The old swimming adage “safety in numbers” certainly applies to junior mining companies on the make. In mid-October, as more excitement gathered within the gold field, a Calgary-based company looked to South America for allies and rich, new territory – not only in the gold sector, but diamonds as well.
The day after the Thanksgiving weekend, Sola Resource Corp. (TSX-Venture:SL) announced it had completed a non-binding Letter of Intent to acquire 30% of privately-held, U.K.-based Amazon Resources Limited, as well as an Option to acquire a further 55% of said firm, totaling at least 85%.
Amazon was coveted for its diamond and gold production facility in the Brazilian province of Minas Gerais, one that is projected to reach full capacity of production with one shift by November, and full capacity with three shifts in the first quarter of 2011. The facility has been structured to enable the operation to run on multiple shifts, with some 5,000 hectares of property claims from which to draw diamond- and gold-ready material.
For this Canadian-headquartered company, the move is right in character. SL has focused for some time on in bedrock-diamond exploration in Canada and Brazil, manganese deposits in Brazil’s Rondônia province and in gold deposits in British Columbia. The Company also holds the rights to an 80% interest in a diamond-bearing kimberlite near Espigão d’Oeste in Rondônia (the Carolina Kimberlite pipe).
“At this time of reduced investment interest in diamond projects,” to quote the website, “the Company has placed its diamond exploration efforts on ‘care and maintenance’ and is currently investigating the potential of the manganese deposits in Rondônia for the creation of a cash flow to help fund all of its international exploration activities.”
Brazil, it goes on to say, “is a pro-mining country with outstanding potentials for the discovery of mineral resources and with a strong commitment to sustained mining development.” Last week, SL officials met in Brazil with officials of Rio Madeira company to explore other opportunities. The idea was to continue discussions surrounding the logistical operations and integration of Rio Madeira as well as review the plant and processing modifications that were required as part of the MoU.
Rio Madeira closed out September with 3,000 metric tonnes of Manganese. The grade averaged 52%, in turn considering this production to be “high grade”. SL is far from taking it easy.
SL stock peaked in June at the bargain price of nine cents a share, dipping as low as 1.5 cents in December. Perhaps it was too much turkey that stopped prospective investors, as only 20,000 shares had changed by midday on October 12, the day of the announcement. The price registered at seven cents – all the more reason why folks interested in adding some mining exposure to their holdings should look into this Canadian company with Brazilian ambition.
