Diamond Fields International Ltd., as part of its continuing efforts to expand and improve its exploration portfolio, has agreed to acquire a prospective-diamond-exploration project located in Finland along with potential rights to other projects under negotiation in Africa and Russia.
Diamond Fields has entered into an agreement with Gondwana (Investments) SA, Angstrom Capital Ltd. and other shareholders of Discoverer Ltd. whereby Diamond Fields will acquire, directly or indirectly through wholly owned private subsidiaries, diamond exploration licences in Finland. The licences include a drill-ready project in the Kuopio-Kaavi kimberlite district of Finland and a licence area in a potential new kimberlite province. The interests being acquired are indirectly owned 70 per cent by Diamond Fields’ controlling shareholder, Jean-Raymond Boulle, and 30 per cent by two other arm’s-length parties.
The Finland licences are located in two separate geographic areas in geologic settings suitable for the emplacement of kimberlites. The core group of licences are located within the Kuopio-Kaavi kimberlite district in south-central Finland. Gondwana has advised that approximately 20 kimberlites of the Group 1 type have been discovered within this district, of which, many have been shown to be diamondiferous. The vendors’ properties lie approximately 60 kilometres northeast of the city of Kuopio, and are readily accessible by a network of excellent roads. Nearby, a full-scale mineral-processing laboratory owned by the Geological Survey of Finland (GTK) is available to provide sample processing services to the company including the processing of bulk samples through a diamond pilot plant. The vendors’ licences in this region consist of claims and claim reservations covering an area of approximately 65 square kilometres. The central Kaavi licence nearly surrounds the claim hosting the two-hectare diamondiferous kimberlite Lahtojoki, which was recently optioned to an Alternative Investment Market-listed company in the United Kingdom.
Gondwana has identified multiple high-quality anomalies in this area with more than 130 till samples processed for kimberlite indicator minerals. One till sample alone returned more than 900 kimberlite indicator grains suggesting a proximal kimberlite source within the licence. Following on the sampling, a program of close-spaced ground geophysics (magnetic and electromagnetic) has recently identified a drill-ready target.
Gondwana has further advised Diamond Fields that the second licence area in north-central Finland may extend over a new kimberlite province. These claim reservations encompass approximately 940 square kilometres, and limited early stage till sampling by the Geological Survey of Finland has yielded kimberlite indicator minerals with promising chemistry.
In addition to the Finland licences, Diamond Fields will assume the vendors’ interests in certain other exploration projects in Africa and Russia whose acquisition are currently under negotiation or application by the vendors. One of these projects includes a number of pending applications for diamond and platinum exploration licences in Africa. Further information on these licences will be provided on approval of the granting of these licences.
The vendors are also assigning their rights to DFI to take over acquisition negotiations on a drill-ready diamond exploration project in Russia as well as a prefeasibility stage base-metal project in Africa.
As consideration for the acquisition of the rights to the projects, DFI has agreed to: (i) issue to the vendors 2.25 million common shares of Diamond Fields International; (ii) reimburse the vendors for their out-of-pocket costs of $656,000 (U.S.) (payable in four equal instalments of 25 per cent commencing on the closing and every four months thereafter); (iii) grant to the vendors a 2-per-cent-gross overriding royalty on revenues from diamonds and gemstones derived from the projects; and (iv) grant to the vendors a 1-per-cent net smelter return royalty on revenues from products other than diamonds and gemstones derived from the projects.
This transaction is subject to a number of conditions including DFI completing a due-diligence review to its satisfaction within 45 days, DFI board approval and receipt of all necessary regulatory and stock exchange approvals.
Gregg J. Sedun, president and chief executive officer of Diamond Fields, stated, “We are delighted with this acquisition as it provides Diamond Fields with additional excellent exploration opportunities including an exciting drill-ready diamond project in Finland as well as the potential to acquire other attractive projects in world-class mineral locations.”
WARNING: The company relies upon litigation protection for “forward-looking” statements.
