A.1. The 1997 Coup took place on the 25 May 1997, by that time the Company had invested a substantial amount of money in the Koidu Kimberlite Project. The 20 tonne per hour (tph) processing plant and all related resources and infrastructure were in place, scheduled to be commissioned on Monday the 26th May. As a result of the uncertainty related to Coup, the Company suspended its operation on the day that the Coup took place and declared force majeure. All expatriate staff were evacuated and the operation was put on care and maintenance in anticipation of acceptable governance and security. In November 1997 the mine was overrun by rebel forces who destroyed the mine and equipment. The project was one day from commissioning.

The Company's first attempt to return to the country was in January 2002. However, at that point in time Koidu, which is our principal area of operation, was still considered unsafe. We therefore waited until the demobilization and the disarmament process was completed, which was by April 2002. The national elections took place in May 2002 and President Kabbah was re-elected by a majority. This gave us sufficient confidence to return in June 2002 to reassess the viability of the project. The technical and baseline environmental assessment was completed by August 2002 and we started re-developing the Koidu Kimberlite Project in January 2003. We believe that the current initiatives by government and its international partners regarding governance and security will ensure peace for the foreseeable future. Future investment will however depend on the success of the first venture, as well as the political and security situation.

Q.2. In your opinion, how successful has the Kimberly process been especially with regards to the diamonds in SL?

A.2. The numbers speak for themselves. The current official export figures from GGDO, in comparison to those of last year and the previous two years show a dramatic increase. Surely this should be an indication that the certification process is successful. I don't think that the illegal diamond trade has come to a halt, there are probably still a lot of diamonds being smuggled; however I think it is just a logical conclusion that those numbers are decreasing proportionately to the official exports. It will be difficult to determine how much is still being smuggled out. Certain reports reflect figures of US$200 to 300 million per annum, but one has to be realistic and look at the potential production capacity of Sierra Leone and the impact that such numbers will have on the market. I am of the opinion that the figure is a lot less then what is commonly reported.

Q.3. The elimination of artisanal miners will not change the situation in the diamond rich regions, according to the Minister, though many think that that will be the end of smuggling what is your point of view on that?

A.3. The artisanal mining sector is a complicated reality in Sierra Leone. Most people in the diamondiferous areas are either directly or indirectly involved and earn their daily bread from it, but it is very difficult to monitor and control, especially for a government with limited resources, and due to the geographical distribution of the alluvial diamonds in Sierra Leone. I think it is logical to say that the illegal trafficing stems from the lack of control in the artisanal mining sector. The truth is that it will be impossible for government to eliminate artisanal mining. The socio-economic environment does not have alternatives to offer and politically, well just look at the number of people involved.

Q.4. One of the principal concerns of foreign mining companies considering investment in Sierra Leone is security in the region and the site, in general. How do you address this concern?

A.4. There are various aspects that have an impact on the security environment namely; the regional security, national security, local security, and security directly related to the operation. Regional security addresses the situations in Guinea, Liberia, and Cote-D-Ivoire which have an influence on the stability of Sierra Leone. The national security includes aspects like; the demobilization and disarmament process, the restructuring of the military and the police, UNAMSIL, IMATT, and general government administration. The level of support and commitment from the international partners is also an indication of what to expect in future.

The problem that we are facing within Kono District is quite complex in that the majority of the people that are engaged in artisanal mining, are from all over West Africa and Sierra Leone which brings with it the different cultural backgrounds, traditional values, and structures. You often find that the foreigners do not abide to the traditional rules and structures which is the first line of government administration at grassroots level

Our current operation; The Koidu Kimberlite Project is situated in the town of Koidu. The lease area is 4km2 surrounded by three villages. The surrounding area is exploited by a large number of artisanal miners. In view of the commercial risk related to the operation we have contracted Securicor, a British based security service provider.

Q.5. Your activities are developing hand in hand with the development of the country, could you give us more info about your on-site investment activities?

