Diamond Rose NL, a diamond explorer chaired by the sister of mining magnate Joseph Gutnick, said it agreed to buy the Guanaco copper-gold project and associated assets in
Sydney-based Diamond Rose said it will pay an advance royalty of $1 million to the Chilean state mining company Empresa Nacional de Mineria by March 15 and will pay ongoing royalties to Kinross and Empresa Nacional amounting to $6.5 million in total. It will also pay Kinross a so-called net profit interest, the company said in a statement filed with the Australian Stock Exchange.
Diamond Rose said it budgeted about Q$2 million ($1.1 million) to convert known resources at Guanaco to reserves to start mining. First gold is scheduled in December at an initial rate of between 50,000 ounces and 100,000 ounces a year and an average cash cost of production of less that $200 an ounce. The Guanaco gold resource currently amounts to more than 1.5 million ounces.
The company proposes to raise about A$4 million through sale of convertible notes and shares, underwritten by California-based PrimeGlobal LLC. PrimeGlobal also agreed to facilitate debt financing of the future development of the project of as much as $25 million, Diamond Rose said.
Shares in Diamond Rose, which last traded at 6.2 cents on Dec. 23 before being placed on a trading halt pending announcement of the Chilean investment, will resume trading on Thursday, the company said.
