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Description of business:
BlueRock Diamonds plc ("BlueRock") was incorporated in England and Wales on 11 October 2012 and was admitted to the ISDX Growth Market as an investment vehicle on 7 March 2013. Following the review and evaluation of a number of potential acquisition targets, the Directors identified the Kareevlei Tenements as an opportunity that fulfilled the Company's investment criteria. The Kareevlei Tenements are located approximately 100km northwest of Kimberley in the Northern Cape Province of South Africa, and contain the diamondiferous Kareevlei Kimberlites; five kimberlite pipes ranging in size from <0.5 hectares to <5.6 hectares. On 23 April 2013, the Company entered into the Kareevlei Option Agreement with Diamond Resources (Pty) Limited, a subsidiary of Tawana Resources NL, pursuant to which the Company was granted an option to acquire the Mining Right over the Kareevlei Tenements and the Mining Equipment for an aggregate consideration of R4 million (approximately 261,000) plus SA VAT. Prior to Admission, the Company, through its Subsidiary, Kareevlei Mining (Pty) Limited ("Kareevlei Mining"), is to exercise its rights under the Kareevlei Option Agreement to enter into and complete the Equipment Agreement and to enter into the Mining Agreement. Following Admission, under the terms of the Mining Agreement (as amended), the Company may conduct Trial Mining Operations until such time as Diamond Resources obtains Ministerial Consent (pursuant to an application to be lodged under section 11 of the MPRDA in a form acceptable to both Diamond Resources and BlueRock) for the transfer of the Mining Right to Kareevlei Mining. The Mining Agreement provides that Kareevlei Mining may be engaged as a contractor to conduct Trial Mining Operations in the period prior to the transfer of the Mining Right. The amount that can be taken by way of bulk sample is limited to four consecutive tranches, the first two of up to 20,000 tonnes each and then a further two tranches of up to 24,000 tonnes each. If after eight months from the inception of the Mining Agreement, Ministerial Consent for the transfer of the Mining Right has not been obtained, under the Supplemental Agreement, unless the parties agree otherwise, Kareevlei Mining has the right to be appointed as a contractor to continue the Trial Mining Operations for an additional period of up to 24 months after the commencement date or until the Ministerial Consent is obtained, whichever occurs first. The Mining Equipment to be acquired by BlueRock on Admission includes an on-site processing plant and a final recovery section which is based in a leased area at the De Beers facility in Kimberley, both of which are in good condition. The on site processing plant includes crushers, screens and a 25 tonne per hour dense media separation plant ("DMS") plant. Electricity to operate the plant is generated by three diesel powered generators. The onsite plant is in good condition and following refurbishment of the screens and crushing circuits is expected to be suitable for kimberlite treatment. The final recovery plant based in Kimberley at the De Beers facility includes conveyors, screens, a containerised dual station FlowsortTM (X ray) machine and a grease table. Since De Beers discovered the Kareevlei kimberlites in 1991 during an airborne magnetic survey, significant prospecting work has been carried out, including percussion and BauerTM auger drilling. Sufficient work had been carried out on three of the pipes, K1, K2 and K3, such that following the execution of the Kareevlei Option Agreement, the Company commissioned a Competent Person's Report on the Kareevlei Tenements in order to provide a resource estimate under the SAMREC code based on the prospecting work to date, a summary of which is as follows: Pipe Tonnes Carats Grade (cpht) Classification K1 1,594,000 101,000 6.3 Inferred K2 2,461,000 111,000 4.5 Inferred K3 3,929,000 147,000 3.7 Inferred Total 7,984,000 359,000 In accordance with the recommendations of the Competent Person, the Company intends to start mining operations by opening up the K1 pipe and removing a portion of the calcrete overburden to expose the calcretised and weathered kimberlite beneath for processing. In accordance with the black economic empowerment requirements in the South African mining industry, Kareevlei Mining is 26% owned by a Kimberley based company, Ghaap Mining (Pty) Limited, while BlueRock owns the remaining 74%. The Company has notified ISDX of its intention to withdraw from the ISDX Growth Market; withdrawal from ISDX will take place immediately prior to admission to AIM.

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BlueRock Diamonds plc

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