JOHANNESBURG (miningweekly.com) – Aim-listed Stellar Diamonds has signed joint venture (JV) agreements with Dubai-based Citigate Commodities Trading to further develop the Baoulé kimberlite project, in Guinea, as well as two early-stage exploration licences in western Liberia.
The company currently holds a 75% interest in the Baoulé project and a 100% interest in the Liberia licences.
Citigate will, through its SAFA Afrique subsidiary, earn up to a 75% interest in Baoulé through a staged earn-in. The first phase will see the company invest $1.5-million to earn a 25% interest, followed by investment of $2-million to earn a further 25% interest. A third stage will entail it funding a prefeasibility study for another 25% stake.
Stellar will receive 56% of gross revenues from the first phase of trial mining, as well as receive a management fee of $150 000.
At the Liberia licences, Citigate can earn up to an 85% interest, with an initial 25% to be earned through the investment of $250 000. Citigate will pay $2-million to earn a further 25% interest in the licences and $4-million to earn the remaining 35% stake.
For both the agreements, Phase 1 is expected to take place over a 12-month period. In the event of the projects moving to Phase 2, work is expected to take place over a two-year period with Phase 3 expected to occur over a three-year period.
SAFA Afrique will be awarded a 25% holding in each project upon receipt by Stellar of initial funds due. This will be adjusted proportionately in the event that the full Phase 1 earn-in funding, which is expected to be received over the 12-month work programme, is not received.
“Stellar is focussed on the proposed Tongo-Tonguma transaction in Sierra Leone. As such, we are delighted to finalise these JVs on terms that are highly attractive to Stellar and our shareholders, who will retain an ongoing interest in the projects, including a proportion of any revenues commensurate with each parties’ shareholding during each particular phase,” Stellar CEO Karl Smithson commented.
The first phase of work was expected to start in November.