VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 17, 2009) - Lucara Diamond Corp. ("Lucara") (TSX VENTURE:LUC) and Motapa Diamonds Inc. ("Motapa") (TSX VENTURE:MTP) are pleased to announce that the companies have signed a letter of intent which contemplates Lucara acquiring all of the outstanding shares of Motapa pursuant to a plan of arrangement under the Business Corporations Act (B.C.). Each Motapa share will be exchanged for 0.9055 shares of Lucara representing a 104 percent premium to Motapa's trailing 20 day volume weighted average price on the TSX Venture Exchange. The exchange ratio is based on the number of Motapa shares presently outstanding. Upon exercise of any or all of Motapa warrants or incentive stock options, the exchange ratio will be adjusted accordingly such that upon completion of the transaction, Motapa shareholders will hold 35% of the combined company. The boards of directors of Lucara and Motapa have overwhelmingly approved the terms of the transaction.
Highlights of the Transaction
The transaction will bring significant benefits to each of Lucara and Motapa and their respective shareholders. In particular, the transaction will provide the combined company with:
- A platform for the combined company to become the leading diamond exploration and development company in Africa via organic growth and acquisition opportunities.
- Ownership consolidation of the highly prospective Mothae diamond development project located adjacent to and on trend with the world-famous Letseng diamond mine in Lesotho.
- Additional exploration assets in Namibia, Gabon and the Democratic Republic of Congo.
- Strengthened management team with extensive specialized diamond experience both inside and outside of Africa.
- Upon completion of the transaction, the combined company will have approximately 98.44 million shares outstanding.
Motapa and Lucara have undertaken to finalize a definitive agreement on or before April 23, 2009 to define the implementation of the plan of arrangement. The definitive agreement will set out the board and management structure of the consolidated company and other details customary to a transaction of this nature.
The transaction is subject to due diligence, signing of a definitive agreement, certain customary conditions, all requisite regulatory approvals as well as Motapa shareholder approval. Upon finalization of a definitive agreement, Motapa will schedule a Special Shareholders' Meeting to consider and vote on the transaction.
