De Beers, Majescor Sign Second Canadian Agreement
October 27, 04
Canadian diamond exploration firm Majescor says it has signed an option agreement to buy a second advanced project in the
The Upper Carp Lake (UCL) project is located around 100 kilometers north of
The Area of Interest of the UCL project, for which De Beers has provided full glacial sediment, indicator mineral, geophysical (ground and airborne) and kimberlite data covers a surface area of more than 10,000 square km.
A total of 12 kimberlites, both pipes and dykes, are known to exist in the project area. Nine of the kimberlites are contained within the 17 mining leases (43,403 acres) that make up the UCL property proper.
Of the nine kimberlites, five pipes yielded enough material to be tested for diamonds by caustic fusion and all proved diamondiferous.
Under the agreement, Majescor can purchase a 100 percent interest in the property by spending C$5 million ($4.1 million) over the next five years. The expenditures over any given year must not be less than C$500,000 ($410,000).
De Beers will retain the right to buy back in to the property at any time up to a decision to mine. It can earn a minimum of 51 percent by reimbursing Majescor twice the full amount of exploration expenditures.
But the back-in interest will be increased to 70 percent should De Beers exercise its right before a decision is taken by Majescor to proceed with a pre-feasibility study on the project, and to 60 percent should De Beers exercise its right after a decision is taken to go to pre-feasibility, but before a decision is taken by Majescor to go to feasibility.
An additional 5 percent interest will be gained by De Beers should it elect to finance the project to production.