West African Diamonds PLC (AIM: WAD) told shareholders at the annual General meeting that the planned merger with Stellar Diamonds Ltd is proceeding well, and a relisting of the enlarged entity on AIM is planned for early February 2010.
The company in early October confirmed in reaction to press speculation that it had signed heads of terms to acquire Stellar, a privately held West African diamond producer, constituting a reverse takeover under AIM rules. Stellar Diamonds’ principal shareholder is African Aura Mining Inc (AIM: AAAM; TSX-V: AAZ).
The new company will have two producing alluvial diamond mines in Guinea, Bomboko and Mandala, with a resource base of over 1.5 million carats, an advanced stage diamondiferous kimberlite exploration project at Droujba in Guinea, a joint venture with Petra Diamonds Ltd (AIM: PDL) on the Koidu dykes in Sierra Leone and a joint venture with privately owned Japanese developer Thunderball Ltd on the Pipe 3 kimberlite pipe and adjacent dykes in Koidu.
It will also have a 5 percent royalty interest on the Plant 11 undersize tailings project in Sierra Leone as well as highly prospective diamond ground on the Tongo dykes in Sierra Leone.
The combined management team has extensive experience in diamonds in West Africa, and the new enlarged entity will be better placed to take full advantage of the merger and growth opportunities available in West Afrika and elsewhere, the company said today.
In Mid-October WAD announced an agreement with Pyramid Resources, a private Sierra Leone company, to reopen the Plant 11 tailings project near Koidu. Pyramid, formed by local WAD advisers and management, has taken over the mining lease and certain plant and equipment and will focus on recovering diamonds contained in the 7 million ton diamond tailing dump.
In mid-September 2009, the company announced the agreement with Thunderball to form a joint venture for developing its secondary Koidu project. The joint venture will provide WAD with the opportunity to explore the previously neglected Koidu license while still maintaining investment in their primary development, the Bomboko project in Guinea.
WAD owns the license at Koidu and under the terms of this new joint venture they will retain 20 percent of the project going forward. Thunderball will be the project operator and major shareholder and will begin an intensive exploration of the licence.
Thunderball are mandated to explore in and around the diamondiferous Pipe 3 kimberlite, part of a 26 square kilometre licence, which also includes kimberlite dykes containing high grades of quality diamonds. Should the subsequent exploration results justify the development of a mine, Thunderball will also take the operator role under the joint venture. WAD will be carried for all expenditure until a mine is fully developed and production has commenced.