2007


Diamcor Mining Inc. Closes Acquisition Of South African Alluvial Diamond Exploration Project



November 6, 2007
Untitled Document

November 6, 2007, KELOWNA, BC – Diamcor Mining Inc. (TSX-V:DMI) (the “Company”) announces that, through its wholly-owned South African subsidiary Blue Dust 25 (Pty) Ltd. (“Blue Dust”), it has now completed all planned due diligence and received the required approvals allowing the Company to conclude the agreement in principle previously announced on September 14, 2007, to acquire a 24% interest in a privately held South African company, Nerikets Properties (Pty) Ltd. (“Nerikets”), (the “Agreement”).  Pursuant to the terms of the Agreement, the Company has also secured an exclusive option to acquire the remaining 76% interest in Nerikets.  Nerikets holds the Prospecting Rights Permit for diamond exploration over a 3,606.44 hectare area known as Hardcastle located on the north bank of the Middle Orange River (the “Property”).  The Property is located close to the Company’s current base of operations and located approximately 200 km southwest of Kimberley , South Africa and approximately 20 km north of Prieska , South Africa

In accordance with the terms of the Agreement, the Company has now completed all conditions precedent to closing including conducting extensive due diligence on the Property through the use of its existing South African management team, the independent geological services of MSA Geoservices (Pty) Ltd. (“MSA”) of South Africa, and the efforts of both its South African and Canadian legal advisors and accountants.  Through the independent work of MSA, the Company commissioned an Initial Independent Technical Report (“Report”) on the proposed Hardcastle Alluvial Diamond Project (“Hardcastle Project” or “Project”) to comply with its disclosure and reporting requirements set forth by the TSX Venture Exchange in compliance with the Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”).  The author and qualified person of the Report is Mr. Norman Lock (BSc, PhD, CGeol FGS, MGSSA, PrSciNat), and the Report has been submitted and filed by the Company as required, and can be referenced on SEDAR by interested individuals at www.sedar.com.

The Hardcastle Project is considered to represent an “Exploration Project” which is inherently speculative in nature.  In the Report, MSA concluded that the Project was being acquired on the basis of sound technical merit and generally considered to be sufficiently prospective, subject to varying degrees of exploration risk, to warrant further exploration and the assessment of its economic potential.  The Project is located near the banks of the Orange River and is easily accessible and served by rural infrastructure including the availability of power for the contemplated requirements.

Area History

By way of background, the Report identifies that the erosion of up to 1,000 m of potentially diamond bearing kimberlite pipes in the general area of Kimberley has long provided a diamond source for the transport and re-deposition of economic concentrations of diamonds in secondary alluvial occurrences.  The geomorphic evolution of the Orange River basin in which the Property is located, has provided a complex history of gravel terrace development, deconstruction and re-deposition in gravel on terraces at various levels.  The alluvial diamond deposits of the Middle Orange may be sourced from primary kimberlite hosts and secondary alluvial deposits in the greater Vaal-Orange drainage basin such as, the diamondiferous kimberlites of Lesotho , the diamondiferous kimberlites of the Kimberley area, the diamondiferous kimberlites of Postmasburg fields including the Finsch mine, and diamonds from the Lichenburg-Western Transvaal alluvial diamond-fields.  A simple sequence of “older gravels” as much as 100 m above the present day valley floor of the Middle Orange, and “younger gravels” at elevations close to the current river level, has been recognized and mapped in detail in many localities in the area.  Each of the terrace levels moving towards the river level embrace areas of diamond concentration in appropriate host gravel accumulations and trap sites.  The Report outlines the general Middle Orange alluvial deposits of the area in which the Property is located as generally underlain by Dwyka tillite that forms a smooth surface with little trapsite potential.  The Report also identifies the higher level terraces as generally of better diamond grade than those at lower relative elevations, and the meanders of the river as having ensured that terrace remnants exist on both the north and south banks of the Orange River .  Initial data on general terrace succession for the Middle Orange River area as outlined in the Report is as follows:

Table 7-1 MSA Report October 18, 2007 (Hardcastle)

General Terrace Succession, Middle Orange River

Unit

Thickness

Gravel Type

Description

The Hutton Sands (Kalahari)

5.0 meters

N/A

Fine, unconsolidated yellow sands and grits

Rooikoppie Gravels

1.5 meters

Secondary (formed from primary gravel by weathering)

Lag or deflation layer of rounded, polished siliceous pebbles in red sand

Calcrete

1.0 meters

N/A

Hard and indurated, generally massive, with rare grits and small pebbles.

Suspended Gravel

1.5 meters

Primary (formed by fluvial activity)

Upward-fining, cross-bedded to massive, sandy.  Calcrete cement reduces downward

Parting

0.8 meters

Primary (formed by fluvial activity)

Patchy, lenticular, structureless pebbly sand and grit.

Basal Gravel

5.0 meters

Primary (formed by fluvial activity)

Upward-fining, cross bedded to massive, common very large boulders at the base, clay rich matrix,calcrete cement in upper parts.

Bedrock

   

Dwyka tillite, shale, etc.

