Stellar Diamonds has signed a memorandum of intent with the based in Dubai, a group of commodity companies Citigate Commodities, providing for the development of conditions for the establishment of joint ventures for the kimberlite project Baul (Baoulé) in Guinea and two new exploration licenses in western Liberia, which have recently been given this diamond company .
The proposed joint venture will allow Stellar to concentrate on the development of high-quality project Tongo (Tongo) in Sierra Leone, said in a statement sent by e-mail to agency Rough & Polished.
The deal depends on the completion of the law firm Citigate evaluation and the parties entering into definitive agreements for a joint venture for each project.
According to the final agreement on the creation of joint ventures Citigate will be eligible for phased income of up to 75 percent of the Resources Tassiliman Baoulé of the authorized capital of the company (RTB), which is in the hands of kimberlite project Baule.
Stellar currently holds a stake of 75 percent in RTB, and the remaining 25 percent is owned by a local partner.
As the company said, Stellar and its local partner will dilute its stake to 25 per cent of the capital of its own project, if Citigate fully fund all three phases of the work.
If Citigate comes to funding for the third phase of the work, the proportion of equity in the project Stellar Baul drop to 18.75 percent.
Citigate will also have the right to invest $ 6.25 million over three separate stages in exchange for a 85 percent stake in the Liberian licenses, leaving Stellar with a share of 13.5 per cent and its local partner with a share of 1.5 percent.
The first phase of the program will lead to further exploration and sampling monitoring within the budget of $ 250,000, which will bring Citigate 25 percent stake in the Liberian licenses. If Citigate decides to move to the second phase of the program, it will have to invest an additional $ 2 million for an additional 25 percent stake in the future will invest $ 4 million in the third phase of the program for a share of 35 percent.
"Terms of the creation of these joint ventures are very attractive for Stellar fact that we essentially ensure the free transfer of interest in the framework of the Baule, and within the framework of our new Liberian licenses, - said CEO Karl Smithson (Karl Smithson). - It is important to note that we will receive a pro rata share of income from the ongoing trial mining at Baul at zero cost, as well as advance payment for the management of projects in the first phase of work. "
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