A lengthy legal battle is shaping up at the Fort la Corne joint venture in Saskatchewan, with
In early November, Shore inked a deal locking up voting support from Cameco and UEM with regard to operating decisions at the joint venture for up to seven years. That support carried a $10-million price tag.
The diamond monolith’s suit seeks to have the voting agreement set aside. De Beers is also looking for a restraining order preventing the joint venture’s management committee — now effectively controlled by Shore — from approving the 2006 exploration program and budget.
The $26-million 2005 budget was the largest yet for the project.
“Shore believes the action to be entirely without merit and intends to vigorously defend the claims made by De Beers,” the company said in a press release.
Shore inherited its 42.245% stake in the Fort la Corne (FalC) diamond project via its merger with Kensington Resources in October. Cameco holds a 5.51% stake in the project, with UEM at 10%; De Beers Canada owns the remaining 42.245% interest. UEM is jointly owned by Cameco and Cogema, a subsidiary of French energy giant
In November, gold giant
The 225-sq.-km FalC project is home to 63 known kimberlite bodies, with the largest measuring up to 200 hectares — on scale with some of the biggest in the world. The joint-venture partners are in the midst of a 3-year exploration and evaluation program designed to advance the project to a decision regarding prefeasibility in 2008, with the ultimate goal of outlining a resource of 70-100 million carats of diamonds.
On a brighter note, the latest 1,538.93-tonne batch of kimberlite from Shore’s nearby Star kimberlite yielded 312 carats worth of diamond, including a 19.25-carat grey stone. The haul also includes stones weighing in at 17.72 (white), 8.95 (off-white), and 5.7 (white) carats, respectively.
The sample is part of a 15,000-tonne, bulk-sampling program aimed at providing data for a prefeasibility study that will include a National Instrument 43-101-compliant reserve estimate. The study will also examine the viability of a potential underground mining operation, which typically requires a diamond valuation parcel of 4,000 to 6,000 carats.
In all, the latest batch included 1,419 commercial-sized diamonds (stones exceeding a 1.18-mm square-mesh screen), with 54 of those tipping the scales at more than a carat. More than half the stones are classified as white, with another 15% being off-white.
So far, Shore has recovered 2,012.51 carats from 11,289.16 tonnes of the Star bulk sample. Combined with diamonds recovered from an initial bulk sample, Shore has now recovered more than 6,000 carats. Valuations of newly recovered diamonds are in progress, and results will be incorporated into the ongoing $44-million prefeasibility study.
Shares in Saskatoon, Sask.-based Shore were off as much as 96, or 12.5%, at $6.75 in early trading in Toronto, after news of De Beers’ lawsuit.
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