2nd Quarter Report - Part 1
January 31 2003 - 5:06AM
UK Regulatory
RNS Number:8766G
Dwyka Diamonds Limited
31 January 2003
HIGHLIGHTS
* During the quarter Dwyka signed an alliance agreement with BHP
Billiton to explore for and develop world class hard rock diamond
deposits in India
* On 19 December 2002 Dwyka Diamonds Limited ("Dwyka") announced that it
had agreed in principle to a proposed merger with Gravity Capital
Limited ("Gravity Capital"). It is proposed the merger will be effected
be the issue of two (2) Dwyka shares for every three (3) Gravity Capital
shares.
DWYKA (ASX: DWY.AX; AIM: DWY.L)
OPERATIONS
The total revenue was disappointing during the final quarter of 2002 due to
lower than budgeted average US$ per carat prices and further compounded by a
strong Rand trend resulting in reduced Rand Revenues.
De Hoop
During the quarter, diamonds weighing 968.37 carats were recovered from 103,857
tonnes of gravel treated. This equates to a grade of 0.93 carats per hundred
tonne ("cpht). These recoveries were from the Fairies Pride resources that is
located on the farm De Hoop.
Exploration
No exploration was conducted during the quarter on the De Hoop project. An extra
drill-line to the north has been approved to pinpoint the continuation of the
gravel-bearing chanel.
At De Hoop North, the proposed exploration drilling program has been drafted. On
site exploration is to commence as the permission from Department of Mineral and
Energy has been obtained. Drilling should commence during February 2003.
Diamond Sales
During the quarter diamonds from De Hoop were sold at an average price of US$269
per carat. This average price was impacted by the lack of large, high quality
diamonds recovered during the quarter.
Nooitgedacht
The Nooitgedacht operation recovered diamonds weighing 778.39 carats from
102,706 tonnes of gravels treated during the quarter. This equates to a
recovered grade of 0.76 cpht.
Exploration
Exploration drilling to ascertain the geophysical generated Kimberlite target
has been completed. No apparent evidence of the presence of a Kimberlite exists,
but the microscopic analyses have to be completed for a final conclusion to be
formulated.
Diamond Sales
During the quarter diamonds from Nooitgedacht were sold at an average price of
US$281 per carat.
Industrial Division
During the quarter, the Industrial Division achieved sales revenue of Rand 3.06
million with the main products sold being cement products, cement bricks and
pavers.
EVALUATION AND DEVELOPMENT PROPERTIES
Melkvlei
The Melkvlei property is located on the northern bank of the Vaal River in the
Barkly West District of the Northern Cape Province.
The gravels of certain pits have been completed and it is clear from the
analysed results that mining reserves are present on this property and that the
mining reserves will be confined to the lower portion of the gravel deposit. A
revised estimation/evaluation of this resource is yet to be completed. The
rehabilitation on this property has been completed.
Blaauwfontein
The Blaauwfontein property is located in the southern bank of the Orange River,
14 km east of the Orange-Vaal confluence in the Hopetown District of the
Northern Cape Province.
Limited trenching was completed confirming gravel presence relative to the
ground geophysical survey results.
Pypklip
The Pypklip property is located in the Northern catchment area of the Harts
River in the Lichtenburg District of the North West Province.
No Field exploration activities were undertaken during the quarter.
CORPORATE
BHP Billiton/Dwyka India Alliance
During the quarter Dwyka signed an alliance agreement with BHP Billiton to
explore for and develop world class hard rock diamond deposits in India.
During the quarter due diligence activities were completed and preparations for
future exploration programmes in India have commenced.
Proposed Gravity Capital Merger
During the quarter the Company announced a proposed merger with Gravity Capital
Limited ("Gravity Capital"). It is proposed that the merger be effected by the
issue of two (2) Dwyka shares for every three (3) Gravity Capital shares.
It is anticipated the proposed merger transaction will result in the issue of
approximately 10.47 million new Dwyka shares.
The proposed merger is subject to:
* Execution of formal merger implementation and related agreements;
* Completion of satisfactory due diligence by both parties;
* Ratification by the respective boards of directors;
* Successful renegotiation of arrangements by both parties with BHP
Billiton; and
* Shareholder and regulatory approvals.
Subject to the Court making the necessary orders, it is currently expected that
Gravity Capital shareholders should receive documentation in relation to the
merger proposal in February 2003 with a Gravity Capital shareholder meeting to
approve the Scheme proposed for March 2003.
Board Changes
During the quarter, Mr Jack Griffin retired as Chairman and Mr Jeff Mews retired
as a Director. Mr Evan Kirby was appointed as Technical Director. Mr Ed Nealon
assumed the role of Non Executive Chairman and Ms Melissa Sturgess assumed the
role of Executive Director.
During the quarter Mr Willi Boehm resigned as Company Secretary, and was
replaced by Mr Grant Button.
Capital Raising
During the quarter the company placed 1,072,577 ordinary fully paid shares at 50
cents each to raise $536,289.
During the quarter the company placed 1,850,000 ordinary fully paid shares at 50
cents each with 1,850,000 free attaching options exercisable of 60 cents each on
or before 30 June 2003, to raise $925,000.
GRANT BUTTON
Company Secretary
Further information please contact:
In Australia: In United Kingdom:
Grant Button, Melissa Sturgess Tim Blackstone
Dwyka Diamonds Limited Blackstone Business Communications
+61 8 9324 2955 +44 207 251 2527
This information is provided by RNS
The company news service from the London Stock Exchange
END
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