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Diamond Exploration Watch: Canadian billionaire takes 19% stake in Canterra (V.CTM)

Peter Kennedy Peter Kennedy, Stockhouse
0 Comments| July 30, 2014

Investor interest in Canadian diamond exploration picked up this week amid reports that British Columbia billionaire Jimmy Pattison has taken an 19% stake in Canterra Minerals Corp. (TSX: V.CTM, Stock Forum), a Vancouver junior that is active in Canada’s Northwest Territories.

The move reunites Pattison -- who heads an $8 billion company with interests in everything from car dealerships to lumber and supermarkets --with Canterra President and CEO Randy Turner.

Pattison was also an investor in another Randy Turner company, Winspear Resources, which was acquired by De Beers in the fall of 2000.

Back in April, Canterra said it had staked 43 new mineral claims, covering 43,000 hectares in the southern portion of the NWT’s Slave Province, an area that hosts three of Canada’s four producing diamond mines, including:

  • Dominion Diamond Corp.’s (TSX: T.DDC, Stock Forum) Ekati diamond mine.
  • The Diavik Diamond Mine, a joint venture involving Dominion Diamond Corp. and Rio Tinto Plc (NYSE: RIO, Stock Forum).
  • De Beers Canada Inc.’s Snap Lake mine.

Canterra is renewing its exploration efforts in the region with the help of a “large proprietary dataset” accumulated over a period of 15 years, the company said recently.

“Analysis of this data, with new advances in techniques and technology has re-ignited our interest in diamond exploration and will be the company’s focus going forward,’’ he said.

Canterra shares rose 25% to 12.5 cents Wednesday, leaving a market cap of $5.2 million, based on 50 million shares outstanding. The 52-week range is 10 cents and 3.5 cents.

Click to enlarge

Canterra issued a press release Tuesday, saying that Pattison has acquired 14 million shares of Canterra, representing an 18.7% stake in the company. Pattison has the option to acquire an additional 3 million shares if all of the warrants are fully exercised, resulting in an ownership of 16.8% of the total issued and outstanding common shares.

Pattison’s interest in Canterra follows his decision to participate in a $2 million private placement financing comprised of 16.2 million units at $0.07 per unit, and 8.6 million common shares issued as “flow-through” shares at $0.10 per share.

Each unit consists of one common share and one-half of one non-transferable share purchase warrant.  Each full warrant entitles the holder to purchase one additional common share until July 29, 2016 at $0.10.
News that the private placement financing has closed comes just one day after Mountain Province Diamonds Inc. (TSX: T.MPV, Stock Forum) said it has lined up a banking syndicate to underwrite a US$370 million term loan to finance the company’s share of the Gahcho Kue diamond mine, which is also located in the South Slave region at Kennady Lake.

Mountain Province and partner De Beers Canada Inc. are on schedule for first production during the second half of 2016.

Two years ago, Mountain Province Diamonds Inc. transferred the adjacent Kennady North diamond property to Kennady Diamonds Inc. (TSX: V.KDI, Stock Forum), which is trading at $6 leaving a market cap of $137.4 million, based on 22.9 million shares outstanding. The 52-week range is $8.74 and $1.67.

Kennady North hosts four known kimberlites, the carrot shaped structures that sometimes contain diamonds. The company is currently focused on mini-bulk sample and delineation drilling at the Kelvin and Faraday kimberlites, as well as exploration drilling at the MZ and Doyle kimberlites and at least four new exploration targets.

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