RJK Explorations Ltd. [RJX.A-TSXV, RJKAF-OTC] is stepping up its search for the source of the historic 800 Carat Nipissing Diamond by increasing its land position around its Bishop diamond exploration claims near Cobalt, Ontario.
Back in March 2019, RJK said it had struck a deal with prospector Anthony Bishop to acquire the Bishop Nipissing diamond properties, which cover 2,090 hectares and encompass at least 18 potential kimberlite pipes.
Bishop (the prospector) had previously spent over four years looking for the source of the Nipissing Yellow Diamond that was found sometime during the development of the silver mines at Cobalt between 1903 and 1905.
Over the past nine months, RJK has conducted research and compiled data on potential kimberlite targets south of Cobalt, RJK said in a news release on November 11, 2019. The results of this work directed RJK to approach key land claim holders, which led to option agreements with prospector Alan Kon, First Cobalt Corp (FCC-TSXV, FTSSF-OTCQB, FCC-ASX) and Power Group Projects Corp., while securing the Kon Kimberlite showing.
“The Kon Kimberlite is the only known kimberlite south of Cobalt between the major structural Lake Tamiskaming and Montreal River faults,’’ the company said. “It has never been drilled properly or properly sampled to determine its diamond potential,” it said.
RJK went on to say that other potential targets on the Kon claims will be drill tested once permitting is obtained. Within the First Cobalt optioned claims lies the Peddie Kimberlite Pipe. Additionally, RJK has staked 177 new claims blocks, comprising some 4,000 hectares in the area.
On Tuesday, RJK shares rallied on the news, rising 12.5% or $0.015 to 13.5 cents. The shares are currently trading in a 52-week range of $0.035 and 14.5 cents.
Under the Kon Kimberlite Property option, RJK can earn a 100% interest by making a $30,000 payment on signing and issuing 250,000 common shares to the property vendor Alan Kon. It would then be required to make a first-year anniversary payment of $50,000 and issue another 250,000 common shares. On the second anniversary, RJK must pay another $100,000 and issue 300,000 Class common shares. Under the deal, a 2% gross overriding royalty on diamonds production has been granted to the vendor except for one legacy claim unit where the royalty is reduced to 1%.
RJK can repurchase the royalty at a rate of $250,000 per 0.5% up to 2%.
Under the agreement with First Cobalt, RJK has three years to sample and then drill one diamond drill hole on selected mineral claims held by First Cobalt to earn a 50% stake in the selected target. In the event that RJK elects to continue exploration on any target subsequent to the first drill hole being completed, RJK will pay $35,000 and spend $100,000 to earn a 100% subject to a 2% gross overriding royalty, of which 100% can be purchased by RJK for $1.5 million.
Under a three-year agreement with Power Group Projects, RJK can identify and drill test with one diamond drill hole any identified potential kimberlite targets within the Power Group Projects land position.
Should RJK decide to continue its initial Phase One on any and each identified target, then RJK and Power would enter into a participating joint venture agreement, under which RJK can earn a 60% interest and Power would have 40%, with RJK acting as operator.
The Bishop claims are situated in a well-established kimberlite field within the Lake Timiskaming Structural Zone. All are on Crown Land, are mostly on high, dry, well-drained topography. Drivable logging roads are within one kilometre or less, affording easy access to the property. Close by are three hydro-electric facilities, a large electric wind farm and a gas pipeline.
The Trans-Canada Hwy. is also very close, as is the train station at Cobalt, an area with a well-established historical mining history.