Brazilian Diamonds: Trial Mining Commences at Abaete Alluvial Diamond Project
Monday May 17, 8:32 am ET
VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 17, 2004) - Brazilian Diamonds (TSX:BDY - News) is pleased to announce that it has reached agreement with Primeira Gema Comercio, Importacao e Exportacao Ltda ("Primeira Gema") under which Primeira Gema will commence trial mining at the Company's 100% owned Abaete Alluvial Diamond Project.
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Primeira Gema is a well known Brazilian company with significant foreign partners which as a group, have been involved for many years in alluvial diamond mining and the buying for export, of rare, large and coloured diamonds.
Under the terms of the Agreement reached, Primeira Gem will commence trial mining at Abaete using Brazilian Diamonds' diamond jig plant which has been used for bulk sampling of a significant volume of diamondiferous gravels delineated at the project.
Brazilian Diamonds will be receive a gross royalty on the value of diamonds recovered during this trial mining, commencing at 3.5% in respect of the first US$ 1 million of production and rising to 7% thereafter.
Primeira Gema has also been granted a six month option to acquire the Abaete project, including licenses, the diamond jig plant and sundry facilities at the site for a cash consideration of US$500,000 and an ongoing gross royalty on production of 3.5%.
Upon the expiry of the option period, if Primeira Gema does not exercised its right to acquire the project, it is obliged to return the project, including diamond plant and license areas, in fully rehabilitated condition.
This transaction does not include any rights to kimberlites found within the license areas, which will remain with Brazilian Diamonds. Should additional kimberlites be discovered on the license areas, they will be transferred to Brazilian Diamonds without payment of compensation to Primeira Gema.
The resumption of work at Abaete is an important element of the Company's strategy to joint venture its significant alluvial portfolio with qualified third parties whilst at the same time continuing to concentrate on the exploration of its extensive kimberlite opportunities. |
