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Message: 80% Interest in Brauna Project Sold for $5 Million
| May 26, 2009 |
| Vaaldiam Resources Ltd.: 80% Interest in Brauna Project Sold for $5 Million |
| TORONTO, ONTARIO--(Marketwire - May 26, 2009) - Vaaldiam Resources Ltd. (TSX:VAA) announces the sale of an 80% equity interest in the Brauna diamond project to a private group for total consideration of $5 million. Under the terms of agreement, Vaaldiam will receive a cash payment of $3.7 million and will be carried through the next phase of development on the Brauna property, of which Vaaldiam's share payable by the purchasers is $0.4 million for a bulk sampling program with an estimated cost of $2 million. The purchaser will also assume $0.9 million of Vaaldiam's current liabilities associated with capital equipment purchases that are also included in the bulk sampling program budget for the Brauna project. Vaaldiam will remain operator of the joint venture. The cash component of the transaction is payable in tranches as follows: i) $741,000 (US$660,000) upon execution of the Letter of Intent; ii) $1,111,000 (US$990,000) payable upon the execution of the formal agreements relating to the transaction, which is expected to be completed within 30 days; and iii) $1,852,000 (US$1,650,000) 30 days following the execution of the formal agreements. Vaaldiam can increase its interest in the project to 49% following the completion of the next phase of development by reimbursing the private group 100% of their costs incurred to that date. Vaaldiam will retain the rights relating to the gold potential of the Brauna project area, however the purchasers will have ownership of any by-product gold recovered as a consequence of diamond mining activities. In addition to having the potential of becoming South America's first kimberlite diamond mine, prospecting, trench sampling and reviews of geological data have revealed significant gold potential. Vaaldiam's Brauna claims are located within an important gold-producing Rio Itapicuru Greenstone Belt, which hosts Yamana Gold's Fazenda Brasiliero Mine and several advanced exploration projects where both open pit and underground gold reserves and resources have been delineated. Vaaldiam will provide investors with an overview of the gold potential of the Brauna project area in a subsequent news release. Ken Johnson, President and Chief Executive Officer of Vaaldiam commented that "this transaction ensures that the Brauna diamond project can rapidly advance through the next phase of its development, while providing Vaaldiam with an opportunity to increase its interest in the project. The agreement provides our Company an important injection of working capital, which will greatly assist the Company in weathering the current economic downturn." This release has been reviewed by Brent Jellicoe, P. Geo., a qualified person under National Instrument 43-101. For additional information regarding Vaaldiam please visit www.vaaldiam.com. |
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