Citigate expands operations into Guinea and Liberia
Citigate Commodities Trading Company has strategically teamed up with Stellar Diamonds Plc to execute new diamond mining projects in Guinea and to operate some exploration licences in Western Liberia.
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This timely joint venture between the two companies represents a significant development in the region’s mining industry. However, the joint venture initiative remains conditional until Citigate concludes the necessary due diligence.
The joint venture relationship is to help the two companies to effectively execute the Baoulé kimberlite project (“Baoulé”) in Guinea which has a resource target of approximately three million carats. The joint venture also relates to two new exploration licences in western Liberia (“Liberia Licences”). The licences have recently been awarded to Stellar Diamonds. Upon completion of the due process by Citigate, the two parties will then enter into definitive joint venture agreements (“JVA”) for each of the listed projects.
Citigate Commodities Trading Limited is a Dubai-based international group led by entrepreneur and founder Tohib Iyiola, a British-born Nigerian. The group has exploration assets in Sierra Leone, currently coordinated by SRK Consulting, and also specialises in the supply of raw commodities, in particular gold and diamonds, to manufacturing and retail groups. Citigate is always actively looking to expand its portfolio of projects and secure primary sources of commodities around sub-Saharan Africa.
Stellar Diamonds Plc, on the other hand, is the London listed (AIM: STEL) diamond development company that is focused on West Africa. The company has recently been awarded two new exploration licences in western Liberia. Stellar is an AIM quoted (AIM: STEL) West African-focused diamond company with projects at the trial mining and mine development stages in Guinea and Sierra Leone. The Chief Executive of Stellar, Karl Smithson, is a qualified geologist and Fellow of the Institute of Materials, Metals and Mining, with 27 years’ experience.
Upon completion and when fully operational, the joint venture will ensure that the Baoulé operation, which is presently estimated to have about three million carat, will target a massive production of up to five million carats of diamonds. After signing the joint venture deal, Citigate Commodities Trading Company will own up to 75 per cent equity of the Baoulé operation and 85 per cent of the joint Liberian licences. These equities will be earned simultaneously in three instalments starting with the initial 25 per cent.
The Liberia Joint Venture operation has a land mass of 670 square kilometres. It is very close to Sierra Leone’s border with Liberia. The place is famous for the rare fancy coloured diamonds. The two new exploration licences recently awarded to Stellar cover areas previously explored by Stellar in 2006/7 which returned positive results. This particular joint venture falls under Safa Afrique portfolio. What this means is that Safa Afrique, which is a Citigate’s Sierra Leone outfit focused on diamond exploration and development, will operate the joint venture with Stellar Diamonds.
“The terms of the joint ventures are highly attractive to Stellar in that we have essentially secured a free carried interest at both Baoulé and our new Liberian licences. Importantly, we will receive a proportion of revenues from ongoing trial mining at Baoulé at zero cost and have an upfront payment for managing the projects during the first phase of work. These joint ventures allow the key management of Stellar to focus efforts on the development of our high-grade Tongo project in Sierra Leone as we progress towards the mining phase, while retaining equity positions in both the Baoulé and Liberia projects,” Karl Smithson said.
Smithson revealed that Stellar was awarded two licences in late February 2016, covering a total area of 670.54 square kilometres in the west of Liberia, around the key diamond area of Kumgbo towards the border with Sierra Leone. Stellar had previously conducted reconnaissance stream sampling in the region in 2006/7 which returned positive results with some samples yielding abundant kimberlitic ilmenite, suggesting proximal kimberlite sources. Stellar currently holds a 90 per cent interest in the licences with its local partner holding the remaining 10 per cent.