Mexivada Receives Signed MOU from Gbense Chiefdom for Diamond Mining at Kono, Sierra Leone

Mexivada Receives Signed MOU from Gbense Chiefdom for Diamond Mining at Kono, Sierra Leone

December 8, 2008 Filed Under: Diamond Mining  

Mexivada has executed a series of legal documents to facilitate start up of new artisanal diamond mining operations in Sierra Leone, Africa, through its subsidiary, Mexivada Gold and Diamond Mining Company (SL) Limited. MGD has received a signed Memorandum of Understanding dated November 14, 2008 from the Gbense Chiefdom of the Kono diamond mining district in Sierra Leone, Africa, to allow MGD to conduct artisanal alluvial mining of diamonds of an initial 1-acre site near Yaradu in the heart of Koidu mining area. Little mining has taken place previously at this site. A private American group mines the adjoining, downstream concession, which is reported to have yielded hundreds of diamonds along a short stretch of the drainage.

The agreement stipulates that Mexivada and the Gbense Chiefdom will share net profits from the venture on a basis of 70% to MGD and 30% to the Gbense Chiefdom. Mexivada works at Kono in concert with the people of the Chiefdoms and with its local partner Pink Diamond Exploration Company Ltd (”Pinks”). Mexivada and Pinks will share profits on the initial venture on a 60% (to MGD) and 40% (to Pinks), with both companies contributing materiel to the venture. Mexivada anticipates that this initial mining venture will cost approximately US$25,000 to conduct, before sale of any diamonds recovered. The project will be managed by Michael Manke, Mexivada’s chief consulting mining engineer, and local resident manager Momoh J. Samura.

Mexivada’s business plan model is to conduct low-cost, potentially high-yield mining operations in areas that have yielded large gem diamonds, such as the 968 carat “Star of Sierra Leone”. No ore reserves have been established in the proposed work areas, and thus no guarantee of success can be given by the participating companies nor by the Gbense Chiefdom. Vice President Sam Sumana previously managed diamond exploration and production operations in the region for the Gbense Chiefdom, and expressed optimism to Mexivada President Richard Redfern that it could be a good area in which to work.

Several fast-track mining opportunities for gold and diamonds are now being evaluated by the Company, in accord with Mexivada’s business mandate to target generation of early stage cash flow to support its exploration programs. MGD will focus on the identification and development of gold placer deposits and alluvial- and kimberlite dike-hosted diamond deposits. Sierra Leone has produced more than 100 million carats of alluvial diamonds.

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