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Mosman Oil moves into diamonds

Published: 12:03 24 May 2016 BST

Picture of a diamond to illustrate investment in miner
The investment is part of a C$1.23mln placing carried out by GEM at 5c per unit of a share and warrants

Mosman Oil and Gas (LON:MSMN) has invested C$400,000 (A$425,000) into Canada–listed diamond group GEM International (CVE:GI.).

Up to now, Mosman had focused on developing its oil and gas interests in Australia but the prevailing conditions in the oil market had persuaded it to broaden its horizons.

The investment is part of a C$1.23mln placing carried out by GEM at 5c per unit of a share and warrants.

Mosman's investment will represent a 20% stake and see it become one of GEM's largest shareholders. 

GEM has an option to acquire around a 42% stake in the Dala diamond prospect in Angola, which lies 25 km south of the Catoca diamond mine.

“Dala is an early stage mine project with potential for the discovery of both alluvial and kimberlite diamonds deposits,” said Mosman.

At 3,000 sq km, the concession is the largest allowable size for a diamond tenement under the Angolan mining code.

John W Barr, Mosman’s chairman, said: "With current prevailing market conditions in the oil and gas sector, the board has expanded its horizon, reviewing investment opportunities in the broader resources arena.

“Whilst the board continues to evaluate interesting opportunities in the Oil and Gas sector, the investment into GEM is at a pivotal point in its development and the Board is confident of the potential GEM's stake in the Dala diamond project will deliver."

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