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LONDON (Alliance News) - Karelian Diamond Resources PLC on Tuesday said it has agreed to acquire a diamond mining permit in Finland from A&G Mining Oy.
Karelian will pay EUR150,000 to acquire the permit over the Lahtojoki diamond project in Finland's Kaavi region. This will include EUR50,000 upfront and EUR100,000 after two years unless Karelian decides against developing the project.
A further royalty of 1.0% will be payable in diamonds or cash on diamond production of up to 2.5 million carats, Karelian said.
Karelian said it believes the Lahtojoki project has the potential to become a profitable low strip ratio open pit diamond mine. It will now review the exploration and feasibility work done to date on the project and carry out any further studies required.
"The acquisition of a mining permit over the Lahtojoki diamond project is excellent news. It is potentially a low cost way for Karelian to take its initial step toward becoming a diamond producer. This complements our diamond exploration programme in Finland and confirms our view that Finland could become a major diamond province," said Karelian Chairman Richard Conroy.
Karelian shares were up 9.1% to 0.90 pence following the announcement.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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