DIAMOND PAGE — Dia Met and BHP resolve claim dispute

A claim dispute regarding the Northwest Territories Diamonds project has been resolved.

Australian mining giant Broken Hill Proprietary (BHP) has signed two separate agreements with its partners in the project — Dia Met Minerals (DMM-T) and geologists Charles (Chuck) Fipke and Stewart Blusson.

The new agreements concern the partners’ interests in the Core zone and Buffer zone claims. BHP will now control 51% of both groups of claims. Dia Met will hold a 29% interest in the Core zone, while Fipke and Blusson will each control 10%. As for the Buffer zone, Blusson will control 31.2%, Fipke 10% and Dia Met 7.8%.

Blusson, a former parter of Fipke (founder of Dia Met), had claimed an increased participating interest in the Buffer zone. The settlement means Blusson’s threatened court action over the dispute will not proceed.

As originally intended, BHP Diamonds will finance the first US$500 million in development costs. Under the new agreement, it will also guarantee the rest of the cash required for development, “subject to reaching satisfactory resolution of marketing arrangements for the project.”

At the same time, Blusson has agreed to transfer to Dia Met a 17.3% participating interest in the Misery pipe, which is part of the Buffer zone.

In return, Dia Met will pay Blusson a royalty for 17.3% of production from the pipe, beginning in 2005.

Over its mine life, the project is expected to process 133 million tonnes from five diamond-bearing pipes. Both open-pit and underground mining will be employed.

In related news, Dia Met has received a letter from a lawyer representing 13 shareholders who maintain that Fipke and Blusson should not have received their 10% participating interest in the Core zone claims optioned to BHP in August 1991 and that they should return the interest to Dia Met.

The shareholders also charge that Blusson breached fiduciary duties by failing to acquire additional mineral claims for Dia Met’s benefit.

Dia Met says it is reviewing the letter.