JOHANNEBURG (miningweekly.com) – Aim-listed Stellar Diamonds has signed binding heads of terms with Dubai-based commodities trading group Citigate Commodities to establish joint ventures (JVs) over the Baoulé kimberlite project, in Guinea, and over new exploration licences recently awarded to Stellar in western Liberia.
The formation of the proposed JVs, according to the weekly mining online news, remains conditional upon completion of due diligence by Citigate and the parties entering into definitive JV agreements for each project.
“The terms of the JVs are highly attractive to Stellar and we have essentially secured a free-carried interest at both Baoulé and our new Liberian licences,” says Stellar CEO Karl Smithson.
He adds that Stellar will receive a proportion of revenues from ongoing trial mining at Baoulé at zero cost and will receive an upfront payment for managing the projects during the first phase of work.
Should the parties proceed with the JVs, Citigate will participate in a staged earn-in of up to 75% of the equity in Resources Tassiliman Baoulé (RTB), which holds the Baoulé kimberlite project.
Stellar currently holds 75% of RTB, with a local partner holding the remaining 25%.
In the first stage of the earn-in, Citigate will provide $1.5-million in funding for further trial mining of the higher-grade eastern lobe of the 5 ha Baoulé kimberlite.
Stellar completed a 100 000 t bulk sampling exercise at Baoulé in June from which total sales generated $1.23-million. It is anticipated that a further 50 000 t of kimberlite will be mined and processed to determine with more accuracy the diamond grade and value of the east lobe.
Stellar was in February awarded two licences covering 670.54 km2 in the west of Liberia, around the key diamond area of Kumgbo towards the border with Sierra Leone.
Stellar currently holds a 90% interest in the licences with its local partner holding the remaining 10%.
Pursuant to entering into a definitive JV agreement, Citigate will have the right to invest $6.25-million in three phases in return for an 85% interest in the licences, leaving Stellar with a 13.5% equity interest and a local partner with a 1.5% interest.