DIAMOND EXPLORATION STRATEGIES SEEKS FUNDING TO EXPLORE TWELVE HIGH-INTEREST PROSPECTING LICENCES IN BOTSWANA

Diamond Exploration Strategies Limited (DES) has entered into a transaction with Peregrine Diamonds to acquire 100% of Diamexstrat Botswana (Pty) Ltd., which has 6,615 km2 of extremely prospective diamond licences in five project areas in Botswana. The transaction will be finalised once all regulatory approvals have been obtained. DES is seeking funding to rapidly advance these projects to deliver at least one early economic diamond assessment. DES believes these projects represent one of the most significant mineral resource portfolios world-wide as;

• Mineral Resource portfolios of this size and potential almost always belong to large mining companies, whereas DES is a private company owned by four individuals. For a funder this has significant advantages, such as quick decision making, lower costs structures, less corporate and stock market bureaucracy, therefore resulting in a more cost-effective earn-in and simpler JV structures and management.
• The project portfolio was assembled by one of the most experienced diamond exploration teams, particularly with regards to Botswana. The team’s previous experience includes- two De Beers Botswana Explorations Managers, a De Beers New Business Manager and a De Beers Group Exploration General Manager.
• Botswana remains the world’s most attractive diamond exploration country due to its investor friendly legislation (allowing up 100% foreign ownership), its low cost structures (some of the lowest $/tonne mining costs and exploration drilling costs, world-wide), its geology (three of its current mines occupy the top 10% of diamond mines in terms of both value and tonnage, as well as residual exploration potential (the Kalahari sands cover much of Botswana and every technological advancement opens up opportunities).
• The DES portfolio is very diverse; from higher-risk/high-reward ‘greenfields’ targets to ‘brownfields’ known kimberlites, ready to be assessed. Some very exciting targets include- high-resolution geophysical anomalies in Kalahari sand-covered areas that also contain low-count kimberlitic proximal indicator minerals, a huge geophysical anomaly in a known kimberlite province (Orapa) which may have never been drilled due to positioning errors by previous workers, known kimberlites of 500ma age (known to have a high incidence of economic occurrences) that have not been tested for diamonds, and kimberlitic indicator anomalies with ‘proximal’ surface textures and ‘high-interest’ mineral chemistry.
• DES is proposing an exploration strategy that would initially focus on the use of low-cost technologies to resolve high-reward targets. Funders would have the opportunity of a phased investment that would be results-based, thus providing a quick low-cost exit if the projects do not deliver.

Exploration activities totalling US$800,000 have been conducted over the past two years. It is estimated that a further US$1,000,000 is required to advance the projects to a portfolio of kimberlite discoveries and known kimberlites justifying an early economic assessment.

DES’s intent is that in order to limit risk, the success of each phase will be a milestone to warrant further investment. The investor will earn into the equity of the company gradually. The following programme is proposed;

It is intended that further capital injections will be sought through a rights issue upon there being a requirement for an economic assessment evaluation to be carried out.

It is important to understand that this is an exploration venture – this means that there is no guarantee of discovery, and there is no return on investment to be calculated until a discovery is made. Frank disclosure drives us to emphasise that while a pre-discovery investment can have a huge multiple of value in the event of a discovery, depending on its size and profitability, it can also result in the loss of the investment in the event there is no discovery. However, we seek to limit the risk by the investment of such tranches as are essential to warrant the next phase of work – so it is results-driven.

Investors are being offered the opportunity to fund that results-driven development of a portfolio of diverse diamond projects, identified and secured by a team of the most experienced diamond prospecting geologists. The licences are in arguably the best locality for diamonds from a geological and political-economic perspective, for a mineral that is known to have a projected shortage of supply and is predicted to have stable growth in the medium- to long-term