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Diamond Discoveries, Quebec Properties Exploration Update Monday November 12, 10:04 am ET
NEW YORK, NEW YORK--(MARKET WIRE)--Nov 12, 2007 -- Diamond Discoveries International Corp. (OTC BB:DMDD.OB - News) would like to provide an update of the activities on the work program for the Quebec properties regarding which DMDD signed an option agreement with project operator Tres-Or Resources Ltd (see news April 2006). ADVERTISEMENT
A two phase exploration program for 2007 and 2008 has commenced with an estimated budget $1,500,000 million as approved by DMDD's board of directors. The program comprises of Phase 1 which commenced in June 2007 and Phase 2 which will follow as warranted by the test results of Phase 1. The work program includes staking, surface exploration, mapping, prospecting sampling both airborne and ground geophysical surveys (initial surveys completed) drilling, assays and/or caustic fusion testing and further work recommendations. Three drill holes totaling 351.5 metres has been completed on one of the Quebec property targets testing a prospective geophysical target identified from proprietary high resolution aeromagnetic survey. Drill core samples have been submitted to ACME Analytical Laboratories in Vancouver B.C. for a multi-element analysis and fire assay for prescious metals. Results are pending.
DMDD is also pleased to report that they have received a go-forward work recommendation on the gold and base metal Notre Dame du Nord claims which form part of the option agreement. The recommended work includes follow-up mapping and prospecting leading to drilling of prospective targets. Proprietary airborne geophysical data identified a previous untested conductor extending a buried volcanic belt of over 10 km in strike length which has yielded reported gold, copper, and zinc mineralization in the past.
Harrison Cookenboo, Ph.D., P.Geo., prepared the recommended work program for the Quebec properties and is a Qualified Person by the standards of National Instrument 43-101, has reviewed the contents of this news release. Dr. Cookenboo is responsible for the design and implementation of the field programs.
-------------------- I refuse to tiptoe through life... only to arrive safely at death.
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Item 2. Management's Discussion and Analysis or Plan of Operation The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-QSB. The following discussion regarding us and our business and operations contains forward-looking statements. Such statements consist of any statement other than a recitation of historical fact, and can be identified by the use of such forward-looking terminology such as "may," "expect," "anticipate," "estimate" or "continue" or the negative thereof or other variations thereon, or comparable terminology. The reader is cautioned that all forward-looking statements are necessarily speculative, and there are certain risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements.
Operations to Date
We were incorporated in the State of Delaware in April of 2000. We have not engaged in commercial operations since inception, and therefore have not realized any revenues from operations since inception. We do not expect to commence operations in the foreseeable future and do not expect to generate revenue in calendar year 2007.
For the nine and three months ended September 30, 2007 and 2006 and the period from April 24, 2000 (date of inception) to September 30, 2007, we incurred $19,342, $-, $61,819, $246 and $2,531,727 in exploration costs, net of reimbursements, and $1,234,824, $694,355, $2,542,743, $289,637 and $15,052,753 in general and administrative expenses, respectively. General and administrative expenses consisted primarily of professional fees related to our corporate filings and consulting and other expenses incurred in operating our business. We incurred a net loss of approximately $1,254,000 or $(0.01) per share based on 307,502,544 weighted average shares outstanding for the nine months ended September 30, 2007 and a net loss of approximately $694,000 or $(0.01) per share based on 311,999,439 weighted average shares outstanding for the three months ended September 30, 2007 compared to a net loss of approximately $2,675,000 or $(0.01) per share based on 300,372,508 weighted average shares outstanding for the nine months ended September 30, 2006 and a net loss of approximately $315,000 or $- per share based on 305,216,830 weighted average shares outstanding for the three months ended September 30, 2006.
Going Concern
In connection with their report on our financial statements as of December 31, 2006, Rodefer Moss & Co, PLLC, our independent registered public accounting firm, expressed substantial doubt about our ability to continue as a going concern because such continuance is dependent upon our ability to raise capital.
We have explored, and continue to explore, all avenues possible to raise the funds required. We have no revenue-producing activity. We cannot continue our exploration efforts until we have raised sufficient capital.
Ultimately, we must achieve profitable operations if we are to be a viable entity. Although we believe that there is a reasonable basis to believe that we will successfully raise the needed funds to continue exploration, we cannot assure you that we will be able to raise sufficient capital to continue exploration, or that if such funds are raised, that exploration will result in a finding of commercially exploitable reserves, or that if exploitable reserves exist on our properties, that extraction activities can be conducted at a profit.
