Diamonds – Gumrock JV – Farm Kareepan
The Gumrock JV – Farm Kareepan Property covers 1,819 hectares and is located in the North West Province of South Africa approximately 200 kilometers north east of Kimberley.
Farm Kareepan Contractors Agreement
Gumrock, on behalf of the Joint Venture, has entered into its first Contractors Agreement on portions of Farm Kareepan 177, Farm Goegedacht 197, Farm Kameelpan 148, Farm Leeuwfontein 185 and Farm Kameelboom 150 (collectively the “Property”). The Contractors Agreement is initially for a six-month period during which time the Joint Venture will pay a 15% gross sales royalty to the landowner and any diamonds sold for over 2 million South African Rand will be subject to a 20% gross sales royalty.
The Joint Venture has commenced test pitting on the Property and to date over 60 test pits ranging from 1 to 5 meters in depth have been completed and mapped. It is anticipated that test pitting will continue for another 1 to 2 weeks and once an understanding is reached with the location of the favorable gravels, bulk sampling will commence. Any diamonds recovered during this period will be sold on open tender.
Gumrock Joint Venture
Southstone has entered into a Production – Exploitation Joint Venture Operating Agreement (the “Joint Venture”) with Gumrock Mining (Pty) Ltd (“Gumrock”). Gumrock has been successfully operating in the alluvial diamond mining business all over South Africa for over 26 years and adds another expert mining contractor to Southstone alluvial diamond operations.
The Joint Venture contemplates operations ranging from 7,000 to 40,000 tonnes per month, has a term of five (5) years commencing on 1 October 2020 to 30 September 2025 and will focus on extracting diamonds from any concessions or mining permits that may be agreed to by both parties within the Republic of South Africa. Southstone has purchased a 14-foot pan plant and conveyor to contribute to the Joint Venture, which remains the property of Southstone and Gumrock has provided a 20-ton excavator, front end loader, pumps and other required mining and support equipment.
The Joint Venture denotes a 50%-50% split of all operating costs and all profits or losses.