LONDON (Alliance News) - Golden Saint Resources Ltd Thursday said that its 75% owned Sierra Leone subsidiary, Golden Saint Diamonds, has reached agreement with Maluei Mohamed from the Southern Zimmi Chiefdom of Makpele, Gelehun who, on 23 July, was granted two artisanal mining licences to sponsor the alluvial mining work to be performed in the Zimmi Areas.
In a statement, Golden Saint Resources said the decision to sponsor the work was made following the recommendation of its senior geologist, Ernst Gbappi, who visited the Zimmi Areas with his team.
Under the terms of an agreement signed last week, Golden Saint Diamonds will be responsible for all the artisanal mining operations through a representative, and shall provide machinery, mining tools, food, fuel and lubricants required for the smooth running of the artisanal mining operation.
This includes the issuing and renewing of the artisanal licences when required in return for full control over the mining operations and confirmation that the value of all diamonds won under the licence are to be shared between the subsidiary and Maluei Mohamed's family as to 70% and 30%, respectively. The agreement is valid for an initial period of three years and can be renewed at the end of this period.
If the results of the artisanal mining are encouraging, GSD will consider applying for a small scale mining licence in the Zimmi Areas.
The area to be covered by the small scale mining licences may not exceed 100 acres by law.
Golden Saint Resources said that the Zimmi areas, while very small, provide the subsidiary with the opportunity to work with the local artisanal miners to establish how prospective the Zimmi Areas are for diamonds.
In return for local community support in the Zimmi Areas over the last six weeks, the subsidiary was given a 3.75 carat intense yellow diamond, which was discovered by Maluei Mohamed in the Zimmi Areas, for sale.
In addition, Golden Saint said it is in negotiations over the terms of engagement for the cutting, polishing and grading of 200 carats of rough diamonds currently held by Golden Saint, following a visit to a factory in Mumbai that operates a diamond processing business.
Golden Saint Resources shares were Thursday quoted down 3.5% at 2.41 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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