Irish prospector Karelian Diamonds is eyeing the prospect of developing its first commercial diamond mine in Finland after acquiring a mining permit from local player A&G Mining for €150,000.
Karelian — a sister company of Conroy Gold and Natural Resources — is solely-focused on the Finnish market, but its licences are mainly concentrated on the Russian border region.
The deal with A&G gives it rights to the Lahtojoki diamond project in the centre of the country.
The Irish firm will make an initial payment of €50,000 with the remaining €100,000 reliant on whether or not Karelian decides to progress the mine plan within the next two years.
A&G will also receive a royalty payment should said mine become commercial.
The financing of a new mine is likely to cost between €20m and €25m.
Karelian chairman Professor Richard Conroy said that early estimates suggest “quite a few relatively small, but jewellery quality diamonds” at the site, where a profitable small mine could be built relatively quickly thanks to the surrounding infrastructure.
He added that the company would likely take a final decision on the mine within the next six months.
“The acquisition of the Lahtojoki diamond pipe mining permit complements our existing licences and is a major step forward for our diamond programme in Finland,” he added.
Earlier this month, Karelian raised nearly €320,000 in a share placing in order to fund projects, including Lahtojoki, and general working capital needs.
Karelian’s share price was down marginally yesterday.
© Irish Examiner Ltd. All rights reserved