India Resources to acquire diamond leases

West Perth-based mining company India Resources Ltd has acquired diamond leases held by AMIL Mining India Private Ltd in return for a 2.5 per cent royalty payment to the vendor, West Perth-based Dwyka Resources Ltd.

The full text of a company announcement is pasted below

Diversified minerals developer India Resources (ASX:IRL) has extended its footprint in India, with the acquisition of prospective diamond leases.

The company has exercised its option over the AMIL Mining India Private Limited leases and is moving to acquire 100% of the controlling company. The leases were previously controlled by Dwyka Resources Ltd with an agreement by BHP Billiton.

This agreement was terminated earlier than its formal November 2007 finish date, which has allowed India Resources to exercise its option ahead of schedule. Under the terms of the option agreement, a 2.5% royalty will be due to Dwyka on production with no up-front acquisition cost is payable;

India Resources Chairman Michael Kiernan said acquisition of the leases expanded and diversified the company's presence in one of the world's most pivotal growth markets.

"India Resources has taken the opportunity to acquire several prospective leases in the vicinity where kimberlite occurrences are known to occur," Mr Kiernan said.

"Clearly India is a key growth market; it is one of the world's largest economies, with a growth rate of 6% expected over the coming years - It is also the home of diamonds and remains the world's largest diamond processor," Mr Kiernan said.

Mr Kiernan said work would now begin in earnest over the diamond properties, initially at the Bhandara Project where India Resources controls more than 8,000 km2 in Orissa along the margin of the Bhandara Craton. Kimberlite occurrences have been recorded here over 300km of strike, including that at Nuapada (see figure) where De Beers Exploration have an active lease holding.

A reconnaissance stream sampling program will be carried out and samples analysed for microdiamonds and indicator minerals in the first and second quarters 2007-2008.

India Resources is also continuing the development of its primary Surda Copper mine project in India.

The company is one track to commence copper production in the first quarter of 2008, with promising geological analysis of historical mine data at Surda, and refurbishment of the plant continuing ahead of schedule.