A.5. Before we discuss the Company's recent performance I think it will be appropriate to give you a little more insight to who we are. Branch Energy is a subsidiary of DiamondWorks Ltd, which is listed on the Toronto Stock Exchange. The holding company is involved in various business sectors all over Africa. These include mineral projects, energy, trade and industry. The May 2002 election results in Sierra Leone gave us confidence in the political era that the Country has moved into. The 1997 loss due to political turmoil is however a constant reminder of the risk related to any investment in Sierra Leone. In June 2002 the Company entered into a Joint Venture partnership with Magma Diamond Resources Ltd for the development of the Koidu Kimberlite Project.

A team of technically qualified and skilled people was subsequently sent to do a detailed assessment of the legal standing of Branch Energy's rights to the Koidu Kimberlite Project, investment climate, security situation, status of Company infrastructure and resources, geology, and mining related support infrastructure within the country. It was immediately obvious that the country has changed for the better since 1997. The security situation improved drastically due the efforts by the United Nations and other foreign organizations. Governance and infrastructure has improved. The "on site" survey was however a shocking reminder of the effects of a civil war. The plant and all the equipment that was left in 1997 were completely destroyed. In spite of this we recognised the efforts being made by the international community and the project's potential, and therefore formulated a 5-year business plan for the Koidu Kimberlite Project. This plan will be reviewed every two years depending on the project's performance and the political situation.

The initial plan required a US$12.5M investment, which included a 50 tph processing plant and all related resources and infrastructure. We contracted various independent consultants that are internationally recognised in the mining industry to assess the technical and financial merits of project.

By January 2003 the JV had spent approximatelyUS$1,2M and the partners had to make a strategic decision whether to proceed by financing the venture from own resources or to suspend it until such time as external finance could be secured. The final decision to proceed was made on the 28th of February 2003. The plan in layman terms; was to construct a 50 tph Bateman processing plant and related infrastructure, and to mobilize sufficient resources to run the plant 24 hours a day. This included; 5 x 25 Tonne ADTs, 2 x 40 tonne Excavators, 2 x Front End Loaders, 1 x Dozer, 1 x Grader, 14 x Light Vehicles, various logistical support vehicles, an accommodation complex to house 100 people, offices, stores, workshops, a medical clinic, and 200 staff. Other mining infrastructure includes; run of mine waste dump, a slimes dam, water supply, explosive stores, roads etc. The mobilization and construction was scheduled over a period of 8 months, starting March 2003. The first foundations were set out on the 5th of May 2003 and we are now about 80% complete. Our aim is to commission the plant on the 15th of October 2003. If one considers the amount of detail that goes into an operation of this nature and that 98% of the materials come from South Africa (160 containers), manufacturing lead times of 16 weeks and shipping periods of 4 weeks, a national workforce with very limited skills and experience, our team has performed exceptionally well.

Our approach was to address all the legal, technical, logistical, resource, environmental, financial, regulatory, security, and management issues in detail during the planning phase and to include the Ministry of Mineral Resources during the process. Issues such as interaction with government offices, interaction with the local community, local stake holder interest and sensitive security aspects were addressed by contracting Companies of international repute to assist with planning and implementation. An example is KPMG (Sierra Leone) who will be our internal auditors, interacting with the Ministry of Finance on our behalf.

One of our objectives is to create real investor confidence by bringing this venture into fruition in a transparent and accountable manner which could be used as an example of how and what could be done in a post war Country that has so much potential.

Q.6. How do you interact with the local community?

A.6. Due to the extreme poverty and general feeling of desperation amongst the majority of Sierra Leoneans, we find that local expectations on every level of society are unreasonably high. Continuous interaction with the local community and the authorities is therefore essential in order to balance these expectations with those of the Company. I must admit that it is not an easy task, especially when one considers the operational challenges that seem to consume every minute of the day.

