Diadem buys Mexican properties

Pending completion of due diligence, Diadem Resources (DIR-M) will acquire a 98% interest in a 70-claim, 57,000-ha portfolio of properties in Mexico’s Zacatecas state.

The Morrow, Bilbao and Zacatecas claims cover three base metal-silver prospects.

To acquire the land package, Diadem will buy all of the shares in the companies that hold the properties. The companies will have cash assets of about $500,000 at the closing of the deal in which Diadem will issue 5 million shares and 2.5 million 2-year warrants exercisable at 25 cents each.

One of the vendors, Portree, would retain either a 6.25% carried interest or a 2.5% net profits interest in the Morro project and be granted a 10% net profits interest in each of the other properties.

Portree would also receive certain cash payments payable by Cyprus Amax Minerals (CYM-N), which can earn a 75% interest in the 34 El Morro claims by spending a total of US$3.9 million in cash payments and exploration expenditures over five years. Once Cyprus earns its 75% interest, Diadem would be carried for another US$10 million, following which Diadem could choose a 25% working interest or a 10% net profits interest royalty. Portree would hold 25% of Diadem’s interest.