MWANA FUNDS GRAVITY DIAMONDS' SEARCH IN DRC
FOR A 14.99 PER CENT SHAREHOLDING
•For two AIM companies, "A meeting of minds as much as a A$5 million investment"
•Funds will allow completion of next phase DRC and Australian exploration
Gravity Diamonds Limited has raised A$5.02 million principally to fund drilling
and exploration in the Democratic Republic of Congo ("DRC") by a placement to
another AIM-listed company, Mwana Africa Plc, which, through a recent
acquisition, owns 20 per cent of one of the DRC's largest diamond producers.
The financing will largely be directed at the continued exploration in the Kasai
Shield, one of the world's most under-explored diamond areas and in which
Gravity has access to a large landholding.
The funding is to be achieved through a placement of 20.08 million ordinary
shares at A$0.25 each.
"The way this has been done should please most people," commented Gravity's
managing director, Phil Harman.
"Mwana's investment represents not only faith in our exploration programme but
is also a meeting of minds on the potential within the DRC. We have been engaged
in discussions for some time about matters of mutual interest in regard to the
Kasai Shield and Mwana has now agreed to back Gravity during the next exciting
phase of its program as well as to expand our technical liaison."
Mwana, which has a portfolio of assets across Africa, signalled its entry into
the DRC diamond industry by acquiring Sibeka SA, which has a 20 per cent
shareholding in Societe Miniere de Bakwanga (MIBA), a leading producer averaging
six million carats of diamonds output per year over the past five years.
Gravity, by funding exploration over the past two years under its arrangement
with BHP Billiton and through a variety of local partnerships, has earned a 100
per cent interest in the Kasai diamond project. BHP Billiton retains a right to
buy back 60 per cent of the available equity in any discovery for four times
Gravity's project expenditure and to carry it through to pre-feasibility.
"Several specific areas have been identified for more detailed follow-up and
targeting. The progress made by our Kasai field team and the knowledge it has
gained, both technically and operationally, has been outstanding".
A portion of the placement monies will also be applied to Gravity's exploration
in Australia where, in particular, further evaluation is taking place of a
diamondiferous kimberlite pipe at its Abner Range prospect.
The shares will be issued on Monday, 7 August 2006.
GRN
gravity diamonds limited
