Sanatana Diamonds secures cash for Mackenzie project

Sanatana Diamonds (SAN-L) has more money to put into its exploration programs at its Mackenzie diamond project in the Northwest Territories.

Two financial arrangements were put into place to raise $7 million in flow-through financing. Canaccord Capital will act as Sanatana’s agent for the placement, which will see 4 million flow-through common shares at an issue price of $1.75 per share.

In London on Friday, Vancouver-based Sanatana’s shares were trading at $1.86 – up 3.43% or 62.

In a press release issued on Friday, Jan. 27, the company says proceeds of the financing will be used, in part, to fund a drill program slated to begin in the spring of 2006. The program will test a minimum of 12 drill-ready kimberlite targets identified through drill sampling and geophysical activities completed during the 2004 and 2005 exploration seasons.

Sanatana also plans a Summer 2006 exploration program consisting of drilling additional potential kimberlite targets, till sampling, geophysics and prospecting.

As part of their continuing collaboration at the Mackenzie diamond project, Kennecott Exploration will provide the necessary letters of credit to cover annual bonding requirements for exploration activities.

Kennecott must pay a total of $7.5 million to acquire a 15% interest in the Mackenzie project and can acquire a 49% interest by taking each individual project to completed feasibility study within 4 years. It can earn a further 11% by taking the project to a completed bankable feasibility study.

Sanatana will continue to manage and operate the exploration program.