Nare Diamonds to Change Name to Lonrho Mining and Agrees Lulo Diamond Joint Venture with Endiama, the State Owned Diamond Mining Company of Angola

28 August 2007
Content from a Premium Partner
Lonrho (London)
press release

Lonrho (AIM: LONR), the conglomerate with a diverse portfolio of African investments, is pleased to announce that Nare Diamonds Limited ("Nare"), the Australian listed African diamond mining company in which it holds a 21.94% stake, intends to:

  • change its name to Lonrho Mining Limited ("Lonrho Mining");
  • seek a dual listing on AIM; and
  • develop a highly prospective 3,000 kilometre square diamond concession in Angola with Endiama.

Lonrho Mining

The Lonrho Mining management team will continue to be led by Charles Mostert, the CEO of Nare Diamonds. He is supported by David Lenigas, the Chairman and Chief Executive Officer of Lonrho who recently become Chairman of Nare, and Geoffrey White, Lonrho's COO, who recently became a non Executive Director of Nare.

The proposed change of name to Lonrho Mining reflects the recent increase in ties with Lonrho and should enable Nare to benefit further from Lonrho's experience and presence in Africa. Lonrho Mining will look to selectively acquire exploration and producing mining assets across the African continent. The proposed change of name of Nare to Lonrho Mining is subject to Nare shareholders' approval.

Lulo Diamond Concession – Angola

Nare has also announced that it has signed a joint venture agreement with Endiama, the national diamond company of Angola and exclusive concessionary for Angolan diamond mining rights, to develop a highly prospective 3,000 kilometre square diamond concession in Angola (the Lulo Diamond Concession). On all the kimberlite deposits Nare's participating interest will initially be 39% of the joint venture which will decrease to 30% after repayment of its investment in the Project. On all alluvial deposits Nare's participating interest will be 40% in the joint venture.

The Lulo Diamond Concession is located in the Cuango River catchment area within the Lunda Norte Province of northeastern Angola. This concession has been one of the prime targets for Nare and contains an identified 29 kimberlite pipes and extensive alluvial resources. It is located close to existing proven kimberlite pipes and alluvial resources and is widely seen as a highly prospective concession.

The Catoca Mine, which is the third largest kimberlite diamond mine in the world and which produces 60% of Angola's diamond production, is located 150km east of the Lulo Diamond Concession. The joint venture between Petra Diamonds and BHP Billiton on the Alto Cuilo is adjacent to the Lulo Diamond Concession where 70 kimberlite pipes have been found, the largest of which is currently being evaluated.

Charles Mostert, Chief Executive Officer of Nare, commented:

"This is an excellent strategic development for Nare. The Lonrho name is recognised throughout Africa, and its reputation is excellent. The closer ties with Lonrho are already providing Nare with unique access to resources and deal flow throughout Africa whilst the dual listing on AIM and the ASX should help Nare to continue to grow rapidly and to develop into a significant African resource company."

David Lenigas, Chairman and Chief Executive Officer of Lonrho Plc and Chairman of Nare, commented:

"Lonrho has been a shareholder of Nare for some time and recognises that the management team has the proven ability to deliver. They have made significant progress at the Schmidtsdrift operations in South Africa, increasing reserves to some 47 million tonnes of diamond bearing gravel as well as increasing production."

"The closer ties, including changing its name to Lonrho Mining, will enable Nare to utilise Lonrho's heritage and contacts to provide a constant flow of exciting resource related projects. Lulo Diamond Concession in Angola is seen as highly prospective and is situated in one of the most sought after locations in Angola. We see this as the first of several large projects that a new Lonrho Mining can develop in Africa, and illustrates the type of deals the Lonrho name can gain access to.

I am sure that the closer relationship and development of Lonrho Mining will prove rewarding for shareholders of Lonrho Plc."

ENQUIRIES

  • Lonrho Plc +44 (0) 20 7016 5105
  • David Lenigas, Chief Executive +44 (0)7881 825 378
  • Emma Priestley, Executive Director +44 (0)7867 785 177
  • Nare Diamonds Limited Charles Mostert +61 407196129, +27 722869288
  • Pelham PR Charles Vivian +44 (0) 20 7743 6672, +44 (0) 7977 297903
  • Alisdair Haythornthwaite +44 (0) 20 7743 6676, +44 (0) 7714 721379
  • Collins Stewart Europe Hugh Field +44 (0) 20 7523 8350
  • Jonny Sloan

NOTES TO EDITORS

About ENDIAMA:

Endiama (Empresa de Diamantes de Angola) is the State owned diamond mining company of Angola. It controls all of the Angolan diamond exploration and mining activities. In 1917, the Portuguese Government established Diamang, a company that was empowered with all of the diamond mining rights in Angola. Diamang held this monopoly until the Angolan independence in 1975. From 1970 to 1975 it engaged De Beers in a consortium called Condiama which was mandated to conduct a rapid, large scale exploration program over most of Angola. In 1977, Diamang was changed and a new company called Endiama was established. In 1995, under the Law of Public Enterprises it was granted its own statutes. This initiated a dual state and entrepreneurial role for this entity. It allows Endiama to grant alluvial mining licences but kimberlite mining licences are still granted subject to ministerial council approval. In 2000, Endiama signed the Kimberley Process which was established by diamond exporting countries to control the trade in so called blood diamonds from conflict regions.

About LONRHO:

Lonrho Plc is an expanding conglomerate that is rapidly growing a successful business throughout Africa. The Company is listed on the London AIM stock exchange (LONR). Lonrho is strategically focused on the development of business opportunities in infrastructure, transportation, support services and natural resources. The Company has over 20,000 shareholders and substantial institutional backing to support its mandate to build a profitable business that plays a fundamental role in the development of the African economy.

Since 2006, the Company has invested in or acquired control of:

  • Hotel Cardoso - www.hotelcardoso.co.mz (retained)
  • Nare Diamonds - www.narediamonds.com
  • Brinkley Mining - www.brinkley-mining.com
  • Luba Freeport - www.lubafreeport.com
  • Fly540 - www.fly540.com
  • Norse Air - www.norseair.co.za
  • Swissta Holdings - www.swissta.com
  • Countermine - www.countermine.com
  • SA Independent Liner Services
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