Cash Flow and Capital Resources
Through September 30, 2007, we have relied on the total consideration of $6,947,156 as a result of proceeds from shareholder advances, the issuance of notes payable and the sales of common stock to support our limited operations. As of September 30, 2007, we had a cash balance of $3,670.
We plan to seek additional equity or debt financing of up to $1,500,000 which we plan to use for the next phase of our exploration program to be conducted through September 30, 2008, as well as working capital purposes. We currently have limited sources of capital, including the public and private placement of equity securities and the possibility of issuance of debt securities to our stockholders. With virtually no assets, the availability of funds from traditional sources of debt will be limited, and will almost certainly involve pledges of assets or guarantees by officers, directors and stockholders. Stockholders have advanced funds to us in the past, but we cannot assure you that they will be a source of funds in the future. If we do not get sufficient financing, we may not be able to continue as a going concern and we may have to curtail or terminate our operations and liquidate our business (see Note 1 to financial statements).
Our business plan for the next year will consist of further exploration on the properties over which we hold the mineral exploration permits as well as preliminary marketing efforts. In June, 2005, the Company engaged McPhar Geosurveys Ltd. ("McPhar") to conduct an airborne magnetic survey of the Torngat property. In July 2005, the Company engaged Watts, Griffis and McOuat ("WGM"), a geological and engineering consulting firm. WGM was retained to oversee and direct the continuing exploration of the Torngat property. The firm of Patterson, Grant and Watson Ltd. ("PGW") reviewed the results of the airborne magnetic survey conducted by McPhar. PWG identified 40 targets, 10 first priority, 23 second priority targets and seven third priority targets. While some of the targets correlate to previously identified kimberlitic dykes, several targets are for new dykes not previously sampled. After their review of the report on the McPhar airborne magnetic survey, WGM outlined a program for exploration during the 2005 season. The primary objectives of the field program were:
1. independent replication of previously reported diamonds recovered from three of the known kimberlite dykes;
2. independent field sampling of drainages associated with airborne anomalies selected by PGW and sample sites selected by WGM to confirm prior results;
3. ground magnetic confirmation of all potential targets that were readily accessible;
4. rock chip sampling of newly discovered and previously untested dykes associated with airborne anomalies; and
5. to the extent possible, test by drilling selected airborne anomalies with the diamond drill already available on the property.
In August 2005, the field exploration commenced with a crew of 12. The crew completed drilling of 2 of the targets identified by PGW. In addition, the crew collected 38 alluvial and rock chip samples from prospective dykes and drainages adjacent to the airborne anomalies and completed ground magnetic surveys covering 20 of the airborne anomalies. The alluvial and rock chip samples along with selected core samples were sent to Saskatchewan Research Council Geoanalytical Laboratory ("SRC") for processing. The results of the sample processing will be available in a few months. Exploration of the Torngat property has been suspended for the winter months due to inclement weather. WGM continues to analyze and compile all the available geophysical, geological and geochemical data. On October 18th, the Company was informed by WGM that all five objectives of the 2005 field program were achieved. Further field exploration of the Torngat property will not resume in 2007 while the Company evaluates a potential opportunity for a joint venture on property located in Quebec.
After consulting with WGM, we estimate that it will require approximately $1,500,000 to conduct any further exploration program through September 30, 2008. This amount will be used to pay for continued drilling of identified targets, prospecting and geological mapping, helicopter and airplane support, lodging and food for workers, pick-up truck rentals, assays, property taxes to the Quebec Department of Natural Resources and supervision. We plan to raise a minimum of $1,500,000 through one or more private offerings pursuant to Rule 506 or Regulation D or through an offshore offering pursuant to Regulation S; however, nothing in this annual report shall constitute an offer of any securities for sale. Such shares when sold will not have been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. If we are unable to raise this amount, we will most likely cease all activity related to our exploration program, or at the very least, proceed on a reduced scale. We have to date relied on a small number of investors to provide us with financing for the commencement of our exploration program, including TVP Capital Corp., a principal stockholder. Amounts owed to these individuals are payable upon demand.
While we recently purchased drill equipment for approximately $236,000, we do not expect to make any other direct expenditure to purchase any equipment as all equipment necessary will continue to be provided by Prospecting Geophysics Ltd. pursuant to the Prospecting and Survey Agreement dated November 14, 2000. However, we will reimburse Prospecting Geophysics, Ltd. for all of it's out of pocket expenses including equipment rental.
We employ one individual on a part time basis, who is an executive officer. We do not expect any significant changes in the number of employees within the next twelve months.
-------------------- I refuse to tiptoe through life... only to arrive safely at death.
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