DIAMOND EXPLORATION STRATEGIES LTD. ANNOUNCES EXPLORATION ALLIANCE AGREEMENT WITH EHR RESOURCES LTD.
EHR enters into diamond exploration alliance agreement in Botswana
- Exploration alliance agreement with Diamond Exploration Strategies Ltd, an experienced privately-owned company with highly prospective diamond licenses in Botswana.
- Funding of US$1.5 million over three years to earn 50% ownership of all discoveries made, with US$0.3m in the first 12 months funded by existing cash reserves.
- Option to increase ownership to 70% of a designated project by sole funding a Scoping Study, and to 90% by sole funding a Feasibility Study.
- Continues disciplined approach to executing EHR’s diamond sector strategy and provides a turn-key entry into a highly prospective exploration region in Botswana, one of the world’s leading diamond jurisdictions.
EHR Resources Ltd (ASX: EHX; “EHR” or “the Company”) is pleased to announce that it has entered into an Exploration Alliance Agreement (“Alliance”) with Diamond Exploration Strategies Ltd (“DES”), a privately owned company focused on diamond exploration in Botswana. Under the terms of the Alliance, EHR will provide funding of US$1.5 million over three years to finance exploration activities, earning 50% ownership of any discoveries made. The Alliance is initially over five areas that have existing prospecting licenses, but extends to cover other prospective areas of Botswana that may be identified.
In announcing the agreement, EHR’s Managing Director, Mr Peter Ravenscroft, said: “We are very pleased to form this alliance with DES, who have an excellent team with a proven track record in diamond exploration and discovery in Botswana. The alliance provides EHR with a turn-key entry into one of the world’s leading diamond jurisdictions with an experienced local partner. EHR shareholders gain immediate exposure to any potential discoveries, and have a path forward to share in further development of any new diamond projects.
“Having a generative early stage exploration program in Botswana is a key component of our balanced portfolio of diamond investments, and follows our recent entry into more advanced exploration in Canada as we carefully execute our broader diamond sector strategy. Botswana is a low cost and stable mining jurisdiction in Africa, and government participation in projects has generally included full financial contribution. The DES Botswana Alliance is an exciting addition to our growing diamond project stable and will form an important part of our emerging project pipeline”, said Mr Ravenscroft.
DES’s Chief Executive Officer, Mr Barry Bayly, said ”We are very excited about this opportunity to advance our current exploration portfolio which includes eight drill-ready geophysical and indicator mineral anomalies and to further develop newly identified high-interest diamond targets with EHR, in one of the world’s top terrains for diamond exploration. EHR and DES are very well aligned in terms of strategy and operational competence and I look forward to a productive alliance.”
The Alliance Agreement
Using the well-proven project generator model, DES will perform all exploration activities using Alliance funding. If a promising discovery is made as a result of these activities and accepted by the joint technical committee as a designated project, the project will be initially owned 50% by EHR and 50% by DES, otherwise the project will remain owned by DES. EHR then has the option to sole fund a Scoping Study on a designated project to earn-in to a 70% ownership interest, with a further option to reach a 90% ownership interest by sole funding a Feasibility Study.
Alliance funding will be US$0.3 million in the first twelve months of the agreement, with subsequent annual funding of US$0.6 million for the succeeding two years. EHR will fund the first year from current cash resources and will fund subsequent years from future financing activities.
Diamond Exploration Strategies Ltd (DES) is a privately-owned diamond exploration and resource development company with its primary focus in Botswana. The principals of DES, Mr Barry Bayly and Mr Mike Shaw, have extensive experience in Botswana after many years in senior roles with De Beers and have built a substantial knowledge base including intimate understanding of certain opportunities being assessed. They are backed by a board of directors with wide experience in the minerals industry.
Through its 100% owned Botswana subsidiary, DiamExStrat Botswana (Pty) Ltd., DES has 2,053 km2 of highly prospective diamond licences in five project areas in Botswana and is continually assessing further opportunities.
More details about DES are available at www.diamondexplorationstrategies.com.
This announcement was authorised for release on the ASX by the Board of EHR Resources Ltd.
EHR Resources Ltd
Adrian Rauso / Steve Suleski
Caution regarding Forward Looking Information
This document contains forward looking statements concerning EHR Resources Limited. Forward looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements in this document are based on EHR’s beliefs, opinions and estimates of the Project as of the dates the forward looking statements are made, and no obligation is assumed to update forward looking statements if these beliefs, opinions or estimates should change or to reflect other future developments.