Minmet, the Anglo-Irish exploration company, said today it will exercise its option to acquire seven diamond exploration claims near Coromandel in Brazil.
The company has completed its initial exploration programme on the so-called Mearim claims of approximately 5,200 hectares along the Santo Inacio river.
Minmet said there is potential for the discovery of large premium-priced diamonds in the claims.
Mr Gordon Riddler, Minmet's technical director, said: "The discovery of strong linear zones of kimberlitic source rocks in the form of breccias and dykes, the established presence of diamonds on the claims, and the large volume of potentially dredgeable gravel now known to be available, combine to justify the view that there is scope for treatment of terrace gravels and continued exploration and bulk testing of the alluvial flats and sub-surface kimberlites.
"The potential for the discovery of large premium priced diamonds is entirely realistic. In addition the decision to purchase the Mearim claims opens the way for the further development of Minmet's gemstone project portfolio."
The consideration for exercising the option is $125,000 in cash and the issue of 680,000 Minmet shares to the vendors, which include Minco Ventures Ltd and Mearim Sociedade de Mineracao Limitada.
The vendors will have the rights to 7.5 per cent of the future profit from the Mearim claims. Minmet will have an option to buy this right for £2.5 million sterling after 24 months of actual production has elapsed.
AFP