Paragon Diamonds (LON:PRG) has taken the first tentative step towards expanding its project portfolio.
It has signed a memorandum of understanding with a private Botswanan company, which holds prospecting licences covering 1,686 square kilometres of one of the world’s major diamond producing nations.
The unnamed firm’s land holding extends over several known kimbelites (potentially diamond bearing volcanic pipes), including the Orapa Kimberlite Field.
The licences were issued in July 2011, are valid until June 2014 and can be extended for a further four years subject to certain conditions.
Paragon has six months to assess the data on the licences, “undertake appropriate due diligence” and negotiate earning an equity interest in the licences in return for funding exploration costs.
Paragon managing director Stephen Grimmer said: "The agreement allows the company to quickly accelerate its exploration presence in Botswana, by participating in some prime exploration opportunities. Notwithstanding, the company is also seeking to increase its presence in Botswana, through direct applications for prospecting licences."