Toronto, Canada — MININGREVIEW.COM — 17 June 2008 – BRC DiamondCore Limited – a growth-focused African diamond explorer, created through the merger of BRC Diamond Corporation of Toronto and DiamondCore Resources of Johannesburg – has signed a letter of intent with Rio Tinto Mining and Exploration Limited whereby Rio Tinto can earn a 60% interest in the Company’s five diamond exploration projects in the northern Democratic Republic of the Congo (DRC) staged earn-in arrangement.
A news release issue here explained that these five projects relate to a total of 106 exploration permits covering approximately 27 000 squ km in the Equateur and Oriental provinces of the northern DRC. Alluvial diamonds are currently being recovered in this region.
Under the proposed arrangement, Rio Tinto would fund an exploration program with the objective of finding and defining kimberlite ore deposits capable of economic development. The letter of intent contemplates the following three phases:
Reconnaissance Phase: Rio Tinto contributes US$550 000 (R4.2 million) towards the initial reconnaissance sampling phase to be completed by BRC by year-end 2009.
Phase 1 Exploration: Upon completion of the reconnaissance phase and receipt and interpretation by Rio Tinto of all reconnaissance sample results, Rio Tinto has the exclusive option to earn an initial 35% interest in the project it selects by spending US$3 million (R23 million) in exploration expenditure by no later than December 31, 2012. The Phase 1 exploration programme will be operated by BRC.
Phase 2 Exploration: Upon completion of Phase 1 exploration on a Northern Project, Rio Tinto would then have the right to earn an additional 25% interest in the applicable Northern Project by spending an additional US$10 million (R76 million) in exploration expenditure on each project by no later than December 31, 2014.
Following Phase 2 exploration, a joint venture company would be formed with Rio Tinto holding a 60% interest and BRC-DiamondCore holding a 40% interest.
BRC-DiamondCore president Dr. Mike de Wit Commented: “Both companies are of the view that these properties are highly prospective for the hosting of diamondiferous kimberlites.”