VANCOUVER, Oct. 16, 2014 /CNW/ - Prima Diamond Corp. (TSX.V:PMD) ("Prima" or the "Company") announces that it has entered into a property option agreement (the "Agreement") dated October 14, 2014 to acquire the Orion Diamond Properties located in the Jamesie County of east-central Quebec from Fiducie Ananke, a Quebec entity, whereby Prima can acquire an undivided 100% interest in and to 45 mineral claims covering more than 2,275 ha (5,621 acres) in 7 separate claim blocks.
Prospective kimberlite targets have been identified on each of the 7 claim blocks of the Orion Diamond Properties through a recent regional airborne magnetic survey. To view the Orion Property Map, please click: http://www.primadiamondcorp.com/orion
"Prima is committed to acquiring diamond properties in successful and proven diamond regions within Canada," commented Robert Bick, Prima's CEO. "So when the Orion Diamond Properties were offered to us, we jumped at the opportunity specifically because these properties are in the same diamond-rich producing zone which hosts Renard, Quebec's new diamond mine. We are also very encouraged by the identification of prospective kimberlite targets on each of the claim blocks."
Renard Diamond Project
The Renard Diamond Project contains Probable Mineral Reserves of 17.9 million carats and is scheduled to begin diamond production in 2016 (January 28, 2013, Stornoway news release) with an 11 years reserve-based mine life with diamond production averaging 1.6 million carats/annum life of mine (NI 43-101 Feasibility Study, March 27, 2013).
Renard has received significant support from the Quebec government and Quebec investors. The Quebec government through Resources Quebec, a subsidiary of provincial agency Investissement Québec, provided $220 million for the Renard project and Caisse de dépôt et placement du Québec provided $105 million. In addition the Quebec government is building road infrastructure to the mine site.
Terms of the Agreement
In consideration of the grant of the option, Prima has agreed to issue to Fiducie Ananke an aggregate of 12,000,000 common shares of Prima upon TSX Venture Exchange (the "Exchange") acceptance. Fiducie Ananke will also retain a 2% Net Sales Royalty ("Royalty") on all diamond production. Prima shall be entitled at any time to purchase 1% the Royalty for $500,000 and the remaining 1% for $1,000,000. The Agreement is subject to final acceptance of the Exchange.
Closing of the agreement is contingent upon Secutor Capital Management Corporation raising a minimum of $2,000,000 for exploration of Prima's properties and for working capital.
Non-Brokered Private Placement
Prima has arranged a non-brokered private placement financing of up to 7,500,000 Units ("Units") of the Company at a price of $0.10 per Unit with a minimum of 5,000,000 Units for gross proceeds of up to $750,000. Each Unit will consist of one common share in the capital of the Company and one-half of one common purchase share warrant (each full warrant, a "Warrant"). Each whole Warrant will be exercisable into one common share at $0.15 for a period of 24 months from closing.
The non-brokered private placement financing also includes up to 14,583,333 Flow Through Units ("FT Units") of the Company at a price of $0.12 per FT Unit for maximum gross proceeds of $1,750,000. Each FT Unit will consist of one common share issued on a flow-through basis within the meaning of the Income Tax Act (Canada) and one non flow-through Warrant exercisable at $0.15 into one common share for a period of 24 months from closing.
Proceeds of the private placements will be used to conduct exploration on the Company's Orion Diamond Properties, Munn Lake Diamond Property, Godspeed Lake Diamond Property, Liard Fluorspar Property and for general working capital.
This private placement replaces the $1,000,000 non brokered private placement announced by the Company on August 5, 2014, which will not proceed.
Finder's fees may be payable by the Company on a portion of the offering in accordance with the Exchange policies and guidelines.
All of the securities issued under this offering will be subject to a hold period expiring four months from closing.
Prima is focused on diamond exploration in two of Canada's highly prospective diamond areas - the Slave Craton in the Northwest Territories and in the Otish Corridor in Quebec. The Slave Craton is host to the Daivik, Ekati, and Snap Lake diamond mines and Gahcho Kué, projected to commence diamond production in 2016. The Orion Diamond Properties are in the Otish Corridor which hosts the Renard Diamond Project with Probable Mineral Reserves of 17.9 million carats and scheduled to begin diamond production in 2016.
ON BEHALF OF THE BOARD
PRIMA DIAMOND CORP.
President and CEO
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Disclaimer for Forward-Looking Statements
Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the matters contemplated herein. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking information in this press release includes, but is not limited to, statements regarding the Company's intention to purchase the Orion Diamond Property, to complete the non-brokered private placement financings, the proposed use of proceeds, and the proposed exploration targets. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including the inability to obtain Exchange approval for the purchase of assets and the private placements, that our proposed financings will complete, and that we may not use the proceeds as expected. Commercial discoveries on properties nearby are not necessarily an indication of commercial mineral resources being on our property. These forward-looking statements are made as of the date of this news release and, except as required by law, the Company assumes no obligation to update these forward-looking statements.
SOURCE: Prima Diamond Corporation
For further information: For more information about Prima Diamond Corp. please visit www.primadiamondcorp.com or contact: Tyler Lowes, Corporate Communications, Tel: 604.681.1568, Email: [email protected]