VANCOUVER, Oct. 16, 2014 /CNW/ - Prima Diamond
Corp. (TSX.V:PMD) ("Prima" or the "Company") announces that it has
entered into a property option agreement (the "Agreement") dated
October 14, 2014 to acquire the Orion Diamond Properties located
in the Jamesie County of east-central Quebec from Fiducie Ananke, a Quebec entity, whereby Prima can acquire
an undivided 100% interest in and to 45 mineral claims covering
more than 2,275 ha (5,621 acres) in 7 separate claim blocks.
Prospective kimberlite targets have been identified on each of
the 7 claim blocks of the Orion Diamond Properties through a recent
regional airborne magnetic survey. To view the Orion Property Map,
please click: http://www.primadiamondcorp.com/orion
"Prima is committed to acquiring diamond properties in
successful and proven diamond regions within Canada," commented Robert Bick, Prima's CEO. "So when the Orion
Diamond Properties were offered to us, we jumped at the opportunity
specifically because these properties are in the same diamond-rich
producing zone which hosts Renard, Quebec's new diamond mine. We are also very
encouraged by the identification of prospective kimberlite targets
on each of the claim blocks."
Renard Diamond Project
The Renard Diamond Project
contains Probable Mineral Reserves of 17.9 million carats and is
scheduled to begin diamond production in 2016 (January 28, 2013, Stornoway news release) with an 11 years
reserve-based mine life with diamond production averaging 1.6
million carats/annum life of mine (NI 43-101 Feasibility Study,
March 27, 2013).
Renard has received significant support from the Quebec government and Quebec investors. The Quebec government through Resources
Quebec, a subsidiary of provincial agency Investissement Québec,
provided $220 million for the Renard
project and Caisse de dépôt et placement du Québec provided
$105 million. In addition the
Quebec government is building road
infrastructure to the mine site.
Terms of the Agreement
In consideration of the grant
of the option, Prima has agreed to issue to Fiducie Ananke an
aggregate of 12,000,000 common shares of Prima upon TSX Venture
Exchange (the "Exchange") acceptance. Fiducie Ananke will also
retain a 2% Net Sales Royalty ("Royalty") on all diamond
production. Prima shall be entitled at any time to purchase 1% the
Royalty for $500,000 and the
remaining 1% for $1,000,000. The
Agreement is subject to final acceptance of the Exchange.
Closing of the agreement is contingent upon Secutor Capital
Management Corporation raising a minimum of $2,000,000 for exploration of Prima's
properties and for working capital.
Non-Brokered Private Placement
Prima has arranged a
non-brokered private placement financing of up to 7,500,000 Units
("Units") of the Company at a price of $0.10 per Unit with a minimum of 5,000,000 Units
for gross proceeds of up to $750,000.
Each Unit will consist of one common share in the capital of the
Company and one-half of one common purchase share warrant (each
full warrant, a "Warrant"). Each whole Warrant will be exercisable
into one common share at $0.15 for a
period of 24 months from closing.
The non-brokered private placement financing also includes up to
14,583,333 Flow Through Units ("FT Units") of the Company at a
price of $0.12 per FT Unit for
maximum gross proceeds of $1,750,000. Each FT Unit will consist of
one common share issued on a flow-through basis within the meaning
of the Income Tax Act (Canada) and one non flow-through Warrant
exercisable at $0.15 into one common
share for a period of 24 months from closing.
Proceeds of the private placements will be used to conduct
exploration on the Company's Orion Diamond Properties, Munn Lake
Diamond Property, Godspeed Lake Diamond Property, Liard Fluorspar
Property and for general working capital.
This private placement replaces the $1,000,000 non brokered private placement
announced by the Company on August 5,
2014, which will not proceed.
Finder's fees may be payable by the Company on a portion of the
offering in accordance with the Exchange policies and
guidelines.
All of the securities issued under this offering will be subject
to a hold period expiring four months from closing.
About Prima
Prima is focused on diamond exploration in
two of Canada's highly prospective
diamond areas - the Slave Craton in the Northwest Territories and in the Otish
Corridor in Quebec. The Slave
Craton is host to the Daivik, Ekati, and Snap Lake diamond mines
and Gahcho Kué, projected to commence diamond production in 2016.
The Orion Diamond Properties are in the Otish Corridor which hosts
the Renard Diamond Project with Probable Mineral Reserves of 17.9
million carats and scheduled to begin diamond production in
2016.
ON BEHALF OF THE BOARD
PRIMA DIAMOND CORP.
"Robert Bick"
Robert
Bick
President and CEO
Tel: 604.681.1568
rbick@primadiamondcorp.com
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Disclaimer for Forward-Looking Statements
Certain statements in this release are forward-looking
statements, which reflect the expectations of management regarding
the matters contemplated herein. Forward-looking statements consist
of statements that are not purely historical, including any
statements regarding beliefs, plans, expectations or intentions
regarding the future. Forward-looking information in this press
release includes, but is not limited to, statements regarding the
Company's intention to purchase the Orion Diamond Property, to
complete the non-brokered private placement financings, the
proposed use of proceeds, and the proposed exploration targets. A
number of risks and uncertainties could cause our actual results to
differ materially from those expressed or implied by the
forward-looking statements, including the inability to obtain
Exchange approval for the purchase of assets and the private
placements, that our proposed financings will complete, and that we
may not use the proceeds as expected. Commercial discoveries on
properties nearby are not necessarily an indication of commercial
mineral resources being on our property. These forward-looking
statements are made as of the date of this news release and, except
as required by law, the Company assumes no obligation to update
these forward-looking statements.
SOURCE Prima Diamond Corporation