Lithoquest Diamonds Inc (CVE:LDI), the exploration group, revealed it is set to triple its footprint in a prospective diamond district in Western Australia as it struck a deal to buy six new licences.
The licences are contiguous to the group's 100%-owned North Kimberley diamond project and it means the company would own more than 5,000 sq km of contiguous land in the North Kimberley region.
READ: Lithoquest Diamonds looking to shine in its quest to find a diamond field in Western Australia
"Our recent kimberlite discoveries in the North Kimberley have prompted the company to increase its land position by more than three times in this prospective diamond district," Bruce Counts, Lithoquest President and CEO, told investors in a statement.
"The technical team's approach to exploration has resulted in the first kimberlite discoveries in the region in more than 20 years. Our objective is to locate economic diamond deposits by applying these same new ideas and methodologies to the existing kimberlite fields that are present throughout the project area."
Last year, the firm discovered kimberlite on its first two drill programs, confirming the project's potential and this month (October), the group began a program to test three areas of interest. On October 21, the company told investors that two new kimberlites had been uncovered.
Known kimberlite fields in the district include the Ashmore, Seppelt and Pteropus, as well as the newly discovered ones by Lithoquest.
Notably, the new licences include the area that surround the Seppelt kimberlites. The Seppelt field was discovered in the early 1990's and comprises three bodies, which includes the highly diamondiferous Seppelt-02 kimberlite.
Largest kimberlites to date
The Pteropus kimberlites also lie within the new ground acquired and are the largest kimberlites discovered to date in the North Kimberley, noted Lithoquest.
To buy the new licences, Lithoquest will issue over 10 million shares and the vendors will be entitled to a 2% net smelter royalty (NSR) on the property and will be reimbursed for certain expenses incurred in connection with the acquisition of the licenses, up to a maximum of C$300,000.
Lithoquest can buy back 1% of the NSR for C$1 million. Closing of the acquisition is conditional on, among other things, Lithoquest completing a private placement to raise not less than $1 million gross.
Shares were unchanged at C$0.080.
Contact the author at giles@proactiveinvestors.com