We have categorised the different groups and formulated a strategy whereby interaction between the Company and each one of these groups is maximised. I will give you three basic examples. 70% of our workforce, which relates to 140 people, has been recruited from the Koidu community. The average household is about 10 people, there is therefore direct interaction with at least 1,400 people in the community on a daily bases. The welfare of our workforce, the Company's performance, culture and discipline etc constantly filters through to the community. The senior national staff in management positions are all well educated and generally come from the ruling houses i.e the traditional leaders within the community. The traditional leadership and administrative structures is one of the systems that we use to educate the local community about our activities and actions. We also get response and concerns via the same channel. The Company has appointed a Community Liaison Officer with the responsibility to address all community related issues immediately, when they arise. We have also appointed a Security Liaison Officer who interacts with all the National Security Forces on a daily bases in order to ensure that security related concerns are addressed.

As responsible investors and in accordance with the Environmental Protection Act we have appointed a World Bank recognised consultant to do a detailed environmental impact assessment, which includes all the socio economic issues within our area of operation.

Q.7. Often a company of your sized and importance has to face certain expectations to contribute to the development of the country or the area developed how is it in your case?

A.7. It is in our interest to assist the country and the effected community with development programs. Both parties' interests are protected in the mining lease agreement between the Government of Sierra Leone and Company. Apart from royalties and taxes to government the Company will contribute a portion of its proceeds to the Agricultural Development Fund. We have also identified three areas of development opportunities for possible participation. These are currently being analysed and a full feasibility study will be conducted in order to ensure maximum benefit for the community.

As part of the environmental impact assessment study we will receive recommendations regarding community development programs. Initiatives that are currently on the table includes; a resettlement development, a clinic, skills training facility and a primary school.

Immediate development programs that are currently running include a feeding scheme for all the staff. This has been sub contracted to the Local Chiefdom Woman's League. The Company constructed an outdoor kitchen and provided all the utensils in order to give them the capacity to prepare 200 meals per day.

Due to our construction requirements a substantial amount of work goes to the local carpenters and metal workers. The other service providers such as the fuel supplier, grocer, security service provider and transporters had to increase their capacity in order to cope with our demands. Our current activities alone have already made a positive impact on the economy.

Once the mine is in production and there is revenue we will definitely get involved in other development programs. We will however be directly involved with the management of whatever programs we invest in.

Q.8. What about plans with regards to enlarging the site?

A.8. We have applied to the local chiefdom authorities for an additional 58.3 acres of land, which will be utilised for our accommodation complex.

Q.9. The Government is looking forward to attract big international mining companies into Sierra Leone, what would be your advice to these companies?

A.9. One has to realize that you are investing in a post war country. For the past ten years this country went through systematic destruction. We have to recognize that the reconstruction will not take place overnight. Local expectations are high, very high, infrastructure is poor, governance is improving every day, security is no longer the main concern, and opportunities are endless.

Based on our performance, I would hope that we will be able to give advice and guidance to others that have the courage and vision to invest in this country that has so many natural resources.

Sierra Leone has its unique challenges, none of which could not be managed or overcome. Companies such as KPMG, Securicor, and SLSA offer essential services in accordance to the international regulations and standards set by their respective holding companies. These services make investment in Sierra Leone easier than before.

Q.10. Could you also tell us also about your professional background and your experience in the mining sector?

A.10. I have been with Branch Energy Ltd since 1997. At that time I was the National Security Manager in Sierra Leone. I was then transferred to our operations in Angola. The Company considered returning to Sierra Leone after President Kabba was restored in 1998. I was then appointed as the Project Manager for the Koidu Kimberlite Project, an assignment that never materialized until June 2002.

I completed a management course in 1999 whereafter I got involved with mining projects in various African countries i.e. the Democratic Republic of Congo, Angola, and Zambia.

After the successful privatization of the copper mines in Zambia I established a trading Company on the Zambian Copperbelt, servicing the mines in Zambia and across the border in the Democratic Republic of the Congo.

I am currently studying for an MBA at Henley Management College. I have also completed a course on Technical Appraisal and Financial Modeling of Mineral Projects with Imperial College in London.

Our success in Sierra Leone is due to a combination of factors. Obviously, our previous experience and understanding of Sierra Leone is our competitive edge, but the experience and knowledge of my project team regarding mining projects in remote areas of Africa is of great value. The operational systems and procedures that we have developed and implemented, and our commitment to transparency and accountability, are the basis on which we will perform in this country.