by Greg Klein | January 25, 2016
Arctic Star Exploration’s (TSXV:ADD) Redemption diamond project stands to gain from a royalty sale by North Arrow Minerals TSXV:NAR. With an option to earn 55% of the project, North Arrow has signed a deal with Umgeni Holdings International to sell part of its share of royalties on the property for $800,000. The money would help fund drill programs at North Arrow’s Pikoo diamond project in Saskatchewan as well as the Redemption project in the Northwest Territories’ diamondiferous Lac de Gras region.
Pikoo has drilling scheduled to begin in mid-February, with Redemption following in about a month.
This agreement will allow the team to immediately move ahead with exploration drilling programs at the Redemption diamond property without impacting Arctic Star’s treasury at all.—Patrick Power, president/CEO of Arctic Star Exploration
North Arrow’s Redemption option requires the company to fund $800,000 in exploration by August. The full 55% calls for North Arrow to spend $5 million by July 2017.
Subject to approvals, the $800,000 sale gives Umgeni a 1.5% gross overriding royalty on diamonds and a 1.5% NSR on base and precious metals for three claims held 100% by North Arrow, as well as a 1.25% GOR and 1.25% NSR on 12 claims and five mining leases now under option from Arctic Star. North Arrow holds sole responsibility for paying the royalties.
Umgeni is a private company in which North Arrow director Christopher Jennings is a beneficiary of the sole shareholder. The agreement would also give Umgeni the right to acquire North Arrow’s Redemption interest. But should the option terminate, Umgeni would lose any right to royalties on claims in which North Arrow no longer held an interest.
“This agreement will allow the team to immediately move ahead with exploration drilling programs at the Redemption diamond property without impacting Arctic Star’s treasury at all,” commented president/CEO Patrick Power.
Previous work has found kimberlite indicator mineral trains including diamonds. Last summer North Arrow, which funds all work on Redemption, reported ground gravity surveys over 25 targets. The property also benefits from 52 overburden RC drill holes by the NWT Geoscience Office in and around Redemption to build a database on indicator minerals and till geochemistry.
T-Rex, another Arctic Star property in Lac de Gras, has 12 known kimberlites. Two have shown diamonds and two others feature kimberlite indicator minerals down-ice. The company also holds the Stein diamond project in Nunavut.