 

 

 

Planned Exploration Work Programme

With initial due diligence and the pending Agreement now complete, geological focus will now be on devising and implementing a recommended field program to better identify, and evaluate, any diamondiferous gravels of the Project to determine potential gravel volume, diamond grade, and average diamond value compliant with CIM Definition Standards for the reporting of mineral resources.  Diamond mineralization and alluvial gravel quantities within the Project boundaries are not known at this time but, as identified in the Report, are present in gravel deposits both upstream and downstream from the Property area.  The best known of these is the Saxendrift Mine on the south bank of the Orange River between Douglas and Prieska, about 40 km upstream from the Property and the Wouterspan deposit on the north bank of the Orange opposite Saxendrift.  Both of these properties, together with Makoenskloof, are under development by other companies.  The Silverstreams, Muishoek and Uitdraai properties are also under investigation by other companies, and straddle the north and south banks of the Orange River immediately adjacent to the Hardcastle Project area but at lower terrace elevations.

The early geophysical work performed for the purposes of the Report generated by MSA is preliminary in nature, and does not provided any conclusive evidence of the potential of the Property.  The initial due diligence work completed on the Project prior to closing was aimed at identifying any areas of potential geological interest on the Property which the Company believes have the potential to contain diamond bearing alluvial gravels.  Through the use of initial satellite based “aster” imagery the Company has identified several areas of interest which collectively cover approximately 30% of the surface area of the Property.  A planned work programme aimed at further understanding these areas of potential interest further through the use of extensive low level helicopter based magnetic gradiometer work over a total of approximately 70% of the Property is scheduled to begin immediately.  The Company believes these additional efforts will provide a more detailed understanding of the sub-surface geological composition of the Property which it will use, in addition to the initial satellite imagery, to finalize plans for an extensive drilling and pitting program in the coming months.  The proposed drilling and pitting program is expected to be followed by a bulk sampling program aimed at establishing the grade and quality of any diamond bearing alluvial gravels the Company may locate.  All relevant exploration efforts will be performed in conjunction with independent parties such as MSA to allow the Company to further build on the NI 43-101 compliant Report.  Implementation of these programs will be funded through the proceeds of the recently completed private placements. 

Terms of the Agreement

Under the terms of the Agreement, Blue Dust acquired a 24% interest in Nerikets, with an option to acquire up to a 100% interest.  As consideration for the 24% ownership of Nerikets, Blue Dust paid a nominal price of R24.00.  In addition to the purchase price payable to Nerikets, Blue Dust has agreed to expend an amount of not less than US $500,000 in Rand equivalent (approximately R3 500 000) for exploration of the Property within the 18 month period from the closing date.  Amounts expended by Blue Dust for exploration will be credited to a loan account with Nerikets in favour of Blue Dust which will only become payable should Blue Dust acquire a 100% interest in Nerikets, or if Blue Dust and Nerikets’ other shareholders elect to dispose of their respective interests, totalling 100% of the shares in Nerikets in a single transaction to one or more third parties.

In addition to the 24% ownership, Blue Dust has secured an exclusive option to purchase the remaining 76% shares in Nerikets for an agreed upon maximum price during the option period of 18 months from the closing date of the Agreement.  As consideration for the above option, Blue Dust has agreed to pay a scaled monthly option fee for the 18 month option period beginning with payments of R75 000 (Approx. $10,700 Cnd) per month for the first 3 months with the first payment commencing on the closing date of the Agreement, followed by payments of R100 000 (Approx. $14,500 Cnd) per month for the next 6 months, and payments of R150 000 (Approx. $21,500 Cnd) per month for the remaining 9 months of the option period.  Should Blue Dust fulfill its obligations with regards to exploration funds but declines, or fails to exercise the option within the 18 month option period, it will still retain a first right of refusal over the optioned shares.  The amounts paid as option fees by Blue Dust will be credited to a shareholder loan account in favour of Blue Dust, which shall only become payable should Blue Dust acquire a 100% interest in Nerikets, or if the parties dispose of their respective shares, to one or more third parties in the manner described above.

In conjunction with the Agreement the parties have signed a Contract Mining Agreement under which Blue Dust has been appointed to act as the agent for and on behalf of Nerikets and as an independent contractor to carry out all exploration and mining activities, as well as the overall management operation and administration of related activities at the Project, for the 18 month option period, and subject to extension prior to expiration of the Contract Mining Agreement.  All benefits arising and accruing from the mining activities shall be to the exclusive benefit of Blue Dust, with the provision that 10% of the actual sale of any single diamond sold for not less than R2 000 000 (Approx. $285,000 Cnd) will be payable to Nerikets.

“We are very pleased to have secured the Hardcastle Alluvial Project.  It represents an opportunity for the Company to explore a region known for high quality diamond reserves and potentially move forward with near-term production, pending our geological and economic analysis,” commented Mr. Dean Taylor, President and CEO of Diamcor Mining Inc.

Diamcor Mining Inc. is a junior resource company with established operations and production history in South Africa .  The Company is determined to use this established operating history and industry knowledge to increase its current production of diamonds through the development and/or acquisition of additional quality properties in the region.

On behalf of the Board of Directors

Mr. Dean H. Taylor
CEO
Diamcor Mining Inc.
DTaylor@Diamcormining.com

Phone: (250) 864-3326
Website: www.diamcormining.com

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

This press release contains certain forward-looking statements.  While these forward-looking statements represent our best current judgement, they are subject to a variety of risks and uncertainties that are beyond the Company’s ability to control or predict and which could cause actual events or results to differ materially from those anticipated in such forward-looking statements.  Further, the Company expressly disclaims any obligation to update any forward looking statements.  Accordingly, readers should not place undue reliance on forward-looking statements.  This news release is not for dissemination in the United States , to “U.S. Persons” or to United States of America news services.

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