Gem International options property adjacent to Canaco’s Handeni

Vancouver – Gem International Resources (GI-V) has skyrocketed out of realtive obscurity with its announced acquisition of an 80% interest in a 227.2-sq-km land package that adjoins Canaco’s (CAN-V) Handeni property in Tanzania.

Gem jumped 24¢ or 66.7% on the news to close at 60¢ on 243,000 shares traded. The boost comes a day after Canaco itself saw a roughly 30% jump to $3.69 after releasing exploration results from its Handeni project as interest in the company’s property grows.

Gem International’s option agreement is with Eden Gold, which Gem quotes as saying about the option property: “A number of gold prospects are being exploited on a small scale by artisanal miners on the property.”

The property adjoins the western boundary of Canaco’s property, while Canaco has been concentrating exploration on the eastern portion of its property.

To earn its 80% interest Gem International has to pay US$2 million in cash, spend US$4 million in the property and issue 7.5 million shares over a 3-year period, while Eden keeps a 2% net smelter return royalty.

On the same day as the option release, Gem announced a private placement of up to 7 million units at 35¢ to raise $2.45 million. Each unit has one share and one 55¢ warrant, good for a year but with an acceleration clause.

Gem International first became active in Tanzania last September when it signed into option agreements to earn a 70% interest on the Maganzo and Kolandoto claims in the Shinyanga region of Tanzania. In March the company entered into an option agreement on the Shiyanka diamond property in the same region and again for a 70% interest.

The company had previously been exploring for diamonds on the Lac de Gras mineral claims in Canada’s Northwest Territories. Gem International has since let a number of claims lapse in the area and now controls 4 claims covering 10,330 hectares.

It was exactly a year ago to the announcement that the company consolidated its shares on a 10 for 1 basis and soon after changed its name from Consolidated Global Diamond. The company now has 18.7 million shares outstanding.