RE: Selling nearly done11 Feb 2024 01:25
The KDR and Rio Tinto Confidentiality Agreement lasted around a decade. It was renewed by Rio in 2014 and lapsed in 2020. Alastair Ford called it explained - July 26, 2010
Shares In Karelian Diamonds Soar As It Joins Forces With Rio On The Ground In Finland
By Alastair Ford
"We're well pleased with it", says Professor Conroy of the recent agreement between his Finnish diamond company, Karelian Diamonds, and Rio Tinto. The markets were well pleased too, pushing Karelian's shares up by almost 200 per cent on Thursday 22nd July, the day the news was announced, and on good volumes too. The following Friday the shares then rose by a further 90 per cent or so, such that by the close of the week the overall rise amounted to a whopping 292 per cent, as Karelian closed at 4.25p.
That made Karelian easily the best performer of the week, although even after all that price strength, it still remains a minnow, capitalised at just £2.5 million. Rio Tinto's intervention certainly makes a difference, and for several reasons. The first, general, point to make is that the Rio deal brings Karelian back to life from the state of semi-hibernation that it had gone into once the global financial crisis got underway. To be fair, and as we've reported here before, Karelian didn't completely batten down the hatches, and was actually out there in Finland picking up ground when everyone else was running for cover. But exploration was well and truly on hold, and to all intents and purposes the markets seem to have taken the view that there was little of real substance happening.
If that was indeed the case, then the markets were well and truly woken from their torpor by the Rio deal. Under the agreement Rio will make available its extensive Finnish database to Karelian for evaluation. In return Rio gains the right to fund any Karelian discovery into production for a 51 per cent interest. The deal covers diamonds, and all other minerals as well, and effectively makes Karelian the defacto exploration arm of Rio Tinto in Finland, although when that interpretation is put to Professor Conroy he deftly sidesteps the issue. "I think we would regard it as fitting very well together", he says. "It's a sensible sort of relationship to have."
Given the history of prospecting for diamonds in Finland, and who acquired who, the Rio data is a prize worth having. As the twentieth century was drawing to a close it was Ashton that really opened up Finland as a country prospective for diamonds. Ashton, the Professor reminds us, discovered Karelian's leading asset, the Seitapera kimberlite pipe, Finland's largest. It was also Ashton which discovered the Lahtojoki pipe currently under joint investigation by Mantle Diamonds and Kopane Diamond Developments. In short, Ashton was the big noise in Finnish diamonds, and it was acquired, along with all its data, by Rio late in the year 2000. But the prize, as far as Rio was concerned, was always Ashton's 40 per cent stake in the Ar
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