Archon Minerals to gain stake in Buffer zone claims in N.W.T.

Prospector Stewart Blusson is vending his 31.2% participating interest in the outlying Buffer zone portion of the Ekati diamond mine project to Archon Minerals (ACS-V).

Ekati, which will soon become Canada’s first diamond mine, is a joint venture involving BHP Diamonds, a subsidiary of Broken Hill Proprietary (BHP-N), which owns a 51% interest in the Core group of claims, and Dia Met Minerals (DMM-T), which owns 29%. The remainder is split equally between Blusson and Dia Met founder Charles Fipke.

The Core group of claims contains the Panda, Misery, Koala, Sable and Fox kimberlite pipes, which form the basis of the mine development plan.

Ownership of the Buffer claims, which lie outside the Core block, is shared 51% by BHP, 31.2% by Blusson, 10% by Fipke and 7.8% by Dia Met. Blusson is not vending any of his interest in the Ekati mine itself.

In exchange for his 31.2% interest in the Buffer zone, Blusson will receive free trading shares in the company, subject to a 1-year holding period. The number of shares issued to Blusson will depend on a valuation report currently being prepared. The last available data indicate that, a year ago, Archon had 7.2 million shares outstanding, with Blusson owning a 66.6% share.

The Ekati mine is in the Lac de Gras region of the Northwest Territories, about 300 km northeast of Yellowknife. Construction costs are estimated at US$700 million, and the mine is slated to enter production in the fourth quarter.

Since the initial discovery more than six years ago, 100 kimberlites have been found on the Ekati property. While there are no details available on the number that have been found in the outlying Buffer claims, the 1997 summer drilling program is known to have resulted in the discovery of 23 new kimberlite bodies, seven of which lie in the Buffer zone.