Just one week after it expanded its diamond hunting grounds in South Africa, Namakwa Diamond Company has taken interests in eight new exploration projects closer to home.
The company has entered into a joint venture over the projects in the Kimberley region of WA with Faustus Nominees, a company controlled by Graeme Hutton for $150,000.
Mr Hutton is an independent director of Australian diamond producer Kimberley Diamond Company and Sandfire Resources. He played a role in iron ore, gold and diamond exploration in Western Australia.
According to Namakwa’s announcement to the Australian Stock Exchange, Mr Hutton will progressively dilute his interest as Namakwa farms-in but will manage and direct all exploration at the projects at no cost.
Faustus owned the eight projects, which comprise five granted exploration licences and four exploration licence applications.
It has the right to earn a 20 per cent interest in the tenements by spending $250,000 on exploration in the first 12 months.
Namakwa can increase its interest to 40 per cent by spending a further $350,000 in the second year and further 60 per cent by spending $500,000 on exploration in the third year.
Once it has earned a 60 per cent interest Namakwa can buy a further 20 per cent for $1.5 million with Faustus’ remaining 20 per cent free-carried or, at Faustus’ election, converted to a 4 per cent gross overriding royalty with the 20 per cent free carried interest relinquished.
If Namakwa elects not to purchase an additional interest it will revert to a 60-40 joint venture with Faustus free-carried.
Last week Namakwa announced that it had secured the acquisition of a second alluvial diamond project in South Africa’s Namaqualand district.
It plans to commence exploration of that project in the second quarter of 2005.
Production started at the company’s main Namakwa Diamond Project in September.
