India Resources Buys Back Royalty on Indian Diamond Leases
25.02.09, 11:39 / Mining
India Resources Ltd (IDL) has announced that it has entered into an agreement to buy back the royalty entitlement held by Dwyka Resources Limited over the latter's diamond leases in India.
Dwyka acquired three project areas in 2006: The Bhandara, Bundelkhand and Dharwar diamond exploration projects. The original option agreement stipulated that Dwyka was granted a 2.5% production royalty on the diamond leases.
IDL reports that Dwyka has now agreed to the termination of the royalty entitlement in consideration for the issue by the company of 2 million ordinary fully paid shares. A voluntary escrow period of six months reportedly applies to these shares.
While India has a long history of alluvial diamond production, in recent years there has only been bedrock diamond production from one kimberlite pipe - the Majhgawan near Panna in Madhya Pradesh. Giant diamond miner Rio Tinto has been involved in this project for some time, investing over $25 million dollars. Rio Tinto has discovered more than 40 kimberlite pipes, and in June 2008 announced a diamond exploration target at their Bunder (Saptarshi) project of 40-70 million ton distributed in 8 pipes at a grade of between 0.3 and 0.7 carats per ton.
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