Tiomin Resources Inc and diamond producer Vaaldiam Resources Ltd announced they have reached a sales agreement under which Tiomin will acquire all of Vaaldiam's outstanding common shares, Marketwire reported. Once the deal is completed, and subject to regulatory approvals, Vaaldiam diamonds will become a Tiomin subsidiary.



The merger stands to produce a well-capitalized, Brazil-focused diamond producer: diamond and gold production at the company's Duas Barras mine will resume in full and Tiomin will have approximately $11.3 million to fund exploration and development, as well as to settle Vaaldiam's outstanding debts.



Company projections say the diamond miner will produce 20,000 carats in diamonds in 2010 and 40,000 carats in 2011.



According to the report, in addition to becoming South America's largest diamond producer, Tiomin will hold interests in three advanced-stage kimberlite deposits in Brazil and Canada, as well as own a large exploration database of kimberlite occurrences in Brazil.



Other company assets stand to include 49% of the potentially world-class Pukaka copper and gold mine in Peru.