JOHANNESBURG (miningweekly.com) – Aim-listed Stellar Diamonds has signed a joint venture (JV) agreement with Guinea-based Société Tassiliman, through which it secured the option to acquire up to a 100% interest in the 5 ha diamondiferous Baoulé pipe, in Guinea.
Located in the former Aredor mining concession, which was one of the largest alluvial diamond mining areas in West Africa, the Baoulé area had a history of producing large, high-quality diamonds, Stellar CE Karl Smithson said.
“As yet no primary kimberlites have been developed and the Baoulé pipe has many of the hallmarks of a potentially large tonnage project that can be rapidly advanced,” he stated.
In-house modelling of previous drilling in the area suggested a target of more than 22-million tons to a depth of 300 m.
The JV entitled Stellar to earn a 75% interest in the 1 km2 property, which hosted the diamondiferous kimberlite pipe, by spending $5-million on the project over an indefinite period.
Once the 75% had been earned, Stellar would also have the option to buy the remaining 25% of the project at an independently assessed fair market value, upon agreement by Tassiliman.
Should this option be taken, Tassiliman would be entitled to a 2% net profit royalty on any future production revenues.
Upon vesting and earning its 75% interest, Stellar would create a new company, into which the licence would be transferred to become the JV vehicle for further development of the asset.
A management committee would also be established with Tassiliman to determine and approve yearly work programmes and expenditures.
Stellar would remain operator of the project at all times and during production would retain full rights to marketing the diamonds on behalf of the JV company.
Meanwhile, Stellar was currently generating an evaluation programme and budget to reassess the Baoulé pipe through drilling and bulk sampling, using the historic database as a guideline.
“The initial target will be to generate an inferred diamond resource of at least three-million carats for the pipe and to establish the diamond value in the current market,” the company said, adding that it intended to relocate its 5 t/h dense media separation/X-ray diamond processing and recovery plant and selected earthmoving machinery from its Droujba project, which was currently on care and maintenance, to the JV area.
This infrastructure would be established on site at Baoulé and be used to process the bulk sample material collected as part of the evaluation programme, the company stated.