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Pangea Diamondfields

Pangea DiamondFields seeks to raise up to US$15 mln in open offer to avoid funding shortfall, to focus on 2 projects

Pangea DiamondFields PLC said it plans to raise up to US$15 million before expenses in an open offer on a 15-for-1 basis and plans to use the money it raises to repay a loan and to focus on developing the Cassanguidi and Bakerville projects in Angola and South Africa to a commercial scale, for the projects to be cash flow positive by the end of 2009.

It said it has received irrevocable undertakings from shareholders representing in aggregate 58.7 percent of the company's issued share capital to approve the open offer at the extraordinary general meeting to be held on December 15 2008. Furthermore, Pangea said it had received irrevocable undertakings from shareholders to exercise their rights under the open offer and make excess applications such that in aggregate, these shareholders are committed to make applications to subscribe for 1,608,579,081 offer shares, thus providing a minimum of US$12 million of new funding.

The open offer will comprise up to 2,007,745,770 new ordinary shares of US$0.005 each at a price of 0.5 pence per share on the basis of 15 offer shares for every existing ordinary share.

Pangea DiamondFields added that it is considering leaving the Alternative Investment Market from August 2009 at the earliest, should the cost of remaining listed prove to not be justified in the context of the current equity markets. It will also review its head office cost base.

The immediate focus is the rapid expansion of the Cassanguidi project to a commercial scale operation producing some 7,000 - 8,000 carats per month and generating positive cash flows. It also recently expanded the Bakerville project to pilot mining status with a potential capacity of around 600 carats per month. Provided the Bakerville project continues to deliver the results seen to date, it will be further developed to commercial status during the second half of 2009. These two projects are expected to be generating positive cash flow in the second calendar quarter of 2009 to support the Company's expenditure on other projects.

The Dimbi project in the Central African Republic will remain on hold until the company determines a strategy to take it forward, adding it still has the potential to develop into an economic project in due course. Advanced exploration activities are planned to continue at the Etoile project in the CAR until the end of 2008, at which time a decision will be made on that project's future.

In the DRC, bulk sampling activities will continue at the Longatshimo project following positive results achieved to date, however in the absence of funding additional to the proceeds of the open offer, there are no current plans for further expansion of the project beyond bulk sampling. Advanced exploration activities are planned to continue at the Tshikapa project including dredging activities currently in progress, with a view to further increasing resources.