Ellendale Resources NL has entered into an agreement with Kimberley Diamond Company NL and Blina Diamonds Ltd relating to Ellendale's diamond tenements. The Ellendale tenements comprise exploration licences E04/801, E04/911, E04/1062, E04/1092 and E04/1093. Kimberley was earning a 75 per cent interest in the tenements by free carrying Ellendale to bankable feasibility over the tenement area. Blina holds tenements prospective for diamonds near the Ellendale tenements. However, Blina has expressed an interest in acquiring 100 per cent of the Ellendale tenements and intends to seek an initial public offer listing on the ASX. Therefore, Kimberley will withdraw from its right to earn 75 per cent of the tenements. The consideration for the acquisition by Blina is the issue of 11.5 million Blina shares or 10 per cent of the issued shares in Blina at the date of the agreement, whichever is higher. The Blina IPO issue price is expected to be 30c a share. Blina will also pay Ellendale a royalty at the rate of 1.5 per cent of the proceeds of sale of production (net of costs). Shares in Ellendale Resources closed steady at 19c while Kimberley Diamond fell 4c to $1.32 today.
ELL Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
