Diamond fever has struck a dormant TSE-listed penny mining stock with a vengeance. United Reef Petroleums (TSE), which a few weeks ago sold at 2 cents a share, has soared to 42 cents on heavy volume, frequently surpassing a million shares daily.
And it is only part of an unusual comeback story unravelled at a well-attended and well-presented “show and tell” in Toronto. A substantial vendor interest in Reef’s promising African diamond play is retained by Ateba Mines, which held the property for four years. Ateba is a penny mining stock currently under a cease-trading order which is likely soon to be lifted by the TSE.
As reported (T.N.M., Aug. 31/92), Reef acquired an option on a 40% equity interest in a large diamond property owned by Howe Centrafique Ltd. in the Central African Republic, a country with an annual alluvial production of more than 500,000 carats of diamonds.
The property embraces a lengthy ribbon of diamondiferous gravels from which native “diggers” have been recovering high-quality gemstones for years. Mousseau Tremblay, a respected Canadian geologist with extensive international diamond experience, will supervise Reef’s exploration program in conjunction with A.C.A. Howe International.
Tremblay carried out a reconnaissance survey of this ground for an exploration arm of the French government in the early 1980s. “The grade is there and the property could be brought into production cheaply,” Tremblay told the gathering.
It is hoped that a commercial production decision can be made early in 1994, with an initial output of 100,000 carats a year at a total capital cost of $6-10 million, the meeting was told. Operating costs are estimated at only $20-25 per cubic metre.
Ateba will soon be debt-free and will not be reorganized, President A.C.A. Howe told The Northern Miner. It will retain a 2.5% royalty interest on the property, rising to 3% if production reaches 500,000 carats. And it will receive $750,000 cash on commencement of any production.
Reef is controlled by Canhorn Mining (TSE); both companies are headed by New York financier H. Becker-Fluegel.
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