J. Stephen: This is from my IG file on STS. I have deleted most of the references and information about Yetwene, so you can see what remains...
STARPOINT GOLDFIELDS INC. (V STS)
Jan. 7,1997
STS is off to South Africa on the 20th, to purchase the heavy diamond processing equipment needed to put their Angolan concessions into production this year. They are bringing a specialist with them, to prepare the Yetwene concession for the arrival of the equipment. They also plan to drill Yetwene further and also the larger Riverstone concession.
Nov. 8, 1996 $2.36
The Riverstone concession will be tested to determine its diamond potential. Riverstone is in Lunda Norte Angola, near Diamond Works' (previously called Carson Gold) properties. This is where 32 diamondiferous pits, with over 300,000 high grade carats, were just announced by DMW.
V.STS Starpoint Goldfields Inc
Shares issued 5,392,887
Nov 5 close $2.26 Wed 6 Nov 96
VSE PRESS RELEASE, Acquisition
On the Riverstone concession the company will be entitled to recover all pre-production expenses, capital investment and ongoing operating expenses from 85% of the remaining 87.5% of gross revenue to arrive at a net profit calculation which will be split with the company retaining 52% of net profit and the optionor retaining 48% of net profit, the optionor and the company will split 15% of the remaining 87.5% of gross revenue as to 50% each. Consideration consists of:
a) An initial payment of US$260,000;
b) Payment of US$740,000 and issuance of 300,000 shares on the date of VSE approval of this agreement;
c) Payment of US$1,500,000 within three months of the date of VSE approval;
d) Issuance of 300,000 shares upon the company receiving gross revenues of US $10,000,000 from the sale of product from either property, subject to receipt and acceptance by the VSE of a revenue statement confirming the amount;
e) Issuance of 400,000 shares upon the company receiving additional gross revenues of US $10,000,000 from the sale of product from either property, subject to receipt and acceptance by the VSE of a revenue statement;
f) On production start-up, issuance of 1,000,000 shares, subject to VSE approval;
g) On receipt of a report by a qualified geologist or mining engineer indicating proven reserves of not less than 1.5 million carats, issuance of 4,000,000 shares and issuance of 4,000,000 warrants to purchase a further 4,000,000 shares at US$3.00 for two years, subject to receipt and acceptance by the VSE of the technical report; and
i) After gross revenues of US$100,000,000 have been received from or credited to the properties, the company will pay a further US$6,000,000.
Oct. 5, 1996
To date STS has signed agreements on 2 Angolan alluvial diamond concessions, Yetwene and Riverstone. The president of STS is in Angola as we write this, negotiating for a third concession. They have closed or are closing private placements which will put around $6 million in the treasury for further exploration of the concessions and for production, scheduled to begin first quarter 1997. The 48 page Orcan Engineering Report clearly indicates over 750,000 carats, on less than 20% of the Yetwene concession, and inferred 2.35 million carats. It indicates a production rate of 500 cubic metres per day for 17 years and we believe the actual production rate per cubic metre could be many times the suggested rate, which is usually conservative. These results alone, suggest that STS is undervalued and the stock may have significant upside, as testing of Riverstone begins this fall. STS will test existing concessions further, acquire additional concessions as they become available and move to immediate production, based on the Orcan Report. All of the pieces are in place and we continue to believe STS may provide exceptional growth opportunity as a short, near and long term investment. We have both a trading position and a core position. We will use our trading position to continue to lower our average core position cost and we continue to accumulate STS, now around $2.30.
July 6, 1996
SPECIAL UPDATE
We first started coverage of STS in April at around .60. We like the company because the people behind STS, while managing Banff Resources which ran from .50 to $4, have previously found mining properties which will be put into production next year. In other words STS' principals have a track record as mine finders which is uncommon for new exploration companies.
When we emailed our Special Report on STS, which can be found at Previous Newsletters at our site, the stock traded up to as high as $1.08. It has pulled back with most junior mining stocks and now trades at around .70. We continue to hold STS and are sending this report as an update and because of several material changes which could have an important effect on the company in the near future and long term.
UGANDA
Previously we informed our readers that STS was evaluating gold properties in Peru and Uganda for possible acquisition. We are told their consulting geologist David Budinski has advised the company he is very impressed with some of the Ugandan prospects. These properties continue to produce gold for local panners. One of the properties has been acquired consisting of 4800 square km's and a work program will be outlined in the near future. STS has options on the other properties and are awaiting the consultant's report this month before deciding whether to proceed on the other claims. Mr. Budinski was the geological consultant for Arequipa during their early property acquisition phase. T.AQP ran from under $1 to a high of $34 and is currently around $20.
PERU
STS is waiting to receive geological reports from the owner of the Peruvian gold properties. Peter Christopher, Starpoint's geological consultant in Peru, indicates that there is definitely gold on the property, based on initial reports and previous work, which is less than 30km's from Arequipa's property. The complete geological reports must be evaluated before STS can decide whether to exercise its option and plan a work program in Peru.
ANGOLA
The most significant change at Starpoint is the recent announcement of the signing of a memorandum of understanding to purchase alluvial diamond concessions in Angola. STS will control 52% of the diamond concession, upon completion of acquisition from a Portuguese company which has established business and political connections in Angola.
Angola has a long history of diamond production. 95% of Angolan diamonds are gem quality which average from $170 US per carat up to $370 US per carat. STS' concession has been mined by locals for many years using crude means, picks and shovels. We are told that previously, on STS' concession, a 30 carat rose colored diamond was found which sold for $18 million US.
Most of the diamonds are deeper down and are covered by 6 to 8 feet of overburden. STS has been brought into the project as operator to provide the heavy equipment and know how needed to prepare for mass production late 1996 or early 1997. STS feels that a feasibility study will not be required and intends to go straight into production, which should cost approximately $5 million.
Diamond dredging of river beds and sedimentary alluvial diamond deposits is much less costly than drilling kimberlite pipes, which requires 100's of millions of dollars to get to production. Endiama, the Angolan government diamond management agency, has mapped 15 blocks of the concession. STS will announce the total proven and estimated reserves in carats when all the consultants reports have been completed. In the meantime they are negotiating other concessions nearby. Recently over $300,000 in diamonds were purchased from the area, including STS' concessions.
To compare the potential of STS' acquisition we mention the following: Eric Friedland (Robert Friedland's brother) recently announced that V.CQG Carson Gold Corp. will acquire 100% interest and issue 33 million shares of Carson for Branch Energy's assets located in the People's Republic of Angola and Republic of Sierra Leone.
Carson Gold's news release states:
"Angola is considered by the diamond industry to contain some of the largest and richest diamond resources in the world. Although alluvial production of diamonds started in Angola in the 1920's, the exploration for and exploitation of kimberlite sources did not start until the 1970' |
