DIAMOND PAGE — Archangel dispute goes to arbitration panel

Another mining venture in the former Soviet Union has found its way to international arbitration proceedings.

Archangel Diamond (AAD-V) filed a request with a Swedish arbitration institute in a dispute related to the Verkhotina mining and exploration licence in northwestern Russia.

The Denver-based company is seeking the immediate transfer of the licence from its Russian joint-venture partner, Arkhangelskgeoldobycha, to Almazny Bereg (AB), a Russian joint-stock company. Archangel Diamond owns a 40% interest in AB, which conducts exploration in the licence area.

Timothy Haddon, president of Archangel Diamond, says the company has complied with all pre-conditions of the transfer under the terms of the agreement with its Russian partner. He notes, however, that some shareholders of Arkhangelskgeoldobycha “appear to be resisting the license transfer,” leaving the company with no choice but to seek arbitration.

“We are hopeful these issues in dispute will be resolved prior to a formal arbitration hearing,” he adds, “but this is a necessary step to protect our shareholders’ assets and interests.” The licence area contains the Grib pipe, which is reported to contain a resource of 73 million tons of kimberlite. Within this resource are an estimated 51 million carats of diamonds at an average grade of 70 carats per ton, valued at US$72 per carat.