Great Western Diamonds Corp. has reported that it has entered into a Memorandum of Understanding with Santa Elina Mines Corporation, which is incorporated in the British Virgin Islands and acts through its Cyprus Branch, and Peter Marrone of Toronto, to acquire for shares and warrants, a 100% interest in 80 Exploration Permits, totaling approximately 690,000 hectares, and 17 Applications for Exploration, totaling approximately 140,000 hectares, known as the Rondonia Diamond Project. Rondonia is a state in the west central region of Brazil.
Great Western Diamonds will purchase all the shares of a subsidiary of Santa Elina, which is the indirect holder of the property. Under the Memorandum of Understanding, 29,633,333 common shares and 14,111,111 common share purchase warrants will be issued to BVI-based Santa Elina, or its subsidiary, and to Mr. Marrone, to satisfy the purchase price of $13,335,000. Each warrant will be exercisable for the purchase of one share, at a price of $0.60 for 24 months after closing.
Completion of this transaction is subject to a number of conditions, including a concurrent private placement to Santa Elina and Mr. Marrone, which will involve units of GWD, for proceeds of not less than $0.60 for 24 months; the negotiation of definitive agreements, due diligence satisfactory to all parties, TSXV and all other applicable regulatory approvals approval of board and shareholders.
President & CEO of GWD, Brent Jellicoe, has said that GWD will apply its extensive diamond exploration expertise to highly-prospective diamond projects in other geographic areas such as Brazil. Also, GWD welcomes the involvement of Peter Marrone and Santa Elina to expand its exploration opportunities.
Prior work on the Rondonia Diamond Project was conducted by De Beers about 30 years ago, and revealed 12 kimberlites in three separate clusters. Additional exploration work was recently finished by BHP Billiton, under an earn-in agreement with Santa Elina. This included ground and airborne magnetic surveys, hand dug pits and auger drilling with the purpose to acquire small samples for diamond recoveries. Currently the project is at an early stage of exploration, and work remains to be done in assessing the potential of previously identified kimberlites, and in finding new kimberlites.
Great Western Diamonds Corp. is an exploration and mine development company, focusing on several diamond projects; the core project is the 100%-owned Candle Lake Diamond Project in central Saskatchewan.