TORONTO TAHERA CORP. and LAZARE KAPLAN INTERNATIONAL have proposed an off-take agreement covering diamonds from the Jericho mine. Under terms of the agreement, Lazare Kaplan would purchase 100% of the output, unless Tahera elects to market up to 25% of the diamonds independently.
When the agreement is finalized, Lazare Kaplan will receive warrants allowing it to purchase US$4 million worth of Tahera shares for Cdn$0.22 each. Exercising the warrants would give Lazare Kaplan an approximate 10% of Tahera's outstanding shares. The agreement between the two companies is subject to Tahera securing the balance of funding for development and operation of the mine. Tahera will retain the right to convert the off-take agreement to a rough diamond marketing agreement with Lazare Kaplan. Also, Tahera will have the right to participate in a 50/50 joint venture with Lazare Kaplan to polish Jericho diamonds.
The signing of a marketing agreement is a major milestone for Tahera as it prepares Nunavut's first diamond mine for production. The environmental impact statement was completed in January 2003, and the regulatory approval process should be complete later this year. The feasibility study supports producing 3 million carats over eight years. It would cost about $44.5 million to get an open pit up and running, and a further $10.4 million would be needed for underground and sustaining costs.
Details of the Jericho development and Tahera's other joint ventures can be found at www.tahera.com.