Australian Kimberley Diamonds NL (AKD) and Zephyr Minerals NL
said CRA Ltd will farm-in to their equally owned offshore
diamond tenements in the Cambridge Gulf and King George River
areas of Western Australia.They said CRA, by farming in -
exploiting the tenement in exchange for an interest - could earn
up to 65 percent of the project by defining a minimum resource
of one million carats in a staged exploration and development
program . The two companies said they could retain up to 35
percent, or elect to dilute to a 20 percent free carried
interest, until a decision to mine is made, by not contributing
to costs, once a one million carat indicated resource is
defined.AKD and Zephyr said that throughout the earning stages,
CRA, as operator, would fund at least A$1 million of exploration
and development to keep the tenements in good standing.AKD,
currently the operator, will make unspecified cash payments to
Zephyr during CRA's farm-in stages, in lieu of AKD's current
obligations to bring the project to a pre-development stage. CRA
and the other two companies will jointly contribute to mine
development costs on a pro-rata basis after a decision to mine is
made.
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