The 45 claims, totaling approximately 2,275 hectares, are located in the Jamésie County Municipality, close to road and power lines.
Quentin Yarie, President & CEO, commented: "The LG Diamonds Project represents a great new opportunity for Honey Badger to diversify its portfolio. There are many success stories when it comes to Diamond exploration in Northern Québec and we see great potential here. The LG Diamonds project is in the same diamond-rich producing zone which hosts Renard, Québec’s new diamond mine.
"We are also very encouraged by the identification of prospective kimberlite targets on each of the claim blocks. The 7 claim blocks appear to be centered on circular magnetic anomalies that are typical of those associated with kimberlite pipes. Furthermore, kimberlite indicators have been found in lake sediments near these magnetic anomalies. Our team is excited to work on this property and will be undertaking shortly an aggressive campaign to model all historic geophysical data, complete a detailed magnetic survey of identified targets, prioritize targets, and conduct a drill program."
The Renard Diamond Project contains Probable Mineral Reserves of 17.9 million carats and is scheduled to begin diamond production in 2016 (January 28, 2013, Stornoway news release) with an 11 years reserve-based mine life with diamond production averaging 1.6 million carats/annum life of mine (NI 43-101 Feasibility Study, March 27, 2013).
Renard has received significant support from the Québec government and Québec investors. The Québec government through Resources Québec, a subsidiary of provincial agency Investissement Québec, provided $220 million for the Renard project and Caisse de dépôt et placement du Québec provided $105 million. In addition the Québec government is building road infrastructure to the mine site.
The consideration for the acquisition is the issuance of 10,000,000 shares of the Company and the grant of a 2% net sales returns ("NSR") royalty to the property vendor, 9019-5504 Quebec Inc. One half, or 1%, of the NSR may be bought back for $1,000,000 and the remaining 1% for $2,000,000. The vendor is at arm’s length to the Company. Closing is subject to TSX Venture Exchange approval and certain other customary closing conditions.
