August 18th, 2005
River Diamonds said on Thursday it had signed an option agreement with a fully-owned subsidiary of Rio Tinto to explore and develop two large prospective areas in Brazil.
Under the terms of the agreement, Rio Tinto Desenvolvimentos Minerais (RTDM) have the option to acquire up to a 60% stake in the properties by spending a minimum of US$10 million within a four year time period.
RTDM have the option to increase their stake to 80% in each of the properties, Paranatinga and Alto Paraguai, after completing a feasibility study.
As part of the agreement, RTDM will provide geophysical data, drilling results, sampling results, and reports on the properties carried out to date.
River Diamonds will pay Rio Tinto US$150,000 over a period of a year and a quarter for the data. Further to examining and reinterpreting this information River Diamonds will spend a minimum of US$1 million on an exploration programme of the areas.
River Diamonds said it had the exclusive right to market diamond production from any kimberlite or alluvial diamond deposits developed for its own account in the areas mentioned.
River Diamonds also has diamond exploration projects in Sierra Leone.