Under the LoI, the company can buy 45 claims covering 2,430 hectares in seven claim blocks in the Otish Mountains of Québec.

Durango Resources CEO Marcy Kiesman said: "This is a positive step forward which will advance Durango and align with the corporate milestones which our board has set out for 2015.

"The Lucky 7 Properties are located in a proven area of rich producing diamonds, the Otish Corridor, which is where Stornoway Diamonds flagship Renard Property resides (Québec’s first diamond mine scheduled to go into commercial production in 2017)."

The company is said to have focused on gold exploration, and plans to proceed with same while expanding into the diamond segment.

If a deal is reached, Durango will issue seven million common shares to third party vendors group.

The transaction will be subject to TSX Venture Exchange approval, and could include a finder’s fees as per the TSX Venture Policy.