DIAMOND PAGE — Rio looks to French Guiana for diamonds

London-based Rio Tinto (RTP-N) has entered into an agreement with Guyanor Ressources (GRL.B-T) to explore for diamonds in central French Guiana.

The major can earn up to a 70% interest in the Dachine diamond property by spending up to US$17 million or making a production decision, which ever comes first, over 10 years. It is required to spend US$750,000 on exploration in the first 12 months of the agreement, though Guyanor will act as operator of the joint venture for the year. At any time after this point, Rio can choose to become operator. Rio also agreed to spend up to US$3.7 million after five years.

Guyanor is not required to fund its portion of the joint venture until after Rio Tinto has earned its 70% interest.

Dachine is an ultramafic body measuring 5 km long and up to 1 km wide. BHP Minerals optioned the property in 1995, whereupon it began producing industrial-grade diamonds.

For the current year, Rio and Guyanor intend to evaluate known occurrences, as well as look for new targets. Recently, Guyanor located three additional diamondiferous bodies elsewhere in French Guiana.

Guyanor is a 71%-owned subsidiary of Golden Star Resources (GSR-X). Golden Star recently agreed to buy a 70% interest in the Bogoso gold mine in Ghana from Billiton. This transaction is expected to close in August.