements of fact. Although the Company believes the
expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Various factors that may affect future results include, but are not limited
to: fluctuations in market prices of precious metals; foreign currency
exchange fluctuations; risks relating to mining exploration and development
including reserve estimation and costs and timing of commercial production;
requirements for additional financing; political and regulatory risks, and
other risks and uncertainties described in the Company's annual information
form filed with the Canadian Securities regulators on SEDAR (www.sedar.com).
Accordingly, readers should not place undue reliance on forward-looking
NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS
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