BHP World Exploration, a division of Australian-based Broken Hill Proprietary (BHP-N), has teamed up with Caledonia Mining (CAL-T) in southwestern Zambia. Their mission? To explore Caledonia’s wholly owned Mulonga Plains diamond property in the Okayango basin.
In recent months, BHP and Caledonia have conducted reconnaissance sampling in an effort to determine the extent to which the Angolan craton underlies the property. The work, funded by BHP, consisted of regional-scale stream- and sediment-sampling for diamond-indicator minerals.
BHP can earn a 60% interest in the property by spending $3 million by Feb.
1, 2001, after which it can boost its stake to 75% by funding and preparing a feasibility study. The major will also act as operator.
Following a decision to develop a mine, Caledonia will have three choices: retain its 25% participating interest by funding 25% of the development costs; retain a 20% interest by funding 5% of the development; or retain a 4% net smelter return royalty with no funding requirements.
BHP is also also exploring Caledonia’s Dunvegan diamond project in the Northwest Territories.
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